2017 and Later Model Year Light-Duty
Vehicle Greenhouse Gas Emissions and
Corporate Average Fuel Economy
Standards:
EPA Response to Comments
&EPA
United States
Environmental Protection
Agency
-------
2017 and Later Model Year Light-Duty
Vehicle Greenhouse Gas Emissions and
Corporate Average Fuel Economy
Standards:
EPA Response to Comments
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
United States
Environmental Protection
Agency
EPA-420-R-12-017
August 2012
-------
Introduction
The following is the Environmental Protection Agency's (EPA) Response to Comments
document for the EPA and National Highway Traffic Safety Administration (NHTSA) Joint
Rulemaking: 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emission
Standards and Corporate Average Fuel Economy Standards. The following document contains
verbatim excerpts of the commenter's text followed by EPA's responses. Citizen comments that
raised unique substantive issues are included. In addition, nearly 300,000 citizens provided
comments in support of the program and about 400 people provided testimony at three public
hearings held for the rulemaking; these comments are not listed or summarized individually, but
rather examples are provided. All of the comments and public hearing transcripts are available in
docket EPA-HQ-OAR-2010-0799 and/or NHTSA-2010-0131. The comments and responses are
organized by topic (see Table of Contents) to help the reader find comments and responses of
interest. An index of commenters and the associated docket numbers is also provided.
This is an EPA document and does not contain NHTSA's responses to comments.
NHTSA's responses to comments are contained in the preamble Section IV and the NHTSA
Final Regulatory Impact Analysis (RIA) for the rule.
-------
Contents
1. National Program 1-1
1.1. General Support for the National Program 1-1
1.2. General Opposition for the National Program 1-81
2. CO2 Emissions Standards 2-1
2.1. Attribute-based (footprint) approach 2-1
2.2. Stringency of Standards 2-12
2.2.1. Overall Stringency 2-12
2.2.2. Car and Light Truck Footprint Curve Shapes and Level of the Standards 2-52
2.2.3. Backstop Standards 2-106
2.3. Additional Flexibility for Intermediate Volume Manufacturers 2-117
2.4. Mid-term Evaluation 2-125
2.5. Test Procedures 2-175
3. Air Conditioning System Credits 3-1
3.1. Credits Related to Reduced Leakage and the Use of Alternative Refrigerants 3-5
3.2. Credits Related to Improved A/C system Efficiency 3-28
3.2.1. A/C Test Procedures 3-33
4. Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles 4-1
5. Advanced Technology Credits for Full-Size Pickup Trucks 5-1
6. GHG Emissions Compliance Treatment of Plug-In Hybrid Electric, Compressed Natural Gas,
Ethanol, Diesel, and Other Alternative Fueled Vehicles, and CAFE Issues 6-1
6.1. Plug-In Electric Vehicles 6-1
6.2. Compressed Natural Gas Vehicles 6-4
6.3. Ethanol Flexible Fuel Vehicles 6-80
6.4. Comments Regarding the Treatment of Diesel-Fueled Vehicles 6-137
6.5. Comments Regarding Other Alternative Fuels 6-148
6.6 Comments Regarding Issues Relevant to Multiple Fuels 6-158
7. Off-Cycle Technology Credits 7-1
7.1. General Comments 7-1
7.2. Pre-Approved Technology List 7-8
7.3. Comments Regarding Using Pre-Approved Li st in MYs 2012-2016 7-96
in
-------
7.4. Comments Regarding Credit Cap and Sales Thresholds Proposed for Pre-Approved
List 7-101
7.5. Step-by-Step Process and Test Procedures 7-111
7.6. Comments Regarding Technology Eligibility Criteria 7-117
8. A/C, Off-Cycle, and "Game Changing" Technology Fuel Consumption Improvement Values
in CAFE Program 8-1
9. Certification, Compliance, and Enforcement 9-1
9.1. Base Tire Definition 9-2
9.2. Car-Truck Definitions 9-6
9.3. Compliance Data Transparency 9-12
9.4. Harmonization with CAFE 9-17
9.5. Durability Procedures for Diesel Vehicles 9-20
9.6. Other Certification and Compliance Related Comments 9-21
10. Additional EPAProgram Elements 10-1
10.1. Average Banking and Trading 10-1
10.1.1. Carry-Forward and Carry-Back of Credits 10-6
10.1.2. Credit Transfers between Cars and Trucks and Credit Trading between
Manufacturers 10-9
10.1.3. Over Compliance Credits for Use in the California ZEV Program 10-13
10.2. Nitrous Oxide (N2O) and Methane (CH4) Standard 10-18
10.2.1. Flexibility for Compliance with N2O and CH4 Standard 10-18
10.2.2. N2O Measurement and Compliance Statement Option 10-21
10.2.3. N2O and CH4 Standards Related Comments 10-30
10.3. Alternative CO2 Standards for Small Volume Manufacturers with U.S. Sales below
5,000 Vehicles 10-33
10.4. Exemption for Small Businesses 10-44
10.5. Exemption for Emergency and Police Vehicles 10-49
11. Gasoline Fuel Quality 11-1
11.1. Need for Octane 11-1
11.2. Aromatics 11-8
11.3. Need to harmonize in-use/certification fuels with LD GHG 11-17
12. Technical Assessment of the Proposed CO2 Standards 12-1
12.1. Baseline, Reference and Control Fleets for Evaluating Standards 12-2
12.2. Types of Technologies Considered and Their Effectiveness 12-8
IV
-------
12.2.1. Engine Technologies 12-21
12.2.2. Transmission Technologies 12-34
12.2.3. Vehicle Technologies 12-34
12.2.4. Electrification, Fuel Cell, and Hybrid Technologies 12-45
12.2.4.1ANL Battery Model 12-60
12.3. Cost of CO2-Reducing Technologies 12-62
12.3.1. Direct Manufacturing Costs 12-70
12.3.2. Indirect Costs 12-71
12.3.3. Learning 12-77
12.3.4. Maintenance Costs 12-78
12.3.5. Stranded Capital 12-78
12.4. Technology Packages, Projected Manufacturer Compliance Costs, Technology
Penetration, and OMEGA/VOLPE 12-80
13. Vehicle Safety 13-1
13.1. General Comments on Vehicle Safety 13-1
13.2. Comments on NHTSA/EPA's Engineering Analysis of Vehicle Safety Including
Light Weight Materials 13-7
13.3. Comments on NHTSA/EPA's Statistical Analysis of Vehicle Safety 13-26
14. Treatment of Life-Cycle Emissions Related to Vehicle Manufacturing 14-1
15. Economic Assumptions Used in Analyses 15-1
15.1. On-RoadFuel Economy Gap 15-1
15.2. Vehicle Lifetimes and Survival Rates 15-3
15.3. Vehicle Miles Traveled 15-3
15.3.1. Issues of Car-Truck VMT Used for Credit Transfers 15-3
15.3.2. VMT Growth Projections 15-3
15.3.3. Rebound Effect 15-3
16. Analysis of GHG Emissions Reductions and Their Associated Effects 16-1
16.1. Impact on GHG emissions 16-1
16.2. Climate Change Impacts from GHG Emissions and Other Climate-Forcing Agents
16-3
16.3. Changes in Global Climate Indicators Associated with the GHG Emissions
Reductions 16-14
17. Analysis of Impacts on Non-GHG Emissions 17-1
18. Analysis of Estimated Costs, Economic and Other Impacts 18-1
v
-------
18.1. Consumer Impacts/Consumer Welfare/Consumer Acceptance of Vehicles 18-8
18.2. Analysis of Costs Associated with the Vehicle Standards 18-75
18.2.1. Per Vehicle Average Costs 18-99
18.2.2. Annual Aggregate Costs 18-107
18.2.3. Consumer Payback Analysis 18-107
18.3. Analysis of Reduction in Fuel Consumption and Resulting Fuel Savings 18-113
18.4. Benefits of Reduced GHGs and Non-GHG Emissions 18-130
18.4.1. Estimated GHG Emissions Reductions Benefits (Including Social Cost of Carbon)
18-130
18.4.2. Estimated Non-GHG Health and Environmental Impacts 18-161
18.5. Energy Security Impacts 18-168
18.6. Other Impacts 18-189
18.6.1. Added Costs from Congestion, Accidents, and Noise 18-189
18.6.2. Benefits of Increased Driving 18-190
18.6.3. Benefits of Less Frequent Refueling 18-190
18.7. U.S. Vehicle Sales Impacts 18-191
18.7.1. Access to Auto Loans and Effects on Low-Income Consumers 18-202
18.8. Employment Impacts 18-214
19. EPA Statutory Authority 19-1
20. Statutory and Executive Orders 20-1
21. Comments Regarding Proposed Regulatory Text 21-1
22. Comments Regarding EPA Tier 3 Rulemaking 22-1
22.1. Tier 3 Standards 22-2
22.2. Changes to Fuel Specifications 22-4
23. Request for Extension of the Comment Period 23-1
24. Comments Regarding PSD/Title V Implications and Pending GHG Lawsuits 24-1
25. Comments Unrelated to the Proposed Rule 25-1
VI
-------
Index of Commenters
Commenter
25x"25 Alliance
AAA
Adams, G.
Addam, Mary
Alexandria Hyundai
Alliance of Automobile Manufacturers
Aluminum Association's Aluminum
Transportation Group
America's Natural Gas Alliance
(ANGA) and American Gas
Association (AGA)
American Chemistry Council (ACC)
American Clean Skies Foundation
(ACSF)
American Council for an Energy-
Efficient Economy (ACEEE)
American Council on Renewable
Energy (ACORE) and Biomass
Coordinating Council (BCC)
American Forest and Paper
Association & American Wood
Council
American Fuel and Petrochemical
Manufacturers (AFPM)
American Honda Motor Co., Inc.
American Iron and Steel Institute
(AISI)
American Lung Association
American Lung Association of the
Mid-Atlantic
American Medical Association of
California
American Petroleum Institute (API)
American Petroleum Institute (API),
National Association of Manufacturers
(NAM), and American Fuel &
Docket ID
EPA-HQ-OAR-2010-0799-11818
EPA-HQ-OAR-2010-0799-9484-Al,EPA-HQ-OAR-2010-0799-9484
EPA-HQ-O AR-20 10-0799- 1 550-A1 , EP A-HQ-OAR-20 10-0799- 1 550
NHTSA-20 10-0 13 1-0208
EPA-HQ-O AR-20 10-0799-1 1788
EPA-HQ-O AR-2010-0799-9487-Al,EPA-HQ-OAR-2010-0799-9487,
EPA-HQ-O AR-2010-0799-10153-A1, EPA-HQ-O AR-2010-0799-10153-
A2, EPA-HQ-O AR-2010-0799-10153, EPA-HQ-O AR-2010-0799-1 1790-
Al, EPA-HQ-OAR-2010-0799-11790, EPA-HQ-OAR-2010-0799-11786,
NHTSA-2010-0131-0262-A1, NHTSA-2010-013 1-0262, NHTSA-2010-
0131-0271-A1, NHTSA-2010-013 1-0271, NHTSA-2010-013 1-0272-A1,
NHTSA-20 10-0 13 1 -0272
EPA-HQ-OAR-2010-0799-11786, NHTSA-2010-013 1-0226-A1, NHTSA-
2010-013 1-0226-A2, NHTSA-2010-013 1-0226-A3, NHTSA-2010-013 1-
0226-A4, NHTSA-2010-013 1-0226-A5, NHTSA-2010-013 1-0226-A6,
NHTSA-20 10-0 13 1 -0226
EPA-HQ-O AR-2010-0799-9548-Al,EPA-HQ-OAR-2010-0799-9548-A2,
EPA-HQ-O AR-20 10-0799-9548
EPA-HQ-O AR-2010-0799-9517-A1,EPA-HQ-OAR-2010-0799-9517-A2,
EPA-HQ-O AR-20 10-0799-95 17, EPA-HQ-OAR-2010-0799-11786
EPA-HQ-O AR-2010-0799-9464-Al,EPA-HQ-OAR-2010-0799-9464
EPA-HQ-O AR-2010-0799-9528-Al,EPA-HQ-OAR-2010-0799-9528,
EPA-HQ-O AR-20 10-0799-9528-A2x, EPA-HQ-O AR-2010-0799-1 1787
EPA-HQ-O AR-2010-0799-9593-Al,EPA-HQ-OAR-2010-0799-9593-A2,
EPA-HQ-O AR-20 10-0799-9593
EPA-HQ-O AR-2010-0799-9537-Al,EPA-HQ-OAR-2010-0799-9537
EPA-HQ-O AR-2010-0799-9485-Al,EPA-HQ-OAR-2010-0799-9485
EPA-HQ-O AR-2010-0799-9489-Al,EPA-HQ-OAR-2010-0799-9489,
EPA-HQ-OAR-2010-0799-11786, NHTSA-2010-013 1-0239-A1, NHTSA-
2010-013 1-0239
EPA-HQ-O AR-2010-0799-9477-Al,EPA-HQ-OAR-2010-0799-9477,
EPA-HQ-O AR-2010-0799-1 1786
EPA-HQ-O AR-2010-0799-9902-A1,EPA-HQ-OAR-2010-0799-9902-A2,
EPA-HQ-O AR-2010-0799-9902
EPA-HQ-O AR-2010-0799-11788
EPA-HQ-O AR-2010-0799-11787
EPA-HQ-O AR-2010-0799-9469-Al,EPA-HQ-OAR-2010-0799-9469-A2,
EPA-HQ-O AR-20 10-0799-9469, NHTSA-2010-013 1-0238-A1, NHTSA-
2010-013 1-0238-A2, NHTSA-2010-013 1-0238
EPA-HQ-O AR-2010-0799-9509-A1,EPA-HQ-OAR-2010-0799-9509
Vll
-------
Commenter
Petrochemical Manufacturers (AFPM)
American Public Gas Association
(APGA)
American Road & Transportation
Builders Association (ARTBA)
American Suzuki Motor Corporation
AMP Electric Vehicles
Anonymous public citizen 4
Anonymous Public Citizen 1
Anonymous public citizen 2
Anonymous public citizen 3
Anonymous public citizen 5
Applied Materials
Arkema Inc.
Association of Global Automakers,
Inc. (Global Automakers)
Aston Martin Lagonda Limited, Lotus
Cars Limited and McLaren
Automotive
Axford, H.
Bassett, S.
Bayer MaterialScience
Biery-Hamilton, Dr. G.
BlueGreen Alliance
BMW of North America, LLC
Borg Warner, Inc.
Bosch
Boyden Gray & Associates PLLC
Business for Innovative Climate &
Energy Policy (BICEP)
Cafagna, R.
California Air Resources Board
(CARB)
California Manufacturers &
Technology Association (CMTA)
California State Sheriffs' Association
Docket ID
EPA-HQ-OAR-2010-0799-9448-Alx,EPA-HQ-OAR-20 10-0799-9448
EPA-HQ-OAR-2010-0799-9403-A1,EPA-HQ-OAR-2010-0799-9403,
EPA-HQ-OAR-2010-0799-9451-A1,EPA-HQ-OAR-2010-0799-9451-A2,
EPA-HQ-OAR-2010-0799-9451, NHTSA-2010-0131-0233-A1, NHTSA-
2010-0131-0233
EPA-HQ-OAR-2010-0799-9523-Al,EPA-HQ-OAR-2010-0799-9523
EPA-HQ-OAR-2010-0799-7984-Al,EPA-HQ-OAR-2010-0799-7984,
EPA-HQ-OAR-2010-0799-8086-Alx,EPA-HQ-OAR-2010-0799-8086
EPA-HQ-OAR-2010-0799-103 17
NHTSA-20 10-0 13 1-0231
EPA-HQ-OAR-2010-0799-1359
EPA-HQ-OAR-2010-0799-2001
EPA-HQ-OAR-2010-0799-2010
EPA-HQ-OAR-2010-0799-7292-Al,EPA-HQ-OAR-2010-0799-7292-A2,
EPA-HQ-OAR-20 10-0799-7292, EPA-HQ-OAR-2010-0799-1 1787
EPA-HQ-OAR-2010-0799-9468-Al,EPA-HQ-OAR-2010-0799-9468
EPA-HQ-OAR-20 10-0799- 1 307-A1 , EPA-HQ-OAR-20 10-0799- 1 307,
EPA-HQ-OAR-2010-0799-9466-Al,EPA-HQ-OAR-2010-0799-9466,
EPA-HQ-OAR-2010-0799-1 1786, EPA-HQ-OAR-2010-0799-1 1787,
NHTSA-2010-0131-0237-A1,NHTSA-2010-0131-0237
EPA-HQ-OAR-2010-0799-5387-Al,EPA-HQ-OAR-2010-0799-5387-A2,
EPA-HQ-OAR-2010-0799-5387, EPA-HQ-OAR-2010-0799-1 1787
EPA-HQ-OAR-2010-0799-9149-A1,EPA-HQ-OAR-2010-0799-9149
EPA-HQ-OAR-2010-0799-8123-A1,EPA-HQ-OAR-2010-0799-8123
EPA-HQ-OAR-2010-0799-9198-A1,EPA-HQ-OAR-2010-0799-9198-A2,
EPA-HQ-OAR-2010-0799-9198,EPA-HQ-OAR-2010-0799-9265-Al,
EPA-HQ-OAR-20 10-0799-9265, EPA-HQ-OAR-2010-0799-1 1786,
NHTSA-2010-0131-0228-A1,NHTSA-2010-013 1-0228
EPA-HQ-OAR-20 10-0799-903 3 -Al , EPA-HQ-OAR-20 10-0799-903 3
EPA-HQ-OAR-2010-0799-1 1786,EPA-HQ-OAR-2010-0799-1 1787
EPA-HQ-OAR-2010-0799-9579-Al,EPA-HQ-OAR-2010-0799-9579,
EPA-HQ-OAR-20 10-0799-1 1788, NHTSA-2010-0131-0251-A1, NHTSA-
2010-0131-0251
EPA-HQ-OAR-2010-0799-9320-A1,EPA-HQ-OAR-2010-0799-9320
EPA-HQ-OAR-2010-0799-9462-Al,EPA-HQ-OAR-2010-0799-9462
EPA-HQ-OAR-2010-0799-9506-A1,EPA-HQ-OAR-2010-0799-9506,
NHTSA-2010-0131-0242-A1,NHTSA-2010-0131-0242
EPA-HQ-OAR-2010-0799-9450-A1,EPA-HQ-OAR-2010-0799-9450
EPA-HQ-OAR-2010-0799-11689-A1, EPA-HQ-OAR-2010-0799-1 1689
EPA-HQ-OAR-2010-0799-9491-A1,EPA-HQ-OAR-2010-0799-9491,
EPA-HQ-OAR-2010-0799-11799-A1, EPA-HQ-OAR-2010-0799-1 1799-
A2, EPA-HQ-OAR-2010-0799-1 1799, EPA-HQ-OAR-20 10-0799-1 1787
EPA-HQ-OAR-2010-0799-9536-Al,EPA-HQ-OAR-2010-0799-9536-A2,
EPA-HQ-OAR-2010-0799-9536,EPA-HQ-OAR-2010-0799-10012-A1,
EPA-HQ-OAR-2010-0799-10012-A2,EPA-HQ-OAR-2010-0799-10012,
NHTSA-2010-0131-0252-A1,NHTSA-2010-0131-0252
Vlll
-------
Commenter
(CSSA), California Police Chiefs
Association (CPCA), California
Narcotic Officers' Association
(CNOA)
Capozzelli, J.
Center for Biological Diversity
Center for Sustainable Systems,
University of Michigan
CEO Pipe Organs/Golden Ponds Farm
Ceres
Chrysler Group LLC
Clean Energy
Clean Fuels Development Coalition
(CDFC)
Climate Institute
Competitive Enterprise Institute (CEI)
Consumer Federation of America
(CFA)
Consumer Reports
Consumers Union
Crime Victims United of California
(CVUC)
CTIA - The Wireless Association
Cuenca, M.
Dawid, I.
Defour Group LLC
Delphi Corporation
Denso International America, Inc.
Detroit NAACP
El 00 Ethanol Group
Docket ID
EPA-HQ-OAR-2010-0799-9488-Al,EPA-HQ-OAR-2010-0799-9488
NHTSA-2010-0131-0221-A1, NHTSA-2010-0131-0221, NHTSA-2010-
013 1-0266-A1,NHTSA-2010-013 1-0266
EPA-HQ-OAR-2010-0799-9479-Al,EPA-HQ-OAR-2010-0799-9479,
EPA-HQ-OAR-20 10-0799-1 1787, NHTSA-2010-0131-0255-A1, NHTSA-
2010-013 1-0255-A2, NHTSA-2010-0131-0255-A3, NHTSA-2010-013 1-
0255-A4, NHTSA-2010-013 1-0255
EPA-HQ-OAR-2010-0799-9493-Al,EPA-HQ-OAR-2010-0799-9493
EPA-HQ-OAR-2010-0799-9229-Al,EPA-HQ-OAR-2010-0799-9229
EPA-HQ-OAR-2010-0799-9475-Al,EPA-HQ-OAR-2010-0799-9475-
A2.pptx, EPA-HQ-OAR-20 10-0799-9475, EPA-HQ-OAR-20 10-0799-
11798-A1, EPA-HQ-OAR-20 10-0799-1 1798, EPA-HQ-OAR-20 10-0799-
11787
EPA-HQ-OAR-2010-0799-9495-Al,EPA-HQ-OAR-2010-0799-9495,
EPA-HQ-OAR-20 10-0799-1 1786, EPA-HQ-OAR-2010-0799-11787, EPA-
HQ-OAR-2010-0799-11788, NHTSA-2010-013 1-0241-A1, NHTSA-2010-
0131-0241
EPA-HQ-OAR-2010-0799-9511-A1,EPA-HQ-OAR-2010-0799-9511,
NHTSA-2010-013 1-0257-A1, NHTSA-2010-013 1-0257
EPA-HQ-OAR-2010-0799-9574-A10, EPA-HQ-OAR-20 10-0799-9574-
All, EPA-HQ-OAR-2010-0799-9574-A12, EPA-HQ-OAR-20 10-0799-
9574-A14, EPA-HQ-OAR-2010-0799-9574-A2, EPA-HQ-OAR-20 10-
0799-9574-A3, EPA-HQ-OAR-2010-0799-9574-A4, EPA-HQ-OAR-20 10-
0799-9574-A5, EPA-HQ-OAR-2010-0799-9574-A6, EPA-HQ-OAR-20 10-
0799-9574-A7, EPA-HQ-OAR-2010-0799-9574-A8, EPA-HQ-OAR-20 10-
0799-9574-Al,EPA-HQ-OAR-2010-0799-9574
EPA-HQ-OAR-2010-0799-7944-Al,EPA-HQ-OAR-2010-0799-7944
EPA-HQ-OAR-2010-0799-9552-Al,EPA-HQ-OAR-2010-0799-9552
EPA-HQ-OAR-20 10-0799-94 1 9-A1 , EPA-HQ-OAR-20 10-0799-94 1 9-A2,
EPA-HQ-OAR-2010-0799-9419-A3,EPA-HQ-OAR-2010-0799-9419-A4,
EPA-HQ-OAR-2010-0799-9419, EPA-HQ-OAR-2010-0799-11786, EPA-
HQ-OAR-2010-0799-11787, EPA-HQ-OAR-20 10-0799-1 1788
EPA-HQ-OAR-20 10-0799-1 1788
EPA-HQ-OAR-2010-0799-9454-Al,EPA-HQ-OAR-2010-0799-9454-A2,
EPA-HQ-OAR-2010-0799-9454-A3,EPA-HQ-OAR-2010-0799-9454
EPA-HQ-OAR-2010-0799-9883-Al,EPA-HQ-OAR-2010-0799-9883,
NHTSA-2010-013 1-0254-A1, NHTSA-2010-013 1-0254
EPA-HQ-OAR-2010-0799-11759-A1, EPA-HQ-OAR-2010-0799-1 1759-
A2, EPA-HQ-OAR-2010-0799-11759
EPA-HQ-OAR-2010-0799-10142-A1,EPA-HQ-OAR-2010-0799-10142
EPA-HQ-OAR-2010-0799-6325-Al,EPA-HQ-OAR-2010-0799-6325
EPA-HQ-OAR-2010-0799-9319-A1,EPA-HQ-OAR-2010-0799-9319
EPA-HQ-OAR-2010-0799-1 1786
EPA-HQ-OAR-2010-0799-9269-Al,EPA-HQ-OAR-2010-0799-9269,
NHTSA-2010-013 1-0232-A1, NHTSA-2010-013 1-0232
EPA-HQ-OAR-2010-0799-11786
EPA-HQ-OAR-2010-0799-7173-A1,EPA-HQ-OAR-2010-0799-7173,
EPA-HQ-OAR-2010-0799-1 1787
IX
-------
Commenter
Eaton Corporation
Ecology Center
EcoMotors International, Inc.
Edison Electric Institute (EEI)
Edmunds.com
Electric Drive Transportation
Association
Encana Natural Gas Inc.
Enhanced Protective Glass Automotive
Association (EPGAA)
Ennis, M.
Environmental Consultants of
Michigan
Environmental Defense Fund (EOF)
EutecticSolutions Inc.
Faria, R.
Feinstein, C.
Ferrari
Ferrari & Maserati of Seattle
Ferrari of Houston, Texas and Ferrari
of Austin, Texas
Fisker Automotive, Inc.
Ford Motor Company
Garmin International Inc.
General Motors Company
Gilles, B.
Gordon, Michael
Governors' Biofuels Coalition
Green, K.
Growth Energy
Docket ID
EPA-HQ-OAR-2010-0799-9494-Al,EPA-HQ-OAR-2010-0799-9494,
EPA-HQ-OAR-2010-0799-1 1786
EPA-HQ-OAR-20 10-0799-1 1786
EPA-HQ-OAR-2010-0799-9594-Al,EPA-HQ-OAR-2010-0799-9594-A2,
EPA-HQ-OAR-20 10-0799-9594
EPA-HQ-OAR-2010-0799-9584-Al,EPA-HQ-OAR-2010-0799-9584-A2,
EPA-HQ-OAR-20 10-0799-9584
EPA-HQ-OAR-2010-0799-1 1787
EPA-HQ-OAR-2010-0799-9449-Al,EPA-HQ-OAR-2010-0799-9449
EPA-HQ-OAR-2010-0799-9585-Al,EPA-HQ-OAR-2010-0799-9585-A2,
EPA-HQ-OAR-20 10-0799-9585, NHTSA-2010-0131-0265-A1, NHTSA-
2010-0131-0265
EPA-HQ-OAR-2010-0799-9301-A1,EPA-HQ-OAR-2010-0799-9301
EPA-HQ-OAR-2010-0799-5612-A1,EPA-HQ-OAR-2010-0799-5612
EPA-HQ-OAR-2010-0799-11760-A1, EPA-HQ-OAR-2010-0799-1 1760-
A2, EPA-HQ-OAR-2010-0799-1 1760, NHTSA-2010-0131-0166-A1,
NHTSA-2010-013 1-0166
EPA-HQ-OAR-2010-0799-9519-A1,EPA-HQ-OAR-2010-0799-9519-A2,
EPA-HQ-OAR-2010-0799-9519-A3,EPA-HQ-OAR-2010-0799-9519,
EPA-HQ-OAR-2010-0799-1 1787, EPA-HQ-OAR-2010-0799-1 1788
NHTSA-2010-013 1-0270
EPA-HQ-OAR-2010-0799-9834-Al,EPA-HQ-OAR-2010-0799-9834
EPA-HQ-OAR-2010-0799-6745-Al,EPA-HQ-OAR-2010-0799-6745
EPA-HQ-OAR-2010-0799-9535-Al,EPA-HQ-OAR-2010-0799-9535-A2,
EPA-HQ-OAR-2010-0799-9535,EPA-HQ-OAR-2010-0799-10037-A1,
EPA-HQ-OAR-2010-0799-10037-A2,EPA-HQ-OAR-2010-0799-10037
EPA-HQ-OAR-2010-0799-9197-A1,EPA-HQ-OAR-2010-0799-9197-A2,
EPA-HQ-OAR-2010-0799-9197
EPA-HQ-OAR-2010-0799-9230-A1,EPA-HQ-OAR-2010-0799-9230-A2,
EPA-HQ-OAR-2010-0799-9230
EPA-HQ-OAR-2010-0799-9266-Al,EPA-HQ-OAR-2010-0799-9266
EPA-HQ-OAR-2010-0799-9463-Al,EPA-HQ-OAR-2010-0799-9463,
EPA-HQ-OAR-20 10-0799-1 1786, EPA-HQ-OAR-2010-0799-1 1787, EPA-
HQ-OAR-2010-0799-1 1788, NHTSA-2010-013 1-0235-A1, NHTSA-2010-
0131-0235
EPA-HQ-OAR-2010-0799-9508-A1,EPA-HQ-OAR-2010-0799-9508,
NHTSA-2010-013 1-0245-A1, NHTSA-2010-013 1-0245
EPA-HQ-OAR-2010-0799-9465-Al,EPA-HQ-OAR-2010-0799-9465,
EPA-HQ-OAR-20 10-0799-1 1786, NHTSA-2010-013 1-0236-A1, NHTSA-
2010-013 1-0236
EPA-HQ-OAR-2010-0799-8065-A1,EPA-HQ-OAR-2010-0799-8065
EPA-HQ-OAR-20 10-0799-9625
EPA-HQ-OAR-2010-0799-9570-A1,EPA-HQ-OAR-2010-0799-9570
EPA-HQ-OAR-20 10-0799- 1 524-A1 , EPA-HQ-OAR-20 10-0799- 1 524
EPA-HQ-OAR-2010-0799-9540-A1,EPA-HQ-OAR-2010-0799-9540-A2,
EPA-HQ-OAR-2010-0799-9540,EPA-HQ-OAR-2010-0799-9505-A1,
EPA-HQ-OAR-2010-0799-9505-A10, EPA-HQ-OAR-20 10-0799-9505-
A13, EPA-HQ-OAR-2010-0799-9505-A14, EPA-HQ-OAR-20 10-0799-
9505-A15, EPA-HQ-OAR-2010-0799-9505-A17, EPA-HQ-OAR-20 10-
X
-------
Commenter
Guardian Automotive Products, Inc.
Haroldson, C.
Hohenstein, H.
Honeywell International, Inc.
Honeywell Transportation Systems
Horst, R.
House of Representatives, Congress of
the United States
Houston Tea Party Society
Howard, P.
Hrin, S.
Hyundai America Technical Center
1CM Inc.
Institute for Energy Research (IER)
Institute for Policy Integrity, New
York University School of Law
Insurance Institute for Highway Safety
(IIHS)
Integrated Consultants, Inc.
International Council on Clean
Transportation (ICCT)
Investor Network on Climate Risk
(INCR) - Ceres
lackson, F.W.
laguar Land Rover North America,
LLC (JLRNA)
lohnson Controls, Inc.
lohnson, C.
Docket ID
0799-9505-A19, EPA-HQ-OAR-2010-0799-9505-A20, EPA-HQ-OAR-
2010-0799-9505-A23, EPA-HQ-OAR-2010-0799-9505-A24, EPA-HQ-
OAR-2010-0799-9505-A3, EPA-HQ-OAR-2010-0799-9505-A8, EPA-HQ-
OAR-2010-0799-9505-A9,EPA-HQ-OAR-20 10-0799-9505
EPA-HQ-OAR-2010-0799-9299-Al,EPA-HQ-OAR-2010-0799-9299
EPA-HQ-OAR-2010-0799-1 1 137-A1, EPA-HQ-OAR-20 10-0799-1 1137
EPA-HQ-OAR-2010-0799-1515-A1,EPA-HQ-OAR-2010-0799-1515
EPA-HQ-OAR-2010-0799-9497-Al,EPA-HQ-OAR-2010-0799-9497,
EPA-HQ-OAR-2010-0799-1 1786, EPA-HQ-OAR-2010-0799-1 1788,
NHTSA-2010-0131-0244-A1,NHTSA-2010-0131-0244
EPA-HQ-OAR-2010-0799-9474-Al,EPA-HQ-OAR-2010-0799-9474
EPA-HQ-OAR-2010-0799-6353-Al,EPA-HQ-OAR-2010-0799-6353
EPA-HQ-OAR-2010-0799-1221-A1,EPA-HQ-OAR-2010-0799-1221
EPA-HQ-OAR-2010-0799-9583
EPA-HQ-OAR-2010-0799-10063-A1, EPA-HQ-OAR-2010-0799-1 1384-
Al, EPA-HQ-OAR-2010-0799-10063, EPA-HQ-OAR-2010-0799-1 1384
EPA-HQ-OAR-2010-0799-1568
EPA-HQ-OAR-2010-0799-9542-Al,EPA-HQ-OAR-2010-0799-9542,
EPA-HQ-OAR-2010-0799-9547-Al,EPA-HQ-OAR-2010-0799-9547,
EPA-HQ-OAR-20 10-0799-1 1786, EPA-HQ-OAR-2010-0799-1 1787, EPA-
HQ-OAR-2010-0799-1 1788, NHTSA-2010-0131-0250-A1, NHTSA-2010-
0131-0250
EPA-HQ-OAR-2010-0799-9541-A1,EPA-HQ-OAR-2010-0799-9541-A2,
EPA-HQ-OAR-20 10-0799-954 1
EPA-HQ-OAR-2010-0799-9573-Al,EPA-HQ-OAR-2010-0799-9573
EPA-HQ-OAR-2010-0799-9480-A1,EPA-HQ-OAR-2010-0799-9480-A2,
EPA-HQ-OAR-2010-0799-9480-A3,EPA-HQ-OAR-2010-0799-9480-A4,
EPA-HQ-OAR-20 10-0799-9480, EPA-HQ-OAR-2010-0799-1 1485-A1,
EPA-HQ-OAR-20 10-0799-1 1485-A2, EPA-HQ-OAR-2010-0799-1 1485-
A3, EPA-HQ-OAR-2010-0799-11485-A4, EPA-HQ-OAR-20 10-0799-
1 1485-A5, EPA-HQ-OAR-2010-0799-1 1485
NHTSA-2010-0131-0222-A1,NHTSA-2010-013 1-0222
NHTSA-2010-0131-0217-A1,NHTSA-2010-0131-0217
EPA-HQ-OAR-2010-0799-9364-Al,EPA-HQ-OAR-2010-0799-9364-A2,
EPA-HQ-OAR-20 10-0799-9364, EPA-HQ-OAR-2010-0799-9365-A1,
EPA-HQ-OAR-2010-0799-9365,EPA-HQ-OAR-2010-0799-9512-A1,
EPA-HQ-OAR-20 10-0799-95 12, EPA-HQ-OAR-2010-0799-1 1786, EPA-
HQ-OAR-2010-0799-1 1787, NHTSA-2010-0131-0225-A1, NHTSA-2010-
0131-0225-A2, NHTSA-2010-013 1-0225, NHTSA-2010-0131-0227-A1,
NHTSA-2010-013 1-0227, NHTSA-2010-013 1-0258-A1, NHTSA-2010-
0131-0258
EP A-HQ-OAR-20 10-0799-95 16-Alx, EPA-HQ-OAR-20 10-0799-95 16
EPA-HQ-OAR-2010-0799-7113-A1,EPA-HQ-OAR-2010-0799-7113,
EPA-HQ-OAR-2010-0799-8041-A1,EPA-HQ-OAR-2010-0799-8041,
EPA-HQ-OAR-2010-0799-11785-A1, EPA-HQ-OAR-2010-0799-1 1785
EPA-HQ-OAR-2010-0799-8102-A1,EPA-HQ-OAR-2010-0799-8102
NHTSA-2010-0131-0253-A1,NHTSA-2010-0131-0253
EPA-HQ-OAR-2010-0799-6528-Al,EPA-HQ-OAR-2010-0799-6528
XI
-------
Commenter
Jordon, A.
Kendall, A.
Kia Motors
Knapp, B.
Kobus, D.
Kunz, R. and J.
Leach, Kyle
League of Women Voters of Michigan
Lennon, S.
Links, W.
Lipetzky, P.
Magna E-Car Systems
Manufacturers of Emission Controls
Association (MECA)
Marks, R.
Marlinghaus, E.
Marshall, C.
Marz, Loren C.
Mass Comment Campaign (1,121)
(World Wildlife Fund)
Mass Comment Campaign (1,338)
(Sierra Club-2)
Mass Comment Campaign (10)
(National Wildlife Federation Action
Fund-1)
Mass Comment Campaign (13,300)
(National Wildlife Federation Action
Fund-3)
Mass Comment Campaign (137
(Citizens for Pennsylvania's Future
(PennFuture))
Mass Comment Campaign (15)
(League of Conservation Voters)
Mass Comment Campaign (15) (Sierra
Club-3)
Mass Comment Campaign (195)
(Environment New Mexico-1)
Mass Comment Campaign (2,120)
(Pew Environmental Group)
Mass Comment Campaign (2,156)
(Environment Michigan)
Mass Comment Campaign (2,851)
(Unknown Organization)
Mass Comment Campaign (20) (Union
of Concerned Scientists-1)
Mass Comment Campaign (20,500)
(Union of Concerned Scientists-3)
Mass Comment Campaign (213)
(Environment Virginia)
Docket ID
EPA-HQ-OAR-2010-0799-9857-Al,EPA-HQ-OAR-2010-0799-9857
EPA-HQ-OAR-20 10-0799-1 1787
EPA-HQ-OAR-20 10-0799-1 1786
EPA-HQ-OAR-2010-0799-8255-Al,EPA-HQ-OAR-2010-0799-8255
EPA-HQ-OAR-20 10-0799- 1 370-A1 , EPA-HQ-OAR-20 10-0799- 1 370
EPA-HQ-OAR-2010-0799-9562-Al,EPA-HQ-OAR-2010-0799-9562
EPA-HQ-OAR-2010-0799-9626
NHTSA-2010-013 1-0198
EPA-HQ-OAR-20 10-0799-90 1 9-A1 , EPA-HQ-OAR-20 10-0799-90 1 9
EPA-HQ-OAR-2010-0799-10348-A1,EPA-HQ-OAR-2010-0799-10348
EPA-HQ-OAR-2010-0799-8184-A1,EPA-HQ-OAR-2010-0799-8184
EPA-HQ-OAR-2010-0799-9263-Al,EPA-HQ-OAR-2010-0799-9263
EPA-HQ-OAR-2010-0799-9452-Al,EPA-HQ-OAR-2010-0799-9452-A2,
EPA-HQ-OAR-2010-0799-9452-A3,EPA-HQ-OAR-2010-0799-9452,
EPA-HQ-OAR-20 10-0799-1 1786
EPA-HQ-OAR-2010-0799-1680-A1,EPA-HQ-OAR-2010-0799-1680
EPA-HQ-OAR-2010-0799-1581-A1,EPA-HQ-OAR-2010-0799-1581
EPA-HQ-OAR-2010-0799-5917-A1,EPA-HQ-OAR-2010-0799-5917-A2,
EPA-HQ-OAR-20 10-0799-59 17
NHTSA-2010-013 1-0213-Alx, NHTSA-2010-0131-0213
EPA-HQ-OAR-2010-0799-5181_MASS
EPA-HQ-OAR-20 10-0799-1 1762-A1, EPA-HQ-OAR-2010-0799-1 1762
EPA-HQ-OAR-2010-0799-1244-A1 MASS, EPA-HQ-OAR-20 10-0799-
1244_MASS
EPA-HQ-OAR-2010-0799-9965-A1 MASSx, EPA-HQ-OAR-20 10-0799-
9965_MASS
EPA-HQ-OAR-20 10-0799-3 114-A1 MASS, EPA-HQ-OAR-20 10-0799-
3114_MASS
EPA-HQ-OAR-2010-0799-1555-A1 MASS, EPA-HQ-OAR-20 10-0799-
1555 MASS
EPA-HQ-OAR-2010-0799-11763-A1, EPA-HQ-OAR-2010-0799-1 1763
EPA-HQ-OAR-2010-0799-9577-A1 MASS, EPA-HQ-OAR-20 10-0799-
9577 MASS
EPA-HQ-OAR-2010-0799-1247-A1 MASS, EPA-HQ-OAR-20 10-0799-
1247 MASS
EPA-HQ-OAR-2010-0799-9683-A1 MASS, EPA-HQ-OAR-20 10-0799-
9683 MASS
EPA-HQ-OAR-2010-0799-9591-A1 MASS, EPA-HQ-OAR-20 10-0799-
9591 MASS
EPA-HQ-OAR-2010-0799-1558-A1 MASS, EPA-HQ-OAR-20 10-0799-
1558 MASS
EPA-HQ-OAR-2010-0799-10166-A1 MASS, EPA-HQ-OAR-20 10-0799-
10166-A2 MASS,EPA-HQ-OAR-2010-0799-10166 MASS
EPA-HQ-OAR-2010-0799-9576-A1 MASS, EPA-HQ-OAR-20 10-0799-
9576 MASS
Xll
-------
Commenter
Mass Comment Campaign (22,122)
(Unknown Organization)
Mass Comment Campaign (262)
(Environment New Mexico-2)
Mass Comment Campaign (27,108)
(Unknown Organization)
Mass Comment campaign (3,855)
(National Wildlife Federation Action
Fund-2)
Mass Comment Campaign (375)
(Union of Concerned Scientists-2)
Mass Comment Campaign (39)
(Unknown Organization)
Mass Comment Campaign (39,464)
(Environmental Defense Fund (EDF))
Mass Comment Campaign (399)
(Rhode Island Sierra Club)
Mass Comment Campaign (4,505)
(Unknown Organization)
Mass Comment Campaign (45)
(Environment Minnesota)
Mass Comment Campaign (61) (The
Social Justice Group)
Mass Comment Campaign (680)
(PennEvironment)
Mass Comment Campaign (8,741)
(Natural Resources Defense Council
(NRDC))
Mass Comment Campaign (80)
(Unknown Organization)
Mass Comment Campaign (9,570)
(Unknown Organization)
Mass Comment Campaign (927)
(Sierra Club-1)
Mass Comment Campaign (99)
(Environment Texas)
Mass Comment Campaign (Multiple
Submitters) (Unknown Organization)
Massachusetts Institute of Technology
(MIT)
Mazda North American Operations
Medinger, R.
Mehrotra, Rahul
Mercedes-Benz USA, LLC
Michigan House of Representatives,
49th District
Michigan State House of
Representatives
Michigan State Senate, District 18
Miller Motorcars
Docket ID
EPA-HQ-OAR-2010-0799-9736_MASS
EPA-HQ-OAR-2010-0799-9700-A1 MASS, EPA-HQ-OAR-20 10-0799-
9700 MASS
EPA-HQ-OAR-2010-0799-9596-A1 MASS, EPA-HQ-OAR-20 10-0799-
9596 MASS
EPA-HQ-OAR-2010-0799-1557-A1 MASS, EPA-HQ-OAR-20 10-0799-
1557_MASS
EPA-HQ-OAR-2010-0799-1246-A1 MASS, EPA-HQ-OAR-20 10-0799-
1246 MASS
EPA-HQ-OAR-2010-0799-1245-A1 MASS, EPA-HQ-OAR-20 10-0799-
1245 MASS
EPA-HQ-OAR-2010-0799-9590-A1 MASS, EPA-HQ-OAR-20 10-0799-
9590 MASS
EPA-HQ-OAR-2010-0799-11761-A1,EPA-HQ-OAR-2010-0799-11761
EPA-HQ-OAR-2010-0799-9595-A1 MASS, EPA-HQ-OAR-20 10-0799-
9595 MASS
EPA-HQ-OAR-2010-0799-9588-A1 MASS, EPA-HQ-OAR-20 10-0799-
9588 MASS
EPA-HQ-OAR-2010-0799-7406-A1 MASS, EPA-HQ-OAR-20 10-0799-
7406 MASS
EPA-HQ-OAR-2010-0799-1556-A1 MASS, EPA-HQ-OAR-20 10-0799-
1556 MASS
EPA-HQ-OAR-2010-0799-9589-A1 MASS, EPA-HQ-OAR-20 10-0799-
9589_MASS
EPA-HQ-OAR-2010-0799-9682-A1 MASS, EPA-HQ-OAR-20 10-0799-
9682 MASS
EPA-HQ-OAR-2010-0799-9578-A1 MASS, EPA-HQ-OAR-20 10-0799-
9578 MASS
EPA-HQ-OAR-2010-0799-1554-A1 MASS, EPA-HQ-OAR-20 10-0799-
1554 MASS
EPA-HQ-OAR-2010-0799-9701-A1 MASS, EPA-HQ-OAR-20 10-0799-
9701 MASS
NHTSA-2010-0131-0219-A1_MASS, NHTSA-2010-0131-0219_MASS
NHTSA-2010-0131-0229-A1,NHTSA-2010-013 1-0229
EPA-HQ-OAR-20 10-0799-1 1787
EPA-HQ-OAR-2010-0799-9035-A1,EPA-HQ-OAR-2010-0799-9035
NHTSA-20 10-0 13 1-0206
EPA-HQ-OAR-2010-0799-9483-Al,EPA-HQ-OAR-2010-0799-9483
EPA-HQ-OAR-2010-0799-7983-Al,EPA-HQ-OAR-2010-0799-7983
EPA-HQ-OAR-20 10-0799-9 175
EPA-HQ-OAR-2010-0799-5594-Alx,EPA-HQ-OAR-2010-0799-5594-Al,
EPA-HQ-OAR-2010-0799-5594
EPA-HQ-OAR-20 10-0799-8 14 1 -Al , EPA-HQ-OAR-20 10-0799-8 14 1 -A2,
Xlll
-------
Commenter
Miller, P.
Minnesota Department of Commerce
Mitsubishi Motors R&D of America,
Inc. (MRDA)
Moravian College
Motor & Equipment Manufacturers
Association (MEMA)
National Alliance of Forest Owners
(NAFO)
National Association of Clean Air
Agencies (NACAA)
National Association of Convenience
Stores (NACS)
National Association of Manufacturers
(NAM)
National Automobile Dealers
Association (NAD A)
National Caucus of Environmental
Legislators
National Corn Growers Association et
al.
National Propane Gas Association
(NPGA)
National Wildlife Federation (NWF)
Natural Resources Defense Council
(NRDC)
Necheles, L.
New Jersey Senate, Third Legislative
District
New York City Council, 3 5th District
New York State Assembly Committee
on Government Operations
New York State Senate, 26th District
NGV America
Nissan North America, Inc.
Northeast States for Coordinated Air
Use Management (NESCAUM)
Oblong Land Conservancy
Docket ID
EPA-HQ-OAR-2010-0799-8141
EPA-HQ-OAR-2010-0799-1755-A1,EPA-HQ-OAR-2010-0799-1755
EPA-HQ-OAR-2010-0799-7363-Alx,EPA-HQ-OAR-2010-0799-7363
EPA-HQ-OAR-2010-0799-9507-A1,EPA-HQ-OAR-2010-0799-9507,
EPA-HQ-OAR-20 10-0799-1 1787
EPA-HQ-OAR-2010-0799-5536-Al,EPA-HQ-OAR-2010-0799-5536
EPA-HQ-OAR-2010-0799-9478-Al,EPA-HQ-OAR-2010-0799-9478
EPA-HQ-OAR-2010-0799-9481-A1,EPA-HQ-OAR-2010-0799-9481,
EPA-HQ-OAR-2010-0799-9534-Al,EPA-HQ-OAR-2010-0799-9534-A2,
EPA-HQ-OAR-20 10-0799-9534
EPA-HQ-OAR-2010-0799-8084-A1,EPA-HQ-OAR-2010-0799-8084,
EPA-HQ-OAR-20 10-0799-1 1787, EPA-HQ-OAR-2010-0799-1 1788
EPA-HQ-OAR-2010-0799-9543-Al,EPA-HQ-OAR-2010-0799-9543
EPA-HQ-OAR-2010-0799-9538-Al,EPA-HQ-OAR-2010-0799-9538-A2,
EPA-HQ-OAR-2010-0799-9538,EPA-HQ-OAR-2010-0799-9587-Al,
EPA-HQ-OAR-2010-0799-9587
EPA-HQ-OAR-20 10-0799- 1 308-A1 , EPA-HQ-OAR-20 10-0799- 1 308,
EPA-HQ-OAR-2010-0799-9575-Al,EPA-HQ-OAR-2010-0799-9575-A2,
EPA-HQ-OAR-2010-0799-9575-A3,EPA-HQ-OAR-2010-0799-9575-A4,
EPA-HQ-OAR-2010-0799-9575-A5, EPA-HQ-OAR-20 10-0799-9575,
EPA-HQ-OAR-20 10-0799-1 1786, EPA-HQ-OAR-2010-0799-1 1787, EPA-
HQ-OAR-2010-0799-1 1788, NHTSA-2010-0131-0261-A1, NHTSA-2010-
0131-0261-A2, NHTSA-2010-0131-0261-A3, NHTSA-2010-013 1-0261-
A4, NHTSA-2010-013 1-0261-A5, NHTSA-2010-013 1-0261, NHTSA-
2010-013 1-0267-A1, NHTSA-2010-013 1-0267
EPA-HQ-OAR-2010-0799-9443-Al,EPA-HQ-OAR-2010-0799-9443
EPA-HQ-OAR-2010-0799-9565-Al,EPA-HQ-OAR-2010-0799-9565,
NHTSA-2010-013 1-0249-A1, NHTSA-2010-013 1-0249
EPA-HQ-OAR-2010-0799-9482-Al,EPA-HQ-OAR-2010-0799-9482
EPA-HQ-OAR-2010-0799-9887-Al,EPA-HQ-OAR-2010-0799-9887-A2,
EPA-HQ-OAR-20 10-0799-9887, EPA-HQ-OAR-2010-0799-1 1786
EPA-HQ-OAR-2010-0799-9472-Al,EPA-HQ-OAR-2010-0799-9472-A2,
EPA-HQ-OAR-20 10-0799-9472, EPA-HQ-OAR-2010-0799-1 1786
EPA-HQ-OAR-2010-0799-2487-Al,EPA-HQ-OAR-2010-0799-2487
EPA-HQ-OAR-2010-0799-9970-A1,EPA-HQ-OAR-2010-0799-9970
EPA-HQ-OAR-2010-0799-9901-A1,EPA-HQ-OAR-2010-0799-9901-A2,
EPA-HQ-OAR-2010-0799-9901
EPA-HQ-OAR-2010-0799-9453-Al,EPA-HQ-OAR-2010-0799-9453-A2,
EPA-HQ-OAR-2010-0799-9453
EPA-HQ-OAR-2010-0799-9884-Al,EPA-HQ-OAR-2010-0799-9884
EPA-HQ-OAR-2010-0799-9461-A1,EPA-HQ-OAR-2010-0799-9461,
NHTSA-2010-013 1-0234-A1, NHTSA-2010-013 1-0234
EPA-HQ-OAR-2010-0799-9471-A1,EPA-HQ-OAR-2010-0799-9471,
EPA-HQ-OAR-2010-0799-1 1786
EPA-HQ-OAR-2010-0799-9476-Al,EPA-HQ-OAR-2010-0799-9476,
EPA-HQ-OAR-2010-0799-1 1788
EPA-HQ-OAR-2010-0799-9915-A1,EPA-HQ-OAR-2010-0799-9915
XIV
-------
Commenter
Pacific Legal Foundation (PLF)
Parker, M.
Paul, M.
Pearce, F.
Pennsylvania Department of
Environmental Protection
Pennsylvania State Senate et al.
Penske Corporation
Pew Charitable Trusts
Pittsburgh Glass Works (PGW)
Plant Oil Powered Diesel Fuel
Systems, Inc.
Porsche Cars North America, Inc.
(PCNA)
Pregibon, D.
Rafter, M.
Renewable Energy Long Island
Renewable Fuels Association (RFA)
Ross, D.
Roush Industries, Inc.
RVIA
SABIC Innovative Plastics US LLC
Salinas, A.
Securing America's Future Energy
(SAFE)
Shick, R.
Sierra Club, Environment America,
Safe Climate Campaign, and Clean Air
Council
Slemp III, R. L.
Smith, Frank Houston
Smith, G.
Society of the Plastics Industry, Inc.
(SPI)
South Coast AQMD
St. Clair-Detroit River Sturgeon for
Tomorrow
Docket ID
EPA-HQ-OAR-2010-0799-8108-A1,EPA-HQ-OAR-2010-0799-8108
EPA-HQ-OAR-2010-0799-9017-A1,EPA-HQ-OAR-2010-0799-9017
EPA-HQ-OAR-2010-0799-9027-A1,EPA-HQ-OAR-2010-0799-9027
EPA-HQ-OAR-2010-0799-10343-A1,EPA-HQ-OAR-2010-0799-10343
EPA-HQ-OAR-2010-0799-7821-A1,EPA-HQ-OAR-2010-0799-7821
EPA-HQ-OAR-2010-0799-9914-A1,EPA-HQ-OAR-2010-0799-9914
EPA-HQ-OAR-2010-0799-9187-A1,EPA-HQ-OAR-2010-0799-9187-A2,
EPA-HQ-O AR-20 10-0799-9 1 87
EPA-HQ-OAR-2010-0799-9496-Al,EPA-HQ-OAR-2010-0799-9496-A2x,
EPA-HQ-O AR-2010-0799-9496-A3,EPA-HQ-OAR-2010-0799-9496,
EPA-HQ-O AR-2010-0799-1 1788
EPA-HQ-O AR-2010-0799-9300-A1,EPA-HQ-OAR-2010-0799-9300
EPA-HQ-O AR-2010-0799-9882-Al,EPA-HQ-OAR-2010-0799-9882,
EPA-HQ-O AR-2010-0799-10337-A1, EPA-HQ-O AR-2010-0799-10337-
A2, EPA-HQ-O AR-2010-0799-10337, EPA-HQ-O AR-20 10-0799-9882-A2,
EPA-HQ-O AR-20 10-0799-9882-A5, EPA-HQ-O AR-20 10-0799-9882-A1 1,
EPA-HQ-O AR-20 10-0799-9882-A12, EPA-HQ-O AR-20 10-0799-9882-
A13, EPA-HQ-O AR-20 10-0799-9882-A6, EPA-HQ-O AR-20 10-0799-
9882-A8, EPA-HQ-O AR-20 10-0799-9882-A9, EPA-HQ-O AR-20 10-0799-
9882-A3
EPA-HQ-O AR-2010-0799-9264-Al,EPA-HQ-OAR-2010-0799-9264,
NHTSA-2010-0131-0224-A1,NHTSA-2010-013 1-0224
EPA-HQ-O AR-2010-0799-8987-Al,EPA-HQ-OAR-2010-0799-8987
EPA-HQ-O AR-2010-0799-1 1587-A1, EPA-HQ-O AR-2010-0799-1 1587
EPA-HQ-O AR-2010-0799-7933-Alx,EPA-HQ-OAR-2010-0799-7933
EPA-HQ-O AR-2010-0799-9490-A1,EPA-HQ-OAR-2010-0799-9490
EPA-HQ-O AR-20 10-0799-1 1788
EPA-HQ-O AR-2010-0799-7823-Al,EPA-HQ-OAR-2010-0799-7823-A2,
EPA-HQ-O AR-2010-0799-7823
EPA-HQ-O AR-2010-0799-9550-A1,EPA-HQ-OAR-2010-0799-9550-A2,
EPA-HQ-O AR-2010-0799-9550
EPA-HQ-O AR-2010-0799-9467-Al,EPA-HQ-OAR-2010-0799-9467,
EPA-HQ-O AR-2010-0799-1 1786
EPA-HQ-O AR-2010-0799-7119-A1,EPA-HQ-OAR-2010-0799-7119
EPA-HQ-O AR-2010-0799-9518-A1,EPA-HQ-OAR-2010-0799-9518,
EPA-HQ-O AR-20 10-0799-1 1787, NHTSA-2010-0131-0259-A1, NHTSA-
2010-0131-0259
EPA-HQ-O AR-2010-0799-6215-A1,EPA-HQ-OAR-2010-0799-6215
EPA-HQ-O AR-2010-0799-9549-Al,EPA-HQ-OAR-2010-0799-9549-A2,
EPA-HQ-O AR-2010-0799-9549-A3,EPA-HQ-OAR-2010-0799-9549,
EPA-HQ-O AR-2010-0799-1 1786
EPA-HQ-O AR-2010-0799-6314-A1,EPA-HQ-OAR-2010-0799-6314
NHTSA-2010-0131-0240-A1, NHTSA-2010-0131-0240-A2, NHTSA-2010-
0131-0240
EPA-HQ-O AR-2010-0799-8438-Al,EPA-HQ-OAR-2010-0799-8438
EPA-HQ-O AR-2010-0799-9492-Al,EPA-HQ-OAR-2010-0799-9492
EPA-HQ-O AR-20 10-0799-1 1787
EPA-HQ-O AR-20 10-0799-4 1 5 1
XV
-------
Commenter
State of New York The Assembly
Statman, P.
Steffanoff, N.
Steyn, R.
Stirling, D.
Sullivan, T.
Susan R.
rarazevich, Yegor
TechAmerica
Tesla Motors, Inc.
The Catskill Center for Conservation
and Development
Toyota Motor North America
U.S. Chamber of Commerce
U.S. Coalition for Advanced Diesel
Cars
Union of Concerned Scientists (UCS)
United Automobile Workers (UAW)
United States Senate
United States Steel Corporation
United Steel Workers (USW)
University of Michigan
Utility Air Regulatory Group (UARG)
Van Coppenolle, J. and L.
Van Voorhies, M.
Varley, R.
Vehicle Production Group LLC (VPG)
VNG.Co (VNG)
Volkswagen
Volkswagen Group of America
Volvo Car Corporation (VCC)
Weiner, L.
Docket ID
EPA-HQ-OAR-2010-0799-10155-A1,EPA-HQ-OAR-2010-0799-10155
EPA-HQ-OAR-2010-0799-1472-A1,EPA-HQ-OAR-2010-0799-1472
EPA-HQ-OAR-2010-0799-9335-Al,EPA-HQ-OAR-2010-0799-9335
EPA-HQ-OAR-2010-0799-8724-Al,EPA-HQ-OAR-2010-0799-8724
EPA-HQ-OAR-2010-0799-10065-A1,EPA-HQ-OAR-2010-0799-10065
EPA-HQ-OAR-2010-0799-10341-A1,EPA-HQ-OAR-2010-0799-10341
EPA-HQ-OAR-2010-0799-10792-A1,EPA-HQ-OAR-2010-0799-10792
NHTSA-2010-013 1-0199
EPA-HQ-OAR-2010-0799-9470-A1,EPA-HQ-OAR-2010-0799-9470
EPA-HQ-OAR-2010-0799-9539-Al,EPA-HQ-OAR-2010-0799-9539-A2,
EPA-HQ-OAR-2010-0799-9539,EPA-HQ-OAR-2010-0799-9592-Al,
EPA-HQ-OAR-20 10-0799-9592, EPA-HQ-OAR-2010-0799-1 1787,
NHTSA-2010-013 1-0260-A1, NHTSA-2010-013 1-0260
EPA-HQ-OAR-2010-0799-9913-A1,EPA-HQ-OAR-2010-0799-9913
EPA-HQ-OAR-2010-0799-9586-Al,EPA-HQ-OAR-2010-0799-9586
EPA-HQ-OAR-2010-0799-9521-A1,EPA-HQ-OAR-2010-0799-9521-A2,
EPA-HQ-OAR-2010-0799-9521-A3,EPA-HQ-OAR-2010-0799-9521
EPA-HQ-OAR-2010-0799-1 1786, NHTSA-2010-013 1-0246-A1, NHTSA-
2010-013 1-0246
EPA-HQ-OAR-2010-0799-9567-Al,EPA-HQ-OAR-2010-0799-9567-A2,
EPA-HQ-OAR-2010-0799-9567,EPA-HQ-OAR-2010-0799-9713-A1,
EPA-HQ-OAR-20 10-0799-97 1 3 -A2, EPA-HQ-OAR-20 10-0799-97 1 3 ,
EPA-HQ-OAR-2010-0799-1 1787, EPA-HQ-OAR-2010-0799-1 1788
EPA-HQ-OAR-2010-0799-9563-Al,EPA-HQ-OAR-2010-0799-9563-A2,
EPA-HQ-OAR-2010-0799-9563, EPA-HQ-OAR-2010-0799-1 1786,
NHTSA-2010-013 1-0248-A1, NHTSA-2010-013 1-0248
NHTSA-2010-0131-0264-A1,NHTSA-2010-0131-0264
EPA-HQ-OAR-2010-0799-1 1786, NHTSA-2010-013 1-0256-A1, NHTSA-
2010-013 1-0256
EPA-HQ-OAR-2010-0799-9580-A1,EPA-HQ-OAR-2010-0799-9580-A2,
EPA-HQ-OAR-2010-0799-9580
EPA-HQ-OAR-2010-0799-7986-Al,EPA-HQ-OAR-2010-0799-7986
EPA-HQ-OAR-2010-0799-9510-A1,EPA-HQ-OAR-2010-0799-9510
EPA-HQ-OAR-2010-0799-1284-A1,EPA-HQ-OAR-2010-0799-1284
EPA-HQ-OAR-2010-0799-1629-A1,EPA-HQ-OAR-2010-0799-1629
EPA-HQ-OAR-20 10-0799- 1 948-A1 , EPA-HQ-OAR-20 10-0799- 1 948
EPA-HQ-OAR-2010-0799-7985-Al,EPA-HQ-OAR-2010-0799-7985-A2,
EPA-HQ-OAR-20 10-0799-7985
EPA-HQ-OAR-2010-0799-7941-A1,EPA-HQ-OAR-2010-0799-7941-A2,
EPA-HQ-OAR-2010-0799-7941,EPA-HQ-OAR-2010-0799-11797-A1,
EPA-HQ-OAR-2010-0799-1 1797-A2, EPA-HQ-OAR-2010-0799-1 1797-
A3, EPA-HQ-OAR-2010-0799-1 1797, NHTSA-2010-013 1-0218-A1,
NHTSA-2010-013 1-0218
EPA-HQ-OAR-20 10-0799- 1 309-A1 , EPA-HQ-OAR-20 10-0799- 1 309
EPA-HQ-OAR-2010-0799-9569-Al,EPA-HQ-OAR-2010-0799-9569,
NHTSA-2010-013 1-0247-A1, NHTSA-2010-013 1-0247
EPA-HQ-OAR-2010-0799-9551-A1,EPA-HQ-OAR-2010-0799-9551-A2,
EPA-HQ-OAR-2010-0799-9551, NHTSA-2010-013 1-0243-A1, NHTSA-
2010-013 1-0243
EPA-HQ-OAR-2010-0799-1 1787
XVI
-------
Commenter
Wenzel, T.
WESPAC Foundation
Whitefoot, K. and Skerlos, S.
Wide World Ferrari, Wide World of
Cars, LLC
World Resources Institute (WRI)
World Steel Association
WorldAuto Steel
Docket ID
EPA-HQ-OAR-20 10-0799-1 1787
EPA-HQ-OAR-2010-0799-9459-Al,EPA-HQ-OAR-2010-0799-9459
EPA-HQ-OAR-2010-0799-9447-Alx,EPA-HQ-OAR-2010-0799-9447
EPA-HQ-OAR-2010-0799-8142-A1,EPA-HQ-OAR-2010-0799-8142-A2,
EPA-HQ-OAR-20 10-0799-8 142, EPA-HQ-OAR-20 10-0799-923 1-A1,
EPA-HQ-OAR-2010-0799-923 1-A2, EPA-HQ-OAR-20 10-0799-923 1
EPA-HQ-OAR-2010-0799-7086-A1,EPA-HQ-OAR-2010-0799-7086-A2,
EPA-HQ-OAR-2010-0799-7086
EPA-HQ-OAR-2010-0799-7766-Al,EPA-HQ-OAR-2010-0799-7766
EPA-HQ-OAR-2010-0799-7174-A1,EPA-HQ-OAR-2010-0799-7174
XV11
-------
National Program
1. National Program
1.1. General Support for the National Program
Organizations Included in this Section
Alexandria Hyundai
Alliance of Automobile Manufacturers
Aluminum Association's Aluminum Transportation Group
American Chemistry Council (ACC)
American Council for an Energy-Efficient Economy (ACEEE)
American Honda Motor Co., Inc
American Lung Association
American Lung Association of the Mid-Atlantic
American Medical Association of California
American Suzuki Motor Corporation
Applied Materials
Association of Global Automakers, Inc. (Global Automakers)
Aston Martin Lagonda Limited, Lotus Cars Limited and McLaren Automotive
Biery-Hamilton, Dr. G.
BlueGreen Alliance
BMW of North America, LLC
Borg Warner, Inc.
Business for Innovative Climate & Energy Policy (BICEP)
California Air Resources Board (CARB)
Capozzelli, J.
Center for Biological Diversity
CEO Pipe Organs/Golden Ponds Farm
Ceres
Chrysler Group LLC
Climate Institute
Consumer Federation of America (CF A)
Consumer Reports
Consumers Union
Delphi Corporation
Detroit NAACP
El00 Ethanol Group
Eaton Corporation
Ecology Center
EcoMotors International, Inc.
Edmunds.com
Electric Drive Transportation Association
Environmental Defense Fund (EDF)
Ferrari
Fisker Automotive, Inc.
1-1
-------
EPA Response to Comments
Ford Motor Company
General Motors Company
Growth Energy
Guardian Automotive Products, Inc.
Honeywell International, Inc.
Honeywell Transportation Systems
House of Representatives, Congress of the United States
Howard, P.
Hyundai America Technical Center
ICM Inc.
Insurance Institute for Highway Safety (IMS)
International Council on Clean Transportation (ICCT)
Investor Network on Climate Risk (INCR) - Ceres
Jaguar Land Rover North America, LLC (JLRNA)
Johnson Controls, Inc.
Kendall, A.
Kia Motors
Kobus, D.
League of Women Voters of Michigan
Magna E-Car Systems
Manufacturers of Emission Controls Association (MECA)
Marshall, C.
Marz, Loren C.
Mass Comment Campaign (1,121) (World Wildlife Fund)
Mass Comment Campaign (1,338) (Sierra Club-2)
Mass Comment Campaign (13,300) (National Wildlife Federation Action Fund-3)
Mass Comment Campaign (137 (Citizens for Pennsylvania's Future (PennFuture))
Mass Comment Campaign (15) (League of Conservation Voters)
Mass Comment Campaign (15) (Sierra Club-3)
Mass Comment Campaign (195) (Environment New Mexico-1)
Mass Comment Campaign (2,120) (Pew Environmental Group)
Mass Comment Campaign (2,156) (Environment Michigan)
Mass Comment Campaign (2,851) (Unknown Organization)
Mass Comment Campaign (20) (Union of Concerned Scientists-1)
Mass Comment Campaign (20,500) (Union of Concerned Scientists-3)
Mass Comment Campaign (213) (Environment Virginia)
Mass Comment Campaign (22,122) (Unknown Organization)
Mass Comment Campaign (262) (Environment New Mexico-2)
Mass Comment Campaign (27,108) (Unknown Organization
Mass Comment campaign (3,855) (National Wildlife Federation Action Fund-2)
Mass Comment Campaign (375) (Union of Concerned Scientists-2)
Mass Comment Campaign (39) (Unknown Organization)
Mass Comment Campaign (39,464) (Environmental Defense Fund (EDF))
Mass Comment Campaign (399) (Rhode Island Sierra Club)
Mass Comment Campaign (4,505) (Unknown Organization)
Mass Comment Campaign (45) (Environment Minnesota)
1-2
-------
National Program
Mass Comment Campaign (61) (The Social Justice Group)
Mass Comment Campaign (680) (PennEvironment)
Mass Comment Campaign (80) (Unknown Organization)
Mass Comment Campaign (9,570) (Unknown Organization)
Mass Comment Campaign (927) (Sierra Club-1)
Mass Comment Campaign (99) (Environment Texas)
Mass Comment Campaign (Multiple Submitters) (Unknown Organization)
Mazda North American Operations
Mehrotra, Rahul
Mercedes-Benz USA, LLC
Michigan House of Representatives, 49th District
Michigan State House of Representatives
Michigan State Senate, District 18
Miller, P.
Minnesota Department of Commerce
Mitsubishi Motors R&D of America, Inc. (MRDA)
Moravian College
Motor & Equipment Manufacturers Association (MEMA
National Association of Clean Air Agencies (NACAA)
National Automobile Dealers Association (NADA)
National Caucus of Environmental Legislators
National Propane Gas Association (NPGA)
National Wildlife Federation (NWF)
Natural Resources Defense Council (NRDC)
New Jersey Senate, Third Legislative District
New York City Council, 35th District
New York State Assembly Committee on Government Operations
New York State Senate, 26th District
Nissan North America, Inc.
Northeast States for Coordinated Air Use Management (NESCAUM)
Oblong Land Conservancy
Pennsylvania Department of Environmental Protection
Pennsylvania State Senate et al.
Pew Charitable Trusts
Porsche Cars North America, Inc. (PCNA)
Renewable Energy Long Island
Renewable Fuels Association (RFA)
Ross, D.
Salinas, A.
Securing America's Future Energy (SAFE)
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Society of the Plastics Industry, Inc. (SPI)
South Coast AQMD
State of New York The Assembly
Tarazevich, Yegor
Tesla Motors, Inc.
1-3
-------
EPA Response to Comments
The Catskill Center for Conservation and Development
Toyota Motor North America
U.S. Coalition for Advanced Diesel Cars
Union of Concerned Scientists (UCS)
United Automobile Workers (UAW)
United States Senate
United States Steel Corporation
United Steel Workers (USW)
Volkswagen Group of America
Volvo Car Corporation (VCC)
Weiner, L.
WESPAC Foundation
Whitefoot, K. and Skerlos, S.
Organization: Alexandria Hyundai
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 63.]
Along with my Hyundai colleague, I appreciate the effort on the part of all agencies in
developing feasible and harmonized national greenhouse gas and CAFE standards.
Organization: Alliance of Automobile Manufacturers
Two years ago the Alliance testified and commented in support of the model year (MY) 2012-16
greenhouse gas (GHG) and corporate average fuel economy (CAFE) rule and encouraged EPA,
NHTSA and the California Air Resources Board (CARB) to continue the single National
Program beyond MY 2016. We continue to support having a single National Program and
appreciate the agencies' efforts to pursue this goal. [EPA-HQ-OAR-2010-0799-9487-A1, p.3]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 95.]
Organization: Aluminum Association's Aluminum Transportation Group
We congratulate EPA and NHTSA on the outstanding body of work reflected in the NPRM.
[NHTSA-2010-0131-0226-Al,p. 1]
In sum, we want to thank the agencies for their continued emphasis on reducing fuel
consumption and GHG emissions and commitment to size-based standards. [NHTSA-2010-
0131-0226-Al,p. 4]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 219-220.]
1-4
-------
National Program
We recognize that developing a comprehensive national fuel economy regulation is a formidable
task with profound consequences, and we want to sincerely congratulate the agencies on the
outstanding job. We sincerely see it as an outstanding body of work and the conclusions are
realistic, attainable and will achieve our national objectives in energy so we think it's an
outstanding job and a credit to all of the agencies and individuals who are involved. It's been a
pleasure to work with the organizations.
Organization: American Chemistry Council (ACC)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 264-265.]
We do want to state on the record that we support the CAFE standards moving forward. We
think that they are aggressive but achievable.
The American Chemistry Council's plastics division would like commend both EPA and
NHTSA on its approach and on this proposal. We believe the proposal takes a huge step forward
in increasing fuel efficiency requirements in automobiles.
Organization: American Council for an Energy-Efficient Economy (ACEEE)
The American Council for an Energy-Efficient Economy (ACEEE) supports the light-duty fuel
economy and greenhouse gas rule proposed by NHTSA and the EPA for model years 2017-2025.
The proposal represents a very substantial reduction in fuel consumption and greenhouse gas
emissions relative to business as usual, as well as enormous saving at the pump for consumers.
The economic impacts of the rule will be substantial and net positive. [EPA-HQ-OAR-2010-
0799-9528-A2, p.l]
Conclusions
Notwithstanding the multiple recommendations we have made that we believe would strengthen
the final rule, we reiterate here our strong support for the proposed standards. We believe that the
joint work done by NHTSA and the EPA, along with the California ARB, has resulted in a
proposal that is highly significant and sound, from both policy and technical perspectives. We
thank the agencies for the opportunity to provide comments and hope that our comments can
help to bring about an even better final rule. [EPA-HQ-OAR-2010-0799-9528-A2, p.9]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 108-113.]
On behalf of ACEEE, I'm here to actively support the role of productive investments in more
energy-efficient technologies as they might positively improve the robustness of the U.S.
economy. In particular, we applaud the U.S. Environmental Protection Agency, the National
Highway Traffic Safety Administration, the administration more generally, and the State of
California for taking steps that will improve the fuel economy of our nation's light-duty vehicles.
1-5
-------
EPA Response to Comments
So in sum, the rule, we think, will drive further gains in gasoline vehicles and begin to pull
advanced technologies into the market. Cost-effective investments in more fuel-efficient vehicles
resulting from this rule should accelerate and optimize benefits, whether jobs, cleaner air and a
more robust economy, especially when we take recent consumer interest in fuel economy into
account.
Organization: American Honda Motor Co., Inc.
American Honda Motor Co., Inc. ("Honda") appreciates the efforts made by EPA and NHTSA to
create the single national program to address motor vehicle greenhouse gas emissions and fuel
economy standards for model years 2017 - 2025. [EPA-HQ-OAR-2010-0799-9489-A1, p. 1]
Honda supports the overarching goal of the NPRM, which is to establish a "coordinated and
harmonized approach" to implementing the Clean Air Act's mandate that EPA regulate motor
vehicle emissions, and the mandate in the Energy Policy and Conservation Act (EPCA) that
NHTSA regulate motor vehicle fuel economy. [EPA-HQ-OAR-2010-0799-9489-A1, p. 1]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17,2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 115-116.]
This NPRM builds upon the important foundation established by the seminal greenhouse gas and
CAFE standards adopted for the '12 to '16 model years. These newly proposed standards
represent an ambitious, challenging, and dramatic set of goals for most of the automobile
industry.
These proposed regulations set forth in the NPRM when harmonized with the proposed
regulations now under consideration in California have the potential to simplify and rationalize
OEM obligations throughout the United States. Without these harmonized regulations, there is a
significant risk that OEMs would face fragmented, conflicting and burdensome regulation of fuel
economy and greenhouse gases. There's a strong likelihood that the California regulations, which
likely would be adopted by additional states, would diverge from the Federal Regulations
resulting in a patchwork of standards that differed in stringency, testing requirements, and
flexibilities throughout the country.
Organization: American Lung Association
The American Lung Association is pleased that the U.S. Environmental Protection Agency seeks
to reduce these emissions from light-duty vehicles. The joint proposed Greenhouse Gas Emission
Standards and Corporate Average Fuel Economy Standards will reduce carbon dioxide emissions
to 163 grams per mile while mandating an average economy of 54.5 miles per gallon in 2025.
[EPA-HQ-OAR-2010-0799-9902-A2, p. 1]
While the proposed rule will have significant benefits, there are still areas of critical need.
Implementation of the proposed rule will benefit from improved testing and calculation of actual
vehicle emissions, reliable air quality impacts assessments of electric vehicles, and averted costs
associated with higher projected fuel costs. [EPA-HQ-OAR-2010-0799-9902-A2, p. 2]
1-6
-------
National Program
The American Lung Association again thanks the U.S. Environmental Protection Agency for
consideration of our comments and for the Agency's effort to curb the impacts of air pollution.
The American Lung Association urges the Agency to promulgate the proposed rule. The true
cost of pollution from mobile sources is paid in compromised human health. As such, the
proposed rule will help to reduce those costs. [EPA-HQ-OAR-2010-0799-9902-A2, p. 2]
Organization: American Lung Association of the Mid-Atlantic
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 80-82.]
American Lung Association of the Mid-Atlantic is pleased that the Environmental Protection
Agency and the National Highway Traffic Safety Administration have jointly proposed more
stringent national standards to reduce greenhouse gas emissions and to increase corporate
average fuel economy.
When implemented the new standards will be remarkable achievements.
We support the proposed rule, and we encourage EPA and NHTSA to promulgate a final rule
that achieves at least the degree of reduction in air pollutants as a proposal would accomplish.
Organization: American Medical Association of California
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 44-48.]
The American Lung Association in California applauds the collaborative effort put forth by the
Obama administration, the State of California, automakers and environmental stakeholders to
develop this proposal that we believe will have a lasting impact on improving public health. The
American Lung Association in California encourages the administration to pursue strong, clean
air programs to improve the health and air of not only Californians, but all Americans.
Increasing fuel economy standards to 54.5 miles per gallon in 2025 and tightening emissions
standards to halve greenhouse gas emissions by 2025 compared to today has the potential to
transform our nation's vehicles into a cleaner, more efficient fleet that will reduce our addiction
to oil, save consumers at the pump, provide expanded choices in cleaner vehicle technologies,
and at the same time, cut harmful emissions that endanger the public's health.
The new greenhouse gas and fuel economy standards are an important milestone in the fight
against climate change, air pollution and the serious public health impacts of our petroleum
dependency and consumption.
Therefore, we urge you to implement strong rules that will withstand any attempts to undermine
these goals.
Organization: American Suzuki Motor Corporation
1-7
-------
EPA Response to Comments
Suzuki Motor Corporation ('Suzuki') supports the concept of a harmonized national approach to
reducing greenhouse gas (GHG) emissions and improving fuel economy. [EPA-HQ-OAR-2010-
0799-9523-Al,p.l]
Organization: Applied Materials
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 198-201.]
But we are very supportive of the proposal that's being reviewed today; the NHTSA and EPA
proposal, and we applaud the Obama Administration for proposing these historic fuel economy
and greenhouse gas emission standards.
We believe that sound public policy can be a critical accelerator for industrial development, and
we think that's embodied in this current proposal.
No. 1, we do believe that sound science-based standards can drive innovation.
We think that the standards as proposed are achievable.
Lastly, again, in terms of industrial development, we're very supportive of the mile per gallon
standard and we believe it's important that there be a domestic industry in this sector as well.
And we think that while this is going to be a global effort, it's going to lead to our domestic
industry being stimulated as well.
Organization: Association of Global Automakers, Inc. (Global Automakers)
This notice of proposed rulemaking brings us another step closer to the goal of having a long
term harmonized national program. Global Automakers and its members have always endorsed a
comprehensive and harmonized national approach to reducing GHG emissions and improving
fuel economy. [EPA-HQ-OAR-2010-0799-9466-A1, letter p. 1]
We have been working diligently with the agencies, including the California Air Resources
Board, to create a harmonized program that meets our national environmental and energy
objectives while providing manufacturers the needed flexibility and lead-time to design and build
a full range of advanced technology vehicles that consumers want to buy. [EPA-HQ-OAR-2010-
0799-9466-A1, letter p. 1]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 65.]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 49-50.]
Global Automakers and its members have always endorsed a comprehensive and harmonized
national approach to reducing GHG emissions and improving fuel economy. The alternative of
-------
National Program
having to comply with a patchwork of state requirements would add significant costs resulting in
higher vehicle prices, with no corresponding environmental or energy security benefits. We have
been working with the Environmental Protection Agency (EPA), Department of Transportation's
(DOT) National Highway Traffic Safety Administration (NHTSA), and California Air Resources
Board (ARB) to create a program that meets national environmental and energy objectives while
providing manufacturers the flexibility and lead-time necessary to design and build advanced
technology vehicles that will provide consumers a full range of vehicle choices. This notice of
proposed rulemaking (NPRM) brings us another step closer to the goal of having a long term,
single national program. [EPA-HQ-OAR-2010-0799-9466-A1, p. 1]
Organization: Aston Martin Lagonda Limited, Lotus Cars Limited and McLaren Automotive
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-20 10-0799- 11 787, pp. 117-118.]
We all fully support the EPA and NHTSA proposal.
Organization: Biery-Hamilton, Dr. G.
I strongly support the proposed new fuel efficiency and greenhouse gas standards for cars and
trucks to require cars and trucks to an average 54.5 miles per gallon by model year 2025. [EPA-
HQ-OAR-2010-0799-9033-Al,p.l]
Together with the 'Phase One' model year 2012-2016 rule finalized in 2010, these tough new
standards would more than double America's average fuel economy and are expected to:
— Save families an estimated $8,200 in fuel savings over the lifetime of a new vehicle by 2025,
for a total of $1.7 trillion in national fuel savings over the life of the program.
— Reduce oil consumption by an estimated 2.2 million barrels a day by 2025 more than our daily
2010 oil imports from the entire Persian Gulf.
— Reduce carbon dioxide pollution by over 6 billion metric tons over the life of the program
equivalent to the emissions from the United States in 2010. [EPA-HQ-OAR-20 10-0799-903 3-
Generating less pollution, putting more money in consumers' wallets, easing our addiction to oil,
modernizing America's fleet of cars and trucks what's not to like? [EPA-HQ-OAR-20 10-0799-
9033-Al,p.l]
I am thrilled that this dramatic and bold proposal has earned the support of automakers,
autoworkers, national security groups, environmental groups, and many other key stakeholders.
And I am proud to add my support to this important rule. [EPA-HQ-OAR-20 10-0799-903 3 -Al,
p.l]
1-9
-------
EPA Response to Comments
I have a small child. Do you have children or grandchildren? If you love them and want them to
have a good future, you will support ANY measure to reduce the use of fossil fuels, and the
resulting CC>2 emissions. Furthermore, you will support policies to change our industrial farming
to reduce methane emissions, also, which change the atmosphere around the planet. [EPA-HQ-
OAR-2010-0799-9033-A1, p.l]
Organization: BlueGreen Alliance
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 58-60.]
The BlueGreen Alliance strongly supports the light-duty vehicle standards for model year 2017
to 2025 that will raise fuel efficiency to 54.5 miles per gallon, nearly double what today's fuel
efficiency standard is and limit the greenhouses gas emissions as it's been noted to 163 grams per
mile.
We also request continuing federal programs to support these auto industry efforts in retooling to
meet the demand for cleaner, more efficient cars.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 60-61.]
This is a unique opportunity to fulfill your commitments to create American jobs, protect
consumers whether they drive a car or truck from high gas prices and to cut America's
dependence on foreign oil. Our 15 BlueGreen Alliance partners and their 15 million members are
committed to promoting the fact that green auto jobs are a win-win for all Americans, and we're
committed to raise awareness among consumers of the significance of these fuel-saving
technologies.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 37-40.]
We strongly support the proposed vehicle standards, which are a great example of how we can
achieve simultaneous progress on our economic and environmental challenges. The proposed
standard offers the opportunity to create quality manufacturing jobs, to reduce our reliance on
imported energy, to reduce our vulnerability to crude oil price volatility, to lean the air and
reduce the accumulation of heat-trapping gases in the atmosphere, and to improve our energy
security and national security.
While job creation is a paramount concern, we should not discount the other benefits that the
proposal will consider. Jf we are ever to make meaningful progress on our imported energy
dependency and avoid accelerated climate destabilization, we will need well-conceived policies
such as these.
Organization: BMW of North America, LLC
1-10
-------
National Program
BMW is committed to working constructively with both EPA and NHTSA to continue a Single
National Program for MYs 2017 through 2025 that also realizes the aggressive greenhouse gas
reductions sought by the State of California in this timeframe. [EP A-HQ-OAR-2010-0799-9579-
Al,p. 1]
The continuation of Single National Program is critical to BMW's ability to plan, design, and
build the most efficient vehicles for all of America. [EPA-HQ-OAR-2010-0799-9579-A1, p. 1]
BMW is committed to delivering sustainable products and supports such standards because we
think it is the right step in order to successfully address the global environmental challenge
facing all nations. [EPA-HQ-OAR-2010-0799-9579-A1, p. 2]
In keeping with our corporate commitment to reduce vehicle greenhouse gas (GHG) emissions,
BMW commends both EPA and NHTSA for their efforts to continue to refine the program
established for MYs 2012 through 2016 that permits automakers to build a single light duty
national fleet, satisfying the requirements of each Agency program as well as those of the State
of California. We also greatly appreciate the efforts of the State of California to ensure this
outcome. A Single National Program is critical for us so we can plan, design, and build the most
efficient vehicles for all of America. [EPA-HQ-OAR-2010-0799-9579-A1, p. 2]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11788, p. 78.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11788, pp. 78-79.]
We commend both the EPA and the NHTSA for the efforts to continue to refine the program that
was previously established for model years 2012 to 2016.
And that program permits auto makers to build a single light-duty national fleet supplying the
requirements of each agency program as well as those of the State of California.
Achievable greenhouse gas emission reductions and commensurate fuel economy increases
depends on both designing more fuel-efficient vehicles and increasing market demand for such
vehicles. We can build the vehicles, but consumers must buy them.
A comprehensive emission reduction policy needs to consider all aspects, most importantly
consumer demand.
In conclusion, the BMW Group is committed to working constructively with EPA and NHTSA
to continue a single national program for model years 2017 to 2025.
We very much appreciate the efforts of the State of California to ensure the continuation of a
single national program going forward.
Organization: Borg Warner, Inc.
1-11
-------
EPA Response to Comments
BorgWarner would first like to commend the EPA and NHTSA for their combined efforts to
continue to harmonize these footprint-based standards and give the automotive industry some
much needed long term clarity. [EPA-HQ-OAR-2010-0799-9320-Al, p. 1]
As a global technology leader focused on improving fuel economy and reducing emissions,
BorgWarner has experienced what can be achieved in other parts of the world and we are eager
to help the U.S. market reach the new standards. [EPA-HQ-OAR-2010-0799-9320-A1, p. 1]
In closing, BorgWarner is supportive of the EPA's and NHTSA's efforts and sees the proposal as
a major step forward in our desire for energy independence and reduced CO2 emissions. We urge
the EPA and NHTSA to revisit the proposed rulemaking to ensure it is purely performance
based, technology neutral and uses accurate measurement and calculation methods. The
marketplace will see the real world results, making the auto industry more stable, globally
competitive and a larger contributor to achieving our nation's goals. [EPA-HQ-OAR-2010-0799-
9320-A1, p. 2]
Organization: Business for Innovative Climate & Energy Policy (BICEP)
As major U.S. businesses representing nearly 500,000 American jobs and over $100 billion in
annual revenue, we are writing to voice our strong support for the proposed Greenhouse Gas
(GHG) Emissions and Corporate Average Fuel Economy (CAFE) Standards. These standards
represent a critical opportunity to strengthen our economy by creating jobs, benefiting the U.S.
auto industry, saving consumers and businesses money on fuel, and reducing greenhouse gas
emissions. [EPA-HQ-OAR-2010-0799-9450-A1, p. 1]
As successful American businesses, we know the importance of recognizing and seizing
opportunities. This rulemaking is a rare opportunity to strengthen our economy, save consumers
and businesses money, create jobs, and mitigate climate risk. We urge the adoption of the
strongest possible fuel economy and GHG standards. [EPA-HQ-OAR-2010-0799-9450-A1, p. 2]
Organization: California Air Resources Board (CARB)
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket number EPA-HQ-OAR-2010-0799-11787, pp. 11-12.]
As you know, the results of our efforts reveal the enormous benefits of the proposed greenhouse
gas standards. Greenhouse gas emissions of 2025 models will be a third lower than those of
2016. Fuel savings will be so substantial that the total cost of owning and operating a low
greenhouse gas vehicle will be less than it is today, despite the higher initial cost of the vehicle.
And the fuel savings means money that would have gone overseas to produce petroleum will
stay in our country where it will be spent and create new jobs for Americans. This is truly a win-
win proposal that will benefit America.
[These comments were submitted as testimony at the San Francisco, California public hearing
on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 12-13]
1-12
-------
National Program
As part of our effort to ensure a national program, CARB has committed to accept compliance
with the EPA greenhouse gas standards as compliance with our state standards. Once this occurs,
hopefully by this summer, CARB will hold another hearing to consider a regulatory provision to
formalize our commitment allowing compliance with EPA standards to fully satisfy the states'
regulation. This is the same process and sequence of events we followed to allow EPA's
compliance with 2012 to 2016 greenhouse gas standards to satisfy CARB standards for those
years. Our intent is clear from our proposal and it will be memorialized in a formal resolution
that would go before our board later this week.
Organization: Capozzelli, J.
The proposed fuel-efficiency and greenhouse gas standards for passenger vehicles and light
trucks are a good step in reducing dangerous global warming, increasing national security and
improving our economy. Compared to business as usual, they will prevent millions of tons of
global warming emissions, save consumers billions of dollars at the gas pump and reduce
America's dependence on dirty fossil fuels. [NHTSA-2010-0131-0221-A1, p.l]
We can no longer afford to pass up this tremendous opportunity. Setting fuel efficiency
standards, because curbing global warming pollution from our transportation sector is one of the
easiest and most effective ways to slow the quickening pace of climate change. [NHTSA-2010-
0131-0221-Al,p.l]
Please adopt the strongest possible standards and close the SUV loophole. We must reduce
carbon pollution from our cars, not increase it.
Organization: Center for Biological Diversity
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 214-216.]
We really appreciate the effort of the EPA in the sense that it should be ruled, and it's a laudable
effort.
Organization: CEO Pipe Organs/Golden Ponds Farm
I support the proposed rule to increase fuel economy for new passenger vehicles to an average of
54.5 miles per gallon by 2025, which will allow cars and light trucks to drive farther on a gallon
of gas and reduce USA dependence on imported oil. The price of gas is once again squeezing the
budgets of USA families, who already are forced to cut back in other areas just to pay for basic
transportation needs. [EPA-HQ-OAR-2010-0799-9229-A1, p.l]
This spring, you set a goal of reducing oil imports by one-third this decade, and in November
you proposed fuel efficiency standards that will effectively double current requirements. I
commend your efforts. I believe it is important to increase USA investment in fuel efficient
1-13
-------
EPA Response to Comments
technologies, save consumers money at the pump, help this country break its dependence on
foreign oil, and protect the global environment. [EPA-HQ-OAR-2010-0799-9229-A1, p.l]
Do not let these standards be watered down. Protect and finalize the new fuel efficiency rules.
[EPA-HQ-OAR-2010-0799-9229-A1, p.l]
Organization: Ceres
As a national coalition of investors, environmental organizations and other public interest groups
working with companies to address sustainability challenges such as global climate change, we
are writing to voice our strong support for the proposed Greenhouse Gas (GHG) Emissions and
Corporate Average Fuel Economy (CAFE) Standards. [EPA-HQ-OAR-2010-0799-9475-A1, p.
1]
In sum, independent, credible analysis shows that the proposed standards will both benefit the
auto industry, especially the Detroit 3, and create jobs. In addition, the proposed standards will
spur innovation, reduce both our dependence on oil and climate risk, and save businesses and
consumers money. Accordingly, we urge the adoption of the strongest standards possible. [EPA-
HQ-OAR-2010-0799-9475-A1, p. 2]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 74-76.]
Organization: Chrysler Group LLC
Chrysler strongly supports a single, harmonized national greenhouse gas and fuel economy
performance standard ("National Program") that allows manufacturers to build "a single fleet of
U.S. vehicles that [will] satisfy all requirements under both programs as well as under
California's [greenhouse gas] program, helping to reduce costs and regulatory complexity while
providing significant energy and environmental benefits." In its letter of support for the proposed
2017-2025 model year ("MY") National Program, Chrysler committed to the proposed standards
as substantially described in the agencies' August 2011 Supplemental Notice of Intent. [EPA-
HQ-OAR-2010-0799-9495-A1, p. 1]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 52-53.]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 25.]
This rulemaking builds upon the landmark Federal greenhouse gas and CAFE program for model
year ("MY") 2012-2016 light-duty vehicles, referred to as the "National Program". Chrysler has
long supported both the original National Program and this extension to it. [EPA-HQ-OAR-
2010-0799-9495-A1, p. 5]
1-14
-------
National Program
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 51.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 57-60.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 24-25.]
Chrysler recognizes the benefit for the country of continuing the national program to address fuel
economy and greenhouse gases. EPA and NHTSA began this program in 2009 with standards for
model years 2012 through '16, and now the agencies are continuing for model years 2017
through '25.
Chrysler supports the goals of the program.
The foundation principles are: (1) strong performance requirements, (2) a midterm review to
assess customer acceptance, and (3) a broad use of incentives to encourage technology
innovations and early integration into production vehicles.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 52-53.]
However, Chrysler fully supports the goals of this program. Sergio Marchionne, our CEO is also
the CEO of Fiat, which is the industry's fuel economy leader in Europe. He understands and
endorses these commitments and is determined to pursue the product actions necessary for
Chrysler to meet these 2017 and beyond goals.
Chrysler will support the final rules if they reflect the commitments and the foundational
principles of the framework agreement. These foundational principles are one, strong
performance requirements; two, a mid-term review to assess customer acceptance; and, three, the
broad use of incentives to encourage technology innovations and early integration into
production vehicles.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 55.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 62.]
In conclusion, I reiterate Chrysler's support for a single harmonized national standard for fuel
economy and greenhouse gas emissions.
Organization: Climate Institute
1-15
-------
EPA Response to Comments
I am writing in support of the strong fuel-efficiency and carbon pollution standards for new cars
and trucks. Having been the scientist whose brief Justice Stevens cited in his majority opinion in
Massachusetts et al. v. EPA to justify granting standing, I would reiterate that the damages
occurring now and projected in the future as a result of greenhouse gas emissions are significant
and the risk of much more severe conditions ahead is very great. [EPA-HQ-OAR-2010-0799-
7944-A1, p. 1]
As my brief also made clear, the transport sector is a key contributor to CC>2 emissions and they
must be reduced. Greatly increasing the mileage standards is a critical step and I urge you to
move forward. [EPA-HQ-OAR-2010-0799-7944-Al, p.l]
Organization: Consumer Federation of America (CFA)
A LANDMARK POLICY SUPPORTED BY AN UNPRECEDENTED CONSENSUS
Seven Presidents have declared the goal of reducing U.S. dependence on oil, but little progress
has been made. Statements at the public hearings held by the National Highway Traffic Safety
Administration (NHTSA) and the Environmental Protection Agency (EPA) on the recently
proposed auto standards for 2017-2025 indicate a remarkable shift in the policy landscape with
the emergence of an unprecedented consensus in support of fuel economy standards that would
double the efficiency of cars and trucks in less than two decades and dramatically reduce oil
consumption and imports. [EPA-HQ-OAR-2010-0799-9419-A1, p. 1]
Public witnesses say and consumer advocates present survey and behavioral evidence that
consumers want and will pay for more fuel efficient vehicles.
Automakers and auto workers say they can and will manufacture those vehicles.
National security experts and environmentalists say the nation will benefit from the standards.
The only stakeholder that does not seem "to get" it is the National Automotive Dealers
Association. [EPA-HQ-OAR-2010-0799-9419-Al, p. 1]
Over the course of a decade, the growing public concern about gasoline and its burden on
household budgets drove a policy consensus in support of higher standards. This consensus
includes not only almost all of the stakeholders in the industry, but it also crosses the federal and
state levels, all branches of government, and both political parties. [EPA-HQ-OAR-2010-0799-
9419-Al,p. 1]
These comments and the attached Technical Appendices explain why the standards have earned
such widespread support and why the concerns of the dealers, genuine though they may be, are
unfounded. We present over a dozen reasons that the standards will benefits consumers, the
economy, national security, and the environment. [EPA-HQ-OAR-2010-0799-9419-A1, p. 1]
The future of the auto industry lies in developing and delivering more fuel efficient vehicles. The
future of the American economy lies in using energy much more efficiently. The proposed
1-16
-------
National Program
standards will help to ensure that the U.S. auto industry and the U.S. economy successfully
negotiate the transition. These comments show that because these fuel economy standards are the
most important energy policy in a quarter of century, they deserve the remarkable national
consensus support they have received. [EPA-HQ-OAR-2010-0799-9419-A1, p. 1]
CONSUMER GROUP COMMENTERS AND APPROACH
The Consumer Federation of America (CFA) and 23 of its member groups appreciate the
opportunity to submit comments on the proposed standards for cars and light duty trucks. As
summarized in Exhibit S-l, we have been actively involved in this important area of energy
policymaking at both the federal and state levels. Over the past seven years, CFA has issued
dozens of reports on the technology, auto market behavior and consumer economics of auto fuel
economy, as well as conducted numerous surveys on consumer attitudes about gasoline
consumption and fuel economy standards. [See Exhibit S-l on p. 2 of Docket number EPA-HQ-
OAR-2010-0799-9419-A1] [EPA-HQ-OAR-2010-0799-9419-A1, p. 1]
CFA has analyzed the economics of fuel economy and monitors the development of fuel
economy standards in an effort to ensure that policymakers set a standard that is good for
consumers and the nation. These comments build on that background and incorporate several of
the early analyses as technical appendices. The comments launch from and focus on the key
factors that impact the consumer, but also reflect the factors that affect the industry and the
conditions that Congress has required the agencies to take into account in the rulemaking. The
following list summarizes the analyses we have conducted to reach the conclusion that the
proposed standards will benefit consumers. The Roman numerals identify the section in the
technical appendix in which data is presented addressing each issue. [EPA-HQ-OAR-2010-0799-
9419-Al,p. 1]
I. CONSUMER REALITY: CONSUMERS NEED MORE FUEL EFFICIENT VEHICLES
Over the past decade, gasoline prices have gyrated wildly around a strong upward trend. Exhibit
S-2 shows the average annual expenditure on vehicle ownership (new and used vehicles)
compared to the expenditure on gasoline, as reported in Bureau of Labor Statistics' annual
Consumer Expenditure Survey. [See Exhibit S-2 on p. 3 of Docket number EP A-HQ-OAR-2010-
0799-9419-A1] [EPA-HQ-OAR-2010-0799-9419-Al, p. 3]
Gasoline prices set a record high in 2011 averaging $3.53 per gallon. The average price for
January 2012 was the highest on record for the month of January. [EPA-HQ-OAR-2010-0799-
9419-Al,p. 3]
Household gasoline expenditures set a record last year, reaching an average of over $2,850 per
year. [EPA-HQ-OAR-2010-0799-9419-Al, p. 3]
Rising gasoline prices have changed the structure of the cost of driving. Ten years ago, the
average cost of owning a vehicle was the largest single component of the cost of driving. Today,
the average cost of owning a vehicle has come down approximately 20% and the cost of gasoline
has tripled. [EPA-HQ-OAR-2010-0799-9419-A1, p. 3]
1-17
-------
EPA Response to Comments
In 2011, the cost of gasoline will equal or exceed the cost of owning the vehicle for the first
time. [EPA-HQ-OAR-2010-0799-9419-A1, p. 3]
In 2011, gasoline expenditures were 40 percent higher than expenditures on home energy
(electricity, natural gas and heating oil); ten years ago, they were 13% lower. [EPA-HQ-OAR-
2010-0799-9419-A1, p. 3]
II. CONSUMERS ATTITUDES: CONSUMERS WANT MORE FUEL EFFICIENT
VEHICLES AND SUPPORT FUEL ECONOMY STANDARDS.
Given the burden on household budgets and the continuing problem of oil vulnerability, it is not
surprising to find that 75 percent or more of respondents to our public opinion polls: [EPA-HQ-
OAR-2010-0799-9419-A1, p. 4]
• are concerned about gasoline prices and dependence on Mid-East oil;
• think it is important to reduce oil consumption; and,
• support higher fuel economy standards as a good way to do so.
• In fact, almost two-thirds of the respondents support a 60 mile per gallon standard with a
payback period of 3-5 years and think it will be good for automakers. [EPA-HQ-OAR-
2010-0799-9419-A1, p. 4]
Exhibit S-3 shows widespread support for fuel economy standards that are even higher than
those proposed by NHTSA-EPA in a national random sample poll of over 2000 respondents.
Substantial majorities support standards across different types of states and the political
spectrum, even with payback periods often years. [See Exhibit S-3 on p. 4 of Docket
number EPA-HQ-OAR-2010-0799-9419-A1] [EPA-HQ-OAR-2010-0799-9419-A1, p. 4]
III. CONSUMER BEHAVIOR: CONSUMERS HAVE SHOWN THEY ARE WILLING TO
PAY FOR MORE FUEL EFFICIENT VEHICLES
Consumers don't just say they want more fuel efficient vehicles—they have shown they are
willing to buy them. Looking at the total light duty markets (cars and light trucks) between 2004,
the year when the worst price increases began, and 2011, the market shares of:] [EPA-HQ-OAR-
2010-0799-9419-A1, p. 5]
• cars increased from 48% to 59% of all vehicles,
• 4-cylinder engines increased from 28% to 48%,
• the use of variable transmissions and the number of gears has increase dramatically, and
• sales of small and mid-sized SUVs increased by more than one-third to almost 21% of all
vehicles sold, while large SUVs dropped by 70% to less than 2% of vehicles sold.
Looking at cars only, [EPA-HQ-OAR-2010-0799-9419-A1, p. 5]
• hybrids increased from less than 1% of cars sold to more than 6%, but
• small cars remained constant at 47% of all cars sold. [EPA-HQ-OAR-2010-0799-9419-
Al,p.5]
1-18
-------
National Program
THE EMERGENCE OF A NATIONAL POLICY CONSENSUS
The reality of soaring consumer expenditures on gasoline and the response by consumers in the
marketplace provides the context for the dramatic shift in public policy and the growth of a
political consensus over the first decade of the 21st century. Although the gasoline price spike of
2000-2001 proved to be a blip, compared to later developments, it got the attention of the public
and policy makers. [EPA-HQ-OAR-2010-0799-9419-A1, p. 14]
At least since the National Academy of Sciences concluded in 2002 that technologies exist to
dramatically increase fuel economy at manageable costs, the public policy debate has been about
how far and how fast the fuel economy of the vehicle fleet can be raised. In the early 2000s,
California exercised its authority under the Clean Air Act to propose new standards to cut
emissions from automobiles, which have the effect of also increasing fuel economy. When 13
states and the District of Columbia adopted the Clean Cars Program, they created a market that
ranks in the top five in the world and gave a big push to raising standards. 1 The automakers
could not ignore such a market. [EPA-HQ-OAR-2010-0799-9419-A1, p. 15]
The much more dramatic price spikes of the middle of the decade moved concerns about
gasoline consumption to center stage, so much so that President Bush made a dramatic statement
about it in his 2006 State of the Union Address by declaring "here we have a serious problem:
America is addicted to oil, which is often imported from unstable parts of the world. The best
way to break this addiction is through technology."2 Democrat and Republican legislators,
federal and state policy makers as well as all three branches came together to support a
significant increase in fuel economy standards. [EPA-HQ-OAR-2010-0799-9419-A1, p. 15]
In response, Congress, with Republican majorities in both houses, enacted the Energy
Independence and Security Act of 2007 (EISA). The law, which both the Bush administration
and the Obama administration moved quickly to implement, reformed and improved the
approach to standards and restarted the process of setting standards, after almost three decades in
which the fuel economy standards program had been essentially dormant. [EPA-HQ-OAR-2010-
0799-9419-A1, p. 15]
Congressional action significantly improved the approach to standard setting in several ways.
For example, by requiring NHTSA to set an attribute-based standard, the incentive to downsize
the fleet is reduced. Authorizing several forms of flexibility promotes efficiency in meeting the
standard. Incentives encourage development of new technologies. The momentum for higher
standards was reinforced by the courts and legal action. A Supreme Court decision upholding the
authority of the U. S. Environmental Protection Agency (EPA) to regulate greenhouse gasses as
a pollutant strengthened federal authority. The federal government supported the Clean Cars
program and the courts upheld state authority. [EPA-HQ-OAR-2010-0799-9419-A1, p. 15]
The Obama Administration has used Executive Branch authority to improve the overall process.
The White House issued an executive order that required EPA and NHTSA to coordinate with
each other and the California Air Resources Board—coordination that immediately led to
increases in the standard that will save consumers over $35 billion in the 2012-2015 period
1-19
-------
EPA Response to Comments
alone. The ongoing effort to set a long-term standard responds to the oft repeated observation
that the auto industry needs time to adapt. [EPA-HQ-OAR-2010-0799-9419-Al, p. 15]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 42.]
The simple fact of the matter is that with every scenario considered by the two agencies the
benefits vastly exceed the costs, and everyone gets that. That's why you heard labor, you have
heard the environmentalist, you've heard automakers and you've heard consumers support this
program.
Simply put, these standards may well be the most important energy policy of the last quarter of a
century. They are a win-win-win for consumers, for the economy, for national security and the
environment.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 58.]
The proposed standards will deliver major economic security, air quality benefits to consumers
and the nation while putting the U.S. auto industry back on the path to global success.
We are not alone in the support of this standard. Consumers, automakers and autoworkers
recognize the important need for achievability of more fuel-efficient vehicles.
It is remarkable that 13 of the 16 major car manufacturers support these standards. Clearly, they
know they can manufacture the vehicles that meet the standard, and they understand it's what
their consumers want and will pay for.
The only major opponents of this consumer-backed policy are the car dealers. Their opposition
shows what I believe to be an incomprehensible reaction to the desires of their customers, the
capability of manufacturers that they sell the cars for, and the critically important need to reduce
our dependency on foreign oil. So we appreciate the opportunity to respond to our good friends
in the auto dealers community.
1 The Clean Cars states (Arizona, Connecticut, Washington D.C., Florida, Maine, Maryland,
Massachusetts, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, and
Washington), account for 40% of U.S. registered vehicles (Bureau of the Census,
STATISTICAL ABSTRACT OF THE UNITED STATES
http://www.census.gov/compendia/statab/2006/transportati on/motor_vehicle_registrations/)
making the market larger than all markets except the rest of the U.S., the European Union and
Japan,
2 'Here we have a serious problem: America is addicted to oil, which is often imported from
unstable parts of the world. The best way to break this addiction is through technology,' he said,
1-20
-------
National Program
adding that technological advances will help achieve a 'great goal: to replace more than 75
percent of our oil imports from the Middle East by 2025." http://articles.cnn.com/2006-01-
31/politics/sotu.energy_l_oil-prices-oil-imports-big-oil?_s=PM:POLITICS
Organization: Consumer Reports
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 168-169.]
In summary, we support the proposed fuel economy standards because in addition to achieving
national security and environmental goals, they will save consumers thousands of dollars, and
improve the selection of fuel efficient and alternative fuel vehicles and maintain the range of
wide vehicle options.
Organization: Consumers Union
Introduction
Consumers Union supports the proposed Corporate Average Fuel Economy (CAFE) standards
and recommends that the National Highway Traffic Safety Administration (NHTSA) and the
Environmental Protection Agency (EPA) move forward to update the program for 2017-2025 to
build upon the progress made in the last CAFE rulemaking for model years 2012-2016. While
we believe a higher CAFE target, particularly for light trucks, would drive even greater fuel
savings and technological advancement, the proposed target is reasonable and provides excellent
value for consumers. [EPA-HQ-OAR-2010-0799-9454-A2, p.l]
Comments
I. Consumers benefit from the proposed standards
Improving fuel economy standards serves important national security, economic, and
environmental goals and provides outstanding consumer benefits. Requiring better fuel
efficiency from every auto manufacturers' fleet will drive innovation, provide more certainty for
investment in cleaner and more efficient technologies, and help erode the price premium often
charged for superior fuel economy. Right now, many automakers charge more for more fuel
efficient versions of certain vehicles,2 and hybrid power trains often run thousands of dollars
more expensive than their traditional counterparts. Improving fuel economy standards will spur
greater investment and deployment of more efficient gasoline engines and create incentive for
improvements in battery technology that will lower costs and improve performance of electric
and hybrid-electric power trains. [EPA-HQ-OAR-2010-0799-9454-A2, pp. 1-2]
In conclusion, Consumers Union commends NHTSA and EPA for developing robust, forward-
looking CAFE standards that should yield substantial consumer benefits and encourages the
agencies to head off and monitor any compliance strategies that undermine the projected
benefits. A more efficient fleet will save consumers thousands of dollars in fuel costs, improve
selection of fuel efficient and alternative fuel vehicles, and maintain a range of options across
1-21
-------
EPA Response to Comments
vehicle class. Thank you for considering our views. [EPA-HQ-OAR-2010-0799-9454-A2, pp.7-
8]
2 - Examples include the Ford Fiesta SFE, Ford Focus SFE and Honda Civic HF.
Organization: Delphi Corporation
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17,2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 108-112.]
We support the continuation of a national program that incorporates energy efficiency and
emission reduction benefits, while remaining technology neutral without favoring selective
approaches.
Again, we feel a national program that incorporates energy efficiency and emission reduction
benefits should remain technology neutral. I think you can see that Delphi has taken this
approach in order to provide its customers the broadest range of technologies to meet their
individual requirements.
Organization: Detroit NAACP
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 139.]
We applaud the EPA, NHTSA as well as DOT as well as California and the Obama
Administration for taking another large step along a long road to sustainable transportation
systems.
Organization: E100 Ethanol Group
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 202.]
The El 00 Ethanol Group fully supports the objectives of this program as evidenced by the White
House graphic released last July.
Organization: Eaton Corporation
Our comments are meant to strike a balance between GHG reduction goals and the economic
realities of the U.S. automotive and transportation industries, taking into account the diverse
goals of all stakeholders ranging from original equipment manufacturers (OEM), automotive
technology suppliers, dealers and environmental advocates. We believe that the framework
outlined in the NPRM is a good step toward a final regulation that will drive innovation and
1-22
-------
National Program
foster both technology and competition, while maintaining fleet diversity and incentivizing over-
achievement of emissions and fuel economy targets. [EPA-HQ-OAR-2010-0799-9494-A1, p. 2]
We hope that our comments contribute to the current framework outlined in the NPRM and lead
to a final regulation that will drive innovation and foster both technology and competition, while
maintaining vehicle performance, safety and affordability. [EPA-HQ-OAR-2010-0799-9494-Al,
p. 3]
Organization: Ecology Center
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 191.]
Beyond the direct benefits of the standard, the Ecology Center would like to commend the EPA
and NHTSA on its successful negotiation that is reflected in the standards we are discussing here
today. It is no small feat to be able to bring together such a broad representation of interests
including the automotive, environmental and consumer groups as well as the State of California
to negotiate a rule that all parties can support. We believe it is important to recognize the
successful process that the agencies have managed and led, including the cooperation between
the two agencies itself.
Organization: EcoMotors International, Inc.
EcoMotors supports continuation of a coordinated National Program to reduce GHG emissions
and improve fuel economy, and generally supports the manner in which the agencies have
proposed to harmonize their regulations. [EPA-HQ-OAR-2010-0799-9594-A2, p. 1]
Organization: Edmunds.com
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 100.]
I'd like to first note that the Edmunds.com agrees with the motivation behind the proposed CAFE
standards; that is, we agree it is necessary for the government to intervene in the market in order
to significantly reduce vehicle emissions and increase reliance on foreign oil.
Organization: Electric Drive Transportation Association
EDTA supports many aspects of this proposal, including the zero-emissions compliance value
and the inclusion of a multiplier for electric drive vehicles. These incentives will enable
manufacturers to accelerate the development and deployment of electric drive technologies,
which will give consumers a wide array of vehicle choices, while also helping to reduce
emissions and reduce our dependence on petroleum fuels. [EPA-HQ-OAR-2010-0799-9449-Al,
p. 1]
1-23
-------
EPA Response to Comments
We urge EPA and NHTSA to finalize a rule that retains strong incentives for electric drive
vehicles, while also addressing the specific concerns raised in these comments. [EPA-HQ-OAR-
2010-0799-9449-A1, p. 7]
Organization: Environmental Defense Fund (EDF)
We applaud the collaboration between EPA, NHTSA, auto companies, the workers that forge
cleaner cars and the state of California in building this proposal, together, through tough
negotiations and an abiding commitment to a common good for our nation. The success of this
collaboration is reflected in the broad support for this rule from small businesses, consumers,
veterans, national security experts, and many more across our land. [EPA-HQ-OAR-2010-0799-
9519-Al,p.2]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 171.]
In 2010, NHTSA and EPA together finalized the first-ever joint greenhouse gas and fuel
economy standards for light-duty vehicles - a laudable achievement. The Agencies estimate that
the standards for MY2012-2016 cars and light trucks will save consumers more than $3000 over
the lifetime of a 2016 vehicle. The rule is also expected to reduce GHG emissions from the light-
duty fleet by approximately 21 percent by 2030 and save 1.8 billion barrels of oil over the
lifetime of the fleet. 12 [EPA-HQ-OAR-2010-0799-9519-A1, p.3]
Following this first phase of fuel economy and GHG standards, in a May 2010 Presidential
Memorandum, President Obama requested that EPA and NHTSA continue a coordinated
National Program to improve fuel efficiency and reduce greenhouse gas emissions of light-duty
vehicles for MY2017-2025. The President stated that the second phase should "seek to achieve
substantial annual progress in reducing transportation sector greenhouse gas emissions and fossil
fuel consumption" and "strengthen the industry and enhance job creation in the United States." 13
In this proposal the agencies estimate the second phase of the National Program will save
approximately 4 billion barrels of oil and 2 billion metric tons of GHG emissions over the
lifetimes of those vehicles sold in MY 2017-2025. The agencies also estimate that the fuel
savings will far outweigh higher vehicle costs, and that the net benefits to society of the proposed
standards will be as much as $421 billion over the lifetime of MY 2017-2025 vehicles. 14 [EPA-
HQ-OAR-2010-0799-9519-A1, p.3]
If finalized, these standards, together with MY 2012-2016 standards, will create a formidable
National Program that will greatly reduce our reliance on foreign oil and our contribution to
climate altering greenhouse gas emissions, while saving Americans over a trillion dollars. [EPA-
HQ-OAR-2010-0799-9519-A1, p.3]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 287.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 172-173.]
1-24
-------
National Program
The proposed rule under consideration today will help to provide energy security, economic
security and climate security for our nation. Increasing the efficiency of our passenger fleet is
one of the single most effective solutions we can employ to reduce our dependence on oil, and
will likely be President Obama's greatest climate and energy security legacy.
Organization: Ferrari
Ferrari appreciates the efforts made by EPA and NHTSA to work closely together and with
CARB in order to develop a proposal for a single coordinated national program (herewith
National Program) to regulate greenhouse gases and fuel economy for the period MYs 2017-
2025, as it was done for the final rule for MYs 2012-16. This is a prerequisite that allows auto
manufacturers to build a single national light-duty fleet that would comply with both the GHG
and the CAFE standards, and also with CARB GHG regulation. [EPA-HQ-OAR-2010-0799-
9535-A2, p.10]
We deem it is essential to have federal regulations on these important topics, to avoid a
patchwork of different State rules. Accordingly, it is necessary that, once the National Program is
adopted as final rule, the California will accept the compliance with it and no other State rules on
this subject will be enacted in the future years. [EPA-HQ-OAR-2010-0799-953 5-A2, p. 10]
It is important to define regulations which do not penalize certain types of vehicles, and
manufacturers to allow consumers to choose from the same mix of vehicles that are currently in
the marketplace. [EPA-HQ-OAR-2010-0799-9535-A2, p. 10]
CC>2 emissions and fuel economy are strictly related to each other. Therefore, we appreciate the
effort of EPA and NHTSA to harmonize the corresponding regulations to the greatest extent
feasible, taking into account the respective statutory obligations. Hopefully such harmonization
should be extended to the provisions reserved to small-volume manufacturers and small business
entities. [EPA-HQ-OAR-2010-0799-9535-A2, p. 14]
Organization: Fisker Automotive, Inc.
Fisker Automotive applauds EPA and NHTSA for their leadership in establishing a National
Program that jointly reduces greenhouse gas emissions and improves fuel economy in the light-
duty fleet. This is an important step the builds upon the groundbreaking May 7, 2010 rule to
establish fleet greenhouse gas emissions and fuel economy standards for model years 2012-2016.
[EPA-HQ-OAR-2010-0799-9266-A1, p. 1]
Fisker believes that protecting the environment and the nation's energy security are important
goals that play an increasingly prominent role in car buying decisions. We also believe that car
buyers would like to reduce their impact without compromising the performance, luxury, or
freedom that they expect from today's cars. [EPA-HQ-OAR-2010-0799-9266-A1, p. 1]
We remain overall strongly supportive of both agencies' efforts to reduce emissions and fuel
consumption, and urge them to allow our company to fully participate in these efforts as soon as
reasonably possible. [EPA-HQ-OAR-2010-0799-9266-Al, p. 5]
1-25
-------
EPA Response to Comments
Organization: Ford Motor Company
Just over two years ago we provided comments on the regulation that harmonized greenhouse
gas emissions and CAFE standards for passenger cars and light duty trucks for model years 2012
through 2016. At that time we encouraged the Agencies to continue to work together to ensure
continuation of the harmonized requirements beyond 2016. This proposal seeks to achieve that
goal. We applaud the combined efforts of EPA and NHTSA in the development of a joint
proposal to extend One National Program. Only a harmonized, nationwide set of GHG and fuel
economy standards will enable manufacturers to plan and invest for the future with confidence.
[EPA-HQ-OAR-2010-0799-9463-A1, p. 1]
While the new requirements go far beyond the first regulation, both in the timeframe covered as
well as the challenges they pose for our industry, we support the national goals for greenhouse
gas reduction and energy independence that have driven these aggressive targets. [EPA-HQ-
OAR-2010-0799-9463-A1, p. 1]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 42-43.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 30-31.]
We applaud the combined efforts of the EPA and NHTSA, as well as the California Air
Resources Board. This proposal provides our industry both the single program moving forward,
as well as the regulatory framework that enables manufacturers to plan and invest for the future
with confidence.
As a result, we are continually investing in our product strategy to improve the fuel economy and
reduce the greenhouse gas emissions of our fleet.
Starting this year, one-third of our vehicle line up will offer a model that achieve at least 40
miles per gallon.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 43.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 30-31.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 10-11.]
The standards proposed are aggressive, but so are the demands from our customers for greater
fuel efficiency.
Organization: General Motors Company
1-26
-------
National Program
General Motors Company recognizes the benefits to the country and to vehicle manufacturers of
continuing the National Program to address fuel economy and greenhouse gases that the
Environmental Protection Agency (EPA) and the National Highway Traffic Safety
Administration (NHTSA) began in 2009 with the standards for model years 2012 through 2016,
and that those agencies are proposing to continue for 2017 and later model years. As indicated in
our comments at the January 17, 2012 public hearing in Detroit, General Motors Company
supports the proposal and hopes it serves as the basis for a continued National Program. [EPA-
HQ-OAR-2010-0799-9465-A1, p. 2]
The agencies' have crafted a proposal that is consistent with the intent of the framework
announced by the administration on July 29, 2011. We commend the technical staffs of both
agencies for working together on this highly complex issue, and appreciate their efforts to
produce a harmonized approach for federal regulation of new vehicle fuel economy and
greenhouse gas emissions. We further commend the agencies for the leadership that the federal
government has shown in trying to minimize the disruptive impacts of having multiple and
different programs at the federal and state levels. [EPA-HQ-OAR-2010-0799-9465-A1, p. 2]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 34-35.]
GM supports the flexibilities in the proposal. They reflect due consideration of the technical data
and are appropriately designed to encourage early investment in technologies that will produce
both fuel consumption and environmental benefits — the same technologies that will be
necessary to meet the challenging future standards. [EPA-HQ-OAR-2010-0799-9465-A1, p 3]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 38.]
In conclusion, we urge both EPA and NHTSA to continue the strong leadership role they have
displayed at the federal level with an integrated approach that addresses infrastructure of vehicles
themselves, fuels, and customer behavior as well as all other sectors of the economy. This
proposal is a positive first step and a good foundation on which we can all build.
Organization: Growth Energy
Growth Energy and its members salute the efforts by NHTSA and EPA (collectively, "the
Agencies") to solicit data, analysis and views on the Joint NPRM, and to respond to the public's
comments. [EPA-HQ-OAR-2010-0799-9505-A1, p. 1]
Organization: Guardian Automotive Products, Inc.
Guardian also applauds the harmonization of fuel economy and CO2 emissions credits. [EPA-
HQ-OAR-2010-0799-9299-A1, p. 1]
Organization: Honeywell International, Inc.
1-27
-------
EPA Response to Comments
Honeywell commends EPA and NHTSA for their hard work and foresight in developing a
Proposed Rule that responds to 'our country's critical need to address global climate change and
to reduce oil consumption' for the foreseeable future. [EPA-HQ-OAR-2010-0799-9497-Al, p.3]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 206.]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 259.]
Honeywell supports the National Program of increasing fuel economy and reducing greenhouse
gas emissions. A harmonized regulatory structure allows OEMs to define product pathways
forward toward compliance. This, in turn, allows suppliers to focus research and development
in order to provide the most substantial short and long-term benefits.
Organization: Honeywell Transportation Systems
Honeywell appreciates the opportunity to contribute to this rulemaking and remains committed
to offering solutions to reduce GHG emissions in the United States in a manner that allows the
nation's automotive industry to thrive. [EPA-HQ-OAR-2010-0799-9474-A1, p.6]
Organization: House of Representatives, Congress of the United States
We write to commend you for bringing certainty to fuel economy and tailpipe emission standards
for model years 2017-25 cars and light trucks to 54.5 miles per gallon (mpg). [EPA-HQ-OAR-
2010-0799-1221-A1, p. 1]
The framework agreement brought together automotive manufacturers, labor, the environmental
community, and government agencies. Industry groups such as the National Association of
Manufacturers praised the agreement as a 'positive step.' As a result, automakers will enjoy
regulatory certainty, which will help them design and build the advanced technology vehicles of
the future and compete in an increasingly global marketplace. The agreement protects American
jobs and consumers, and as such was a remarkable achievement. [EPA-HQ-OAR-2010-0799-
1221-Al,p. 1]
These regulations, taken together with the first phase of the standards for model years 2012-16
vehicles, will remove the need for as much as 3.8 million barrels of petroleum per day by 2030.
Consumers will save thousands of dollars at the pump for gasoline they will no longer need to
buy over the lifetime of their vehicles. [EPA-HQ-OAR-2010-0799-1221-A1, p. 1]
In conclusion, we believe that these standards to reduce petroleum use in cars and light trucks
represent an opportunity to increase our national and economic security in an unprecedented way
by dramatically decreasing our dependence on foreign sources of petroleum. They also bring a
certainty to the regulatory framework for the industry and workers who design and build these
vehicles. [EPA-HQ-OAR-2010-0799-1221-A1, p. 1]
1-28
-------
National Program
Organization: Howard, P.
I am writing in support of the strong fuel-efficiency and carbon pollution standards for new cars
and trucks. [EPA-HQ-OAR-2010-0799-10063-A1, p. 1]
The benefits of strong standards are overwhelming. By giving automakers a clear direction for
improving their new vehicles, EPA and DOT together are ensuring that new vehicles in 2025
will be almost twice as efficient as new vehicles today. I know the automakers can do better and
these standards will ensure that automakers innovate and put the best technologies to work to cut
dangerous carbon pollution and help America move beyond oil. [EP A-HQ-OAR-2010-0799-
10063-Al,p. 1]
I applaud the EPA and DOT for working together to propose these standards that will strengthen
fuel efficiency and carbon pollution standards for new passenger cars and trucks to 54.5 mpg by
2025. It matters to me that we take this critical step to curb the dangers of climate disruption, cut
our addiction to oil, and keep billions of dollars in our economy instead of spending them on oil.
[EPA-HQ-OAR-2010-0799-10063-A1, p. 1]
Organization: Hyundai America Technical Center
The improvement of fuel economy and the control of GHGs are very important to Hyundai.
Hyundai has long been an industry fuel efficiency leader and, in 2010, we publicly pledged to
reach fleet-wide performance of 50 plus mpg by 2025. In our discussions with the agencies on
this rulemaking, we have consistently supported a standard in excess of 50 mpg and we continue
to support the agencies on this rulemaking. [EPA-HQ-OAR-2010-0799-9547-A1, p.l]
We appreciate the significant effort on the part of all the agencies in the difficult task of
developing feasible and harmonized national greenhouse gas and CAFE standards. We believe
that it is the right thing to do for the environment and for the nation's energy security. [EPA-HQ-
OAR-2010-0799-9547-A1, p.l]
In summary, Hyundai applauds the agencies' efforts in putting together a national program to
reduce GHG emissions and improve fuel economy. [EPA-HQ-OAR-2010-0799-9547-A1, p.8]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11786, p. 172.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11788, p. 22.]
We continue to support the agencies in this rulemaking. We believe that it's the right thing to do
for the environment and for the nation's energy security.
Organization: ICM Inc.
1-29
-------
EPA Response to Comments
There are a multitude of reasons for pursuing higher fuel economy fuel standards in light-duty
trucks and passenger vehicles ranging from energy security to improved air quality to economic
development. We believe the CAFE Rule presents an opportunity to touch all of these objectives,
which, of course, begin with the simple notion of reducing our use of imported petroleum. [EPA-
HQ-OAR-201 0-0799-954 1-A2, p.l]
Organization: Insurance Institute for Highway Safety (IIHS)
As we have done in the past, IIHS supports NHTSA's efforts to increase fuel economy while
maintaining vehicle safety through the use of a size-based system. [NHTSA-2010-013 1-0222-
Organization: International Council on Clean Transportation (ICCT)
This proposed rule builds upon the impressive improvements in the 2012 — 16 final rules and
takes another large step towards catching up with vehicle efficiency in Europe, Japan, and other
nations (Figure 1). We applaud EPA and NHTSA, along with California, the Administration, and
the vehicle manufacturers, for taking another step along the road to a sustainable transportation
system and enhancing U.S. credibility worldwide. [See Figure 1 on p. 1 of Docket number EPA-
HQ-OAR-2010-0799-9512-A1] [EPA-HQ-OAR-2010-0799-9512-A1, p. 1]
There are tremendous opportunities to dramatically reduce climate change emissions from
passenger vehicles in the near term. Internal combustion engines are over a century old and are
widely perceived as nearing the end of their development, but the reality is exactly the opposite.
The same is true for materials that make up the vehicle body and parts. Rapid improvements in
computer — based tools are opening up technology gains that were never possible before.
Computer simulations and computer— aided— design are enabling vastly improved designs and
on — board computers allow unprecedented integration of engine, transmission, and hybrid
operation. Instead of slowing down, the pace of technology development just keeps accelerating.
This is especially true of lightweight material design. [EPA-HQ-OAR-2010-0799-9512-A1, p. 2]
Aggressive standards and long — term signals are needed to fully realize this technology
potential. ICCT strongly supports a strong federal rule and recognizes and applauds the
constructive role that California has played in building the technical and public support for this
critical rulemaking. [EPA-HQ-OAR-2010-0799-9512-A1, p. 2]
The proposed 2017—25 rules provide the long — term goals needed for manufacturers to develop
consistent, long — term technology and product plans, and serves as a valuable precedent for
other countries worldwide evaluating future efficiency and greenhouse gas standards. The overall
stringency of the proposed rules is potentially adequate, provided that it is not eroded
significantly by additional credits or changes in the final rule. [EPA-HQ-OAR-20 10-0799-95 12-
Al,p.2]
As shown in Figure 1, countries worldwide are also adopting efficiency standards and promoting
technology improvements. Similar standards are needed in the US to ensure that our domestic
manufacturers remain fully competitive in the world market and maintain domestic employment.
1-30
-------
National Program
[Figure 1 can be found on p. 1 of Docket number EPA-HQ-OAR-2010-0799-9512-A1] [EPA-
HQ-OAR-2010-0799-9512-Al,p. 13]
Efficiency standards are a win for consumers, a win for energy security, a win for manufacturers,
and a win for the economy. It is all paid for by oil exporting countries, as efficiency standards
will both reduce their oil exports and depress the amount they get paid per barrel. [EPA-HQ-
OAR-2010-0799-9512-Al,p. 13]
Efficiency standards or incentives tied directly to vehicle efficiency are necessary to capture
these huge benefits for energy security and the economy. There are no other options. Certainly,
care must be taken to set the standards appropriately, as has been done in the proposed rule, but
rolling back or stopping the standards is equivalent to shutting down oil wells in the US. In fact,
it is worse due to the missed opportunity to improve the economy. [EPA-HQ-OAR-2010-0799-
9512-Al,p. 13]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 192.]
We applaud EPA, NHTSA, along with California, the Administration and the vehicle
manufacturers for taking another large step along the road to a sustainable transportation system.
In closing the ultimate goal is to create a sustainable transportation system. ICCT looks forward
to working with everyone involved including, first of all, including the federal and state agencies
and vehicle manufacturers to help shape the best policies and programs to meet our clean air,
energy security and climate change objectives.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 28-29.]
I want to congratulate you and the staff of EPA, as well as the California Resources Board,
NHTSA, for building on the earlier rule and aggressively setting the stage so that the U.S. can
not only catch up but surpass countries in the world in the desire to improve fuel economy,
reduce greenhouse gases and reduce dependence on fossil fuels.
Organization: Investor Network on Climate Risk (INCR) - Ceres
As long-term investors, and as members of the Investor Network on Climate Risk (INCR), which
represents over $10 trillion in assets, we are writing to voice our strong support for the proposed
Greenhouse Gas (GHG) Emissions and Corporate Average Fuel Economy (CAFE) Standards.
Independent analysis shows that strong standards will lead to job creation across the country, as
well as increased profitability for the auto industry, a major driver of the economy. Further,
these standards represent an unprecedented opportunity to shield us from volatile oil price spikes
as well as to reduce climate risk.[EPA-HQ-OAR-2010-0799-9516-A1, p. 1]
In sum, strong standards will strengthen our economy, spur innovation, reduce both our
dependence on oil and climate risk, save businesses and consumers money, and create jobs.
1-31
-------
EPA Response to Comments
Accordingly, we urge the adoption of the strongest standards possible. [EPA-HQ-OAR-2010-
0799-9516-A1, p. 2]
Organization: Jaguar Land Rover North America, LLC (JLRNA)
We would like to take the opportunity to thank both the Environmental Protection Agency and
National Highway Traffic Safety Administration for their efforts in pulling together this proposal
for a single national standard for 2017 - 2025 model years. Going forward this will continue to
provide stability to enable future business and product strategy planning to take place. [EPA-HQ-
OAR-2010-0799-8102-A1, cover letter]
Organization: Johnson Controls, Inc.
Johnson Controls is encouraged that NHTSA and EPA are continuing to work together on this
second phase of the national program for MYs 2017-2025. Johnson Controls strongly supports
the continuation of a uniform national program. It allows vehicle manufacturers to focus
investments on cost-effective technologies for their fleets in order to meet the requirements of
the proposed rule, while delivering products that consumers will want and represents a viable
economic solution. This activity allows the energy storage manufacturer to continually innovate,
advancing development, and deliver commercially viable products. [NHTSA-2010-0131-0253-
Al,p.2]
Furthermore, Johnson Controls supports the efforts of the agencies to harmonize and align their
respective standards, where appropriate. Synchronizing standards improves regulatory clarity
and provides certainty. [NHTSA-2010-0131-0253-A1, p. 4]
• Harmonization for this next phase of the National Program is critical to its long-term success.
Johnson Controls supports the proposals to harmonize the GHG emissions and CAFE standards.
Organization: Kendall, A.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 166.]
I'd also like to state my support for the rulemaking or proposed rulemaking and offer praise for
all the in-depth research that's already happened.
Organization: Kia Motors
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17,2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 100-101.]
I want to start by saying that Kia emphatically supports the proposal and believes that it is
important for the agencies to set tough but feasible standards while providing flexibilities which
allow each automaker to maximize their strengths in achieving the standards.
1-32
-------
National Program
Organization: Kobus, D.
As an Environmental Scientist, I know the importance of this kind of policy in turning our future
toward one of renewables in the time we need to do it. [EPA-HQ-OAR-2010-0799-1370-Al, p.
2]
The projected annual benefits of such standards by 2030 are enormous:
* 23 billion gallons of gasoline saved
* 280 million metric tons of global warming pollution avoided
* $45 billion in savings at the gas pump [EPA-HQ-OAR-2010-0799-1370-A1, p. 2]
I support the proposed standards, and I urge you to ensure that these projected benefits become a
reality by keeping these standards free of loopholes that could undermine their environmental
and economic benefits. [EPA-HQ-OAR-2010-0799-1370-A1, pp. 2-3]
Organization: League of Women Voters of Michigan
The League of Women Voters of Michigan supports the proposed rules for fuel efficiency and
emissions standards and believes they will have significant public health and economic benefits.
[NHTSA-2010-0131-0198, p.l]
We support the new standards because they will substantially reduce pollution caused by vehicle
emissions. We know that air pollution damages people's health and causes premature death,
particularly in children, the elderly, and people with chronic health problems. Air pollution is a
major trigger of asthma attacks. [NHTSA-2010-0131-0198, p.l]
We support these regulations for the benefit of our children's health and future. [NHTSA-2010-
0131-0198, p.l]
In addition to lives saved and quality of life benefits, air quality improvements have tangible
economic benefits, due to better health and productivity and reduced medical expenses. The new
vehicle standards will also spur innovation and investment in new technologies, which will
create jobs in advanced automotive technology [NHTSA-2010-0131-0198, p.l]
Organization: Magna E-Car Systems
I'm pleased to comment in support of the 54.5 mpg proposed fuel economy standards put
forward by the Environmental Protection Agency (EPA) and National Highway Traffic Safety
Administration (NHTSA). [EPA-HQ-OAR-2010-0799-9263-Al, p. 1]
The 54.5 mpg fuel economy standards are necessary spur investment and innovation in the
hybrid and electric vehicle technologies, like Magna E-Car Systems and other automotive
1-33
-------
EPA Response to Comments
suppliers essential to meeting our growing 21st century transportation energy needs. [EPA-HQ-
OAR-2010-0799-9263-A1, p. 2]
Organization: Manufacturers of Emission Controls Association (MECA)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 179-183.]
We believe an important opportunity exists to significantly reduce greenhouse gas emissions and
improve fuel economy from passenger cars, light-duty vehicle trucks and medium duty
passenger vehicles.
To conclude, MECA commends EPA, NHTSA and California for taking important steps to
further reduce greenhouse gas emissions and improve fuel economy for light-duty vehicles. Our
industry is prepared to do its part and deliver cost-effective advanced emission
control technologies to the market for these more fuel efficient vehicles.
Organization: Marshall, C.
When I first read of the goal of 54.5 mpg for the year 2025, my reaction was that I liked the rule,
but it seemed ambitious. Then I read that the rule was a negotiated rulemaking, and that the auto
community participated. My spirits soared. I think negotiated rulemakings that include members
of the affected community make better regulations in the long-run than imposed regulations.
[EPA-HQ-OAR-2010-0799-5917-A2, p. 1]
I think this particular regulation is a win-win-win program because of all the benefits for (1)
reducing carbon emissions, ozone precursors, and other auto emission pollutants, (2) reducing oil
consumption, imports, and extraction, and (3) making the U.S. more competitive in this
technological realm. [EPA-HQ-OAR-2010-0799-5917-A2, p. 1]
Organization: Marz, Loren C
I generally support the proposed rule to increase fuel economy of cars and light trucks from 2017
to 2025. EPA and NHTSA are to be commended for proposing such significant increases in the
Corporate Average Fuel Economy (CAFE). Our economy and climate would benefit from such
reductions in fuel consumption and greenhouse gas (GHG) emissions. [NHTSA-2010-0131-
0213-Al,p.l]
Organization: Mass Comment Campaign (1,121) (World Wildlife Fund)
I am writing in support of the proposed fuel efficiency standards for new cars and light trucks.
[EPA-HQ-OAR-2010-0799-5181_MASS, p.l]
The proposed standards will strengthen fuel efficiency and reduce the carbon pollution
contributing to climate change. By increasing standards for new passenger cars and light trucks
1-34
-------
National Program
to 54.5 mpg by 2025, we will show the world that the U.S. is serious about curbing climate
change and reducing our dependence on oil. [EPA-HQ-OAR-2010-0799-5181_MASS, p.l]
I urge both the Environmental Protection Agency and the Department of Transportation to
finalize these strong standards. [EPA-HQ-OAR-2010-0799-5181_MASS, p.l]
Organization: Mass Comment Campaign (1,338) (Sierra Club-2)
America's dependence on oil puts our environment, economy and national security at risk. You
recently took an important step toward addressing this problem when you outlined new vehicle
efficiency standards that would ensure new cars and light trucks meet the equivalent of a 54.5
mpg fleetwide standard by 2025. [EPA-HQ-OAR-2010-0799-11762-A1, p.l]
The projected annual benefits of such a standard by 2030 are enormous:
-$80 billion in savings at the gas pump
-23 billion gallons of gasoline saved
-280 million metric tons of global warming pollution avoided [EP A-HQ-OAR-2010-0799-
11762-Al,p.l]
Moving forward, I urge you to ensure that these projected benefits become a reality by keeping
this standard as strong as possible through the rulemaking process, and avoiding loopholes that
could undermine the standard's environmental and economic benefits. [EPA-HQ-OAR-2010-
0799-11762-A1, p.l]
Organization: Mass Comment Campaign (13,300) (National Wildlife Federation Action Fund-
3)
I am submitting the following comments in support of strong fuel efficiency standards, along
with the names of the 13,300 supporters of the National Wildlife Federation Action Fund who
have sent similar comments to the docket via emails to a-and-r-Docket@epa.gov: [EPA-HQ-
OAR-2010-0799-9965_MASS, p.l]
I support making our nation's cars and trucks more efficient to cut the carbon pollution from car
exhaust that is driving global warming, which threatens the future of American wildlife. [EPA-
HQ-OAR-2010-0799-9965_MASS, p.l]
Taken together, the new and proposed fuel economy standards will cut our demand for oil by 3.4
million barrels per day. That equates to nearly a third of today's transportation fuel use and it cuts
carbon pollution by more than 600 million metric tons per year in 2030—that's about 10% of total
US carbon pollution today. [EPA-HQ-OAR-2010-0799-9965_MASS, p.l]
These deep oil savings also mean less pressure for risky new drilling projects in the Arctic or to
clear cut forest for Canadian tar sands. [EPA-HQ-OAR-2010-0799-9965_MASS, p.l]
1-35
-------
EPA Response to Comments
Please move forward with strong fuel efficiency standards that cut oil use and reduce carbon
pollution. [EPA-HQ-OAR-2010-0799-9965_MASS, p.l]
Organization: Mass Comment Campaign (137 (Citizens for Pennsylvania's Future
(PennFuture))
I applaud you and President Obama for proposing strong new fuel economy and tailpipe
pollution standards that will result in cleaner cars and cleaner air. The reduction in greenhouse
gas and criteria pollution that these standards would achieve are critically important in stabilizing
the climate and protecting human health. [EPA-HQ-OAR-2010-0799-3114-A1_MASS, p.l]
-By 2030, the standards would cut annual global warming pollution the equivalent of shutting
down 80 coal-fired power plants for a year. This would be of tremendous benefit in slowing
climate change.
-The proposed standards would create almost 500,000 jobs across the country, including 21,000
in Pennsylvania.
-The standards would save as much oil in 2030 alone as we currently import from Saudi Arabia
and Iraq. [EPA-HQ-OAR-2010-0799-3114-A1_MASS, p.l]
Please make sure the proposed standards are not weakened in any way before being enacted. I
am copying my Congressional representatives on this email so that they know how important a
strong clean cars rule is to me, and that I want them to support a strong rule as well. Thank you
for your efforts reflected in this proposal that will improve public health, enhance national
security, protect the environment, and strengthen our economy. [EPA-HQ-OAR-2010-0799-
3114-A1_MASS, p.l]
Organization: Mass Comment Campaign (15) (League of Conservation Voters)
I support the proposed new rules that would increase national fuel economy standards to 54.5
miles per gallon by the year 2025 and I commend the Obama administration for continuing to
pursue strong, clean vehicle standards that will reduce our dangerous dependence on oil and cut
global warming pollution, while creating much-needed jobs and saving drivers money at the
pump. Additionally, these landmark standards remind us of the valuable role that the federal
government can play in strengthening the economy and protecting the planet. [EPA-HQ-OAR-
2010-0799-1555-A1_MASS, p.l]
We can do this! [EPA-HQ-OAR-2010-0799-1555-A1_MASS, p.l]
Organization: Mass Comment Campaign (15) (Sierra Club-3)
Electric vehicles can help America move beyond oil. I support your effort to improve fuel
efficiency and carbon pollution standards for new cars and light trucks to 54.5 mpg and 163
grams per mile carbon pollution in 2025. These standards ensure that Americans will have better
1-36
-------
National Program
fuel efficiency and advanced technology choices in their new vehicles for years to come. [EPA-
HQ-OAR-2010-0799-11763-A1, p.l]
Americans can expect real benefits from your standards. In 2030 alone, strong standards will
deliver:
• $44 billion in net savings at the gas pump
• 23 billion gallons of gasoline saved
• 280 million metric tons of carbon pollution avoided. [EPA-HQ-OAR-2010-0799-11763-A1,
p.l]
A well designed program will help bring electric vehicles to the market while ensuring that the
pollution reduction, oil savings and consumer benefits of the standards are achieved. I urge you
to ensure these standards deliver real benefits for America and avoid loopholes that could
undermine the program. [EPA-HQ-OAR-2010-0799-11763-Al, p.l]
Organization: Mass Comment Campaign (195) (Environment New Mexico-1)
America's dependence on oil puts our environment, economy, and national security at risk. Your
recent proposal of new fuel efficiency standards was a historic step toward addressing this
problem. [EPA-HQ-OAR-2010-0799-9577-Al_MASS, p.l]
The environmental benefits of such a standard by 2030 are enormous. By 2030, we could:
-save more oil than we imported from Saudi Arabia last year, and
-slash global warming pollution by an amount equivalent to shutting down 70 coal-fired power
plants. [EPA-HQ-OAR-2010-0799-9577-Al_MASS, p.l]
Moving forward, I urge you to ensure that these projected benefits become a reality by keeping
this standard as strong as possible through the rulemaking process, and avoiding loopholes that
could undermine the standard's environmental benefits. [EPA-HQ-OAR-2010-0799-9577-
A1_MASS, p.l]
Organization: Mass Comment Campaign (2,120) (Pew Environmental Group)
I support the proposed rule to increase fuel economy for new passenger vehicles to an average of
54.5 miles per gallon by 2025, which will allow cars and light trucks to drive farther on a gallon
of gas and reduce U.S. dependence on imported oil. The price of gas is once again squeezing the
budgets of American families, who already are forced to cut back in other areas just to pay for
basic transportation needs. [EPA-HQ-OAR-2010-0799-1247-A1_MASS, p.l]
This spring, you set a goal of reducing oil imports by one-third this decade, and in November
you proposed fuel efficiency standards that will effectively double current requirements. I
1-37
-------
EPA Response to Comments
commend your efforts. I believe it is important to increase U.S. investment in fuel efficient
technologies, save consumers money at the pump, help this country break its dependence on
foreign oil, and protect the environment. Don't let these standards be watered down—protect and
finalize the new fuel efficiency rules. [EPA-HQ-OAR-2010-0799-1247-A1_MASS, p.l]
Organization: Mass Comment Campaign (2,156) (Environment Michigan)
America's dependence on oil puts our environment, economy and national security at risk. You
recently took an important step toward addressing this problem when you proposed new global
warming pollution and vehicle efficiency standards that would ensure new cars and light trucks
meet the equivalent of a 54.5 mpg fleetwide standard by 2025. [EPA-HQ-OAR-2010-0799-
9683-Al_MASS, p.l]
The projected annual benefits of such standards by 2030 are enormous:
• $45 billion in savings at the gas pump
• 23 billion gallons of gasoline saved
• 280 million metric tons of global warming pollution avoided [EP A-HQ-OAR-2010-0799-9683-
A1_MASS, p.l]
I support the proposed standards, and I urge you to ensure that these projected benefits become a
reality by keeping these standards free of loopholes that could undermine their environmental
and economic benefits. [EPA-HQ-OAR-2010-0799-9683-Al_MASS, p.l]
Organization: Mass Comment Campaign (2,851) (Unknown Organization)
I'm writing today in support of stronger fuel-economy and carbon pollution standards for new
cars and trucks. [EPA-HQ-OAR-2010-0799-9591-A1_MASS, p.l]
The EPA and the Department of Transportation have an opportunity to ensure that new vehicles
in 2025 will be nearly twice as fuel efficient as vehicles today. Adopting stronger standards will
drive innovation and incentivize automakers to put their best technologies to work. [EPA-HQ-
OAR-2010-0799-9591-A1_MASS, p.l]
The proposed 54.5 mpg standard will be a major step forward to reduce our dependence on fossil
fuels. Additionally, it will save Americans billions of dollars annually which can be reinvested in
our economy. [EPA-HQ-OAR-2010-0799-9591-A1_MASS, p.l]
Please adopt the strongest fuel-economy and carbon pollution standards possible. [EPA-HQ-
OAR-2010-0799-9591-A1_MASS, p.l]
Organization: Mass Comment Campaign (20) (Union of Concerned Scientists-1)
1-38
-------
National Program
As a scientist, I believe it is vitally important to take this major step to reduce global warming
emissions. As proposed, the standard would reduce U.S. emissions by as much as 290 million
metric tons in 2030, the equivalent of taking over 40 million of today's typical cars and trucks off
the road for a year. [EPA-HQ-OAR-2010-0799-1558-A1_MASS, p.l]
Strong fuel efficiency and vehicle emissions standards have the potential to cut America's oil
dependence by 1.5 million barrels per day in 2030, more oil than we currently import from Saudi
Arabia and Iraq combined. [EPA-HQ-OAR-2010-0799-1558-A1_MASS, p.l]
A strong clean car program is good for all Americans. [EPA-HQ-OAR-2010-0799-1558-
A1_MASS, p.l]
Organization: Mass Comment Campaign (20,500) (Union of Concerned Scientists-3)
UCS applauds the agencies for proposing standards that represent historic progress for American
consumers, the U.S. auto industry, clean air, and U.S. energy security. However, key provisions
in the proposal could erode these benefits if automakers exploit them, and should be addressed
by the agencies before the standards are finalized. [EPA-HQ-OAR-2010-0799-10166-
A1_MASS, p.l]
America's dangerous dependence on oil puts our environment, economy, and national security at
risk. That's why I strongly support the proposed fuel efficiency and global warming emissions
standards for new cars and light trucks sold in model years 2017-2025. [EPA-HQ-OAR-2010-
0799-10166-A2_MASS, p.l]
The proposed standards are achievable and reasonable and will save me money at the pump, curb
millions of tons of harmful global warming emissions, and save as much oil in 2030 alone as we
currently import from Saudi Arabia and Iraq. They will also drive innovation in the U.S. auto
industry, creating new jobs across the country. [EPA-HQ-OAR-2010-0799-10166-A2_MASS,
p.l]
Though I strongly support these standards, I am concerned about possible loopholes that
automakers could exploit. [EPA-HQ-OAR-2010-0799-10166-A2_MASS, p.l]
We cannot afford to delay in confronting the threats of climate change and our dangerous oil
dependence. I urge you to move forward with the strongest possible standards free of harmful
loopholes. [EPA-HQ-OAR-2010-0799-10166-A2_MASS, p.2]
Organization: Mass Comment Campaign (213) (Environment Virginia)
America's dependence on oil puts our environment, economy, and national security at risk. You
recently took an important step toward addressing this problem when you proposed new global
warming pollution and vehicle efficiency standards that would ensure new cars and light trucks
meet the equivalent of a 54.5 mpg fleetwide standard by 2025. [EPA-HQ-OAR-2010-0799-
9576-Al_MASS, p.l]
1-39
-------
EPA Response to Comments
The projected annual benefits of such standards by 2030 are enormous:
— 23 billion gallons of gasoline saved
— 280 million metric tons of global warming pollution avoided
-- $45 billion in savings at the gas pump [EPA-HQ-OAR-2010-0799-9576-Al_MASS, p. 1]
I support the proposed standards, and I urge you to ensure that these projected benefits become a
reality by keeping these standards free of loopholes that could undermine their environmental
and economic benefits. [EPA-HQ-OAR-2010-0799-9576-Al_MASS, p.l]
Organization: Mass Comment Campaign (22,122) (Unknown Organization)
I support the proposed rule to increase fuel economy for new passenger vehicles to an average of
54.5 miles per gallon by 2025, which will allow cars and light trucks to drive farther on a gallon
of gas and reduce U.S. dependence on imported oil. [EPA-HQ-OAR-2010-0799-9736_MASS,
p.l]
The price of gas is once again squeezing the budgets of American families, who already are
forced to cut back in other areas just to pay or basic transportation needs. [EP A-HQ-OAR-2010-
0799-9736_MASS,p.l]
This spring, you set a goal of reducing oil imports by one-third this decade, and in November
you proposed fuel efficiency standards that will effectively double current requirements. I
commend your efforts. I believe it is important to increase U.S. investment in fuel efficient
technologies, save consumers money at the pump, help this country break its dependence on
foreign oil, and protect the environment. Don't let these standards be watered down - protect and
finalize the new fuel efficiency rules. [EPA-HQ-OAR-2010-0799-9736_MASS, p.l]
Organization: Mass Comment Campaign (262) (Environment New Mexico-2)
America's dependence on oil puts our environment, economy and national security at risk. You
recently took an important step toward addressing this problem when you proposed new global
warming pollution and vehicle efficiency standards that would ensure new cars and light trucks
meet the equivalent of a 54.5 mpg fleetwide standard by 2025. [EPA-HQ-OAR-2010-0799-
9700-A1_MASS, p.l]
The projected annual benefits of such standards by 2030 are enormous:
• $45 billion in savings at the gas pump
• 23 billion gallons of gasoline saved
• 280 million metric tons of global warming pollution avoided [EPA-HQ-OAR-2010-0799-9700-
A1_MASS, p.l]
1-40
-------
National Program
I support the proposed standards, and I urge you to ensure that these projected benefits become a
reality by keeping these standards free of loopholes that could undermine their environmental
and economic benefits. [EPA-HQ-OAR-2010-0799-9700-A1_MASS, p.l]
Organization: Mass Comment Campaign (27,108) (Unknown Organization)
I am writing in support of the strong fuel-efficiency and carbon pollution standards for new cars
and trucks. [EPA-HQ-OAR-2010-0799-9596-Al_MASS, p.l]
The benefits of strong standards are overwhelming. By giving automakers a clear direction for
improving their new vehicles, EPA and DOT together are ensuring that new vehicles in 2025
will be almost twice as efficient as new vehicles today. I know the automakers can do better and
these standards will ensure that automakers innovate and put the best technologies to work to cut
dangerous carbon pollution and help America move beyond oil. [EP A-HQ-OAR-2010-0799-
9596-Al_MASS, p.l]
I applaud the EPA and DOT for working together to propose these standards that will strengthen
fuel efficiency and carbon pollution standards for new passenger cars and trucks to 54.5 mpg by
2025. It matters to me that we take this critical step to curb the dangers of climate disruption, cut
our addiction to oil, and keep billions of dollars in our economy instead of spending them on oil.
[EPA-HQ-OAR-2010-0799-9596-Al_MASS,p.l]
Organization: Mass Comment campaign (3,855) (National Wildlife Federation Action Fund-2)
I support making our nation's cars and trucks more efficient to cut the carbon pollution from car
exhaust that is driving global warming, which threatens the future of American wildlife. [EPA-
HQ-OAR-2010-0799-1557-A1_MASS, p.l]
Taken together, the new and proposed fuel economy standards will cut our demand for oil by 3.4
million barrels per day. That equates to nearly a third of today's transportation fuel use and it cuts
carbon pollution by more than 600 million metric tons per year in 2030—that's about 10% of total
US carbon pollution today. [EPA-HQ-OAR-2010-0799-1557-A1_MAS, p.l]
These deep oil savings also mean less pressure for risky new drilling projects in the Arctic or to
clear cut forest for Canadian tar sands. [EPA-HQ-OAR-2010-0799-1557-A1_MASS, p.l]
Please move forward with strong fuel efficiency standards that cut oil use and reduce carbon
pollution. [EPA-HQ-OAR-2010-0799-1557-A1_MASS, p.l]
Organization: Mass Comment Campaign (375) (Union of Concerned Scientists-2)
America's dangerous dependence on oil puts our environment, economy, and national security at
risk. That's why I strongly support the proposed fuel efficiency and global warming emissions
standards for new cars and light trucks sold in model years 2017-2025. [EP A-HQ-OAR-2010-
0799-1246-A1_MASS, p.l]
1-41
-------
EPA Response to Comments
The proposed standards are achievable and reasonable and will save me money at the pump, curb
millions of tons of harmful global warming emissions, and save as much oil in 2030 alone as we
currently import from Saudi Arabia and Iraq. They will also drive innovation in the U.S. auto
industry, creating new jobs across the country. [EPA-HQ-OAR-2010-0799-1246-A1_MASS,
p.l]
Though I strongly support these standards, I am concerned about possible loopholes that
automakers could exploit. [EPA-HQ-OAR-2010-0799-1246-A1_MASS, p.l]
We cannot afford to delay in confronting the threats of climate change and our dangerous oil
dependence. I urge you to move forward with the strongest possible standards free of harmful
loopholes. [EPA-HQ-OAR-2010-0799-1246-A1_MASS, p.l]
We cannot afford to delay in confronting the threats of climate change and our dangerous oil
dependence. I urge you to move forward with the strongest possible standards free of harmful
loopholes. [EPA-HQ-OAR-2010-0799-1246-A1_MASS, p.l]
Organization: Mass Comment Campaign (39) (Unknown Organization)
I strongly support the proposed CAFE standards for cars and light trucks from 2017 to 2025. The
goals summarized in these standards (Docket ID No. EPA-HQ-OAR-2010-0799 and/or NHTSA-
2010-0131) show a promising future for the nation's health, environment, national security, and
economy. [EPA-HQ-OAR-2010-0799-1245-A1_MASS, p.l]
The estimates released by the White House show the potential for an enormous reduction in
green house gas emissions. The decrease in air pollution will be substantial. I am happy to
support this strong environmental regulation - one that will directly improve citizen health.
[EPA-HQ-OAR-2010-0799-1245-A1_MASS, p.l]
Organization: Mass Comment Campaign (39,464) (Environmental Defense Fund (EDF))
I strongly support the proposed new fuel efficiency and greenhouse gas standards for cars and
trucks to require cars and trucks to an average 54.5 miles per gallon by model year 2025. [EPA-
HQ-OAR-2010-0799-9590-A1_MASS, p.l]
Together with the 'Phase One' model year 2012-2016 rule finalized in 2010, these tough new
standards would more than double America's average fuel economy and are expected to:
— Save families an estimated $8,200 in fuel savings over the lifetime of a new vehicle by 2025,
for a total of $1.7 trillion in national fuel savings over the life of the program.
— Reduce oil consumption by an estimated 2.2 million barrels a day by 2025 more than our daily
2010 oil imports from the entire Persian Gulf.
1-42
-------
National Program
— Reduce carbon dioxide pollution by over 6 billion metric tons over the life of the program
equivalent to the emissions from the United States in 2010. [EP A-HQ-OAR-2010-0799-9590-
A1_MASS, p.l]
Generating less pollution, putting more money in consumers' wallets, easing our addiction to oil,
modernizing America's fleet of cars and trucks what's not to like? [EP A-HQ-OAR-2010-0799-
9590-A1_MASS, p.l]
I am thrilled that this dramatic and bold proposal has earned the support of automakers,
autoworkers, national security groups, environmental groups, and many other key stakeholders.
And I am proud to add my support to this important rule. [EPA-HQ-OAR-2010-0799-9590-
A1_MASS, p.l]
Organization: Mass Comment Campaign (399) (Rhode Island Sierra Club)
Dear President Obama,
You recently highlighted the urgency of moving beyond oil and pledged to reduce America's
dependence on foreign oil by one third. [EPA-HQ-OAR-2010-0799-11761-Al, p.l]
You can deliver on your pledge to American people by setting new standards requiring cars and
light trucks to achieve the standard of at least 60 miles per gallon and emit no more than 143
grams of global warming pollution per mile by 2025. [EP A-HQ-O AR-2010-0799-11761-Al,
p.l]
Using American ingenuity, we can build cars and trucks that will reduce our dependence on oil
by 2.5 million barrels each day by 2030 - that's almost 50 percent more oil than we currently
import from the entire Persian Gulf. We need your leadership to set strong pollution and fuel
efficiency standards for new cars and trucks that will help break our county's dependence on oil.
[EPA-HQ-OAR-2010-0799-11761-A1, p.l]
Organization: Mass Comment Campaign (4,505) (Unknown Organization)
The proposed fuel-efficiency and greenhouse gas standards for passenger vehicles and light
trucks are a laudable step in reducing dangerous global warming, increasing national security and
improving our economy. Compared to business as usual, they will prevent millions of tons of
global warming emissions, save consumers billions of dollars at the gas pump and reduce
America's dependence on dirty fossil fuels. But these rules can and should be significantly
strengthened. [EPA-HQ-OAR-2010-0799-9595-Al_MASS, p.l]
Increasing the fuel efficiency of our vehicles is the low-hanging fruit in the battle against
dangerous climate change, and we can no longer afford to pass up this tremendous opportunity.
Please adopt the strongest possible standards and close the SUV loophole. [EPA-HQ-OAR-2010-
0799-9595-Al_MASS, p.l]
Organization: Mass Comment Campaign (45) (Environment Minnesota)
1-43
-------
EPA Response to Comments
America's dependence on oil puts our environment, economy, and national security at risk. Your
recent proposal of new fuel efficiency standards was a historic step toward addressing this
problem. [EPA-HQ-OAR-2010-0799-9588-Al_MASS, p.l]
THANK YOU. Let's please keep working on cutting our dependence on oil. [EPA-HQ-OAR-
2010-0799-9588-Al_MASS, p.l]
The environmental benefits of such a standard by 2030 are enormous:
- save more oil than we imported from Saudi Arabia last year, and
- slash global warming pollution by an amount equivalent to shutting down 70 coal-fired power
plants. [EPA-HQ-OAR-2010-0799-9588-Al_MASS, p.l]
Moving forward, I urge you to ensure that these projected benefits become a reality by keeping
this standard as strong as possible through the rule-making process, and avoiding loopholes that
could undermine the standard's environmental benefits. [EPA-HQ-OAR-2010-0799-9588-
A1_MASS, p.l]
Organization: Mass Comment Campaign (61) (The Social Justice Group))
We support these improved fuel efficiency standards not only for our own personal benefit, but
also for the sake of our national security, our economy, and the world's environment. [EPA-HQ-
OAR-2010-0799-7406-A1_MASS, p.2]
THE ISSUE: Support clean air and fight global warming by endorsing the Obama
administration's proposal to raise automobile fuel efficiency standards.
The Obama administration has proposed a historic 54.5 miles per gallon fuel efficiency standard.
Under this new proposal, it is estimated that American drivers would collectively save $80
billion a year at the pump, a savings that over time would outweigh the cost of the lower
emission technology. We would make a significant dent in carbon emissions and drastically
reduce our need for oil consumption in transportation. The new standard would mean that cars
and trucks would achieve roughly double the fuel economy of the average vehicle on the road
today. [EPA-HQ-OAR-2010-0799-7406-A1_MASS, p.6]
Some cars can already meet these standards, but most do not. This is a huge opportunity for
American automakers. To remain competitive in the global marketplace, our automakers must
make more fuel-efficient vehicles. These new standards will encourage investments in
technology and produce new jobs in our domestic auto industry. [EPA-HQ-OAR-2010-0799-
7406-A1_MASS, p.6]
The EPA estimates the 54.5 mpg standards will:
** save consumers a net of $4,400. based on the expected fuel savings and the cost of the lower
emissions technology
1-44
-------
National Program
** reduce U.S. dependence on oil by 1 .7 million barrels per day. more than we imported from
Saudi Arabia and Iraq in 2010:
** reduce harmful air pollution that causes climate change by 297 million metric tons per year by
2030, which is equivalent to the annual emissions of 76 coal-fired power plants. [EPA-HQ-
OAR-2010-0799-7406-A1_MASS, p.6]
This petition will be forwarded to the administration during the public comment period for these
proposed standards. [EPA-HQ-OAR-2010-0799-7406-A1_MASS, p.6]
Organization: Mass Comment Campaign (680) (PennEvironment)
America's dependence on oil puts our environment, economy, and national security at risk. You
recently took an important step toward addressing this problem when you proposed new global
warming pollution and vehicle efficiency standards that would ensure new cars and light trucks
meet the equivalent of a 54.5mpg fleetwide standard by 2025. [EPA-HQ-OAR-2010-0799-
1556-A1_MASS, p.l]
The projected annual benefits of such standards by 2030 are enormous:
* 23 billion gallons of gasoline saved
* 280 million metric tons of global warming pollution avoided
* $45 billion in savings at the gas pump [EPA-HQ-OAR-2010-0799-1556-A1_MASS, p.l]
I support the proposed standards, and I urge you to ensure that these projected benefits become a
reality by keeping these standards free of loopholes that could undermine their environmental
and economic benefits. [EPA-HQ-OAR-2010-0799-1556-A1_MASS, p.l]
Organization: Mass Comment Campaign (80) (Unknown Organization)
I support the Environmental Protection Agency's (EPA) joint proposal with the National
Highway Traffic Safety Administration (NHTSA) to improve fuel economy and reduce
greenhouse gas (GHG) emissions for passenger cars and light-trucks for model years 2017
through 2025. The proposed fleet-wide average of 49.6 mpg will create a new generation of
clean vehicles and respond to our country's critical need to reduce oil consumption. [EPA-HQ-
OAR-2010-0799-9682-Al_MASS, p.l]
This proposal will save four billion barrels of oil and two million metric tons of greenhouse gas
emissions over the lifetime of those vehicles. The proposal also incentivizes the expanded
production of hybrid and electric vehicles, which will further reduce our dependence on foreign
oil and cut greenhouse gases. [EPA-HQ-OAR-2010-0799-9682-Al_MASS, p.l]
I also strongly urge the agencies to carefully evaluate whether basing these fuel standards on the
size of a vehicle will incentivize manufacturers to build larger vehicles. Ensuring manufacturers
1-45
-------
EPA Response to Comments
do not benefit from building larger vehicles that emit more emissions is fundamental to the
success of the National Program. [EPA-HQ-OAR-2010-0799-9682-Al_MASS, p.l]
Organization: Mass Comment Campaign (9,570) (Unknown Organization)
The proposed standards are achievable and reasonable and will save me money at the pump, curb
millions of tons of harmful global warming emissions, and save as much oil in 2030 alone as we
currently import from Saudi Arabia and Iraq. They will also drive innovation in the U.S. auto
industry, creating new jobs across the country. [EPA-HQ-OAR-2010-0799-9578-Al_MASS,
p.l]
Though I strongly support these standards, I am concerned about possible loopholes that
automakers could exploit. [EPA-HQ-OAR-2010-0799-9578-Al_MASS, p.l]
We cannot afford to delay in confronting the threats of climate change and our dangerous oil
dependence. I urge you to move forward with the strongest possible standards free of harmful
loopholes. [EPA-HQ-OAR-2010-0799-9578-Al_MASS, p.l]
Organization: Mass Comment Campaign (927) (Sierra Club-1)
I am writing in support of the proposed fuel-efficiency and carbon pollution standards for new
cars and trucks. [EPA-HQ-OAR-2010-0799-1554-A1_MASS, p.l]
I applaud the EPA and DOT for working together to propose these standards that will strengthen
fuel efficiency and carbon pollution standards for new passenger cars and trucks to 54.5 mpg by
2025. This is a critical step we can take to curb climate disruption, cut our addiction to oil, and
keep billions of dollars in our economy instead of spending them on oil. [EP A-HQ-OAR-2010-
0799-1554-A1_MASS, p.l]
In these tough economic times I celebrate these efforts because they will promote innovation and
job growth not just in the automotive industry but across the nation, all while helping the U.S.
cut dangerous carbon pollution and our addiction to oil. [EP A-HQ-OAR-2010-0799-15 54-
A1_MASS, p.l]
Once again, I strongly support these vitally important standards that will protect our
environment, economy, and national security. I urge both the EPA and DOT to finalize these
strong standards. [EPA-HQ-OAR-2010-0799-1554-A1_MASS, p.l]
Organization: Mass Comment Campaign (99) (Environment Texas)
America's dependence on oil puts our environment, economy and national security at risk. You
recently took an important step toward addressing this problem when you proposed new global
warming pollution and vehicle efficiency standards that would ensure new cars and light trucks
meet the equivalent of a 54.5 mpg fleetwide standard by 2025. [EP A-HQ-OAR-2010-0799-
9701-A1_MASS, p.l]
1-46
-------
National Program
The projected annual benefits of such standards by 2030 are enormous:
• $45 billion in savings at the gas pump
• 23 billion gallons of gasoline saved
• 280 million metric tons of global warming pollution avoided [EP A-HQ-OAR-2010-0799-9701-
A1_MASS, p.l]
I support the proposed standards, and I urge you to ensure that these projected benefits become a
reality by keeping these standards free of loopholes that could undermine their environmental
and economic benefits.[EPA-HQ-OAR-2010-0799-9701-Al_MASS, p.l]
Organization: Mass Comment Campaign (Multiple Submitters) (Unknown Organization)
The rising price of gas is once again squeezing the budgets of American families, who are being
forced to cut back in other areas to pay for basic transportation needs. Please take action to
ensure that cars and light trucks can drive farther on a gallon of gas and reduce our dependence
on imported oil. [NHTSA-2010-0131-0219-A1_MASS, p.l]
This spring, you set a goal of reducing oil imports by one-third this decade. Fuels efficiency
standards of up to 60 miles per gallon by 2025 would increase investments in fuel efficient
technologies, save consumers money at the pump, and help the United States break its cycle of
addiction to foreign oil by saving more than 1.3 billion barrels. I urge you to support new fuel
efficiency standards of up to 60 miles per gallon. [NHTSA-2010-0131-0219-Al_MASS,p.l]
The rising price of gas is once again squeezing the budgets of American families, who are being
forced to cut back in other areas to pay for basic transportation needs. Please take action to
ensure that cars and light trucks can drive farther on a gallon of gas and reduce our dependence
on imported oil. [NHTSA-2010-0131-0219-A1_MASS, p.l]
This spring, you set a goal of reducing oil imports by one-third this decade. Fuels efficiency
standards of up to 60 miles per gallon by 2025 would increase investments in fuel efficient
technologies, save consumers money at the pump, and help the United States break its cycle of
addiction to foreign oil by saving more than 1.3 billion barrels. I urge you to support new fuel
efficiency standards of up to 60 miles per gallon. [NHTSA-2010-0131-0219-Al_MASS,p.l]
Organization: Mazda North American Operations
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11787, p. 63.]
As one of the 13 auto makers that signed the letter of commitment, Mazda welcomes the
opportunity to be a partner in helping to advance a continued, harmonized national program on
fuel economy and greenhouse gas emissions for the 2017 to 2025 model years. While offering
manufacturers the certainty of knowing the fuel economy targets for many years into the future,
1-47
-------
EPA Response to Comments
the proposed standards do represent an extreme technical challenge for the auto industry, and
especially for smaller automakers, such as Mazda, who have more limited resources to develop
and market advanced technology vehicles. Nonetheless, we are committed to making our best
efforts to meet the proposed targets.
Organization: Mehrotra, Rahul
Thank you for even considering proposing a rule to raise average fuel economy standards.
[NHTSA-2010-0131-0206, p.l]
Organization: Mercedes-Benz USA, LLC
DAG fully supports the agencies' effort to create a unified program that allows one product
pathway towards compliance. [EPA-HQ-OAR-2010-0799-9483-A1, p. 2]
Organization: Michigan House of Representatives, 49th District
I'm State Representative Jim Ananich of Flint and I have the distinct honor of serving
Michigan's 49th House District. I'm pleased to comment today on and in support of the proposed
54.5 mpg fuel economy standards proposed by the Environmental Protection Agency (EPA) and
National Highway Traffic Safety Administration (NHTSA). [EP A-HQ-OAR-2010-0799-7983-
Al,p. 1]
Since I took office last year, my top priority has been to improve our economy and help get the
people of Genesee County and Michigan back to work. The proposed 54.5 mpg fuel economy
standards will be a significant step forward in accomplishing these goals. These standards will
help create jobs, save consumers money, and keep the members of our armed services out of
harm's way. [EPA-HQ-OAR-2010-0799-7983-A1, p. 1]
The Obama Administration and automakers deserve recognition for their collaborative efforts to
reach an agreement on fuel economy at a time when leaders in Washington cannot seem to agree
on anything. This shows that we can rise above the divisive rhetoric of our politics and reach
agreement on commonsense solutions to our most pressing issues. [EP A-HQ-OAR-2010-0799-
7983-A1, p. 2]
Organization: Michigan State House of Representatives
I'm State Rep. Jim Townsend & am pleased to offer my comments on the fuel economy
standards proposed by the Environmental Protection Agency & National Highway Traffic Safety
Administration.
I serve the 26th Michigan House District, which covers the cities of Madison Heights & Royal
Oak. My district includes many people who work in the auto industry & many more earn a living
as a result of those who do. I also have worked in the auto industry & would like to recognize the
1-48
-------
National Program
automakers leadership in reaching an agreement with the Obama Administration that's as good
for jobs & the economy as it is for consumers. [EPA-HQ-OAR-2010-0799-9175, p. 1]
The 54.5 mpg fuel economy standard will create good paying jobs for American autoworkers. A
recent study conducted by the United Auto Workers, Natural Resources Defense Council &
National Wildlife Federation found that the proposed standards would create over 150,000 jobs
at over 500 facilities that produce parts for advanced internal combustion engines, hybrid &
alternative fuel vehicles, plug-in electric vehicles, & shared components. Here in Michigan the
standards will create a little more than 38,000 jobs at nearly 100 facilities. [EPA-HQ-OAR-2010-
0799-9175, p. 1]
Also, for consumers, who spend about $2,000 a year on fuel, these fuel economy standards can
quickly add up to big savings. Americans spend over $1.3 billion each day on gas. Greater fuel
efficiency will save consumers up to $6,600 in fuel costs over the lifecycle of a 2025
model. [EPA-HQ-OAR-2010-0799-9175, p. 1]
Finally, the big growth markets for the auto industry are dominated by countries whose
consumers expect leadership in fuel economy. These standards will help prepare the industry for
the export market & give American-made cars a leg up in other countries. [EPA-HQ-OAR-2010-
0799-9175, pp. 1-2]
These standards will spur innovation & encourage the development the hybrids, electric, & more
fuel efficient vehicles crucial to the continued success of automakers. I thank the EPA &
NHTSA for opportunity to comment. [EPA-HQ-OAR-2010-0799-9175, p. 2]
Organization: Michigan State Senate, District 18
I'm pleased to comment today on the fuel economy rules proposed by the Environmental
Protection Agency (EPA) and Department of Transportation (DOT), and to lend my strong
support for standards that would increase the fuel efficiency of light duty vehicles to a fleet wide
average of 54.5 mpg. [EPA-HQ-OAR-2010-0799-5594-A1, p. 1]
In short, as the auto industry enters this new chapter, all the signs point to a market for more fuel
efficient cars, and all the roads to get there run through Greater Metro Detroit. [EPA-HQ-OAR-
2010-0799-5594-A1, p. 2]
Organization: Miller, P.
Though I heartily support the proposed rule to increase fuel economy for new passenger vehicles
to an average of 54.5 miles per gallon by 2025, we can do better!!! [EPA-HQ-OAR-2010-0799-
1755-Al,p. 1]
This spring, you set a goal of reducing oil imports by one-third this decade, (make that two-thirds
and you would be closer to what we need) and in November you proposed fuel efficiency
standards that will effectively double current requirements. I commend your efforts. I believe it
is important to increase U.S. investment in fuel efficient technologies, save consumers money at
1-49
-------
EPA Response to Comments
the pump, help this country break its dependence on foreign oil, and protect the environment.
Don't let these standards be watered down—protect and finalize the new fuel efficiency rules.
[EPA-HQ-OAR-2010-0799-1755-A1, p. 1]
Organization: Minnesota Department of Commerce
I support the stated goals of the proposed rule to improve fuel economy of light-duty vehicles for
model years 2017-2025 as a means to further reduce greenhouse gas emissions and reduce oil
consumption. [EPA-HQ-OAR-2010-0799-7363-A1, p. 1]
Organization: Mitsubishi Motors R&D of America, Inc. (MRDA)
On May 21, 2010, President Obama issued a Memorandum requesting EPA and NHTSA to
jointly develop a coordinated National Program to improve fuel efficiency and reduce GHG
emissions of passenger cars and light-duty trucks for MYs 2017 through 2025. To that end, EPA
and NHTSA, with continuous consultation from the California Air Resources Board (CARB),
published several notices leading up to the NPRM. Mitsubishi Motors applauds the efforts of the
Administration and agencies to follow through on their commitment to continue the National
Program to regulate GHG emissions and fuel economy of light-duty vehicles for MY 2017 and
later MYs. For this reason, in July 2011, Mitsubishi Motors demonstrated its support of the
National Program by signing a letter of commitment to the process and structure of the overall
program as described in the NPRM. [EPA-HQ-OAR-2010-0799-9507-A1, p.2]
Mitsubishi Motors is appreciative of the inclusive rulemaking process. We stand committed to
the continued development of a National Program based on the technical, economic and
consumer realities of the United States light-duty automotive market. [EPA-HQ-OAR-2010-
0799-9507-A1, p.2]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 95-99.]
Mitsubishi Motors applauds the efforts of the Obama administration and agency staff to follow
through on their commitments to continue one national program on the federal level for these
model years.
Similarly, Mitsubishi Motors is appreciative of the inclusive process that led to the publication of
this NPRM. Mitsubishi Motors stands committed to continuing the development of the national
program based on technical, economic and consumer realities in the United States' light-duty
automotive market. To ensure these realities are fully considered in setting fuel economy and
greenhouse gas standards for these later model years included in this rulemaking, a midterm
evaluation is critical to this process.
Organization: Moravian College
Please do your part, in bringing our nation of drivers into welcoming a new generation of
automobiles that are more fuel efficient and burn their fuels more cleanly. We need this for
1-50
-------
National Program
energy independence as well as health benefits of a cleaner environment. [EPA-HQ-OAR-2010-
0799-5536-A1, p. 1]
Organization: Motor & Equipment Manufacturers Association (MEMA)
In order to meet regulatory requirements and consumer demand for cleaner, more fuel-efficient
advanced vehicles, motor vehicle parts manufacturers have increasingly taken on a significant
role in the research, development, engineering, and manufacturing of the advanced technologies
necessary to meet these ever-increasing goals. Working together, suppliers and vehicle
manufacturers develop an assortment of technologies and products that improve vehicle
performance, safety, fuel efficiency, and emissions. These components and systems are
rigorously tested on a range of platforms, each with varying degrees of performance. [EPA-HQ-
OAR-2010-0799-9478-A1, p.l]
MEMA is encouraged that NHTSA and EPA are continuing to work together on this second
phase of the National Program for Model Years (MY) 2017-2025. MEMA strongly supports the
continuation of a uniform, footprint-based National Program because it permits vehicle
manufacturers to focus their resources on investing in the best technologies available for their
fleet in order to achieve the levels prescribed by the program. This, in turn, feeds the ability of
the supplier base to continually innovate, to advance development, and to turn research
technologies into commercially viable products. [EPA-HQ-OAR-2010-0799-9478-A1, pp. 1-2]
Furthermore, MEMA supports the efforts of the agencies to harmonize and align their respective
standards, where appropriate. Synchronizing improves regulatory clarity and provides certainty.
[EPA-HQ-OAR-2010-0799-9478-Al,p.2]
Harmonization for this next phase of the National Program is important to its long-term success.
MEMA supports the proposals to harmonize the GHG emissions and CAFE standards, as
appropriate. [EPA-HQ-OAR-2010-0799-9478-A1, p.2]
MEMA welcomes and supports the proposals to harmonize the GHG emissions and CAFE
standards, as appropriate. Synchronizing improves regulatory clarity and provides certainty. We
support the agencies' decision to parallel the efficiency credits and fuel consumption
improvement values for compliance calculations for their respective GHG emissions and CAFE
standards programs. Specifically, aligning the air conditioning and off-cycle elements such that
the efficiency improvement credits have an equivalent fuel consumption improvement in the
compliance calculations is an appropriate, and needed, improvement to the National Program.
Credits are an important tool and can be positively applied and provide the industry necessary
options to achieve future standards. [EPA-HQ-OAR-2010-0799-9478-A1, p.4]
Excluding the internal harmonization between the respective EPA and NHTSA programs in this
NPRM, MEMA asks the agencies to take into account other regulatory endeavors that may
impact the ultimate efficacy of National Program standards. For example, subtle differences in
California's program (compared to the National Program), and the state's other vehicle-related
requirements, are just different enough such that suppliers have to conduct multiple compliance
test regimens. On the global front, a multitude of similar, but different regulations and
1-51
-------
EPA Response to Comments
requirements for other parts of the world, further burden companies with compounding testing
and compliance costs. [EPA-HQ-OAR-2010-0799-9478-A1, p.4]
A truly harmonized regulatory framework will help with economies of scale and avert multiple
layers of compliance programs. Essentially, since motor vehicle parts manufacturers bear a
significant proportion of research, development and testing costs, any opportunities for
government entities to synergize, harmonize and align related regulatory frameworks and
compliance needs are important and should be considered by all stakeholders and, where
appropriate, take corrective action. Continued cooperation and harmonization of the EPA,
DOT/NHTSA, the State of California and others is extremely important for the long-term
success of the Program. [EPA-HQ-OAR-2010-0799-9478-A1, pp.4-5]
Motor vehicle parts manufacturers develop a wide variety of technologies and products that
continually improve vehicle performance, safety, fuel efficiency, and emissions. The entire
motor vehicle industry needs consistent, long-term policies so that all stakeholders can more
effectively meet the regulatory requirements and consumer demands for cleaner, efficient
advanced technology vehicles and thrive in the current economic environment. MEMA and the
supplier industry are committed to policies that enable the introduction of new technologies
needed to support sustainable mobility. MEMA strongly supports the continuation of a uniform
National Program because it permits vehicle manufacturers to focus their resources on investing
in the best technologies available for their fleet in order to achieve the levels prescribed by the
program. Furthermore, these standards must be technology-neutral, performance-based, not
impose "preferred technology" pathways and allow for a fully competitive marketplace. [EPA-
HQ-OAR-2010-0799-9478-A1, p. 13]
Organization: National Association of Clean Air Agencies (NACAA)
NACAA is very pleased to support this proposal. We note also that there is a broad group of
stakeholders that supports EPA's and NHTSA's actions to continue, and build upon, the national
programs adopted in 2010 to reduce greenhouse gas (GHG) emissions from, and improve the
fuel economy of, model year (MY) 2011 through 2016 light-duty vehicles (LDVs). On July 29,
2010, 13 major automakers sent letters to EPA and the U.S. Department of Transportation
expressing their support for a next phase of the national vehicle program to further reduce GHG
emissions and increase fuel economy. These automakers together manufacture over 90 percent of
all vehicles sold in the U.S. In their respective letters, the automakers commit to "working with
EPA and NHTSA, the states, and other stakeholders to help our country address the need to
reduce dependence on oil, to save consumers money, and to ensure regulatory predictability and
certainty by developing this kind of strong, coordinated National Program." The California Air
Resources Board, the United Auto Workers and numerous environmental and consumer
organizations have also offered their support for this program. [EP A-HQ-OAR-2010-0799-8084-
Al,p. 1]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11788, p. 37.]
1-52
-------
National Program
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 33.]
This proposal to further the LDV GHG emissions and CAFE standards programs is also
consistent with and complementary to the federal GHG and fuel economy standards for MY
2014 through 2018 medium and heavy-duty vehicles adopted in 2011. [EPA-HQ-OAR-2010-
0799-8084-A1, p. 2]
In 2007, 31 percent of all U.S. GHGs were emitted by mobile sources, which, since 1990, have
been the fastest-growing source of U.S. GHG emissions. LDVs emit carbon dioxide (CO2),
methane, nitrous oxide and hydrofluorocarbons (HFCs) and are responsible for almost 60 percent
of all mobile source GHG emissions. CO2 emissions in 2007 represented approximately 94
percent of all LDV GHG emissions (including HFCs). [EPA-HQ-OAR-2010-0799-8084-A1, p.
2]
Relative to the national objective of improving energy and national security by reducing
dependence on foreign oil, net petroleum imports in 2009 accounted for about 51 percent of U.S.
petroleum consumption. In that same year, transportation was responsible for approximately 71
percent of petroleum consumption, with LDVs accounting for about 60 percent of transportation
oil use, which equates to about 40 percent of all U.S. oil consumption. [EPA-HQ-OAR-2010-
0799-8084-A1, p. 2]
The estimated benefits of this proposal (over the lifetime of the MY 2017 through 2025 vehicles)
are a reduction in oil consumption of 4 billion barrels and a reduction in GHG emissions of 2
billion metric tons. The anticipated fuel savings amounts to $347 billion to $444 billion (based
on a gasoline price of $3.38 per gallon in 2015 and $3.64 per gallon in 2020). [EPA-HQ-OAR-
2010-0799-8084-A1, p. 2]
The total estimated costs of this program (over the lifetime of the MY 2017 through 2025
vehicles) will be around $140 billion and the total monetized benefits will be on the order of
$449 billion to $561 billion, for a net benefit to society in the range of $311 billion to $421
billion. [EPA-HQ-OAR-2010-0799-8084-A1, p. 2]
Based on EPA's analysis, the fuel cost savings will "far outweigh" higher vehicle costs. For
consumers, the new standards would add, on average, about $2,000 to the cost of a new vehicle
in MY 2025. However, a consumer who pays cash when purchasing a MY 2025 vehicle can
expect to make up this cost in about three and a half years and, thereafter, continue to accrue
savings in fuels costs. A consumer who purchases a MY 2025 vehicle using credit will save
more each year in fuel costs than the amount of the increased payments on the car loan. [EPA-
HQ-OAR-2010-0799-8084-A1, p. 2]
The co-benefits to be derived from such a program extend far beyond climate change, fuel
savings and energy security, and include the following:
• reduced PM2.5 and NOX emissions due to reduced gasoline distribution emissions
associated with tanker trucks; [EPA-HQ-OAR-2010-0799-8084-A1, p. 2]
1-53
-------
EPA Response to Comments
mitigation of some of the disproportionate adverse health impacts (including those
associated with toxic air pollutants and criteria pollutants) on environmental justice
communities affected by emissions from high traffic and located near gasoline refining
and distribution facilities; [EPA-HQ-OAR-2010-0799-8084-A1, p. 3]
reduced adverse health impacts near roadways due to the increase in cleaner vehicles;
reduced risk of accidental spills of volatile crude oil due to proportional reduction in oil
imports via marine tankers;
buffering against gasoline price volatility for consumers and a hedge against rising fuel
prices due to the increased use of domestic and alternative fuel sources;
economic growth and the creation of high-quality jobs across the country due to the need
for the innovative automotive technologies upon which the standards rely; and
reduced hydrocarbon emissions due to lower fuel throughput at retail distribution
outlets. [EPA-HQ-OAR-2010-0799-8084-A1, p. 3]
Fourth, NACAA is aware that state and local governments are struggling to maintain current
road infrastructure and to fund enhancements. NACAA believes that the issue of how to provide
longterm transportation infrastructure funding is a critical national need that should be
addressed. However, the debate over long-term transportation funding should not affect the level
or delay adoption of the proposed fuel economy standards. [EP A-HQ-OAR-2010-0799-8084-
Al,p.4]
Finally, NACAA urges that EPA and NHTSA ensure that this final rule is promulgated by July
2012, as planned. Further, NACAA encourages EPA, upon promulgation of this rule, to begin
assessing the efficacy of another phase of standards to apply to post-2025 MY vehicles. [EPA-
HQ-OAR-2010-0799-8084-A1, p. 4]
Organization: National Automobile Dealers Association (NADA)
NADA continues to believe that a single national light-duty vehicle fuel-economy/GHG program
is essential to the extent that it avoids any unworkable patchwork of state laws. The EISA
mandate for a fleet-wide combined fuel economy average of at least 35 miles per gallon by 2020
(with a commensurate reduction in GHGs of at least 30 percent), followed by standards set to
achieve maximum achievable performance is Congress' clear direction. [EP A-HQ-OAR-2010-
0799-9575-A1, p. 12]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11786, p. 69.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11788, p. 92.]
NADA supports a single national program for light vehicle fuel economy.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11787, pp. 56-57.]
1-54
-------
National Program
NADA strongly believes that the issues and goals involved in this rulemaking are national in
scope, and that California regulators should not be dictating national policy or setting fuel
economy standards.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 69.]
NADA supports the single national program governing light-duty vehicle fuel economy as that is
what Congress sought in 2007 when it enacted the Energy Independence and Security Act.
Organization: National Caucus of Environmental Legislators
America's deepening dependence on oil puts our economy, environment, and national security at
risk. The introduction of new global warming pollution and vehicle efficiency standards ensuring
new cars and light trucks meet the equivalent of 54.5 miles per gallon fleet-wide by 2025 is an
important step in the right direction. These standards will reduce pollution and save Americans
money through greater fuel efficiency. [EPA-HQ-OAR-2010-0799-9443-Al, p. 1]
Reducing the nation's reliance on foreign oil is an important objective that these standards can
help to achieve. It is critical that the consumer and environmental benefits of these standards are
maximized by rejecting efforts to weaken the standards. We support keeping the standards as
strong as possible through the rulemaking process. [EPA-HQ-OAR-2010-0799-9443-A1, p. 1]
Americans understand that cleaner, more fuel-efficient vehicles can help break our addiction to
oil, and they overwhelmingly support strong fuel efficiency and pollution standards. In a recent
poll, Consumer Reports found that 80 percent of survey respondents favored raising the national
standard to around 55-mpg. [EPA-HQ-OAR-2010-0799-9443-Al, p. 1]
The standards proposed for 2017-2025 will greatly decrease the average new vehicle's global
warming pollution, cutting annual nationwide emissions by 280 million metric tons in 2030—
equivalent to the annual emissions from roughly 70 coal-fired power plants. The standards
outlined will also reduce U.S. gasoline consumption by 23 billion gallons in 2030— equivalent
to the 2010 U.S. imports from Saudi Arabia and Iraq. Allowing for loopholes to weaken these
standards would needlessly send money to foreign countries and extend our dependence on oil.
[EPA-HQ-OAR-2010-0799-9443-A1, pp. 1-2]
These standards will determine the efficiency of cars and trucks our children will drive decades
from now. As state legislators, on behalf of our constituents we applaud efforts to break
America's addiction to oil, keep billions of dollars in our economy and reduce the threat of
climate change. We urge your administration to ensure that the standards developed for 2017-
2025 vehicles are as strong as possible, in order to maximize their benefits for our economy, our
environment and our national security. [EPA-HQ-OAR-2010-0799-9443-Al, p. 2]
Organization: National Propane Gas Association (NPGA)
1-55
-------
EPA Response to Comments
NPGA supports the Environmental Protection Agency's (EPA) and the National Highway
Traffic Safety Administration's (NHTSA) goals to further reduce Greenhouse Gas (GHG)
emissions and improve fuel economy for light-duty vehicles for model years 2017-2025. Further,
we support the President's request to address global climate change and reduce our nation's oil
consumption. And, we firmly believe the use of Liquefied Petroleum Gas (LPG), an EPA
approved clean alternative fuel, will help reduce our nation's dependency on oil and reduce CC>2
emissions, a stated goal of the subject proposed rulemaking. [EP A-HQ-OAR-2010-0799-9482-
Al,p. 1]
Organization: National Wildlife Federation (NWF)
The standards are also an example of how industry, labor, and conservationists can and must
continue to work together to use the Clean Air Act as a tool for innovation and to solve critical
environmental, energy and economic challenges that we face. [EP A-HQ-OAR-2010-0799-9887-
A2, pp. 1-2]
The proposed 2017-2025 standards will approximately double fuel economy of our cars, SUV's
and pickups from today's levels to an average of 54.5 miles per gallon by 2025. Vehicles built
under the standard will save America 4 billion barrels of oil and 2 billion metric tons of carbon
pollution. [EPA-HQ-OAR-2010-0799-9887-A2, pp. 2-3]
Taken together with the 2012-2016 light duty standards and the 2014-2018 medium and heavy
duty standards being implemented now, the proposed standards will cut carbon pollution over
650 million metric tons a year in 2030 - about 10% of total US carbon pollution today. This is an
historic step forward to combat our climate challenge. [EPA-HQ-OAR-2010-0799-9887-A2, p.
3]
Taken together these standards are also the largest step the nation has ever taken to cut oil use
and enhance our energy security. As shown in Figure 1, above, these standards together will cut
our demand for oil by 3.6 million barrels per day; more than all the oil we import today from the
Persian Gulf, Venezuela and Russia combined. [Figure 1 can be found on p. 2 of Docket number
EP A-HQ-OAR-2010-0799-9887-A2] [EPA-HQ-OAR-2010-0799-9887-A2, p. 3]
And as we are ensuring that every car and truck uses less fuel, steady expansion of electric and
advanced vehicle technology can take us even further- to a mass market, high performance
vehicle fleet that uses little oil and produces near zero pollution. [EPA-HQ-OAR-2010-0799-
9887-A2, p. 3]
Deep cuts in the oil we need means less pressure for risky new drilling projects in the Arctic or
for clear cutting forest for Canadian tar sands. It means less need for new pipelines, fewer leaks
and threats to people, wildlife and our public and private lands. [EPA-HQ-OAR-2010-0799-
9887-A2, p. 3]
These standards show we can take real steps to roll back climate change and protect wildlife for
generations to come. [EPA-HQ-OAR-2010-0799-9887-A2, p. 3]
1-56
-------
National Program
The proposed standard is also critical to regain and sustain our leadership in the most advanced
vehicle technologies - including hybrid and electric cars and trucks. The strong long term targets
embodied in the 2017-2025 rule are essential to justify ongoing investments in hybrid and
electric technology necessary to combat high fuel prices and environmental challenges, and to
ensure the competitiveness of the American auto industry in a changing world. Weto [sic] meet
to build robust network of domestic innovators, suppliers and manufacturers ready to meet
national and global demand, to ensure an industry able to lead the clean global auto industry of
the future, and to ensure consumers are protected against the real and present risk of rising and
volatile oil prices. [EPA-HQ-OAR-2010-0799-9887-A2, pp. 5-6]
Standards are also strongly supported by the public.
A recent survey by Consumers Reports found 80% of car owners in support of fuel economy
standards that would achieve 55 mpg by 2025, and the agencies' recent field hearings were
swamped with overwhelmingly positive testimony. 14 The public knows fuel economy standards
work. They work for wildlife, they work American families, they work for the auto industry and
autoworkers and they work for the economy. [EPA-HQ-OAR-2010-0799-9887-A2, p. 7]
We thank the agencies for their clarity of vision and perseverance in developing this essential
standard. [EPA-HQ-OAR-2010-0799-9887-A2, p. 7]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 27-28.]
America needs a strong, clean industrial sector that employs billions with good jobs while
producing the most efficient products possible. Our members depend on all kinds of vehicles
from small hybrids to cars to pick-ups to off-road vehicles. We still believe in the potential of the
American auto industry.
Over the past two years, the hard working people here in Detroit and in Ohio and Missouri and
North Carolina and all across the country have been proving dramatically that they have what it
takes for America to lead in a prosperous clean energy future. Their efforts, combined with these
new standards, and effective public and private investment show how an industry can be retooled
to be vibrant in the present and even more relevant and powerful in the future. Strong standards
through the 2025 year are critical to staying on this path.
The standards are also an example of how an industry and labor and the conservation community
can and must work together to use the Clean Air Act as a tool for innovation and to solve critical
and environmental energy and economic changes we face today.
These standards deliver.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 31-32.]
1-57
-------
EPA Response to Comments
The proposed standard is also critical to regain and sustain our leadership in the most advanced
vehicle technologies including hybrid electric cars and trucks. These technologies will be critical
to combating high fuel prices and environmental challenges into the future and the
competitiveness of the American auto industry in a changing world.
Investments in cutting edge electric vehicles and other innovations increase fuel efficiency across
the board, and long-term targets create certainty in a world tyrannized by volatile oil prices and
availability.
Together we must work to build a robust network of innovators, suppliers and caring consumers
to lead in the global economy for the auto industry's future.
14 http://news.consumerreports.org/cars/2011/11/survey-car-owners-want-better-fuel-economy-
supportincreased- standards.html. This recent survey finds comparable results to many previous
polls.
Organization: Natural Resources Defense Council (NRDC)
The U.S. EPA and NHTSA proposed passenger vehicle carbon pollution fuel economy standards
for model years 2017-2025 is the third historic agreement to bring us cleaner cars and trucks.
The latest announcement follows on the joint NHSTA and EPA rules for model years 2012 to
2016 passenger vehicles and for model years 2014 to 2018 medium- and heavy-duty trucks. 1,2
These agreements exemplify how leadership, partnership, and compromise can help solve the
enormous environmental, economic and energy challenges facing our country. [EPA-HQ-OAR-
2010-0799-9472-A2, p. 2]
The model year 2017-2025 National Program standards will act as a powerful economic stimulus
by keeping a total of $350 billion in the U.S. economy by 2030 instead of sending it overseas to
Saudi Arabia, Iran, Venezuela and other oil-exporting nations. 5 This higher level of investment
in the U.S. economy, especially auto manufacturing, will result in roughly half a million more
jobs by 2030.6 [EPA-HQ-OAR-2010-0799-9472-A2, p. 3]
American consumers are already benefiting from the more fuel-efficient vehicle options
available due to the current National Program requirements and will benefit more as the
standards get stronger. By 2030, the new agreement will provide the equivalent of a $330 tax
rebate to every American household. 12 Compared to today's average vehicle, a 54.5 mpg-
equivalent standard will save the average driver $6,600 over the vehicle's lifetime, with most
drivers seeing benefits immediately in the form of reduced total monthly payments for the car
and fuel. [EPA-HQ-OAR-2010-0799-9472-A2, p. 5]
The most recent clean car agreement enjoys an unprecedented breadth and depth of support
including from almost all of the auto industry!4, and from Republicans and DemocratslS,
1-58
-------
National Program
consumer advocacy groups 16, 17, national security groups 18, 19, economists20, business
Ieaders21, small business owners22, theUAW23, and environmental organizations24. [EPA-
HQ-OAR-2010-0799-9472-A2, p. 6]
Numerous polls show that a large majority of Americans support substantially strengthening of
clean car standards. A Consumer Federation of America found 60 percent of American
consumers support a 60 mpg standard with a payback of three and five years.25 A poll for
national environmental groups found 83 percent of voters support a 60 mpg standard with a
payback of four years.26 Polls by the investor group Ceres found 56 percent of Michigan voters
and 59 percent of Ohio voters support 60 mpg with a payback time of four years.27 According to
a recent poll by the Consumer Reports National Research Center, 80 percent agreed that fuel
economy standards should require auto manufacturers to increase the overall fleet average to at
least 55 miles per gallon by 2025.28 Finally, a poll by the Public Policy Institute of California
found that an overwhelming 84 percent of Californians support requiring automakers to
significantly improve fuel efficiency, including 76 percent of Republicans.29 [EPA-HQ-OAR-
2010-0799-9472-A2, pp. 6-7]
Small business owners - many of whom buy cars and trucks for their businesses - also strongly
support higher fuel economy standards. A recent poll by the Small Business Majority found that
87 percent of small business owners overwhelmingly support adopting strong fuel efficiency
standards now and 80 percent support requiring the auto industry to increase mileage to 60 mpg
by 2025.30 According to the Small Business Majority poll: "Small business owners say that in
order to survive and remain competitive, they need automobiles that get better gas mileage and
cost less to operate." [EPA-HQ-OAR-2010-0799-9472-A2, p. 7]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 198-201.]
The proposed standards are a giant step forward. The standards are good for the environment,
consumers, and the economy. The standards ensure that as a nation we are investing in our future
instead of being beholden to a status quo of heavy dependence on oil which is fueling dangerous
emissions of carbon pollution and draining our economic wealth.
These standards will help protect our economy by helping reduce extreme weather events such as
hurricanes, heat waves and floods.
The national program and this latest set of standards are examples of good government. Despite
the gridlock in Congress, the EPA, NHTSA and the California Air Resources Board have
demonstrated an effective partnership to develop policies that meet the objectives of the Clean
Air Act and the Energy Policy and Conservation Act.
Each agency has played an important and critical role in shaping this proposal. This proposal is
also a product of discussions with the automotive industry, labor, environmental, and consumer
stakeholders, and the result is a strong set of standards.
1-59
-------
EPA Response to Comments
1 EPA and NHTSA. "Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate
Average Fuel Economy Standards for MY 2012-2016 (Final Rule)." 75 FR 25324.
2 EPA and NHTSA. "Greenhouse Gas Emission Standards and Fuel Efficiency Standards for
Medium- and Heavy-duty Engines and Vehicles." 76 FR 57106.
5 NRDC calculation based on EPA NPRM (76 FR 74854) estimates of oil consumption
reduction, import fractions and incremental vehicle costs. Fuel prices from AEO 2011.
6 Ceres. More Jobs per Gallon: How Strong Fuel Economy/GHG Standards will Fuel American
Jobs. July 2011.
12 UCS and NRDC. "Saving Money at the Gas Pump: State-by-State Consumer Savings from
Stronger Fuel Efficiency and Carbon Pollution Standards." September 2011.
14 Commitment letters from 13 automakers to Secretary LaHood and Administrator Jackson.
Dated July 2011 . Letters from BMW, Chrysler, Ford, GM, Honda, Hyundai, Jaguar Land Rover,
Kia, Mazda, Mitsubishi, Nissan, Toyota Volvo, http://epa.gov/otaq/climate/regulations.htm
15 Bipartisan Joint Letter to President Obama. Signed by The Honorable Diane Feinstein, US
state Congress, D-California, et al. Dated July 25, 2011.
16 American Consumer Advocacy Groups. Joint Letter to President Obama. Signed by
Consumer Federation of American, et al. Dated September 22, 2010.
17 Consumer Union. Consumers Reports Says 56 Miles-Per-Gallon Vehicle Standard is Good,
but 62 MPG is Better Aggressive Fuel Economy Standard by 2025 Will Save Consumers Money
and Dramatically Cut Oil Consumption. Press Release. June 30, 2011.
18 Securing America's Future Energy. Oil Savings from the Proposed 2017-2025 Fuel Economy
Standards. Issue Brief. June 8, 2011
19 Ashley Howe. Truman Thanks Obama in POLITICO. Blog. Truman Project. August 3, 2011.
http://www.operationfree.net/2011/08/03/truman-advertisement-featured-in-politico/
20 American Economist Group Joint Letter to President Obama. Signed by Michael Anderson,
Ph.D. University of California, Berkley, et al. Dated June 7, 2011
21 Environmental Entrepreneurs (E2) Joint Letter to President Obama. Signed by Curtis Abbott,
Lucesco Lighting Inc., et al. Date June 30, 2011
22 Small Business Majority. Small Businesses Strongly Support Raising Fuel Efficiency
Standards. Press Release. July 29, 2011
23 UAW. UAW supports administration proposal on light-duty vehicle CAFE and greenhouse
gas emissions reductions. Press Release. July 29, 2011.
1-60
-------
National Program
24 Environmental Advocacy Groups Joint Letter to President Obama. Signed by Cindy Shogan
Alaskan Wilderness League, et al. Dated September 9, 2010.
25 Consumer Federation of America. The Consumer Case for Strong Fuel Economy Standards:
56 MPG by 2025 Works. Press Release. June 28, 2011.
26 The Mellman Group, Inc. Memo to Environment America, The National Resources Defense
Council, Sierra Club, & Union of Concerned Scientists. Voters Overwhelmingly Support Stricter
Fuel Efficiency Standards. Released September 15, 2010.
27 Ceres. Voters in America's Auto & Manufacturing Heartland Want 60 MPG Fuel Economy
Standards by 2025. Press release. May 25, 2011.
28 Consumer Reports National Research Center. Consumer Reports Survey: Large Majority of
Consumers Support Stronger Fuel Economy Standards to Save Money, Lower Fuel Costs. Press
Release. November 14, 2011.
29 Public Policy Institute of California. PPIC Statewide Survey: Californians and the
Environment. Press Release of Findings. July 27, 2011.
30 Small Business Majority. Small Businesses Strongly Support Raising Fuel Efficiency
Standards. Fuel Efficiency Poll. July 29, 2011.
Organization: New Jersey Senate, Third Legislative District
America's deepening dependence on oil puts our economy, environment, and national security at
risk. I am writing to applaud you for taking an important step to confront the dangers of this
dependence by proposing new global warming pollution and vehicle efficiency standards that
would ensure new cars and light trucks meet the equivalent of the 54.5-mpg fleetwide standard
by 2025. [EPA-HQ-OAR-2010-0799-9970-A1, p. 1]
I applaud you for seizing this historic opportunity to do more than any previous administration to
break America's dependence on oil, keep billions of dollars in our economy and reduce the threat
of climate change, I urge you to maximize the consumer and environmental benefits of these
standards by keeping the standards as strong as possible through the rulemaking process in order
to maximize their benefits for our economy, our environment and our national security. [EPA-
HQ-OAR-2010-0799-9970-A1, p. 1]
Organization: New York City Council, 35th District
Your administration has taken important steps to confront the dangers of our dependence on
oil—most recently, proposing new global warming pollution and vehicle efficiency standards
that would ensure new cars and light trucks meet the equivalent of the 54.5-mpg fleetwide
standard by 2025. I am writing to applaud you for developing these standards. [EPA-HQ-OAR-
2010-0799-9901-A2, p. 1]
1-61
-------
EPA Response to Comments
These standards will determine the efficiency of cars and trucks our children will drive decades
from now. I applaud you for seizing this historic opportunity to do more than any previous
administration to break America's addiction to oil, keep billions of dollars in our economy and
reduce the threat of climate change. I urge you to ensure that the standards your administration
develops for 2017-2025 vehicles are as strong as possible, in order to maximize their benefits for
our economy, our environment and our national security. [EPA-HQ-OAR-2010-0799-9901-A2,
p. 1]
Organization: New York State Assembly Committee on Government Operations
Your administration has taken important steps to confront the dangers of our dependence on
oil—most recently, proposing new global warming pollution and vehicle efficiency standards
that would ensure new cars and light trucks meet the equivalent of the 54.5-mpg fleetwide
standard by 2025. I am writing to applaud you for developing these standards. [EPA-HQ-OAR-
2010-0799-9453-A2, p. 1]
These standards will determine the efficiency of cars and trucks our children will drive decades
from now. I commend you for seizing this historic opportunity to do more than any previous
administration to break America's addiction to oil, keep billions of dollars in our economy and
reduce the threat of global climate change. I urge you to ensure that the standards your
administration develops for 2017-2025 vehicles are as strong as possible, in order to maximize
their benefits for our economy, our environment and our national security. [EPA-HQ-OAR-
2010-0799-9453-A2, p. 1]
Organization: New York State Senate, 26th District
Your administration has taken important steps to confront the dangers of our dependence on oil-
most recently, proposing new global warming pollution and vehicle efficiency standards that
would ensure new cars and light trucks meet the equivalent of the 54.5-mpg fleetwide standard
by 2025. I am writing to applaud you for developing these standards. [EPA-HQ-OAR-2010-
0799-9884-A1, p. 1]
These standards will determine the efficiency of cars and trucks our country's children will drive
decades from now. I applaud you for seizing this historic opportunity to do more than any
previous administration to break America's addiction to oil, keep billions of dollars in our
economy and reduce the threat of climate change. I urge you to ensure that the standards your
administration develops for 2017-2025 vehicles are as strong as possible, in order to maximize
their benefits for our economy, our environment, and our national security. [EPA-HQ-OAR-
2010-0799-9884-A1, pp. 1-2]
Organization: Nissan North America, Inc.
Nissan remains committed to the program and to the terms and conditions set forth in Nissan's
letter dated July 29, 2011, and in the agencies' Second Supplemental Notice of Intent published
in the Federal Register on the same date. The following comments further demonstrate the
1-62
-------
National Program
overall benefits and technological underpinning of the proposal, as well as identifying additional
improvements and corresponding benefits. [EPA-HQ-OAR-2010-0799-9471-A1, p.l]
Nissan's environmental commitment extends beyond the regulatory program. As a leader in
electric powertrains, Nissan brought to market the all-electric Nissan LEAF and will continue to
drive development and deployment of electric powertrains. Nissan also remains dedicated to
continued improvements in internal-combustion powered vehicles, safe weight reduction and
advances in traditional hybrid technology. Nissan expects its fleet during the model years
covered by this rulemaking to include a diverse array of technologies and powertrains. [EPA-
HQ-OAR-2010-0799-9471-A1, p.l]
Industry-wide success in meeting the proposed standards will certainly depend on the extent to
which the market for new vehicle technologies develops during the covered model years.
Widespread adoption of battery electric vehicles and other advanced powertrains requires not
only industry to broadly embrace investment in these technologies, but also for consumers to
adopt these new technologies. Given the planning and lead-times necessary for such a market
shift, the proposed incentives for battery electric powertrains (multiplier credit and zero
emissions compliance value) and other proposed incentives are essential. Only through the
government's support of industrial innovation in the transportation sector can the U.S. achieve its
long-term greenhouse gas (GHG) public policy objectives. Not including the proposed Incentives
In the final rulemaking will discourage manufacturer investment in these technologies, and
signal a significant change in Administration policy and delay the realization of the substantial
long-term greenhouse gas reductions associated with these transformational, 'game changing'
vehicle technologies. [EPA-HQ-OAR-2010-0799-9471-A1, pp. 1-2]
Nissan believes that the proposed program strikes an appropriate balance between aggressive
standards and the encouragement of advanced technologies necessary to meet those standards.
As proposed, the regulatory program recognizes that although the automobile manufacturers
must invest significantly in technological advances, the economic and market conditions-both
within the U.S. and globally-must also support such an investment. Thus the structure of the
proposal-with standards firmly established for MYs 2017-2021 and with a robust mid-term
evaluation of technological and market feasibility for MYs 2022-2025-is essential. [EPA-HQ-
OAR-2010-0799-9471-A1, p.2]
Nissan commends the agencies for the comprehensive joint rulemaking, and strongly supports
global efforts to curb greenhouse gas emissions. Success in reducing the impact of mobile source
greenhouse gas emissions requires a coordinated and thoughtful effort that goes beyond the
automobile industry, however. Nissan, for its part, is committed to improving existing internal
combustion engines and investing in a future of electric vehicles and other advanced powertrains
to reduce the transportation sector's GHG emissions. [EPA-HQ-OAR-2010-0799-9471-A1, p.24]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 126-131.]
Nissan supports the national program and remains committed to the regulatory program as set
forth in the notices of intent and the proposed rule.
1-63
-------
EPA Response to Comments
The proposal also represents a significant leap forward in advancing more environmentally
friendly vehicles and zero emissions transportation.
The national program represents a significant step forward in reducing greenhouse gas emissions
and fuel consumption through a unified federal and state regulatory structure. We appreciate the
efforts of federal agencies and California in providing a regulatory program that allows for one
product pathway to compliance and that includes incentives to promote longer term public
policy.
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 69-74.]
The proposed rule is a positive step that builds on the progress made under the current CAFE
rules, and will achieve important economic and environmental benefits.
These proposed new standards will significantly reduce fuel consumption and greenhouse gas
emissions and expand the use of alternative fuels.
We urge EPA to continue to evaluate the greenhouse gas effects of these provisions, and take the
necessary steps to ensure preservation of the overall goals of the program.
In summary, the joint EPA/NHTSA effort to address greenhouse gas emissions and fuel
consumption through this rulemaking is a positive step that builds on the progress of the current
CAFE rules.
Organization: Oblong Land Conservancy
Your agency, with the President's support, is taking the right steps to improve fuel economy in
America's fleet of vehicles.
In order to reduce our dependence on foreign oil, and all the costs and dangers that this economic
relationship entails, we must wean ourselves from this wasteful source.
There are immense savings at the gas pumps that will benefit almost all Americans, and
contribute to economic prosperity.
It will substantially reduce air pollution and reduce the threats of global warming.
Please do your share to maximize the clear benefits to America's economy, our national security
and our environment.
The Oblong Land Conservancy commends your efforts, and supports these goals. [EPA-HQ-
OAR-2010-0799-9915-Al,p. 1]
1-64
-------
National Program
Organization: Pennsylvania Department of Environmental Protection
The Commonwealth of Pennsylvania appreciates the opportunity to submit comments on the
"2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas (GHG) Emissions and
Corporate Average Fuel Economy Standards" proposed by the Environmental Protection Agency
(EPA) and the National Highway Traffic Safety Administration (NHTSA) on December 1, 2011.
The proposal is designed to "represent a continued harmonized and consistent National Program"
(76 FR 74854). We are pleased that EPA and NHTSA (the agencies) continue to work with
automobile manufacturers to harness the large number of available energy efficient engine
technologies that offer the potential to increase the nation's energy efficiency. This continued
initiative to ensure greater vehicle fuel efficiency will reduce the nation's dependence on foreign
sources of energy, help promote an American energy infrastructure that will support the
country's transportation needs and save motorists money at the pump. [EPA-HQ-OAR-2010-
0799-7821-A1, p. 1]
The benefits of the agencies' final coordinated rule in terms of fuel savings will be substantial.
According to the proposed rule, from model years 2017 through 2025, the fuel cost savings will
outweigh the higher vehicle costs based on today's price of gasoline. A consumer who pays cash
when purchasing a model year 2025 vehicle can expect to recover the $2,000 extra cost for a
vehicle through fuel savings in about 3.5 years. Also, according to the proposed rulemaking,
passenger cars will see an average annualized rate of carbon dioxide (CO2) emission reductions
of five percent. For light trucks, the average annualized rate of CC>2 emission reductions would
be 3.5 percent per year for model years 2017 through 2021 and increase to five percent per year
for model years 2022 through 2025. Finally, the proposed rule indicates that the new fuel
economy standards will also result in small reductions in criteria pollutant emissions. The
Commonwealth urges the agencies to ensure that all of the proposed emission reduction
milestones are achieved expeditiously. [EPA-HQ-OAR-2010-0799-7821-A1, p. 2]
It is also imperative that EPA and NHTSA harmonize the National Program with the program
established by the California Air Resources Board (CARB) for motor vehicles. For example,
harmonization will allow automobile manufacturers to produce similar vehicles for states that
require CARB-certified vehicles and those that require Federally-certified vehicles. We support
harmonization because of its significant benefits for both the environment and consumers. [EPA-
HQ-OAR-2010-0799-7821-A1, p. 2]
We support the agencies' proposed rulemaking (CAFE and GHG emission standards) for motor
vehicles including passenger cars and light-duty trucks, which would create more fuel-efficient
light-duty vehicles in this country as governments in countries around the world are considering
similar efforts. Keeping the nation's vehicle fleet fuel efficient is important for reducing our
dependence on unreliable sources of fossil fuels, promoting a homegrown energy supply and
infrastructure, and maintaining our nation's competitiveness and standard of living. We also
support EPA's efforts to harmonize Federal light-duty vehicle standards with light-duty vehicle
standards developed by CARB. [EPA-HQ-OAR-2010-0799-7821-A1, p. 5]
1-65
-------
EPA Response to Comments
Finally, EPA should properly account for GHG emissions, which includes extending the
harmonization effort with CARB by adopting the same position on test fuels as the California
program. [EPA-HQ-OAR-2010-0799-7821-A1, p. 5]
Organization: Pennsylvania State Senate et al.
America's deepening dependence on oil puts our economy, environment, and national security at
risk. Your administration has taken important steps to confront this challenge-most recently,
announcing an outline for a new phase of fuel efficiency and auto pollution standards through
2025. I am writing to applaud you for developing these standards, and urge you to maximize the
consumer and environmental benefits of these standards by keeping the standards as strong as
possible through the rulemaking process. [EPA-HQ-OAR-2010-0799-9914-Al, p. 1]
Americans understand that cleaner, more fuel-efficient vehicles can help break our addiction to
oil, and they overwhelmingly support strong fuel efficiency and pollution standards. In a
nationwide poll, the Mellman Group found that 83 percent of likely voters favored a 60 miles-
per-gallon standard - even if it would add $3,000 to the up-front price of a new vehicle. Strong
standards maximize consumer savings at the pump. [EPA-HQ-OAR-2010-0799-9914-A1, p. 1]
The standards your administration has outlined for 2017-2025 will greatly decrease the average
new vehicle's global warming pollution, cutting annual nationwide emissions by 280 million
metric tons in 2030-equivalent to the annual emissions from 72 coal-fired power plants. The
standards you outlined will also reduce U.S. gasoline consumption by 23 billion gallons in 2030-
roughly equivalent to the 2010 U.S. imports from Saudi Arabia and Iraq. Allowing for loopholes
to weaken these standards would needlessly send money to foreign countries and extend our
dependence on oil. [EPA-HQ-OAR-2010-0799-9914-Al, p. 1]
These standards will determine the efficiency of cars and trucks our children will drive decades
from now. We applaud you for seizing a historic opportunity to do more than any previous
president to break America's addiction to oil, keep billions of dollars in our economy and reduce
the threat of climate change. I urge you to ensure that the standards your administration develops
for 2017-2025 vehicles are as strong as possible, in order to maximize their benefits for our
economy, our environment and our national security. [EPA-HQ-OAR-2010-0799-9914-A1, p. 1]
Organization: Pew Charitable Trusts
Attached please find comments from The Pew Charitable Trusts and more than 36,000
Americans in support of the proposed fuel efficiency rules for model years 2017-2025 light duty
cars and trucks under consideration by the Environmental Protection Agency and Department of
Transportation. [EPA-HQ-OAR-2010-0799-9496, p. 1]
The proposed rule would double passenger vehicle fuel efficiency from the level enacted in
2007, a significant increase that will save consumers money at the pump, blunt the economic and
national security threats presented by oil dependence and price volatility, and help American
manufacturers develop new technologies that spur investment in research, development, and
production of advanced vehicles. [EPA-HQ-OAR-2010-0799-9496-A2, p. 1]
1-66
-------
National Program
Pew has long supported higher federal fuel economy standards. In 2007, we worked to help
achieve overwhelming bipartisan support in Congress on the first fuel economy increase in 30
years. [EPA-HQ-OAR-2010-0799-9496-A2, p. 1]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2009-2010-0799-11788, p. 17]
In addition to the petition submitted to President Obama on November 1, 2011 and signed by
more than 31,000 Americans, Pew has, and will continue to, highlight the importance of fuel
efficiency with auto supply manufacturers, working families, and veterans at events around the
nation. We have also attached a follow-up petition that includes more than 36,000 signatures of
Americans that urge EPA and DOT to adopt a strong final rule. [EPA-HQ-OAR-2010-0799-
9496-A2, p. 2]
Dear Mr. President:
I support the proposed rule to increase fuel economy for new passenger vehicles to an average of
54.5 miles per gallon by 2025, which will allow cars and light trucks to drive farther on a gallon
of gas and reduce U.S. dependence on imported oil. The price of gas is once again squeezing the
budgets of American families, who already are forced to cut back in other areas just to pay for
basic transportation needs. [EPA-HQ-OAR-2010-0799-9496-A3, p. 1]
This spring, you set a goal of reducing oil imports by one-third this decade, and in November
you proposed fuel efficiency standards that will effectively double current requirements. I
commend your efforts. I believe it is important to increase U.S. investment in fuel efficient
technologies, save consumers money at the pump, help this country break its dependence on
foreign oil, and protect the environment. Don't let these standards be watered down—protect and
finalize the new fuel efficiency rules. [EPA-HQ-OAR-2010-0799-9496-A3, p. 1]
[Note: This comment was signed by 36,000 Americans.]
We have also sought to inform the public and policymakers across the nation about the dangers
of U.S. oil dependence to our nation's economy, national security, and to the lives of the U.S.
servicemen and women who defend oil transit routes and chokepoints around the world. [These
comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing on
January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 17-18.]
Organization: Porsche Cars North America, Inc. (PCNA)
Porsche supports the goal of setting ambitious targets for long-range reduction in fuel
consumption. Most importantly, it is critical to establish a single National standard for GHG so
that manufacturers are able to integrate technologies consistently. [EPA-HQ-OAR-2010-0799-
9264-A1, p. 2]
Organization: Renewable Energy Long Island
1-67
-------
EPA Response to Comments
I applaud you for seizing this historic opportunity to do more than any previous administration to
break America's dependence on oil, keep billions of dollars in our economy and reduce the threat
of climate change. I urge you to maximize the consumer and environmental benefits of these
standards by keeping the standards as strong as possible through the rulemaking process, in order
to maximize their benefits for our economy, our environment and our national security. [EPA-
HQ-OAR-2010-0799-7933-A1, p. 1]
Organization: Renewable Fuels Association (RFA)
As detailed in the attached comments, RFA is supportive of the stated goals of the CAFE/GHG
program. However, we are concerned by several elements of the proposal, as summarized below:
[EPA-HQ-OAR-2010-0799-9490-A1, p. 1 ]
While RFA is supportive of the stated goals of the program, which are "to address global climate
change and to reduce oil consumption," we are concerned by several elements of the proposal
that appear to discourage the future production of flexible fuel vehicles (FFVs) capable of
operating on gasoline blends containing greater than 15%vol. fuel ethanol (El5). [EPA-HQ-
OAR-2010-0799-9490-A1, p.3]
Additionally, we believe the agencies must ensure the final CAFE/GHG regulation is
harmonized with, and does not undermine the requirements of, other related regulations, such as
the Renewable Fuel Standard (RFS) and pending "Tier 3" rules. Vehicle engines, emissions
controls, and motor fuels operate as highly integrated systems. Therefore, as they finalize the
CAFE/GHG rule, the agencies must carefully consider what fuel properties and characteristics
will be necessary for automakers to achieve the proposed standards. [EPA-HQ-OAR-2010-0799-
9490-A1, p.3]
In closing, RFA remains steadfastly supportive of consistent, science-based policies that reduce
petroleum consumption, decrease transportation costs, and reduce GHG emissions. These
objectives work in concert to enhance national energy security, strengthen our economy, and
protect our environment. While we applaud EPA/NHTSA for endeavoring toward these goals in
the current CAFE/GHG proposal, we are concerned that progress may be undermined by several
elements of the proposal that discourage the future production of FFVs. [EPA-HQ-OAR-2010-
0799-9490-A1, p.8]
Organization: Ross, D.
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 240-244.]
In our very imperfect world, the ongoing political grid-lock, the proposed CAFE and greenhouse
gas standards are the single most effective policy option on the table for addressing our over-
dependence on fossil fuels.
As an economist and a local government official, I'm clear that the benefits of these standards far
outweigh the cost for our environment and our economy.
1-68
-------
National Program
I thank everyone involved in developing the proposed standards. I thank you for your patience in
hearing me out, and urge finalization of strong standards for model years 2017, 2025 this
summer.
Organization: Salinas, A.
With transportation accounting for 20% of all U.S. greenhouse gas emissions, the new fuel-
efficiency and global warming pollution reduction proposals by the Department of
Transportation and the EPA are encouraging. However, the proposed rules need strengthening.
[EPA-HQ-OAR-2010-0799-7119-A1, p. 1]
Organization: Securing America's Future Energy (SAFE)
SAFE has long advocated increasing the fuel economy of the light-duty vehicle (LDV) fleet.
Doing so is, in the short- to medium-term, one of the most effective ways to decrease the
petroleum intensity of our economy, thereby enhancing our energy, economic, and national
security. For that reason, SAFE strongly supports the general framework and overall fuel
economy and emission reduction goals that were the subject of an agreement between the
automakers and the regulators last summer, whose components were incorporated into the
proposed rule. SAFE also believes that the rule has the potential to help support the adoption of
grid-enabled vehicles (GEVs) (electric vehicles (EVs) and plug-in hybrid electric vehicles
(PHEVs)), which rely entirely on grid-delivered electricity or use substantially less liquid fuels
than traditional vehicles with internal combustion engines, substantially enhancing our economic
and national security by relying on a diverse portfolio of domestic fuels, with stable prices,
instead of the highly volatile global oil market. [EPA-HQ-OAR-2010-0799-9518-A1, p. 2]
SAFE expresses its appreciation for the agencies ongoing efforts to improve fuel economy in
order to improve our national and economic security, and hopes that its comments contribute to
the agencies ongoing efforts to do so as in a responsible and aggressive manner. SAFE is
committed to providing the regulating agencies any possible assistance that will help them as
they proceed through this rulemaking process. [EPA-HQ-OAR-2010-0799-9518-A1, p. 19]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 148.]
We strongly support the agreement reached last summer between the administration and
automakers and its embodiment in the proposed regulation because of the amount of the oil
savings that it will achieve.
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
The Sierra Club, Environment America, Safe Climate Campaign and the Clean Air Council
applaud EPA and NHTSA for proposing to strengthen vehicle fuel efficiency and greenhouse gas
standards for MY 2017-2025 cars and light trucks - what is now called the National Program.
Together with standards for 2012-2016 vehicles, this Administration has put new cars on a path
1-69
-------
EPA Response to Comments
to being twice as efficient in 2025 as new vehicles today. More stringent fuel economy and
greenhouse gas standards are the biggest single step we can take to curb dangerous climate
change and tackle our addiction to oil. [EPA-HQ-OAR-2010-0799-9549-A2, p. 1]
Conclusion: When finalized, strong 2017-2025 standards will provide automakers with a
longterm direction for safely improving fuel efficiency and reducing greenhouse gas emissions
from new vehicles. There is no doubt that with these standards, combined with the historic
standards that these agencies completed for 2012-2016, are the biggest single step we can take to
help move American beyond oil and curb dangerous carbon pollution. This long-term path that a
full 14 years of standards offers is critical and will unleash innovation. [EPA-HQ-OAR-2010-
0799-9549-A2, p. 11]
As proposed, these standards are demanding significant change in the vehicles automakers make
and sell with the promise that these vehicles will emit less greenhouse gas emissions. These
changes will benefit consumers, our economy, national security and environment. A strong final
rule is needed, with limits on the overall impacts of the flexibilities the proposal offers. To fully
realize the promised oil savings and emission reductions from these standards the agencies must
ensure the program continues though 2025. [EPA-HQ-OAR-2010-0799-9549-A2, p. 11]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 121-126.]
Sierra Club applauds EPA and NHTSA for proposing to strengthen vehicle efficiency and
greenhouse gas standards for model year 2017 to 2025 cars and light trucks. Together with the
standards for 2012 to 2016 vehicles this Administration has put new cars on the path of being
twice as efficient as new cars today. By 2025, the new vehicles are expected to average 54.5
miles per gallon and emit 162 grams per mile of greenhouse gas pollution delivering to
consumers vehicles down the road according to the agencies will average 37 miles per gallon.
These standards are the biggest single step we can take to reduce greenhouse gas emissions and
tackle our oil addiction. Cars and light trucks drive our addiction to oil to consume over 8 million
barrels of oil a day and CC>2 nearly 20 percent of U.S. climate-destructing pollution. Our oil
addiction drains our economy as much as $1 billion every day costing jobs and threatening our
national security.
There is no doubt with these standards that these are the biggest single steps we can take to move
Americans beyond oil and curb carbon pollution. However, more needs to be done. Even with
more efficient vehicle standards, we must increase our transportation choices to reduce how
much people drive and reduce the carbon content of the fuels we use. When it comes to vehicles,
however, President Obama and EPA and NHTSA have guaranteed progress for the next 13
years. We urge EPA and DOT to finalize strong standards in July.
Organization: Society of the Plastics Industry, Inc. (SPI)
SPI appreciates the proposal's response to the critical need to address global climate change. Our
policy statement on climate change encourages continued research to develop strategies to
1-70
-------
National Program
conserve energy and reduce emissions, and expresses our belief in the importance of developing
innovative technologies to minimize the impact on climate change. [EPA-HQ-OAR-2010-0799-
9492-Al,pp.l-2]
We thank the EPA and NHTSA for collaborating with vehicle manufacturers in the development
oftheNPRM, [EPA-HQ-OAR-2010-0799-9492-Al, p.2]
Organization: South Coast AQMD
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 68-71.]
The South Coast AQMD staff supports overall the proposed greenhouse gas emissions standards
and timeline. The proposed emissions standards and companion fuel economy standards will
result in a significant reduction in greenhouse gas emissions, as well as provide crucially
important co-benefits in reducing criteria emissions in support of attainment of federal and state
air quality standards for ozone and particulates.
In summary, we strongly urge U.S. EPA and NHTSA to finalize the proposed rule as early as
possible.
Organization: State of New York The Assembly
Your administration has taken important steps to confront the dangers of our dependence on oil
most recently, proposing new global warming pollution and vehicle efficiency standards that
would ensure new cars and light trucks meet the equivalent of the 54.5-mpg fleetwide standard
by 2025. I am writing to applaud you for developing these standards. [EP A-HQ-OAR-2010-
0799-10155-Al,p. 1]
These standards will determine the efficiency of cars and trucks our children will drive decades
from now. I applaud you for seizing this historic opportunity to do more than any previous
administration to break America's addiction to oil, keep billions of dollars in our economy and
reduce the threat of climate change. I urge you to ensure that the standards your administration
develops for 2017-2025 vehicles are as strong as possible, in order to maximize their benefits for
our economy, our environment and our national security. [EPA-HQ-OAR-2010-0799-10155-A1,
p. 1]
Organization: Tarazevich, Yegor
While I do strongly support reducing air pollution and oil dependency by increasing the fuel
economy [NHTSA-2010-0131-0199, p.l]
According to a new study from University of Michigan researchers Kate Whitefoot and Steven
Skerlos, with new CAFE standard it would be more profitable for automakers to keep building
larger and larger vehicles:
1-71
-------
EPA Response to Comments
http://www.washingtonpost.com/blogs/ezra-klein/post/cafe-loophole-could-lead-to-bigger-
cars/2011/12/14/gIQA3bGLuO_blog.html [NHTSA-2010-0131-0199, p.l]
Organization: Tesla Motors, Inc.
As a California based manufacturer devoted solely to the development and manufacture of
electric vehicles and electric vehicle batteries and drivetrain systems, Tesla views EPA's and
NHTSA's proposal as a step in the right direction. As detailed in these comments, however,
Tesla believes there is still room for improvement, as well as a better understanding of the
increasing capabilities and decreasing costs of electric vehicle technology. [EPA-HQ-OAR-
2010-0799-9539-A2, p. 1]
As an initial matter, Tesla Motors supports the general direction of EPA's and NHTSA's
proposal. [EPA-HQ-OAR-2010-0799-9539-A2, p. 3]
Tesla Motors again appreciates the opportunity to provide these comments. With reduction of
our dependence on petroleum as the exclusive source of transportation fuel a national imperative,
EPA and NHTSA are in a unique position to establish a final rule that encourages the promotes
the development of alternatives like electric vehicle technology. As Tesla continues to
demonstrate the feasibility of ever improving EV technology at lower price points, we would
encourage EPA and NHTSA to continue a leadership position by enacting a final rule that pushes
technology forward. [EPA-HQ-OAR-2010-0799-9539-A2, pp. 7-8]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 90-93.]
We are largely supportive of the effort to increase vehicle efficiency and to reduce greenhouse
gas emissions, and I thank you for your work in this sector.
Thus, while we applaud EPA and NHTSA's proposal, we believe that it represents a good start,
but it doesn't properly - that it doesn't fully take into account the full potential of EV technology.
And so we believe that standards could, indeed, be much higher.
Organization: The Catskill Center for Conservation and Development
America's deepening dependence on oil puts our economy, environment, and national security at
risk. I am writing to applaud you for taking an important step to confront the dangers of this
dependence by proposing new global warming pollution and vehicle efficiency standards that
would ensure new cars and light trucks meet the equivalent of the 54.5-mpg fleetwide standard
by 2025. [EPA-HQ-OAR-2010-0799-9913-A1, p. 1]
I applaud you for seizing this historic opportunity to do more than any previous administration to
break America's dependence on oil, keep billions of dollars in our economy and reduce the threat
of climate change. I urge you to maximize the consumer and environmental benefits of these
standards by keeping the standards as strong as possible through the rulemaking process, in order
1-72
-------
National Program
to maximize their benefits for our economy, our environment and our national security. [EPA-
HQ-OAR-2010-0799-9913-Al,p. 1]
Organization: Toyota Motor North America
Toyota views the joint EPA and NHTSA rulemaking process as a necessary step toward our
ultimate objective - a true, single national standard governing fuel economy and greenhouse gas
emissions in the future. [EPA-HQ-OAR-2010-0799-9586-A1, p.l]
Toyota appreciates the measures the agencies have taken to further harmonize certain aspects of
the two regulations. Yet, the different underlying legal frameworks of each agency prevent
harmonization in a few key areas, resulting in differing levels of stringency. [EPA-HQ-OAR-
2010-0799-9586-A1, p.2]
Recognizing that Toyota's ultimate goal of a single national standard governing fuel economy
and GHG's may not be practical under current law, we appreciate the efforts by the agencies to
harmonize as much as possible the various provisions of NHTSA's CAFE standards and EPA's
GHG standards. In particular, subject to specific comments provided later in this document,
Toyota generally supports NHTSA's adoption of the following provisions in order to further
harmonize with EPA's GHG regulations: (1) full-size hybrid pick-up truck credits; (2) A/C
efficiency credits; and (3) off-cycle technology credits. [EPA-HQ-OAR-2010-0799-9586-A1,
p.5]
Organization: U.S. Coalition for Advanced Diesel Cars
The Coalition expresses its support for federal policies that are aimed at increasing America's
twin goals of energy independence and reducing vehicle emissions. [NHTSA-2010-013 1-0246-
As stated throughout these comments, the Coalition is strongly in favor of the EPA and
NHTSA's twin objectives to increase America's energy independence through better fuel
economy and attempts to reduce GHG emissions from new vehicles. [NHT SA-2010-013 1-0246-
Al,p.8]
Organization: Union of Concerned Scientists (UCS)
On behalf of the Union of Concerned Scientists and our more than 350,000 supporters, please
accept the attached technical comments regarding the proposed rule for 2017 and later model
year light-duty vehicle greenhouse gas emissions and corporate average fuel economy standards.
[EPA-HQ-OAR-2010-0799-9567-A2, letter p. 1]
UCS strongly supports the proposed standards, and applauds the work of the U.S. Environmental
Protection Agency (EPA), the National Highway Traffic Safety Administration (NHTSA), and
the California Air Resources Board (CARB) for their respective roles in the development of the
proposed standards. [EPA-HQ-OAR-2010-0799-9567-A2, letter p. 1]
1-73
-------
EPA Response to Comments
Your proposal represents historic progress, simultaneously helping tackle the threat of climate
change, assisting the recovery of our domestic automotive industry, improving our nation's
energy security, and strengthening the economy by saving consumers money at the pump. [EPA-
HQ-OAR-2010-0799-9567-A2, letter p. 1]
Importantly, however, key provisions included in the proposal could erode these benefits, and
should be addressed by the agencies before the standards are finalized. We provide further detail
on these issues in our submitted comments. We urge the agencies to address these concerns and
finalize strong vehicle standards for model years 2017-2025 by July 2012, consistent with the
timeline issued in the most recent Notice of Intent. [EPA-HQ-OAR-2010-0799-9567-A2, letter
p. 1]
Whether it is the threat of international terrorism, the devastating impacts of global climate
change, or lost income and jobs due to oil price shocks, the damage caused by America's heavy
reliance on oil is clear. Since transportation accounts for the majority of America's oil
consumption, making our cars and light trucks cleaner and more fuel efficient is one of the most
effective steps we can take to cut our reliance on oil, reduce the heat-trapping pollution that
causes global warming, and put money back into the pockets of American consumers. [EPA-HQ-
OAR-2010-0799-9567-A2, p. 1]
The proposed light-duty vehicle standards for model years (MYs) 2017-2025 represent a historic
step forward. Combined with the existing standards for MYs 2012-2016, the proposed standards
would nearly double the fuel efficiency and halve the greenhouse gas emissions of light duty
vehicles sold in MY2025 compared to new vehicles sold today. This represents the most
significant action ever taken by the federal government to cut America's oil dependence and curb
global warming pollution. [EPA-HQ-OAR-2010-0799-9567-A2, p. 1]
Automakers have the technology to make all new light-duty vehicles cleaner and more fuel-
efficient. The proposed standards would ensure that this technology is used to finally give
consumers a real choice of fuel efficient vehicles - in the car, pickups minivan, and SUV
segments alike - when they purchase a new vehicle. In addition, investing in new fuel-saving
and pollution control technology will add value to vehicles and enhance the competitiveness of
the U.S. auto industry. This will help continue the economic recovery of the American auto
industry, protect existing jobs, and create new good-paying jobs into the future. [EPA-HQ-OAR-
2010-0799-9567-A2, p. 1]
UCS applauds the important work of the U.S. Environmental Protection Agency (EPA), the
National Highway Traffic Safety Administration (NHTSA), and the California Air Resources
Board (CARB) for their respective roles in the development of the proposed standards.
Throughout the regulatory process, the agencies have been transparent, relied heavily on
independent technical analysis, and sought ongoing input from the public and other stakeholders.
UCS urges the agencies to finalize strong vehicle standards, with attention paid to provisions in
the proposal (noted in Section II below) that, if exploited by automakers, would reduce the
program's anticipated benefits. [EPA-HQ-OAR-2010-0799-9567-A2, p. 1]
1-74
-------
National Program
The agencies have proposed new light-duty vehicle standards for MYs 2017-2025, which would
result in an anticipated fleetwide average greenhouse gas emissions level of 163 grams-per-mile
and a fleetwide average CAFE level of 49.6 miles-per-gallon in MY2025. If finalized and fully
implemented, these standards would deliver significant benefits to consumers, the domestic auto
industry, the environment, and U.S. energy security. [EPA-HQ-OAR-2010-0799-9567-A2, p. 2]
The National Program Harmonizes Fuel Economy and Greenhouse Gas Standards while
Maintaining California Authority
The proposed standards for MYs 2017-2025 build on the successful framework established
originally in the rulemaking for fuel efficiency and greenhouse gas standards of MY2012-2016
vehicles. This National Program allows automakers to sell a single national fleet of new light-
duty vehicles that comply with federal and state requirements under the Clean Air Act and the
Corporate Average Fuel Economy (CAFE) program. Under this structure, EPA continues to set
and administer national greenhouse gas standards under the Clean Air Act, while NHTSA sets
and administers CAFE standards. Throughout this process, both EPA and NHTSA have
coordinated with CARB, which will establish its own greenhouse gas standards, as allowed
under the Clean Air Act. However, CARB has indicated that it will once again accept
compliance with the National Program as compliance with its own program, based on conditions
articulated in the letters of commitment signed in July 2011 and reiterated in the resolution
language adopted by the Air Resources Board at their January 27th 2012 hearing. 11,12 [EPA-
HQ-OAR-2010-0799-9567-A2, p. 4]
Since President Obama first directed the agencies to develop the second phase of the National
Program in May 2010, both EPA and NHTSA have worked constructively to develop the
proposed standards, based on rigorous technical analysis and public input. The agencies released
a Notice of Intent (NOI) and supporting Technical Assessment Report (TAR) in September
2010. This was followed by a supplemental NOI in November 2010. Finally, the agencies
released a second supplemental NOI in July 2011, and in November 2011 a robust Technical
Support Document that accompanied the MY2017-2025 proposed rule. Throughout the process,
both the public and key stakeholders were invited to submit comments to the agencies. In
addition to the formal regulatory announcements, the agencies met routinely with key
stakeholders, both individually and through stakeholder panels, throughout the regulatory
process. UCS commends the agencies for conducting a thorough, transparent, and inclusive
regulatory process to this point. [EPA-HQ-OAR-2010-0799-9567-A2, p. 4]
UCS applauds the agencies for proposing standards that represent historic progress for American
consumers, the U.S. auto industry, clean air, and U.S. energy security. However, key provisions
included in the proposal could erode these benefits, and should be addressed by the agencies
before the standards are finalized. We provide further detail on these issues in the remaining
portion of our comments. We urge the agencies to address these concerns and finalize strong
standards for model years 2017-2025 by July 2012, consistent with the timeline issued in the
most recent Notice of Intent. [EPA-HQ-OAR-2010-0799-9567-A2, p. 5]
As important and promising as the proposal is, there are several areas that should be improved to
more accurately reflect current data and research on key issues, while other areas should be
1-75
-------
EPA Response to Comments
changed to avoid opportunities for automakers to exploit several provisions in the proposal. UCS
encourages the agency to address these items before finalizing standards for model year 2017-
2025 vehicles. [EPA-HQ-OAR-2010-0799-9567-A2, p. 5]
Again, UCS commends and thanks the agencies for their diligent work in developing the
proposed MY2017-2025 standards. We look forward to the agencies addressing the issues noted
above, and finalizing strong standards through 2025 by July 2012. [EPA-HQ-OAR-2010-0799-
9567-A2, p. 14]
America's dangerous dependence on oil puts our environment, economy, and national security at
risk. That's why I strongly support the proposed fuel efficiency and global warming emissions
standards for new cars and light trucks sold in model years 2017-2025. [EPA-HQ-OAR-2010-
0799-9713-A2, p. 2]
The proposed standards are achievable and reasonable and will save me money at the pump, cur
millions of tons of harmful global warming emissions, and save as much oil in 2030 alone as we
currently import from Saudi Arabia and Iraq. They will also drive innovation in the U.S. auto
industry, creating new jobs across the country. [EPA-HQ-OAR-2010-0799-9713-A2, p. 2]
We cannot afford to delay in confronting the threats of climate change and our dangerous oil
dependence. I urge you to move forward with the strongest possible standards free of harmful
loopholes. [EPA-HQ-OAR-2010-0799-9713-A2, p. 2]
We support these efforts to reduce global warming emissions, improve the fuel efficiency of our
vehicles, reduce our dependence on oil, and protect public health by ensuring drivers have more
choices for clean cars and light trucks through the use of strong, cost-effective standards. [EPA-
HQ-OAR-2010-0799-9713-A2, p. 3]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 214-
220.]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 137-
140.]
11 http://www.epa.gov/otaq/climate/letters.htm
12 Final ARB resolution language had not been posted to ARB's website at the time of
submission.
38 Edmunds.com. 2010 Hyundai Elantra SE Features and Specs. Accessed January 5, 2011
online at http://www.edmunds.com/hyundai/elantra/2010/features-
specs.html?sub=sedan&style=101197480
1-76
-------
National Program
39 Vehicles that Meet or Exceed Proposed Targets With Current Powertrain Designs. Draft Joint
Regulatory Impact Analysis, Table 3.12-1.
Organization: United Automobile Workers (UAW)
The UAW applauds NHTSA and EPA for their efforts in developing these proposed standards
and urges the agencies to issue final regulations based on them. [EPA-HQ-OAR-2010-0799-
9563-A2, p.l]
These proposed standards are NHTSA's proposal to implement the continuance of fuel economy
standards in accordance with the Energy Independence and Security Act of 2007 (EISA) and
EPA's proposal to continue the regulation of greenhouse gas emissions from light-duty vehicles
under the Clean Air Act (CAA). [EPA-HQ-OAR-2010-0799-9563-A2, p.l]
The UAW commends both agencies and the Obama administration for putting forth proposals
that extend and strengthen the unified national system of fuel economy and greenhouse gas
emission regulation established for model years 2012-2016. These proposals provide needed
regulatory certainty to the automobile industry by removing the threat of a confusing and costly
patchwork of state and federal regulation of light-duty greenhouse gas emissions beginning in
model year 2017. [EPA-HQ-OAR-2010-0799-9563-A2, p.l]
The proposed rules will benefit the nation by reducing greenhouse gas pollution and lessening
the nation's dependence on foreign oil, while at the same time giving consumers relief from
rising and volatile fuel prices and lowering the overall cost of owning and operating a light-duty
vehicle. [EPA-HQ-OAR-2010-0799-9563-A2, p.l]
The UAW is pleased that the proposals recognize the complexities of the automobile market and
the wide variety of products that consumers demand. These proposals call for improvements in
fuel efficiency and reductions in tailpipe pollution that are fair, sensible and achievable across
the many classes of cars and trucks sold in the United States. The proposed federal programs
create a level playing field for manufacturers across the market. [EPA-HQ-OAR-2010-0799-
9563-A2, pp.1-2]
In conclusion, the UAW is pleased to offer its strong support for the proposals put forward by
NHTSA and EPA. We commend the Obama administration for its success in implementing the
2012-2016 rules and developing these proposed rules for 2017-2025 with an open process of
stakeholder engagement. It is wise and efficient to gather as much information as possible from a
wide variety of stakeholders before crafting proposed regulations, especially so when much of
that information is deeply technical and closely held by the automakers. [EPA-HQ-OAR-2010-
0799-9563-A2, p.7]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11786, pp. 21-26.]
It's an honor to be here this morning on behalf of our membership to voice UAW's full and
strong support for the proposed rules, regulating greenhouse gas emissions and fuel economy.
1-77
-------
EPA Response to Comments
The proposed rules are sensible, achievable and needed. They are good for the auto industry and
its workers, good for the broader economy, good for the environment and good for our national
security.
Also I want to say that UAW believes that the auto manufacturers, all the companies that
participated in the technical discussions about these proposals and signed a letter of commitment
to support its frameworks deserves tremendous credit for their commitment to dramatically
increase the efficiency and reduce the emissions of vehicles sold in the United States.
This is a testament to good government. It shows how government can bring disparate
stakeholders together to solve problems that are important to the American public. These
proposed rules will reduce the pollution that contributes to climate change, significantly reduce
America's dependence on foreign oil and save American families money at the pump. They will
also create jobs in the auto industry and throughout the economy.
That's an incredible set of positive effects from these proposed rules, and it sums up why the
United Auto Workers are in strong support of these proposals.
President Obama and his Administration, including the two agencies here today, did a
tremendous job in developing the proposed rules. We thank the President for all the great work
he has done to strengthen the American auto industry and automotive communities.
Organization: United States Senate
We are writing to express our support for your efforts to establish a coordinated national
program for fuel economy and emissions standards for model year 2017 to 2025 cars, light
trucks, and SUVs. The proposed regulations will increase nationwide fleetwide fuel economy to
54.5 miles per gallon by 2025. The standards will implement Federal law in a manner that
provides industry with certainty, saves consumers billions of dollars at the pump, reduces our
dependence on oil, and improves the health of American communities. [NHTSA-2010-0131-
0264-Al,p.l]
These proposed regulations implement the policies set forth in the 2007 Ten in Ten Fuel
Economy Act (Title I of Public Law 11 0-140) in a manner supported by many automotive
manufacturers, as well as the labor and environmental community. Industry groups such as the
National Association of Manufacturers praised the agreement on the proposed standards as a
'positive step.' The regulatory certainty created by this proposal, which unifies state and Federal
regulations into a single regime, will help automakers to design and build advanced technology
vehicles and compete in an increasingly global marketplace. [NHTSA-2010-0131-0264-A1, p.l]
We appreciate your efforts to achieve your statutory mandates of reducing oil use and pollution
in a manner that will allow the automobile industry to grow and thrive. We encourage you to
continue working with stakeholders to attain the critical national objectives of reduced pollution,
improved energy security, and lower consumer gasoline costs while reducing compliance costs.
[NHTSA-2010-0131-0264-A1, p.2]
1-78
-------
National Program
Organization: United States Steel Corporation
U. S. Steel supports the objectives of the EPA and NHTSA to improve fuel economy and reduce
the greenhouse gas emissions associated with light vehicles. U. S. Steel also supports the Energy
Independence and Security Act (EISA) of 2007 and 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 goal of reducing carbon emissions
and reducing oil consumption. [NHTSA-2010-0131-0256-A1, p. 1]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 207.]
Organization: United Steel Workers (USW)
The United Steelworkers strongly supports the Administration's goals to increase fuel efficiency
standards for America's cars and trucks. Efficiency measures - whether they pertain to vehicles
or industry - can have the dual benefit of achieving greenhouse gas emission reductions and
making American businesses more globally competitive. We believe the vehicle emissions
reduction and fuel economy improvement as proposed by this joint NHTSA/EPA document will
serve both of these goals. [EPA-HQ-OAR-2010-0799-95 80-A2, p.l]
Organization: Volkswagen Group of America
Following the establishment of the 2012-2016 National Program, Volkswagen continued to
engage with agency staff to evaluate and discuss future potential for further improvements in
light duty GHG emissions and fuel economy. [EPA-HQ-OAR-2010-0799-9569-A1, letter p. 1]
Volkswagen Group of America, Inc. (Volkswagen) supports the vision expressed by this
rulemaking which is to continue into the 2017-2025 timeframe a harmonized National GHG and
CAFE program. Volkswagen would like to acknowledge the effort made by EPA, NHTSA, and
the State of California in building upon the previous 2012-2016 rulemaking. Volkswagen
participated in the negotiations during the development of the previous National program and we
have continued to meet with agency technical staff on a regular basis to provide updates
regarding our input on future technology trends and efficiency improvements. We are
appreciative of the opportunity to supply the agencies with these comments and we look forward
to continued constructive dialogue. [EPA-HQ-OAR-2010-0799-9569-A1, p. 3]
Volkswagen elected not to endorse the Supplemental Notice of Intent (SNOI) released prior to
this NPRM. We were encouraged that the proposal retains the framework for a single, national
fuel economy program. However, we were concerned that the framework resulted in an
unbalanced distribution of burden and that targeted flexibilities further amplified the inequities of
the program. Volkswagen could not responsibly endorse a proposal that conflicted with our key
principles stated above. [EPA-HQ-OAR-2010-0799-9569-A1, p. 6]
Volkswagen wishes to once again acknowledge the hard work and dedication by agency staff in
crafting this proposal. Volkswagen appreciates the enormous complexity involved in evaluating
1-79
-------
EPA Response to Comments
future technology developments which attempt to balance the needs of diverse stakeholders. We
are pleased to have the opportunity to provide these comments and look forward to continued
technical dialogue with agency staff. [EPA-HQ-OAR-2010-0799-9569-A1, p. 29]
Organization: Volvo Car Corporation (VCC)
VCC supported the adoption of a single national program to address both greenhouse gases and
fuel economy for model years 2012-2016 and commends the federal government for taking a
leadership role in the evolution of these regulations. [EPA-HQ-OAR-2010-0799-95 51-A2, p. 1]
VCC supports the effort of the Environmental Protection Agency (EPA), the National Highway
Traffic Safety Administration (NHTSA) and the California Air Resources Board (CARB) to
work towards the continuation of the single national program. This will allow the long-term
development of a national program that enables a robust and realistic development process
towards environmental vehicles which address greenhouse gases and fuel economy for the period
2017-2025. [EPA-HQ-OAR-2010-0799-9551-A2, p. 1]
The joint efforts of EPA and NHTSA to achieve harmonized requirements are essential to reach
the overall objectives. [EPA-HQ-OAR-2010-0799-9551-A2, p. 4]
Application of Credits for Both GHG - EPA and CARB and CAFE-NHTSA
The proposed EPA and NHTSA requirements are coordinated, but not fully harmonized. They
are also coordinated with CARB but are not completely harmonized. VCC suggests providing
equivalent fuel consumption and CO2 credit values toward both the GHG (EPA and CARB) and
CAFE programs (NHTSA). [EPA-HQ-OAR-2010-0799-9551-A2, p.9]
The current economic situation limits the opportunities for financial incentives to deploy new
environmental innovations. These constraints affect both industry and government opportunities
and mean we must manage our available resources very carefully. [EPA-HQ-OAR-2010-0799-
9551-A2, p. 15]
It is therefore a balancing act and extremely important that the mechanisms built into the EPA
and NHTSA regulations are flexible. [EPA-HQ-OAR-2010-0799-9551-A2, p. 15]
Organization: Weiner, L.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 105.]
I'm here today to support proposed standards and grateful to EPA and NHTSA for putting this
forth.
Organization: WESPAC Foundation
1-80
-------
National Program
America's deepening dependence on oil puts our economy, environment, and national security at
risk. I am writing to applaud you for taking an important step to confront the dangers of this
dependence by proposing new global warming pollution and vehicle efficiency standards that
would ensure new cars and light trucks meet the equivalent of the 54.5-mpg fleet-wide standard
by 2025. [EPA-HQ-OAR-2010-0799-9459-A1, p.l]
The projected annual benefits of such standards by 2030 are enormous: [EPA-HQ-OAR-2010-
0799-9459-Al,p.l]
$45 billion in savings at the gas pump [EPA-HQ-OAR-2010-0799-9459-A1, p.l]
23 billion gallons of gasoline saved [EPA-HQ-OAR-2010-0799-9459-A1, p.l]
280 million metric tons of global warming pollution avoided [EPA-HQ-OAR-20 10-0799-9459-
I applaud you for seizing this historic opportunity to do more than any previous administration to
break America's dependence on oil, keep billions of dollars in our economy and reduce the threat
of climate change. I urge you to maximize the consumer and environmental benefits of these
standards by keeping the standards as strong as possible through the rule-making process, in
order to maximize their benefits for our economy, our environment and our national security.
[EPA-HQ-OAR-2010-0799-9459-Al,p.l]
Organization: Whitefoot, K. and Skerlos, S.
This proposed rule takes important steps toward reducing oil consumption and greenhouse gas
emissions. However, further measures are needed to ensure that the projected fuel economy
improvements actually occur, and that incentives to upsize the vehicle fleet are reduced. [EPA-
HQ-OAR-2010-0799-9447-A1, p. 1]
Response:
EPA acknowledges the general support for the proposed rule expressed by a very wide
range of commenters. The commenters supported the proposal for many reasons, including the
following: Appreciation of the effort to align the program with NHTSA's and CARB's
programs; the aggressive but achievable standards that send a long-term signal to auto
manufactures for their future planning; the expectation of significantly reduced CC>2 emissions
and large fuel savings; expectation that the program will benefit businesses (including the auto
industry), create jobs, benefit consumers, and spur innovation. EPA is maintaining all key
provisions of the proposed rule that prompted these comments.
1.2. General Opposition for the National Program
Organizations Included in this Section
1-81
-------
EPA Response to Comments
Adams, G.
Addam, Mary
Anonymous public citizen 4
Anonymous public citizen 5
Axford, H.
Bassett, S.
Cafagna, R.
Cuenca, M.
Defour Group
Ennis, M.
Environmental Consultants of Michigan
Faria, R.
Feinstein, C.
Gilles, B.
Gordon, Michael
Green, K.
Haroldson, C.
Hohenstein, H.
Horst, R.
Houston Tea Party Society
Institute for Energy Research (IER)
Jordon, A.
Knapp, B.
Kunz, R. and J.
Leach, Kyle
Lennon, S.
Links, W.
Lipetzky, P.
Medinger, R.
Mehrotra, Rahul
National Automobile Dealers Association (NADA)
Parker, M.
Paul, M.
Pearce, F.
Pregibon, D.
Rafter, M.
Shick, R.
Slemp III, R. L.
Statman, P.
Steffanoff, N.
Steyn, R.
Sullivan, T.
Van Voorhies, M.
Varley, R.
Organization: Adams, G.
1-82
-------
National Program
I oppose the proposed rule to increase fuel economy for new passenger vehicles to an average of
54.5 miles per gallon by 2025, which will allow cars and light trucks to drive farther on a gallon
of gas and reduce U.S. dependence on imported oil. [EPA-HQ-OAR-2010-0799-1550-Al, p. 1]
This spring, you set a goal of reducing oil imports by one-third this decade, and in November
you proposed fuel efficiency standards that will effectively double current requirements. I
question your efforts. I believe it is important to increase U.S. investment in sustainable energy
technologies including fuel efficient technologies, charge consumers even more money with
taxes at the pump, help this country break its dependence on foreign oil, and protect the
environment. Don't let these standards be watered down—protect and finalize new fuel efficiency
rules in all areas, not only in transportation. [EPA-HQ-OAR-2010-0799-1550-Al, p. 1]
Organization: Addam, Mary
In the face of peak oil and climate change, why are we waiting til 2017 for better fuel standards?
It should have been done 40 years ago. [NHTSA-2010-0131-0208, p.l]
Organization: Anonymous public citizen 4
I read the letter written by several governors to support this proposal. California is not a wise
choice to model ourselves after, a bankrupt state. I do not support this proposal. Add this on top
of everything else we are burdened with and our economy will soon reach the point of no
recovery. If the future of the automobile industry is restricted to building electric and hybrid
vehicles, then I will probably be walking. [EPA-HQ-OAR-2010-0799-10317, p.l]
Organization: Anonymous public citizen 5
The general public does not want this bill, and it would be irresponsible to pass it. It should not
be passed. [EPA-HQ-OAR-2010-0799-2010, p.l]
Organization: Axford, H.
Mr. President [sic] You leave My Choice of Vehicles Up to My Needs, And What I CAN
AFFORD. You are destroying our economy by many of your actions. [EPA-HQ-OAR-2010-
0799-9149-A1, p. 1]
Environmental Protection Agency should not increase the CAFE mandate. American families
should decide which cars and light-trucks fit their needs and not have our choices dramatically
limited by EPA. [EPA-HQ-OAR-2010-0799-9149-A1, p. 2]
These regulations are based on one simple assumption—that federal bureaucrats know better
than American families what is best for us. This assumption is wrong. EPA does not know which
cars are best for me and my family and should therefore not limit my choices through
regulation. [EPA-HQ-OAR-2010-0799-9149-A1, p. 2]
1-83
-------
EPA Response to Comments
When EPA claims that it has "designed proposed standards to preserve consumer choice" this is
only true if you are rich. The rest of us will pay dearly. [EPA-HQ-OAR-2010-0799-9149- Al, p.
2]
EPA should allow people to make our car choices for themselves based on our needs instead of
imposing more mandates from Washington, D.C. [EPA-HQ-OAR-2010-0799-9149-A1, p. 2]
Organization: Bassett, S.
I strongly do not support the proposed new fuel efficiency and greenhouse gas standards for cars
and trucks to require cars and trucks to an average 54.5 miles per gallon by model year 2025.
[EPA-HQ-OAR-2010-0799-8123-A1, p. 1]
Organization: Cafagna, R.
Environmental Protection Agency should not increase the CAFE mandate. American families
should decide which cars and light-trucks fit their needs and not have our choices dramatically
limited by EPA. [EPA-HQ-OAR-2010-0799-11689-A1, p. 1]
These regulations are based on one simple assumption—that federal bureaucrats know better
than American families what is best for us. This assumption is wrong. EPA does not know which
cars are best for me and my family and should therefore not limit my choices through regulation.
[EPA-HQ-OAR-2010-0799-11689-A1, p. 1]
EPA should allow people to make our car choices for themselves based on our needs instead of
imposing more mandates from Washington, D.C. [EPA-HQ-OAR-2010-0799-11689-A1, p. 2]
Organization: Cuenca, M.
The Environmental Protection Agency should NOT increase the CAFE mandate. American
families should decide which vehicles fit their needs and not have our choices limited by the
EPA. [EPA-HQ-OAR-2010-0799-10142-Al,p. 1]
These regulations are based on a single assumption federal bureaucrats know better than
American families what is best for us. This assumption is wrong. The EPA does NOT know
which cars are best for me and my family therefore, should not limit my choices through
regulation! [EPA-HQ-OAR-2010-0799-10142-Al, p. 1]
When the EPA claims it has "designed proposed standards to preserve consumer choice" this is
only true if you are rich. The rest of us will pay dearly. [EPA-HQ-OAR-2010-0799-10142-A1, p.
2]
The EPA should allow people to make vehicle choices for themselves, based on our needs
instead of imposing more mandates from Washington, D.C. [EPA-HQ-OAR-2010-0799-10142-
Al,p.2]
1-84
-------
National Program
Organization: Defour Group
Regarding climate change and CAFE, President Carter's former White House economic advisor
on energy policy, William Nordhaus of Yale concludes:
The measure of whether someone is serious about tackling the global warming problem can be
readily gauged by listening to what they say about the carbon price. Suppose you hear a public
figure who speaks eloquently of the perils of global warming and proposes that the nation should
move urgently to slow climate change. Suppose that person proposes regulating the fuel
efficiency of cars, or requiring high-efficiency light bulbs, or subsidizing ethanol, or providing
research for solar power - but nowhere mentions the need to raise the price of carbon. You
should conclude that the proposal is not serious and does not recognize the central economic
message about how to slow climate change. To a first approximation, raising the price of carbon
is a necessary and sufficient step for tackling global warming. The rest is largely fluff. 19 [EPA-
HQ-OAR-2010-0799-9319-A1, p. 12]
Organization: Ennis, M.
I strongly oppose these standards.
We cannot afford any of these absurd idea's. [EPA-HQ-OAR-2010-0799-5612-A1, p. 1]
Organization: Environmental Consultants of Michigan
Agency Was Arbitrary and Capricious In the Selection of Policy
The Agency's stated goal is to achieve important reductions in greenhouse gas emissions and
fuel consumption from the light-duty vehicle part of the transportation sector claiming that the
affected vehicles contribute substantially to greenhouse gas emissions (GHG) and petroleum fuel
usage. Since 2002, the Agency has set a goal of carbon neutrality. With this goal in mind, the
Agency has the obligation to conduct a fair and balanced evaluation of policy options to achieve
this goal. [NHTSA-2010-0131-0166-Al,p. 1]
CAFE Has Been a Policy Failure [NHTSA-2010-0131-0166-A1, p. 1]
We now have over thirty years of history to determine the viability of continuing the use of
CAFE (or its EPA equivalent tailpipe greenhouse gas standards) as a policy tool. In evaluating
the official government CAFE datal we find that three of the nine highest volume
manufacturers2, Honda, Nissan and Mercedes Benz have DECREASED their combined car and
truck fleet average CAFE since 1980. Although the Korean based companies were not in the
market in 1980, they have reduced their CAFE since entering the market in 1986. This can
hardly be considered a successful policy when fully half the major participants have actually
backslid on CAFE over thirty years. [NHTSA-2010-0131-0166-A1, pp. 1-2]
It is impossible to conclude that CAFE has been a successful national policy.
1-85
-------
EPA Response to Comments
• Japanese based companies have increased their CAFE performance by only 2 mpg in the
past 30 years (Figure 12) [Figure 12 can be found on p. 19 of Docket number NHTSA-
2010-0131-0166-A1]
o Sales increased by a factor of 2.4
• European based companies have DECREASED their CAFE performance by almost a
mile per gallon (0.9 mpg) in the past 30 years (Figure 13) [Figure 13 can be found on
p. 20 of Docket number NHTSA-2010-0131-0166-A1]
o Sales have been essentially flat
• Korean based companies have DECREASED their CAFE performance by one mile per
gallon since they entered the US market in 1986 (Figure 14) [Figure 14 can be found on
p. 21 of Docket number NHTSA-2010-0131-0166-A1]
o Sales increased by a factor of 4
• The 3 remaining domestic companies have increased their CAFE performance by about 5
mpg (4.8 mpg) in the past 30 years (Figure 15) [Figure 15 can be found on p. 22 of
Docket number NHTSA-2010-0131-0166-A1]
o Sales decreased by almost half
• The limited success in increasing fuel economy over the past thirty years was the result of
fuel price swings (Figure 16) and shifting sales from domestic manufacturers to Asian
based companies. [Figure 16 can be found on p. 23 of Docket number NHTSA-2010-
013 1-0166-A1] [NHTSA-2010-0131-0166-A1, p. 2]
In looking at the domestic industry, history shows that there were 5 domestic based companies in
1980;
• American Motors went bankrupt (only the Jeep brand survived);
• International Harvester (now Navistar) left the segment;
• Chrysler required two federal bailouts and one bankruptcy filing;
• General Motors required one federal bailout and one bankruptcy filing [NHTSA-2010-
0131-0166-Al,p. 2]
Given this history and a complete lack of regional progress it is impossible to conclude that
CAFE has been a successful national policy. [NHTSA-2010-0131-0166-A1, p. 2]
Conclusion
These proposed standards are unfair to environmentalists, to manufacturers and to consumers.
Instead of wasting another thirty plus years on CAFE and its duplicative tailpipe counterpart, the
Federal government has no choice but to scrap this proposal and eliminate the existing tailpipe
1-86
-------
National Program
greenhouse gas standards. EPA should immediately begin work on a National low carbon fuel
standard. [NHTSA-2010-0131-0166-A1, p. 8]
1 October 2011 Summary of Fuel Economy Performance - October 28, 2011; U. S. Department
of Transportation; NHTSA, NVS-220
2 These companies represent over 93% of US sales
Organization: Faria, R.
Environmental Protection Agency must not increase the CAFE mandate. American families will
decide which cars and light-trucks fit their needs and not have our choices dramatically limited
by EPA. [EPA-HQ-OAR-2010-0799-9834-Al,p. 1]
These regulations are based on one simple assumption—that federal bureaucrats know better
than American families what is best for Americans. This assumption is wrong. EPA does not
know which cars are best for me and my family and will therefore not limit my choices through
regulation. The EPA must be disbanded...!!! [EPA-HQ-OAR-2010-0799-9834-A1, p. 1]
When EPA claims that it has "designed proposed standards to preserve consumer choice", it
simply means that they wish to expand their size and control over the American people. Disband
the EPA now...!!! [EPA-HQ-OAR-2010-0799-9834-A1, p. 2]
I will not allow the EPA to make my car choices. The EPA only wishes to impose more
mandates from Washington, D.C. thereby increasing their size and control over Americans.
[EPA-HQ-OAR-2010-0799-9834-A1, p. 2]
Organization: Feinstein, C.
I do not support the proposed standards. [EPA-HQ-OAR-2010-0799-6745-A1, p. 1]
Organization: Gilles, B.
I strongly oppose the proposed new fuel efficiency and greenhouse gas standards for cars and
trucks to require cars and trucks to an average 54.5 miles per gallon by model year 2025. [EPA-
HQ-OAR-2010-0799-8065-A1, p. 1]
Organization: Gordon, Michael
I oppose these regulations. There is no evidence whatsoever that greenhouse gas emissions harm
the environment and thus this regulation is not necessary. [EPA-HQ-OAR-2010-0799-9625, p.l]
Organization: Green, K.
1-87
-------
EPA Response to Comments
I question the proposed rule to increase fuel economy for new passenger vehicles to an average
of 54.5 miles per gallon by 2025, which will allow cars and light trucks to drive farther on a
gallon of gas and reduce U.S. dependence on imported oil. [EPA-HQ-OAR-2010-0799-1524-A1,
p. 1]
This spring, you set a goal of reducing oil imports by one-third this decade, and in November
you proposed fuel efficiency standards that will effectively double current requirements (for fuel
efficiency?). I question your efforts. While I agree that it is important to increase U.S. investment
in fuel efficient technologies, save consumers money at the pump, help this country break its
dependence on foreign oil, and protect the environment. [EPA-HQ-OAR-2010-0799- 1524-A1, p.
1]
Setting standards that are impossible to meet does nothing to help American consumers; nor does
it ensure future energy independence for the country. [EPA-HQ-OAR-2010-0799-1524-A1, p. 1]
Organization: Haroldson, C
I am writing in OPPOSITION of the strong fuel-efficiency and carbon pollution standards for
new cars and trucks. [EPA-HQ-OAR-2010-0799-11137-A1, p. 1]
Organization: Hohenstein, H.
I do NOT support the proposed rule to increase fuel economy for new passenger vehicles.
I do not believe -1 think it is important to increase private U.S. investment in fuel efficient
technologies, save consumers money at the pump, help this country drill more crude in America
and become less dependence on foreign oil. Consequently our environment will improve. Do
NOT let these standards be mandated on the American people. They have lost enough freedom.
Organization: Horst, R.
I'm strongly opposed the any governmental agency regulating fuel mileage standards under the
guise of clean air! [EPA-HQ-OAR-2010-0799-63 53-Al, p. 1]
Organization: Houston Tea Party Society
My name is Neal Meyer and I am a member of the Houston Tea Party Society, a Tea Party group
with some 3,500 members. My comment is in regards to the U.S. EPA rule mandate that motor
vehicles must achieve greater fuel economy standards. [EPA-HQ-OAR-2010-0799-9583, p. 1]
My belief, and I believe I am speaking for many, is that the U.S. government should not be
setting fuel economy standards for motor vehicles. The price of crude oil has gone up from $20
per barrel back in 2000, to $100 per barrel in 2012, with the price of gasoline having gone up
from $1.00 per gallon to $3.50 - $4.00 per gallon during the year 2000 - 2012 time frame. There
is evidence that this increase in fuel prices has caused Americans to decide to drive fewer vehicle
1-88
-------
National Program
miles and to start buying motor vehicles that get better fuel economy on their own, without the
requirement of a mandate from the federal government. It is this sort of meddling, where the
federal government substitutes its judgment for those of Americans, that has angered many
Americans. [EPA-HQ-OAR-2010-0799-9583, p. 1]
So, in conclusion, on behalf of the Houston Tea Party Society, I would say to the U.S. EPA to no
not enact, adopt, or enforce this rule. [EPA-HQ-OAR-2010-0799-9583, p. 1]
Organization: Institute for Energy Research (IER)
Lastly, EPA is legally required to consider less restrictive alternatives to achieve their goals of
greenhouse gas emission reductions from motor vehicles. EPA does not conduct this analysis in
this proposed rule.[EPA-HQ-OAR-2010-0799-9573-Al, p. 2]
For these reasons, EPA should not regulate greenhouse gases from vehicles using the Clean Air
Act. [EPA-HQ-OAR-2010-0799-9573-A1, p. 2]
Another problem is that the EPA's analysis doesn't ask whether the proposed rules would reduce
greenhouse gas emissions in the most efficient manner. In the economics of climate change
literature, it theoretically improves social welfare if governments around the world jointly
implement a uniform carbon tax equal to the estimated Social Cost of Carbon. The higher price
on carbon emissions leads to reductions by precisely those emitters that are most able to afford it.
As a result, this "market-based" (though the term is somewhat of a misnomer since it results
from government tax policy) approach to fighting climate change would achieve the correct
reduction in total emissions in the least-cost manner. [EPA-HQ-OAR-2010-0799-9573-A1, p.
22]
In this theoretically optimal scenario, it is very improbable that the worldwide response to the
new carbon tax regime would consist of U.S. manufacturers sharply increasing the fuel
efficiency of light duty cars and trucks. There are other, cheaper ways of reducing carbon
emissions by a desired quantity. By eschewing "market-based" approaches and directly ordering
the particular form of emission reductions—namely by increasing the fuel efficiency of new
vehicles in certain classes by specific amounts by specific deadlines—the proposed rules are
economically inefficient, relative to other possible policies. [EPA-HQ-OAR-2010-0799-9573-
Al, pp. 22-23]
Organization: Jordon, A.
President Obama stop limiting our automobile choices [EPA-HQ-OAR-2010-0799-9857-A1, p.
1]
Get Government OUT of my life and BUSINESS [EPA-HQ-OAR-2010-0799-9857-A1, p. 1]
Organization: Knapp, B.
1-89
-------
EPA Response to Comments
I strongly OPPOSE the proposed new fuel efficiency and greenhouse gas_standards for cars and
trucks to require cars and trucks to an average 54.5 miles per gallon by model year 2025. [EPA-
HQ-OAR-2010-0799-8255-A1, p. 1]
Organization: Kunz, R. and J.
Environmental Protection Agency should not increase the CAFE mandate. American families
should decide which cars and light-trucks fit their needs and not have our choices dramatically
limited by EPA. [EPA-HQ-OAR-2010-0799-9562-A1, p. 1]
EPA should allow people to make our car choices for themselves based on our needs instead of
imposing more mandates from Washington, D.C. [EPA-HQ-OAR-2010-0799-9562-A1, p. 1]
Organization: Leach, Kyle
I think this rules are too long and basically suck. We will all be driving stupid prius like cars.
This is AMERICA dang it. [EPA-HQ-OAR-2010-0799-9626, p.l]
Organization: Lennon, S.
Environmental Protection Agency should not increase the CAFE mandate. American families
should decide which cars and light-trucks fit their needs and not have our choices dramatically
limited by EPA. [EPA-HQ-OAR-2010-0799-9019-A1, p. 1]
When EPA claims that it has "designed proposed standards to preserve consumer choice" this is
only true if you are rich. The rest of us will pay dearly. [EPA-HQ-OAR-2010-0799-9019-Al, p.
1]
EPA should allow people to make our car choices for themselves based on our needs instead of
imposing more mandates from Washington, D.C. [EPA-HQ-OAR-2010-0799-9019-A1, p. 1]
Organization: Links, W.
Environmental Protection Agency should not increase the CAFE mandate. American families
should decide which cars and light-trucks fit their needs and not have our choices dramatically
limited by EPA.
These regulations are based on one simple assumption—that federal bureaucrats know better
than American families what is best for us. This assumption is wrong. EPA does not know which
cars are best for me and my family and should therefore not limit my choices through regulation.
[EPA-HQ-OAR-2010-0799-10348-A1, p. 1]
When EPA claims that it has "designed proposed standards to preserve consumer choice" this is
only true if you are rich. The rest of us will pay dearly.
1-90
-------
National Program
EPA should allow people to make our car choices for themselves based on our needs instead of
imposing more mandates from Washington, D.C. President Obama and all you bureaucrats who
need to just back off on telling us what type of vehicles we should drive, you have no idea.
Organization: Lipetzky, P.
I NOT support the proposed rule to increase fuel economy for new passenger vehicles to an
average of 54.5 miles per gallon by 2025, which will allow cars and light trucks to drive farther
on a gallon of gas and reduce U.S. dependence on imported oil. [EPA-HQ-OAR-2010-0799-
8184-Al,p. 1]
Organization: Medinger, R.
Stop all your government 'Big Brother' snooping and intervention. We are really smart enough to
live our own lives without your socialist agenda. [EPA-HQ-OAR-2010-0799-9035-A1, p. 1]
Organization: Mehrotra, Rahul
I believe these efforts are too little, too late.
We have already scorched our planet beyond the tipping point.
It may help if this standard was made effective right away, with punitive damages for delays.
[NHTSA-2010-0131-0206, p.l]
Your leadership and initiative in this matter needs to be dictated by the mess we have caused,
and not the conveniences of those who have created the mess.
After all, we are only asking to get back to where we were. [NHTSA-2010-0131-0206, p.l]
Organization: National Automobile Dealers Association (NADA)
Yet, the proposal continues to ignore this direction, opting instead for a bureaucratic cobbling
together of NHTSA's CAFE standards with EPA's largely redundant GHG standards. [EPA-HQ-
OAR-2010-0799-9575-A1, p. 12]
The time-honored EPA test procedures used to calculate NHTSA's CAFE standards rely on
equations involving a carbon balance technique where fuel economy is calculated from the
measurement of exhaust emissions, and an assumption that the quantity of carbon in a vehicle's
exhaust gas is equal to the quantity of carbon consumed by the engine as fuel. The physics and
chemistry involved spell a direct relationship; controlling fuel economy controls GHGs and
controlling GHGs controls fuel economy. NADA continues to believe that any further
rulemakings in this area should involve NHTSA CAFE standards, supplemented by a few
appropriately tailored EPA rules governing motor vehicle air conditioning, fuels, and vehicle
use. Moreover, EPA should focus its resources on 'doing no harm,' such as by ensuring that its
1-91
-------
EPA Response to Comments
emissions standards, including potential Tier III standards, avoid conflicting with mandates
aimed at achieving fuel economy improvements. Indeed, this is yet another lesson learned from
the commercial truck experience where the emissions mandates at issue served to severely
undermine fuel economy performance. [EPA-HQ-OAR-2010-0799-9575-A1, p. 12]
Lastly, NAD A continues to strongly object to the needless deference being given to the
California Air Resources Board and to its unnecessary and arguably preempted fuel economy
rules. NHTSA and EPA should take the policy position that the issuance of a final national rule
should eliminate, once and for all, any basis for the state regulation of fuel economy. NADA
strongly suggests that EPCA's explicit preemption of the adoption or enforcement of state laws
'related to' fuel economy was necessary to ensure national uniformity and to avoid a patchwork
of state-by-state mandates that would conflict a 'National Program,' and undermine the safety,
job loss, equity, and consumer affordability and choice considerations required by EPCA. [EPA-
HQ-OAR-2010-0799-9575-A1, pp. 12-13]
Organization: Parker, M.
Environmental Protection Agency should not increase the CAFE mandate. American families
should decide which cars and light-trucks fit their needs and not have our choices dramatically
limited by EPA. [EPA-HQ-OAR-2010-0799-9017-A1, p. 2]
These regulations are based on one simple assumption—that federal bureaucrats know better
than American families what is best for us. This assumption is wrong. EPA does not know which
cars are best for me and my family and should therefore not limit my choices through
regulation. [EPA-HQ-OAR-2010-0799-9017-A1, p. 2]
When EPA claims that it has "designed proposed standards to preserve consumer choice" this is
only true if you are rich. The rest of us will pay dearly. [EPA-HQ-OAR-2010-0799-9017-Al, p.
2]
EPA should allow people to make our car choices for themselves based on our needs instead of
imposing more mandates from Washington, D.C. [EPA-HQ-OAR-2010-0799-9017-A1, p. 2]
Get the overreaching theiving goverment out of the American peoples lives. The last thing this
country needs is more regulation. You don't enforce the laws we do have so stop making
ridiculous new ones. This Republic government that has been over taken by democacy (a failing
government) is failing. The depts that have been set up such as the dept of energy has failed and
you can't fix it. You are destroying the very freedoms and even the illusion of freedom we still
have. Government is not the solution, the Constitution is; Freedom and Liberty. The only thing
that you are succeeding at is destroying this country, but that has been your malicious intent all
along. [EPA-HQ-OAR-2010-0799-9017-A1, p. 2]
Organization: Paul, M.
Environmental Protection Agency (EPA) should "NOT" increase the Corporate Average Fuel
Economy (CAFE) mandates. AMERICAN FAMILIES should be able to decide which cars and
1-92
-------
National Program
light-trucks fit their needs and "NOT" HAVE OUR CHOICES DRAMATICALLY
LIMITED... BY THE EPA. [EPA-HQ-OAR-2010-0799-9027-A1, p. 2]
Increased CAFE mandates are based on one simple ASSUMPTION—that federal bureaucrats
'know better' than American families what is best for us. THIS ASSUMPTION IS WRONG..
EPA does »»NOT" know which cars are best for me and my family AND should therefore
••NOT" limit my choices through regulation. [EPA-HQ-OAR-2010-0799-9027-A1, p. 2]
When EPA claims that it has "designed proposed standards to PRESERVE CONSUMER
CHOICE"... WHAT 'HOGWASH!!!. IN FACT, THIS REGULATION WOULD IN FACT,
ELIMINATE CHOOSING A CAR THAT DIDN'T MEET THE CAFE MANDATE AND...
RAISE THE COSTS ON ALL VEHICLES...,THUS "ELIMINATING" CONSUMER
CHOICE, [EPA-HQ-OAR-2010-0799-9027-A1, p. 2]
IT IS THEREFORE "ANOTHER USELESS REGULATION" ATTEMPTING TO FURTHER
CONTROL... THE AMERICAN PUBLIC, THE ECONOMY, AND... IT WILL ONLY HAVE
NEGATIVE IMPACTS ON OUR COUNTRY. [EPA-HQ-OAR-2010-0799-9027-A1, pp. 2-3]
Organization: Pearce, F.
Environmental Protection Agency should not increase the CAFE mandate. American families
should decide which cars and light-trucks fit their needs. It is unreasonable and against the best
interests of our nation to have choices limited by the EPA.
It appears that you assume federal bureaucrats know better than American families what is best
for us. This assumption is wrong. EPA does not know which cars are best for me and my family
and must not limit my choices through such regulation. [EPA-HQ-OAR-2010-0799-10343-A1,
p.l]
EPA should allow people to make car choices for ourselves based on our needs instead of
imposing more mandates from Washington, D.C. [EPA-HQ-OAR-2010-0799-10343-Al, p. 1]
Thank you for rescinding this unnecessary burden on the American people. [EPA-HQ-OAR-
2010-0799-10343-A1, p. 1]
Organization: Pregibon, D.
EPA should allow people to make our car choices for themselves based on our needs instead of
imposing more mandates from Washington, D.C. [EPA-HQ-OAR-2010-0799-8987-A1, p. 1]
Organization: Rafter, M.
I am writing to oppose the absurd fuel-efficiency and carbon pollution standards for new cars
and trucks. [EPA-HQ-OAR-2010-0799-11587-A1, p. 1]
1-93
-------
EPA Response to Comments
Organization: Shick, R.
On behalf of U.S. consumers everywhere and as a 24 year automotive industry veteran, I am
writing to express my profound opposition to the new CAFE requirements proposed by the
Obama administration. [EPA-HQ-OAR-2010-0799-6215-A1, p. 1]
Please do not approve the proposed CAFE regulations in the best interests of the U.S. consumer.
[EPA-HQ-OAR-2010-0799-6215-A1, p. 1]
Organization: Slemp III, R. L.
I am NOT in favor of the proposed fuel economy standards. [EP A-HQ-OAR-2010-0799-6314-
Al,p. 1]
Organization: Statman, P.
We are so far beyond the (infernal) primitive internal combustion engine of the 18th Century.
Why are we still burning fossil fuels? This is a joke, right? 54mpg by 2025?
How about 0 emissions by 2013? We know the technology is affordably available.
You won't do it, but it was good to write this down for you to ignore. [EPA-HQ-OAR-2010-
0799-1472-A1, p. 1]
Organization: Steffanoff, N
If the Government is really concerned about air pollution and consuming petroleum resources
then the Federal Government needs to consider the energy cost in the manufacture of any
car/vehicle. In essence we would be better off, collectively, amortizing the energy cost of
manufacture of vehicles over the longest time period possible. People who are willing to drive
older cars (20 years old or older) should be 'rewarded' by relaxing the air pollution standards on
these older cars to encourage their being driven as long as possible to amortize the energy cost of
their manufacture as far into the future as possible. [EPA-HQ-OAR-2010-0799-9335-A1, pp. 1-
2]
The Environmental Protection Agency should NOT increase the CAFE mandate. American
families should decide which cars and light-trucks fit their needs and not have our choices
dramatically limited by EPA. [EPA-HQ-OAR-2010-0799-9335-A1, p. 2]
These regulations are based on one simple assumption—that federal bureaucrats know better
than American families what is best for us. This assumption is wrong. EPA does not know which
cars are best for me and my family and should therefore not limit my choices through regulation.
[EPA-HQ-OAR-2010-0799-9335-A1, p. 2]
1-94
-------
National Program
When EPA claims that it has "designed proposed standards to preserve consumer choice" this is
only true if you are rich. The rest of us will pay dearly. [EPA-HQ-OAR-2010-0799-93 3 5- Al, p.
2]
EPA should allow people to make our car choices for themselves based on our needs instead of
imposing more mandates from Washington, D.C. [EPA-HQ-OAR-2010-0799-9335-A1, p. 2]
Organization: Steyn, R.
I vehemently oppose the Environmental Protection Agency's proposal to increase the CAFE
standards for the following reasons: [EPA-HQ-OAR-2010-0799-8724-A1, p. 2]
* American families should decide which cars and light-trucks fit their needs and not have our
choices dramatically limited by the EPA or any other government bureaucracy. That is called
FREEDOM, which the Obama administration and its bureaucratic minions are intentionally and
rapidly stripping from the American people. [EPA-HQ-OAR-2010-0799-8724-A1, p. 2]
Organization: Sullivan, T.
Environmental Protection Agency should not increase the CAFE mandate. American families
should decide which cars and light trucks fit their needs. We should not have our choices
dramatically limited by EPA or any government agency. [EPA-HQ-OAR-2010-0799-10341-A1,
p. 1]
These regulations are based on one simple assumption - that federal bureaucrats know better than
American families what is best for us. This assumption is wrong. EPA does not know which cars
are best for me and my family and should therefore not limit my choices through regulation.
[EPA-HQ-OAR-2010-0799-10341-A1, pp. 1-2]
When EPA claims that it has "designed proposed standards to preserve consumer choice" this is
only true if you are rich. The rest of us will pay dearly. The EPA is not being truthful. [EPA-HQ-
OAR-2010-0799-10341-A1, p. 2]
EPA should allow people to make our car choices for themselves based on our needs instead of
imposing more mandates from Washington, D.C. Stop ruining our economy trying to satisfy the
false theory of global warming. [EPA-HQ-OAR-2010-0799-10341-A1, p. 2]
Organization: Van Voorhies, M
I DO NOT SUPPORT THIS PROPOSAL. [EPA-HQ-OAR-2010-0799-1629-A1, p. 1]
Organization: Varley, R.
I have great concern that this is asking far far too little. It seems ridiculous to me that it should
take 28 years (from 1997 to 2025) to do less than double that mileage. It needs to be done much
1-95
-------
EPA Response to Comments
faster than this. I hope that by then we will not be using petroleum gas at all. [EPA-HQ-OAR-
2010-0799-1948-A1, p. 1]
Response:
EPA acknowledges several general comments opposing the proposed program. A few of
these commenters expressed that the program should be more stringent and be implemented
sooner. Issues of stringency and timing are addressed in RTC Section 2.2 below.
Most commenters opposing the program express a general belief that the proposed rule is
unnecessary, in some cases stating that market forces would be sufficient to achieve the
environmental, fuel savings, and energy security goals of the program. These comments are
strongly controverted by historic evidence. As discussed in preamble section HID. 1 .a, fuel
economy improvements have historically remained unchanged in periods of flat CAFE standards
— absent price spikes in automotive fuels. These historic trends, coupled with the AEO2011
projection of largely stable gasoline prices through MY 2025, strongly support EPA's conclusion
that market forces alone will not result in the improvements projected for the rule. All the
written public comments on this issue strongly supported EPA's analysis. See preamble section
III.D.l.a. In addition, since the MYs 2012-2016 standards are footprint-based, every major
manufacturer is expected to be constrained by the new standards in 2016, and manufacturers of
small vehicles will not routinely over-comply as they had with the past universal CAFE
standards. There are additional factors that reinforce the historical evidence. While it is possible
that one or two companies may over-comply, any voluntary over-compliance by one company
would generate credits that could be sold to other companies to substitute for their more
expensive compliance technologies. This ability to buy and sell credits could eliminate any
over-compliance for the overall fleet, absent the GHG rule. Throughout the preamble, technical
documents, and this Response to Comments document, EPA presents its broad analytical
rationale for the program and will finalize all the major aspects of the proposed rulemaking.
A number of commenters expressed the belief that the proposed program would limit the
vehicle choices available to consumers. This is not the case. As discussed in more detail in the
preamble and in other comment responses, the footprint attribute-based standard tends to force
improvement across the entire spectrum of vehicle footprints and reduces incentive to downsize
vehicles as a compliance strategy. In addition, the agencies have included costs of preserving all
vehicle utility found in the present fleet (see e.g. EPA RIA at p. 1-40), and demonstrated
feasible, cost-effective compliance paths to meet the standards without eliminating any utility
found in the present fleet. Consequently, any changes in types of vehicle offered for sale would
be a result of market forces and manufacturer responses thereto, but would not be a direct
consequence of this rule. EPA addresses impacts on consumers, including vehicle choice issues,
in Section 18.1 below.
One commenter stated that because past CAFE standards had not resulted in significant
improvements in fuel economy, EPA and NHTSA should not pursue new GHG and CAFE
standards. On the contrary, EPA has shown in the earlier GHG rulemaking and in this one that
new, stringent CAFE and GHG standards can be expected to result in large reductions in
emissions and in fuel consumption in the coming years, precisely because they are more
1-96
-------
National Program
stringent than earlier standards, as described in Section 16.1 below. Also in Section 16.1, EPA
addresses the need for GHG reductions.
With respect to comments from the Defour Group and Institute for Energy Research, we
note that the merits of carbon pricing schemes are outside the scope of this rule. EPA has taken a
common-sense approach to developing standards for greenhouse gas emissions from mobile
sources under the Clean Air Act. These actions have focused on reducing greenhouse gas
emissions by increasing the efficiency of cars and trucks. EPA's analyses show that these
regulations will save consumers money at the pump, improve energy security by reducing oil
consumption, and cut millions of tons of harmful greenhouse gas emissions.
1-97
-------
-------
CO? Emissions Standards
2. COz Emissions Standards
2.1. Attribute-based (footprint) approach
Organizations Included in this Section
Alliance of Automobile Manufacturers
Aluminum Association's Aluminum Transportation Group
BMW of North America, LLC
Consumer Federation of America (CF A)
Consumer Reports
Ecology Center
Ferrari
Ford Motor Company
General Motors Company
Institute for Policy Integrity, New York University School of Law
Insurance Institute for Highway Safety (IIHS)
International Council on Clean Transportation (ICCT)
Mercedes-Benz USA, LLC
National Automobile Dealers Association (NADA)
Society of the Plastics Industry, Inc. (SPI)
United Automobile Workers (UAW)
Organization: Alliance of Automobile Manufacturers
Continued Use of Footprint Attribute [EPA-HQ-OAR-2010-0799-9487-A1, p.85]
The Alliance agrees that footprint is integral to a vehicle's design and is dictated by the vehicle
platform, which is typically used for a multi-year model life cycle. As such, it continues to be a
reasonable choice for setting standards. Further, since footprint was the basis for all regulatory
discussions, it remains the appropriate attribute. [EPA-HQ-OAR-2010-0799-9487-A1, p.85]
Analysis of manufacturer data and understanding of the vehicle energy efficiency dependence on
footprint suggests that linear attribute curves based on gym (gallons per mile) versus footprint is
an appropriate way to adjust for size differences across the industry. Vehicle efficiency is driven
by road load, mass, and powertrain/driveline efficiency. Regressions of vehicle road load energy
over EPA driving cycles, frontal area and mass show strong linear relationships with footprint.
[EPA-HQ-OAR-2010-0799-9487-Al,p.85]
Weighting and Regression Analysis [EPA-HQ-OAR-2010-0799-9487-A1, p.86]
The Alliance also supports the weighting and regression analysis used to develop the 2017-2021
model year CAFE and GHG curves. We further support the derived relationships between the
vehicles' CCVfuel consumption and their related footprints as an appropriate attribute. However,
as mentioned elsewhere in our comments, these weightings and analysis should be reviewed
2-1
-------
EPA Response to Comments
during the midterm evaluation for the MY 2022-2025 model years. [EPA-HQ-OAR-2010-0799-
9487-A1, p.86]
Organization: BMW of North America, LLC
BMW fully supports the continued use an attribute-based program. [EPA-HQ-OAR-2010-0799-
9579-A1, p. 1]
With respect to a Single National Program, BMW fully supports the continued use an attribute-
based program for passenger cars and light trucks as proposed by EPA and NHTSA. Compared
to a uniform standard for passenger cars and light trucks, an attribute-based standard drives fuel
efficiency and GHG reduction in all segments while taking into account the manufacturer's
product portfolio. However, because BMW offers a worldwide product portfolio and most of the
CO2 and fuel economy regulations worldwide are based on vehicle weight instead of footprint,
BMW continues to recommend that these regulations be harmonized as much as possible. [EPA-
HQ-OAR-2010-0799-9579-A1, p. 3]
Organization: Consumer Federation of America (CFA)
The attribute-based approach ensures that the standards do not require radical changes in the
types or size of vehicles consumers drive; so, the full range of choices will be available to
consumers. [EPA-HQ-OAR-2010-0799-9419-A1, p. 8]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 90.]
Third, the approach to setting standards is consumer friendly and facilitates auto maker
compliance.
The new attribute-based approach as you've heard provides no incentive to change the size of the
vehicles. Consumers will get the cars they want; they'll all be more fuel efficient.
Organization: Consumer Reports
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 168.]
Because the CAFE standards are now footprint-based, improvements across all vehicle sizes, so
each class will see an efficiency.
Organization: Ecology Center
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 188.]
2-2
-------
CO? Emissions Standards
One is that the proposed standards continue the attribute-based structure and requirements for
steady improvement that were established in the current standards. When first proposed by the
agencies in 2009 following the historic 2007 Energy Independence and Security Act, this new
approach represented a breakthrough in regulation for this sector. Not only were the
requirements more fairly applied among vehicle manufacturers but the rules also more
effectively stimulated innovation by requiring improvements across all vehicle sizes and classes.
The rules also included provisions that help ensure the continued production of domestic fuel-
efficient vehicles, and we support those as well.
Organization: Ferrari
1) Vehicle attributes to be considered [EPA-HQ-OAR-2010-0799-9535-A2, p. 11]
We agree that the CO2 and CAFE standards are based on one or more vehicle attributes. The
footprint is the attribute selected first by NHTSA since 2011 MY CAFE regulation and then in
the joint National Program MYs 2012-16 for both CO2 and CAFE standards. [EPA-HQ-OAR-
2010-0799-9535-A2, p. 11]
The footprint alone does not take into account many of a vehicles' other characteristics that
greatly affect the fuel economy/ CO2 emissions, like the engine displacement and power,
transmission, curb weight, aerodynamics, etc. This fact is recognized by both EPA and NHTSA,
as written in Section II.C.2. (pages 74912 and 74913): [EPA-HQ-OAR-2010-0799-9535-A2,
p.ll]
There are several policy and technical reasons why NHTSA and EPA believe that footprint is the
most appropriate attribute on which to base the standards, even though some other vehicle
attributes (notably curb weight) are better correlated to fuel economy and emissions. [EPA-HQ-
OAR-2010-0799-9535-A2, p.ll]
Further... we recognize that weight is better correlated with fuel economy and CO2 emissions
than is footprint. [EPA-HQ-OAR-2010-0799-9535-A2, p.ll]
We sent our comments on this important issue in the previous rulemaking for MYs 2012- 16. We
would prefer at least a second attribute to be considered, in addition to the footprint. For
example: the power to curb weight ratio. Nonetheless, we admit that it seems logical to continue
with the footprint, as proposed, to be consistent with the final regulation enacted for MYs 2012-
16. [EPA-HQ-OAR-2010-0799-9535-A2, p.ll]
We agree to keep the type and shape of curves that define CO2 and fuel economy standards.
[EPA-HQ-OAR-2010-0799-9535-A2, p.ll]
Organization: Ford Motor Company
2-3
-------
EPA Response to Comments
Ford supports the continuation of footprint-based standards with separate car and truck fleets
based on NHTSA vehicle definitions for both the GHG and CAFE programs. [EPA-HQ-OAR-
2010-0799-9463-A1, p. 8]
Ford and the auto industry have long supported separate car and truck attribute-based standards
because cars and trucks have different functional characteristics, even if they have the same
footprint and nearly the same base curb weights. For example, the Ford Edge and the Ford
Taurus have the same footprint, but vastly different capabilities with respect to cargo space and
towing capacity. Some of the key features incorporated on the Edge that enables the larger tow
capability include an engine oil cooler, larger radiator and updated cooling fans. This is just one
of the many examples that show the functional difference between cars and trucks and further
support the need to maintain separate car and truck attribute-based standards. [EPA-HQ-OAR-
2010-0799-9463-A1, p. 8]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 34.]
Turning now to more specific comments of the proposed rulemaking, we support the relative
manner in which car and truck targets have been set to reflect their respective capabilities to
improve fuel economy.
Organization: General Motors Company
GM supports the proposed footprint-based CO2 and CAFE standards for 2017-2021. [EPA-HQ-
OAR-2010-0799-9465-A1, p. 2]
Organization: Institute for Policy Integrity, New York University School of Law
The agencies should rethink their footprint-based standards, which may be unnecessary to
respect consumer preferences, may negatively impact safety, and are likely to be overall
inefficient. Increasing the safety of one car can impose a negative safety externality on others,
and consumer preferences can adjust as average fleet-wide attributes shift. As a result, trying to
eliminate the incentive to build smaller cars may block a cost-effective compliance strategy and
may not guarantee a safer fleet. [EPA-HQ-OAR-2010-0799-9480-A1, p. 2]
Part II. Vehicle Attributes
The agencies assume that the current market accurately reflects the range of consumer
preferences for vehicle attributes like performance, carrying capacity, safety, and comfort, failing
only with respect to fuel economy technology. The agencies want to ensure that the proposed
rule will preserve both consumer choice and the same mix of vehicle options. If instead the rule
were to impact vehicle attributes like size and power, the agencies worry that consumers might
experience a loss in welfare, erasing some of the large net benefits the rule should generate for
consumers and society. [EPA-HQ-OAR-2010-0799-9480-A1, p. 12]
2-4
-------
CO? Emissions Standards
To this end, the agencies take two steps. First, they tie the prescribed standards to vehicle
footprint, so that larger vehicles will generally be subject to less stringent controls compared to
smaller vehicles. Second, the agencies apply an assumption of constant performance to their cost
estimates, believing that manufacturers will spend whatever extra it costs to maintain current
vehicle attributes as they increase fuel economy. [EPA-HQ-OAR-2010-0799-9480-A1, p. 12]
The agencies should rethink both their attribute-based standards and their estimation of costs.
First, the footprint-based standards may be unnecessary to respect consumer preferences, may
negatively impact safety, and may be overall inefficient. Several arguments call into question the
footprint-based approach, but a particularly important one is that large vehicles can impose a
negative safety externality on other drivers. [EPA-HQ-OAR-2010-0799-9480-A1, p. 12]
Second, the agencies' constant performance cost estimates represent an upper bound to possible
consumer welfare losses and are most likely overestimates, because vehicle attributes are partly
positional and consumer preferences can shift with changing attributes. Similarly, the unlikely
chance that the agencies' cost projections underestimate consumer welfare losses is further
mitigated by the actual nature of consumer preferences. Finally, those same insights from
positional goods theory and the bandwagon effect should be considered in the agencies' forecast
for the future consumer market for new technologies like electric vehicles. [EPA-HQ-OAR-
2010-0799-9480-A1, p. 12]
Footprint-Based Standards May Be Unnecessary to Respect Consumer Preferences, May
Negatively Impact Safety, and May Be Overall Inefficient
The agencies choose to set regulatory stringency according to vehicle footprint, in part because
the statute requires NHTSA to base standards on attributes related to fuel economy. The agencies
offer five justifications for choosing a footprint-based approach: [EPA-HQ-OAR-2010-0799-
9480-A1, p. 13]
• First, they claim the optimal attribute-based standard will achieve greater overall fuel savings
than the optimal flat standard, since an attribute-based approach encourages all manufacturers to
add new technologies every year, even those manufacturers with fleets that are already relatively
efficient.
• Second, out of concerns for safety, the agencies want to remove the incentive to build smaller
cars in order to comply with the standard.
• Third, the agencies believe the attribute-based approach will be more equitable than a flat
standard, which could impose disproportionate burdens on some manufacturers.
• Fourth, the agencies want to preserve the current vehicle mix in the marketplace in order to
respect consumer choice.
2-5
-------
EPA Response to Comments
• Fifth, the agencies believe a footprint-based approach involves a lower risk of manufacturers
"gaming" the system, at least compared to a weight-based approach. [EPA-HQ-OAR-2010-
0799-9480-A1, p. 13]
All five justifications are problematic. [EPA-HQ-OAR-2010-0799-9480-A1, p. 13]
The first justification assumes that attribute-based approaches will increase overall fuel savings
since, under a flat standard, manufacturers with fleets that are already relatively fuel efficient
would have little incentive to continue upgrading. However, this claim very much depends on
whether the proposed attribute-based standard is actually optimal: an inefficient footprint-based
standard is unlikely to achieve greater overall fuel savings than the optimal flat standard. [EPA-
HQ-OAR-2010-0799-9480-Al,p. 13]
Moreover, given that reducing vehicle size, weight, and performance are relatively cheap and
readily available compliance options,84 even the optimal footprint-based standard may suffer
from inefficiencies by disincentivizing an otherwise cost-effective strategy. Wenzel's research
suggests that "a fuel economy standard that discourages vehicles with smaller footprint. . . will
not be as effective in reducing fuel consumption and associated greenhouse gas emissions as a
single stringent standard applied across all vehicle sizes. ... A single stringent fuel economy
standard would discourage the continued use of light trucks (with low fuel economy) as
essentially substitutes for cars, and encourage greater use of lighter and smaller
vehicles."85 [EPA-HQ-OAR-2010-0799-9480-A1, p. 13]
NHTSA should consider the advantages and disadvantages of all fuel economy-related attributes,
and choose the attribute-based approach that will allow it to maximize net benefits of the rule;
EPA should do the same with all possible approaches, including non-attribute, flat standards.
One fuel economy-related attribute the agencies do not seem to have considered that may
warrant analysis is vehicle fuel type. [EPA-HQ-OAR-2010-0799-9480-A1, p. 13]
Manufacturers could also decrease weight without decreasing footprint as a compliance strategy.
The overall effects of such a choice on safety are not immediately clear, though at least some
evidence suggests that redesigning truck-based SUVs into car-based crossover SUVs resulted in
both lighter vehicles and decreased safety risks to drivers and others.91 [EPA-HQ-OAR-2010-
0799-9480-A1, p. 14]
More importantly, the relationship between size and safety is neither simple nor unidirectional.
To the extent smaller cars fare worse in crashes with bigger cars, increasing size may improve an
individual driver's safety; but it may simultaneously impose a negative safety externality on
other drivers, whose cars are now relatively smaller compared to the growing average fleet size.
Decreasing size may have similarly opposing impacts on safety. Therefore, maintaining or
increasing the average size of the entire fleet does not guarantee the safest outcome, and
decreasing the fleet's average size in response to a fuel economy rule might have no overall
change in safety levels (though at some point, reducing the size or changing attributes could
affect the vehicle's intrinsic safety, as distinct from its relative safety). As Wenzel, a leading
researcher on this subject, has explained, "a fuel economy standard that discourages vehicles
with smaller footprint, or lower weight, will not necessarily reduce casualties. . . .Details of
2-6
-------
CO? Emissions Standards
vehicle design, which can be improved through direct safety regulations, will have a greater
effect on occupant safety than fuel economy standards that are structured to maintain vehicle size
or weight."92 [This comment can also be found in section 13.1 of this comment summary.]
[EPA-HQ-OAR-2010-0799-9480-A1, p. 14]
The third justification put forward is that a flat standard would inequitably affect some
manufacturers more. However, to the extent that the fuel economy program can incorporate a
trading scheme for compliance credits, the market would help smooth out any disproportionate
impacts on certain manufacturers. Additionally, trading will ensure that manufacturers with
relatively efficient fleets still have an incentive to continue improving fuel economy (in order to
generate credits), which will further mitigate the agencies' first concern, mentioned
above. [EPA-HQ-OAR-2010-0799-9480-A1, p. 14]
The fourth justification states that the agencies need to preserve the current vehicle mix in order
to respect consumer choice. The agencies do not, however, adequately explain why maintaining
the current vehicle mix is necessary to protect consumer welfare. The negative safety externality
generated by larger vehicles indicates that the vehicle fleet may, on average, be too big;
furthermore, some vehicle downsizing may represent a cost-effective method for compliance and
have little impact on consumer welfare (as explained below). 94 Preserving the current vehicle
mix is therefore not necessary to protect consumer welfare, and there is no reason to preserve the
current mix as an end unto itself. [EPA-HQ-OAR-2010-0799-9480-A1, pp. 14-15]
The fifth justification sees a footprint-based standard as a way to discourage "gaming" behavior,
especially compared to a weight-based standard. A weight-based standard may be easier to game
than a footprint-based standard, but that does not mean that manufacturers will not still game the
proposed regulation in ways that reduce overall efficiency. In fact, it seems the footprint-based
standard creates an incentive to expand vehicle size in order to relax the applicable standard.
Given that automobile manufacturers already respond to very fine-tuned tax incentives for fuel
economy,95 it certainly seems possible that the proposed rule will encourage some gaming of the
average footprint. [EPA-HQ-OAR-2010-0799-9480-A1, p. 15]
NHTSA should remember that footprint and weight are not the only possible fuel economy-
related attributes on which to base policy. For example, it might be much harder for
manufacturers to game either a much flatter attribute-based standard or a standard differentiated
by vehicle fuel type. EPA should assess whether a different approach, including a non-attribute,
flat standard, might be the best at discouraging gaming. [EPA-HQ-OAR-2010-0799-9480-A1, p.
15]
In conclusion, a footprint-based standard may be unnecessary to respect consumer preferences,
and may interfere with downsizing that could be, on the whole, consumer-welfare enhancing; it
may have negative impacts on safety, given the negative safety externality that relative size can
generate; and it may simply be inefficient compared to a more optimal, flatter standard. The
agencies should seriously rethink whether the footprint-based approach is the best option. [EPA-
HQ-OAR-2010-0799-9480-Al,p. 15]
2-7
-------
EPA Response to Comments
If the agencies do go forward with a footprint-based approach, they should study its effects
carefully and revisit the matter when more evidence is available. The first footprint-based fuel
economy standards took effect with model year 2012.96The agencies therefore now have an
opportunity to begin analyzing how the attribute-based standards influence manufacturers'
production decisions. The agencies should consider whether the results of such a study challenge
the footprint-based approach, at least during the planned mid-term evaluation, if not
sooner. [EPA-HQ-OAR-2010-0799-9480-A1, p. 15]
The agencies should rethink their footprint-based standards, which may be unnecessary to
respect consumer preferences, may negatively impact safety, and may be overall inefficient.
Increasing the safety of one car can impose a negative safety externality on others, and consumer
preferences can adjust as average fleet-wide attributes shift. As a result, trying to eliminate the
incentive to build smaller cars may block a cost-effective compliance strategy and may not
guarantee a safer fleet. [EPA-HQ-OAR-2010-0799-9480-A1, p. 20]
84 See generally Christopher R. Knittel, Automobiles on Steroids: Product Attribute Trade-Offs
and Technological Progress in the Automobile Sector (U.C. Davis Inst. of Transportation Studies
UCD-ITS-RR-09-16, 2009).
85 Tom Wenzel, Analysis of the Relationship Between Vehicle Weight/Size and Safety, and
Implications for Federal Fuel Economy Regulation, at 43 (Report for the U.S. Dep't of Energy,
Lawrence Berkeley National Laboratory Paper LBNL-3143E, 2010).
88 Wenzel, supra note 85, at 7.
89 Id. A very few luxury car models have footprints in the 55-80 square feet range, which also
have flat standards.
91 Wenzel, supra note 85, at 43.
92 Id.
94 See infra note 99, and accompanying text.
95 James Sallee & Joel Slemrod, Car Notches: Strategic Automaker Responses to Fuel Economy
Policy (NBER Working PaperNo. 16604, 2010). Also see attached symposium paper on the
energy paradox, at 11-12.
96 Proposed Rule, supra note 5, at 74,912.
Organization: Insurance Institute for Highway Safety (IIHS)
2-8
-------
CO? Emissions Standards
NHTSA has again proposed using vehicle footprint as the measure for varying CAFE
requirements, and IIHS agrees that this will reduce the incentive for automakers to downweight
or downsize vehicles to improve fuel economy. [NHTSA-2010-0131-0222-A1, p. 1]
Organization: International Council on Clean Transportation (ICCT)
17) Footprint Curves
We commend EPA and NHTSA for continuing to use a footprint-based adjustment to the CAFE
standards instead of weight-based adjustments. Footprint-based adjustments fully encourage
manufacturers to introduce lightweight materials, which can improve vehicle efficiency by 20%
or more in the long run. Lightweight materials also extend the electric drive range of fuel cell
and plug-in vehicles by a similar amount. This is one area of policymaking where the U.S. is
ahead of the rest of the world. Japan, Europe, and China have all adopted standards with weight-
based adjustments that effectively discourage the use of lightweight materials. [EPA-HQ-OAR-
2010-0799-9512-Al,p. 48]
Organization: Mercedes-Benz USA, LLC
DAG also supports the overall structure of the attribute-based program and the provisions for
transferring and trading credits. [This comment can also be found in section 10.1.2 of this
comment summary.] [EPA-HQ-OAR-2010-0799-9483-A1, p. 2]
Organization: National Automobile Dealers Association (NADA)
All things being equal, NADA supports a final rule that provides vehicle manufacturers with the
greatest degree of compliance flexibility. In most instances, compliance flexibilities are nothing
more than accommodations designed to recognize, harness, and leverage consumer demand.
Perhaps the best example of a well-designed compliance flexibility is the attribute based
framework, which recognizes that the motoring public demands a range of light-duty vehicle
types to meet their needs and desires. By preserving access to an essential mix of cars and trucks,
the proposal leverages consumer demand to facilitate continuous improvements across all
vehicle types, regardless of product mix. Moreover, when fuel economy standards are set
properly, under the direction enacted by Congress, the incentive to downsize or down-weight is
reduced, helping to preserve passenger safety. [EPA-HQ-OAR-2010-0799-9575-A1, p. 11]
Organization: Society of the Plastics Industry, Inc. (SPI)
SPI also supports the agencies' choice to incentivize the use of advanced lightweight materials
and structures versus reductions in vehicle size by adopting a "footprint" approach to emission
reductions. Composite throttle valve housing can be 30 percent lighter than its metal equivalent,
and high precision engineering is producing replacements for metal parts. Body panels and
bumpers made of plastic composites that perform comparably to those made of metal can be as
much as 50 percent lighter, contributing to both greater fuel efficiency and safety by lowering the
2-9
-------
EPA Response to Comments
vehicle's center of gravity. And while approximately eight percent of the total vehicle weight of
the average U.S. light vehicle is plastics and composites, a minimum of 30 percent (by weight; in
one or more subsystems beyond interior trim) is achievable. [EPA-HQ-OAR-2010-0799-9492-
Al,p.4]
Organization: United Automobile Workers (UAW)
First, the UAW is pleased that the EPA and NHTSA are proposing to continue the joint system
that preserves in both regulations the attribute-based framework mandated by EISA. This
structure eliminates the discriminatory impact of the old CAFE system on full-line producers and
allows for greater fuel savings and greenhouse gas emissions reductions by requiring
improvements from all manufacturers regardless of their product mix. [EP A-HQ-OAR-2010-
0799-9563-A2, p.2]
Response:
Most of the comments received on this issue support the continued use of footprint from the
MYs 2012-2016 rule as the most appropriate vehicle characteristic for a single-attribute standard
(AAM, Consumer Reports, IMS, ICCT, NAD A, UAW, and others). Commenters requesting
that EPA use a different approach generally suggested one of two alternatives: either use a
weight-based standard to harmonize with the standards of other nations, or use a multi-attribute
standard which accounts for vehicle characteristics that impact performance, such as engine
power. IPI suggested that the agencies consider a flat standard. Detailed responses to these
comments are provided in preamble II.C.
Regarding international harmonization, EPA agrees with BMW that the use of vehicle weight as
the primary attribute would result in standards that, in that respect, are similar to those in Europe,
China, and Japan. However, as in the MYs 2012-2016 rule, EPA continues to believe that the
benefits of harmonization with the European standards do not outweigh the detriments. Setting a
weight-based GHG standard removes much of the incentive for manufacturers to use weight
saving materials as a technique to reduce fuel consumption and CO2 emissions. Manufactures
are currently using various mass reduction techniques across the light-duty fleet, and are likely to
continue to do so throughout the MYs 2017-2025 rulemaking timeframe. When combined with
other technologies, EPA believes that manufacturers can achieve compliance with the standards
by applying mass reduction at levels that do not affect overall societal safety, as discussed in
chapter 3.3.5 of the Joint TSD and section II. G of the preamble. Significantly, the agencies
believe that a footprint based standard is also more difficult to game and has inherent advantages
in terms of providing appropriate compliance options for vehicles at all sizes and cargo carrying
capabilities, as discussed in preamble II.C.2.
Regarding the use of a multi-attribute standard, EPA believes that it would be inappropriate to
base the GHG standard on engine power as an explicit attribute, as requested by Ferrari and
Porsche. Vehicles with higher engine power tend to have higher CO2 emissions due to their
typically larger displacements, and the fact that the engines operate at lower average loads over
the two-cycle test procedure. To base the GHG standard on engine power would encourage
manufactures to forego technologies and design strategies that decrease fuel economy and CO2
2-10
-------
CO? Emissions Standards
emissions, and could encourage vehicles with inherently higher power and consequently innately
higher CO2 emissions as a means of compliance.
EPA acknowledges that there is a demand for high performance vehicles and provided a number
of compliance mechanisms for manufacturers of these vehicles in this regulation. No individual
vehicle need meet its target, allowing larger manufacturers to account for high performance
vehicles by averaging with vehicles with more typical levels of acceleration performance.
Smaller manufacturer provisions such as the intermediate volume and SVM flexibilities provide
allowances for smaller manufacturers which typically have limited product lines and fewer
opportunities to average. Due to their performance and luxury features, these vehicles also tend
to have higher prices and higher profits. Thus it is possible that these vehicles will be better able
to absorb the cost of higher cost vehicle efficiency technologies than vehicles with lower profit
margins. Limited line manufacturers may also choose to purchase credits as a compliance
mechanism. See section III.B.6 and III.C for a greater discussion of these program provisions.
As a further response, the analysis supporting this rule considers the adoption of technologies
which maintain all vehicle attributes and includes the costs to do so as a cost of the rule. See
EPA RIA at 1-40. It is important to note that these standards have been appropriately designed
to maintain consumer choice. See International Harvester v. EPA, 478 F. 2d 615, 640 (D.C. Cir.
1973) (EPA required to consider issues of basic demand for passenger vehicles in making
technical feasibility and lead time determinations in section 202 rules). The footprint based
standards have been designed to discourage changes in vehicle size as a compliance strategy, and
the agencies' technology penetration analysis for these standards included costs to preserve the
utility of vehicles in the current fleet.
IPI presented a number of comments on the form of the standard, and suggested that the agencies
consider flat standards, or alternatively, a standard whose form maximizes net benefits. These
issues are discussed in preamble II.C.2. In short, with regard to a flat standard, NHTSA is
required by statute to issue an attribute based standard, and for purposes of harmonization (in
addition to those reasons are articulated in TSD 2.1 and 2.2), EPA has also issued an attribute
based standard. While ZPI's suggestion that the agencies select the attribute-based approach that
maximizes net benefits may have merit, net benefits are but one of many considerations which
led to the setting of the standard. Estimations of net benefits in future analyses are subject to
significant uncertainties, which is among the reasons EPA uses technical analysis and reasonable
judgement to inform its regulatory policies.
IPI also commented that "given that reducing vehicle size, weight, and performance are
relatively cheap and readily available compliance options, even the optimal footprint-based
standard may suffer from inefficiencies by disincentivizing an otherwise cost-effective strategy."
While downsizing and downpowering vehicles may be relatively inexpensive techniques (from a
manufacturer's perspective) to reduce GHG emissions, changes to these attributes may have
unintended consequences for consumer welfare. In addition, as many commenters (e.g. NAD A)
have legitimately pointed out, the rule's benefits only accrue if consumers purchase the new
vehicles with GHG emission reducing technologies. Removing otherwise desired vehicle
attributes could lead to less consumer acceptance. See Preamble section III.H. 1 .a noting that one
reason for the so-called energy paradox (why consumers have in the past valued fuel economy
2-11
-------
EPA Response to Comments
less than its actual value) is that consumers might associate higher fuel economy with
inexpensive, less well designed vehicles. As such, EPA has promulgated a standard and shown a
compliance path that doesn't require changes to these attributes.
2.2. Stringency of Standards
2.2.1. Overall Stringency
Organizations Included in this Section
Alexandria Hyundai
Alliance of Automobile Manufacturers
American Chemistry Council (ACC)
American Council for an Energy-Efficient Economy (ACEEE)
Anonymous public citizen 2
Anonymous public citizen 3
Anonymous public citizen 5
Association of Global Automakers, Inc. (Global Automakers)
Bassett, S.
BMW of North America, LLC
California Air Resources Board (CARB)
Capozzelli, J.
Center for Biological Diversity
Chrysler Group LLC
Consumer Federation of America (CF A)
Consumer Reports
Consumers Union
Ecology Center
Environmental Consultants of Michigan
Ferrari
Ford Motor Company
Growth Energy
Haroldson, C.
Honeywell International, Inc.
Honeywell Transportation Systems
Howard, P.
Hrin, S.
Hyundai America Technical Center
International Council on Clean Transportation (ICCT)
Jackson, F.W.
Manufacturers of Emission Controls Association (MECA)
Marlinghaus, E.
Marshall, C.
Mass Comment Campaign (10) (National Wildlife Federation Action Fund-1)
Mass Comment Campaign (4,505) (Unknown Organization)
2-12
-------
CO? Emissions Standards
Mass Comment Campaign (61) (The Social Justice Group)
Massachusetts Institute of Technology (MIT)
Mercedes-Benz USA, LLC
Miller, P.
National Association of Clean Air Agencies (NACAA)
National Automobile Dealers Association (NADA)
National Wildlife Federation (NWF)
Northeast States for Coordinated Air Use Management (NESCAUM)
RVIA
Smith, Frank Houston
Society of the Plastics Industry, Inc. (SPI)
Susan R.
Tarazevich, Yegor
Toyota Motor North America
Union of Concerned Scientists (UCS)
United Automobile Workers (UAW)
Van Coppenolle, J. and L.
Volkswagen Group of America
Volvo Car Corporation (VCC)
Organization: Alexandria Hyundai
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 66.]
The 54.5 MPG target for 2025 represents a significant advance from where we are as an industry
today.
Organization: Alliance of Automobile Manufacturers
The agencies should assure equivalent program stringency. The proposed EPA and NHTSA
requirements are coordinated, but not fully harmonized. The Alliance believes that adjustments
to the NHTSA program are needed to ensure that it properly harmonizes with the EPA
requirements under the differing statutory authorities provided to the agencies. [EPA-HQ-OAR-
2010-0799-9487-A1, p.4]
Adjusting for Year-Over-Year Stringency [EPA-HQ-OAR-2010-0799-9487-A1, p.86]
The NPRM describes the methodology for adjusting standard curves for year-over-year
stringency increases, noting that for the MY 2017-2025 rules, the curves are adjusted on a
relative basis (applying the same percentage reductions in a given year across the entire footprint
range). This method is in contrast to the methodology used in the MY 2012-2016 rules, where
curves were adjusted on an absolute basis (applying the same absolute gram per mile and fuel
consumption reductions in a given year across the entire footprint range). The agencies request
comment on their conclusions and invite further recommendations for other means to adjust the
2-13
-------
EPA Response to Comments
standard curves for year over year stringency increases. [EPA-HQ-OAR-2010-0799-9487-A1,
p.86]
Given that many of our member companies support the standards as proposed, the Alliance
declines to make comments on specific changes. However, we believe that the agencies should
examine their approach to adjusting the curves for year-over-year stringency as part of the mid-
term evaluation to determine if actual improvements made in the 2012-2016 model year period
suggest a declining correlation between the footprint attribute and vehicle emissions/fuel
consumption (supporting adjustments on a relative basis) or whether the correlation remains
roughly the same as observed in the 2008 model year fleet (supporting adjustments on an
absolute basis). [EPA-HQ-OAR-2010-0799-9487-A1, p.86]
Organization: American Chemistry Council (ACC)
We do not comment on the CAFE levels proposed except to reaffirm that the levels proposed by
the agencies are technologically feasible and economically practicable as a matter of statue.
[EPA-HQ-OAR-2010-0799-9517-A1, p. 2]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 264.]
We support the specific fuel efficiency goals and time limits proposed in the standard.
Organization: American Council for an Energy-Efficient Economy (ACEEE)
Overall Stringency of Standards
The agencies propose target curves for the standards obtained by adjusting the curves discussed
in the previous section. We support the agencies' decision to shift the target curves vertically by
application of fixed percentages rather than by simply translating them up or down, as was done
previously (Joint TSD 2-51). The new approach is clearly more consistent with the objective of
preserving the relationships among stringencies of the targets across footprints. [EPA-HQ-OAR-
2010-0799-9528-A2, p.7]
We do, however, have concerns about the agencies' choice of curves among all the curves
generated in this way. Section III.D.6 of the NPRM discusses the alternatives considered by
EPA, a total of four in addition to the proposal and a reference case. Each of the four considers a
standard for either cars or trucks that is 20 gpm more or less stringent that the proposed
standards. All four alternatives, in addition to the proposed standards, are found to be achievable,
except by a single, small-volume manufacturer (Ferrari). Based on this result, it is unclear why
one of the more stringent alternatives, e.g. Alternative 2, or another more stringent standard,
would not be superior to the proposed standard. EPA shows that Alternative 2 would cost about
$500 more per vehicle, but does not make the case that Alternative 2 is not cost-effective. The
crux of EPA's lengthy argument that it has chosen the best standard seems to be that more
stringent alternatives such as Alternative 2 call for a substantially greater penetration of
advanced technologies, particularly hybrids but also including EVs and PHEVs. These
2-14
-------
CO? Emissions Standards
alternatives adhere to technology penetration rates that fall within the caps set by EPA to ensure
feasibility, however. Within those parameters, it seems reasonable that an alternative demanding
higher penetration rates for advances technologies is preferable, especially given that promoting
the development of advanced technologies is among the objectives of the rule. [EPA-HQ-OAR-
2010-0799-9528-A2, pp.7-8]
The argument for the superiority of the proposed standards is all the weaker in view of the fact
that EPA did not take into account the various flexibilities that have been proposed, such as
credits for plug-in vehicles and hybrid credits for large pickups. We also note that the projected
percentage of hybrids purchased in 2025 (15 percent, NPRM p.75061) is at the low end of the
penetration suggested in the NOT (3-14 percent in the 4 percent per year scenario, 25-65 percent
in the 5 percent per year scenario), once again raising the question of whether the proposed
standards are the maximum achievable. [EPA-HQ-OAR-2010-0799-9528-A2, p.8]
Recommendations Reconsider whether alternative standards such as Alternative 2 that deliver
greater benefits than the proposed standards are achievable and cost-effective. Show compliance
costs by manufacturer for all years in the NPRM. [EPA-HQ-OAR-2010-0799-9528-A2, p.8]
Organization: Anonymous public citizen 2
The most obvious and most simple is not to use more corn gasoline, but to double the efficiency
of vehicles. Lead consumers to purchase smaller cars and trucks. To see what the auto makers
have done just take a look at pickup trucks. They have discontinued smaller trucks and cars.
Each year they are just a little bigger. [EPA-HQ-OAR-2010-0799-1359, p.l]
Instead of giving subsidies to grow alternative fuels, lets give incentives to have consumers
smaller vehicles. [EPA-HQ-OAR-2010-0799-1359, p.l]
We also need to develop more efficient vehicles. But reducing the vehicle mass would result in
less fuel being used. [EPA-HQ-OAR-2010-0799-1359, p.l]
Organization: Anonymous public citizen 3
Increase the goal from 54.5 mpg to 100 mpg. It's time to lead. [EPA-HQ-OAR-2010-0799-
2001, p.l]
Organization: Anonymous public citizen 5
The Proposed Legislation is not founded on any sound scientific conclusions. The affects of
basing legislation on technology that does not exist is irresponsible and irrational. Instead of
punishing the consumer by forcing pseudoscience based laws onto the manufacturers, why don't
you create incentives for innovation? [EPA-HQ-OAR-2010-0799-2010, p.l]
Organization: Association of Global Automakers, Inc. (Global Automakers)
2-15
-------
EPA Response to Comments
The standards proposed by the agencies are extremely stringent and are based on a large number
of assumptions about technology and the auto market over the next decade. By extending the
standards for many years into the future, the agencies provide manufacturers with substantial
lead-time, which is of great value in compliance planning. On the other hand, the long time
frame means that standards in the later years will be based on relatively long-range projections
and assumptions. [EPA-HQ-OAR-2010-0799-9466-A1, p. 1]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 65-66.]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 50.]
Organization: Bassett, S.
Also a true 54.5 MPG is unrealistic. Have you people never heard of the laws of physics? It will
take x amount of energy (regardless of fuel type) to move a weight ( auto) a distance of x. [EPA-
HQ-OAR-2010-0799-8123-Al,p. 1]
Organization: BMW of North America, LLC.
The framework for model years 2017-2025 sets very ambitious GHG and fuel economy
standards which can only be achieved through the adoption of all proposed compliance
flexibilities. [EPA-HQ-OAR-2010-0799-9579-A1, p. 1]
Compliance will also require significant automaker efforts to reduce vehicle emissions coupled
with public policy measures for steering market demand towards more fuel efficient vehicles.
This is particularly true for E-mobility where customer acceptance and future growth in demand
will depend largely on vehicle affordability, measures to address range concerns, and
infrastructure availability for public recharging. Significant market penetration of electric
vehicles, especially in the latter years, is needed to ensure automakers' compliance with these
proposed standards covering MYs 2017 through 2025. [EPA-HQ-OAR-2010-0799-9579-A1, p.
2]
As a premium manufacturer, BMW designs and builds vehicles with outstanding product
characteristics in order to satisfy higher customer expectations compared to other manufacturers,
yet with similar vehicle footprints. Consequently, our product and specific US premium vehicle
market characteristics require increased levels of technology in order to meet future standards
compared to other manufacturers. Many of the technologies mentioned in the draft joint
Technical Support Document have already been implemented in BMW Group models.
Therefore, the significant penetration of these advanced conventional technologies in our
existing fleet will make it even more challenging for BMW to achieve compliance with these
very stringent standards. [EPA-HQ-OAR-2010-0799-9579-A1, pp. 3-4]
Organization: California Air Resources Board (CARB)
2-16
-------
CO? Emissions Standards
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 10-12]
As you know, at the President's request, CARB participated in the development of the
greenhouse gas standards that you are considering today. We shared our knowledge developing
the nation's first greenhouse gas standards which were adopted back in 2004 and became
effective in California and 10 other states with the 2009 models. We contributed to new studies
that form some of the technical underpinnings of the EPA proposal and co-authored with the
federal agencies the Technical Assessment Report that was issued in late 2010. We continue to
work with the federal agencies to ensure that the proposed EPA greenhouse gas standards could
be used as an alternative to California's standards and result in a unified set of regulations that
would allow vehicle manufacturers to produce a single vehicle model that would meet state and
federal greenhouse gases and federal fuel economy standards. We believe your proposal is
consistent with these objectives.
Our proposed greenhouse gas standards are nearly identical to what you are proposing. Our
analysis of the costs and benefits draws from the many hours of discussion we had with your
staff on the best information and the latest analytical techniques to use in our respective
regulatory documents.
For this to become a reality, EPA needs to finalize its standards largely as currently proposed.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 13-15.]
In addition to the greenhouse gas standards, CARB's Advanced Clean Car proposal includes new
exhaust and evaporative emission standards for hydrocarbons, oxides and nitrogen and
particulate matter starting with 2015 models. These standards will reduce the said emissions by
roughly 75 percent by the 2025 models with similar reductions in particulate conditions.
These reductions will help our urban areas meet the more stringent health-based ambient air
quality standards that are forthcoming. And the costs of achieving these standards is low and the
technology is readily available. We have tailored the implementation schedule of these standards
to be compatible with the gradual tightening of greenhouse gas standards, so that the greenhouse
gas, smog-forming and soot-emission reductions can be addressed in an efficient manner by the
development engineers of the car companies.
Our Advanced Clean Car package also includes a proposal to strengthen the ZEV mandate. Ten
other states and the District of Columbia have adopted this program which collectively account
for a little more than a quarter of all sales of passenger vehicles in the nation. By 2025 we are
proposing that 15 percent of all passenger vehicles sold in California and its partner states be
ZEVs, which include battery, hybrid and fuel cell vehicles.
We point this out because the extremely low or nonexistent greenhouse gas emissions of these
zero-emission vehicles will count towards compliance with the national standards. As you know,
2-17
-------
EPA Response to Comments
the analysis of the proposed federal standards indicates a significant number of ZEVs will not be
needed to achieve compliance with the federal rules. Thus, placement of ZEVs in California and
its partner states to meet the California ZEV mandate provides the emission reduction credits that
reduce the reductions that must be achieved from the remainder of a vehicle manufacturer's fleet.
This, of course, is only a side benefit of strengthening the ZEV mandate whose main objective is
to push technology onto a sustainable pathway that will take us to an 80 percent reduction in
greenhouse gas emissions by 2050.
Organization: Capozzelli, J.
However, the proposed rules are not strong enough. They contain a dangerous loophole that lets
SUVs improve gas-mileage standards later than passenger vehicles. This will spur production of
even more SUVs, and the auto industry is attempting to weaken these already-inadequate
standards. Increasing the fuel efficiency of our vehicles is essential in the battle against
dangerous climate change. [NHTSA-2010-0131-0221-A1, p.l]
These standards leave the United States behind Europe. Japan and China in fuel efficiency. In the
long run, higher standards will benefit both American consumers and manufacturers by pushing
innovation instead of stagnation. [NHTSA-2010-0131-0221-A1, p.l]
These rules can and should be significantly strengthened. [NHTSA-2010-0131-0221-A1, p.l]
All but one of the alternative standards discussed in the rule's would allow greenhouse gas
emissions from cars and light trucks to increase through 2025; but dangerous climate change
cannot be avoided unless greenhouse gases actually, decrease. The rules should adopt
the alternative that actually decreases carbon pollution ever year through 2025. [NHTSA-2010-
0131-0221-Al,p.l]
Organization: Center for Biological Diversity
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 214-216.]
We also do believe, though, the rules are not good enough. They are certainly not good enough
when you look at the scale of the problems we face; and they are also not good enough when you
look at what is technologically feasible and what is going on around the world.
And so while we really appreciate the fact that the rule is willing to increase fuel efficiency, we
don't believe they do so fast enough, and they leave the U.S. far behind fuel efficiency standards
in the European Union, Japan and China.
So we fear that putting these standards, which are a step forward and we appreciate the effort in
place for the next 13 years until 2025, would still leave the U.S. behind what's happening in the
EU, China and Japan instead of putting it as a forefront.
2-18
-------
CO? Emissions Standards
Clearly, the transportation sector is the low hanging fruit here and I realize a lot can be done
here, a lot is being done, and we appreciate that effort, but we hope that you will look at
strengthening these rules because of the gravity of the crises we are facing when you issue the
final rule.
The Center supports the Agencies' efforts to limit greenhouse gas pollution from new passenger
vehicles and light trucks, and we appreciate efforts the Agencies have made to respond to our
comments to earlier CAFE and vehicle greenhouse gas rulemakings. But as we point out below,
the current NPRM contains a number of significant flaws. We request that the Agencies remedy
them to bring the forthcoming final MY 2017-2025 vehicle and greenhouse gas rulemaking into
compliance with the Energy Policy and Conservation Act ("EPCA"), as amended by the Energy
Independence and Security Act of 2007 ("EISA"), and the Clean Air Act ("CAA"). [EPA-HQ-
OAR-2010-0799-9479-A1, p. 2]
The importance of achieving maximum feasible fuel efficiency, along with maximum feasible
greenhouse gas reductions, in the 14 years between now and the end of 2025 cannot be
overstated. As the Agencies themselves observe, "DOE has stated that vehicle efficiency has the
greatest short-to mid-term impact on oil consumption." 1 Further, "20% of total U.S. CO2
emissions come from passenger cars and light trucks," a total that amounts to 4% of global
emissions. But the CAFE rules issued by the Agencies over the years, and therefore their effect
on reducing greenhouse gas emissions, has failed to make inroads on the problem: "Passenger
cars and light trucks . . . account for more than half of U.S. transportation CO2 emissions, and
CO2 emissions from these vehicles have increased by 17 percent since 1990." The alternative the
Agencies prefer would continue to increase greenhouse gas emissions through 2025. The
Agencies should, for the first time in their history, reverse this trend and promulgate a
rulemaking that reduces rather than increases greenhouse gas emissions. [EPA-HQ-OAR-2010-
0799-9479-A1, p. 2]
The targets adopted by the Agencies as the "preferred alternative" do not achieve emissions
reductions, and do not constitute the maximum feasible fuel efficiency level under EPCA/EISA,
nor protect the public health and welfare with an adequate margin of safety under the CAA. The
"preferred" alternative would arrive at what is described in the NPRM as the "equivalent" of
54.5 mpg in 2025. This number, when expressed without adequate explanation, is misleading. In
fact, when not inflated by air conditioning credits that lower greenhouse gas emissions but do
nothing to increase fuel efficiency, the number is 49.6 mpg - though even that number signifies
only the "estimated average required fleet-wide fuel economy"; once carmakers' use of various
"flexibilities" and credits are accounted for, the estimated average "achieved" mileage drops to
just 46.7 mpg. The actual real-world fleet-wide fuel efficiency number is even lower, translating
to no more than approximately just 40 mpg (and 223 grams per mile). Because fuel efficiency
itself, regardless of how it is counted, never exceeds 49.6 mpg, it is simply incorrect to claim a
fuel efficiency "equivalent to" 54.5 mpg, and we urge the Agencies to clarify the effects of the
rulemaking without referring to the highly ambiguous concept of equivalency. Equivalency
relates to calculations of greenhouse gas emissions but in no way to mileage standards, a
distinction certain to escape the average reader. But whether stated as 46.7 mpg or 49.6 mpg, the
target is insufficient. [EPA-HQ-OAR-2010-0799-9479-Al, pp. 2-3]
2-19
-------
EPA Response to Comments
The failure to implement maximum feasible mileage standards through the next 14 years - a
period exceeding the years between 2010 and 2020 that have been named the "critical decade"
because of their unparalleled importance in the effort to avoid the most drastic effects of climate
change - would not only be in violation of Congressional mandates, but would also constitute a
regulatory failure of potentially irremediable proportions. Only Alternative 4 actually reduces
greenhouse gas emissions. Adopting any other alternative will also continue to leave the U.S. far
behind its competitors in the global automotive market. The preferred alternative is far from
what is both technically and economically feasible to reduce the nation's dependence on foreign
oil. [EPA-HQ-OAR-2010-0799-9479-A1, p. 3]
Below we point out the various deficiencies inherent in the rulemaking. Among the most
egregious is the laundry list of near-exemptions, credits, and other give-aways that would be
provided to the largest and least efficient vehicles covered by the rulemaking: the SUVs, pickup
trucks and other "light trucks" that have constituted the most profitable vehicle class, and that
have proliferated on America's highways while stymieing real progress on fuel efficiency for
decades. Yet, this rulemaking would reintroduce the SUV loophole with a vengeance. We
encourage the Agencies to address these deficiencies, abandon the preferred alternative and
instead drive industry to use the next 14 years to overhaul, rather than merely tinker with, vehicle
technology and achieve the results the statutes demand. [EPA-HQ-OAR-2010-0799-9479-A1, p.
3]
1. The Agencies must set fuel efficiency standards that achieve maximum fuel efficiency and
energy conservation
The Agencies' discussion of the factors that must be considered in setting CAFE standards - and,
more importantly, the manner in which the Agencies weigh them - must be corrected in a
number of ways. While noting in passing that they cannot undermine energy conservation, the
Agencies nonetheless list energy conservation merely as one among many factors to consider,
failing to discern that it is the overriding purpose of the statutes. That energy conservation has
been ignored or, at a minimum, arbitrarily relegated to secondary or tertiary importance, is
evident from the following statement: [EPA-HQ-OAR-2010-0799-9479-Al, p. 4]
While the GHG emissions targets do become more stringent each year, the emissions targets
have been selected to allow compliance by vehicles of all sizes and with current levels of vehicle
attributes such as utility, size, safety, and performance. Accordingly, these proposed standards
are projected to allow consumers to choose from the same mix of vehicles that are currently in
the marketplace. [EPA-HQ-OAR-2010-0799-9479-A1, p. 4]
In other words, the Agencies have selected standards that value purported consumer choice and
the continued production of every vehicle in its current form over the need to conserve energy: as
soon as increased fuel efficiency begins to affect any attribute of any existing vehicle, stringency
increases cease. That is clearly impermissible and contrary to Congressional purpose. 17 Given
this outcome, it is not surprising that, as has been widely reported, the NPRM is the result of an
"agreement" between the Agencies and the regulated industries - something that, at a minimum,
taints the objectivity of the rulemaking process but instead is touted as an accomplishment. 18
2-20
-------
CO? Emissions Standards
Protecting "the same mix of vehicles currently on the market" or the "current levels of vehicle
attributes" is decidedly not the Agencies' task. [EPA-HQ-OAR-2010-0799-9479-A1, p. 4]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 215-216.]
Secondly, all but one of the alternative standards discussed in the rules would allow overall
greenhouse gas emissions from cars and light trucks to increase in 2025. And given the climate
crisis, we don't believe we can afford this, and so we would look at pushing for fuel efficiency
standards in the range of 60 miles per gallon rather than 54, which is the current proposal, and
real world looks more like something like 49.
G. The Agencies Should Adopt Alternative 4
As we pointed out in our comments to the DEIS, only Alternative 4 would actually reduce
greenhouse gas emissions from the nation's vehicle fleet; for all of the reasons stated, adopting
this standard is a necessity if exceptional damage from climate change is to be avoided. [EPA-
HQ-OAR-2010-0799-9479-A1, p. 23]
Cars achieving and even exceeding the fuel economy level of 69 mpg, reached by Alternative 4
by 2025, are already on the road today, such as the Toyota Prius and the Nissan Leaf. 106
Accordingly, it is clear that 69 mpg by 2025 is technically feasible 14 years from now. Indeed, it
is beyond question that a fleet-wide average of 62 mpg (representing approximately a 6% annual
increase) can be achieved based mostly on existing, off-the-shelf technologies, such as
downsized turbocharged engines, electric power-train design, regenerative breaking, six-and
seven-speed transmissions, high strength, high-strength lightweight materials, and enhanced
aerodynamic designs. 107 As stated above, to arrive at a technology-forcing alternative, NHTSA
must push beyond existing technologies and include those still in the research and development
stage in its modeling assumptions, which can model uncertainties concerning adoption and fleet
penetration the Agencies perceive. Doing so demonstrates that Alternative 4 will be
technologically feasible in the time provided. [EPA-HQ-OAR-2010-0799-9479-A1, p. 23]
The Agencies in the past have justified decisions not to adopt higher stringency standards
because of concerns about economic feasibility. But the economic benefits of the rulemaking
here would exceed its costs by more than $300 billion, at a minimum. And, even leaving aside
the huge benefits external to the immediate purchase transaction, it is clear that fuel savings
alone will more than make up for realistically estimated vehicle cost increases. We note here that
the Agencies present no analysis of maximized societal benefits, where the benefits most
optimally compare to the anticipated costs. In other words, there is no rigorous analysis of
economic feasibility that justifies rejecting Alternative 4 as the appropriate standard for this
rulemaking. Energy conservation along with the prevention of extreme climate change damages,
however, demands it. Because Alternative 4 is both technological and economic feasible and best
promotes energy conservation, it must be adopted. [EPA-HQ-OAR-2010-0799-9479-A1, p. 23]
2-21
-------
EPA Response to Comments
The Agencies' preferred alternative of 49.6 mpg clearly does not constitute the maximum
feasible fuel economy level because other countries will surpass that number (and in case of the
EU, far surpass it) five years earlier, by 2020: by then, the EU will have achieved 64.8 mpg,
Japan 55.1 mpg, and China 50.1 mpg. 108 The following graph demonstrates this point: [See
figure on p. 24 of Docket number EPA-HQ-OAR-2010-0799-9479-A1] [EPA-HQ-OAR-2010-
0799-9479-A1, p. 24]
Given the accelerating rapidity of technical improvements, reaching 69 mpg by 2025, five years
after Europe reaches 64.8 mpg, is clearly feasible and is the alternative the Agencies should
embrace. [EPA-HQ-OAR-2010-0799-9479-Al, p. 24]
106 The Prius, for example, achieves 71 mpg in CAFE testing. See UCS, Translating New Auto
Standards Into On- Road Fuel Efficiency at 2 (May 2011), available at
http://www.ucsusa.org/clean_vehicles/solutions/cleaner_cars_pickups_and_suvs/clean-car-
standards-resourcecenter. html. [EPA-HQ-OAR-2010-0799-9479-A1, p. 23]
107 UCS, The Road Ahead at 3 (Sept. 2010), available at
http://www.ucsusa.org/clean_vehicles/solutions/cleaner_cars_pickups_and_suvs/clean-car-
standards-resourcecenter. html; see also Interim Joint Technical Assessment Report in this
docket, which finds that technologies to achieve a 6% annual efficiency increase are available
today or will become available and, as compared to the other standards it analyzed, would
provide the largest societal gains, far exceeding costs, and deliver the greatest net lifetime owner
savings and greenhouse gas reductions. [EPA-HQ-OAR-2010-0799-9479-A1, p. 23]
108 International Council on Clean Transportation, Global Comparison of Light-Duty Vehicle
Fuel Economy/GHG Emissions Standards (Aug. 2011), Figure: Historical Fleet Fuel Economy
Performance and Current or Proposed Standards, available at http://www.theicct.org/global-
passenger-vehicle-standards-update. [EPA-HQ-OAR-2010-0799-9479-A1, p. 24]
1 Draft Environmental Impact Statement for Corporate Average Fuel Economy ("CAFE")
Standards, Passenger Cars and Light Truck Model Years 2017-2025 ("DEIS") at S-7. [EPA-HQ-
OAR-2010-0799-9479-A1, p. 2]
17 CBD v. NHTSA, 538 F.3d at 1195. [EPA-HQ-OAR-2010-0799-9479-A1, p. 4]
18 See, e.g., Jason Plautz, Fuel Economy: Cost Concerns Still Dog Newly Released CAFE
Standards, GREENWIRE, Nov. 4 2011. [EPA-HQ-OAR-2010-0799-9479-A1, p. 4]
Organization: Chrysler Group LLC
2-22
-------
CO? Emissions Standards
The challenge of meeting the proposed 2025 MY standards must not be underestimated. We
believe it's important to observe that reaching the projected overall average of 163 grams per
mile of carbon dioxide will require manufacturers to make unprecedented reductions in light-
duty vehicle greenhouse gas emissions and fuel consumption following the large improvements
which will be necessary in the 2012-2016 model years. Market acceptance of the technologies
required (and costs incurred) to meet these standards will be a critical factor in the success of the
2017-2025 MY National Program; customer choice and uptake will ultimately determine the
success of this program. [EPA-HQ-OAR-2010-0799-9495-A1, p. 1]
The proposed 2017-2025 standards are very aggressive. Manufacturers are only beginning their
compliance with the 2012-2016 National Program, which will drive a 24% improvement over the
2008 MY baseline to achieve the 2016 MY standard. The proposed standards for 2017-2025
model years continue this unprecedented rate of improvement, driving an additional 35%
improvement over roughly two product cycles. These improvements will be made possible, in
part, through flexibilities such the recognition of air conditioning and off-cycle improvements
and incentive programs such as the "game-changing" pickup truck incentives and advanced
technology vehicle multipliers for electric, plug-in hybrid electric and CNG vehicles. [EPA-HQ-
OAR-2010-0799-9495-A1, p. 5]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 51-52.]
The challenge of meeting the proposed standards must not be underestimated. We believe it's
important to observe that reaching the projected overall average of 163 grams per mile of carbon
dioxide in model year 2025 will have to be achieved within 13 years or approximately two
product cycles.
[This comment was also submitted as testimony at the San Francisco, California public hearing
on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 24.]
The proposed 2017-2025 National Program reaches thirteen years into the future. Setting
standards this far into the future provides long-term fuel economy and greenhouse gas goals to
automotive manufacturers and suppliers enabling strategic planning for the needed
improvements. However, this lead-time comes at the cost of less certain estimates for technology
development, cost, and customer acceptance and demand. [EPA-HQ-OAR-2010-0799-9495-A1,
p. 5]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 58.]
We believe it is important to observe that reaching the projected overall average of 163 grams
per mile carbon dioxide in model year 2025 will have to be achieved within 13 years or roughly
two product cycles.
Organization: Consumer Federation of America (CFA)
2-23
-------
EPA Response to Comments
The proposed rule recognizes the need to keep the standards in touch with reality in several
important ways.
The standards are set at a moderately aggressive level that is clearly beneficial and achievable.
The cost estimates are consistent with the results of independent analyses of technology costs
made over the past decade.
The proposed standards are consistent with the rate of improvement that the auto industry
achieved in the first decade of the fuel economy standard setting program.
The new approach to setting standards is consumer-friendly and facilitates automaker
compliance. The standards do not require dramatic shifts in power train technologies or
reductions in weight and offer flexibility and incentives for new technologies, and include a mid-
term review.
The setting of a coordinated national standard that lays out a steady rate of increase over a long
time period gives consumers and the industry certainty and time to adapt to change. [EPA-HQ-
OAR-2010-0799-9419-A1, p. 8]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 90-91.]
The standards accelerate the adoption of existing technologies at costs that are widely
recognized. They provide incentives in flexibility for new technologies.
The setting of a long steady path over a long time period coordinated across all the agencies in
this country gives consumers and the industry the time they need to adjust.
Fifth, the auto industry has a strong incentive to comply. The standard takes the risk out of
investing in fuel efficiency. All the auto makers have to do — you don't have to worry about
some guy manufacturing cheap fuel inefficient cars. They all have to comply.
Organization: Consumer Reports
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 168.]
The proposed targets are aggressive, but they're also conservative enough to allow the
manufacturers to increase the deployment of new technologies to meet these requirements.
Organization: Consumers Union
Because the proposed rule provides ample lead time—approximately two and a half design
cycles by 2025—automakers will be able to incorporate more efficient technologies and
materials into the vehicles at a measured pace, thus reducing compliance costs and putting
2-24
-------
CO? Emissions Standards
everyone on the same playing field in the race to find the best, most efficient way to meet new
fuel economy targets. The proposed targets are aggressive enough to encourage groundbreaking
new technological advances, but conservative enough to be attained even with strong
incremental improvements and increased deployment of existing technology. [EPA-HQ-OAR-
2010-0799-9454-A2, p.2]
Organization: Ecology Center
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 188-189.]
Second, we do like the longer time frame contained in the proposed rules. By looking out further
into the future the rules can ensure consistency of approach and allow manufacturers to better
plan for the vehicles that they will need to develop.
Organization: Environmental Consultants of Michigan
Tailpipe greenhouse gas standards (the flip side of CAFE) cannot achieve the target reductions
Using the latest government greenhouse gas lifecycle model for the transportation sector,
GREET 2011, one can conclude that achieving carbon neutrality through tailpipe emission
standards is not within the realm of possibility. [NHTSA-2010-0131-0166-A1, p. 3]
According to the 2011 Department of Energy greenhouse gas model, replacing the entire on road
fleet of light duty cars and trucks with gasoline powered vehicles that achieve over 125 miles per
gallon is necessary to reduce segment GHGs by 80%. This is not a CAFE standard of 125 mpg
but every car and truck on the road would have to achieve this level of on-road efficiency. These
levels are more than double the proposal. [NHTSA-2010-0131-0166-A1, p. 3]
Battery electric vehicles are even less useful in reaching the goal of carbon neutrality. Replacing
every car and truck on the road with electric vehicles would reduce GHG emissions by only 26%
at a cost of $2.5 trillion plus the cost of additional fuel production. Advocates of the electric
option opine that use of carbon free electricity will be prevalent in the future. The federal
government recently invested a half trillion dollars in the solar power company Solyndra only to
have the company go bankrupt. The dream of solar power is a long way off. Others point to wind
power as the solution for electricity. Already environmentalists are lining up protesting wind
farms because of the noise pollution and the fact that the turbine blades kill large numbers of
migratory birds7. Nuclear power is not supported by environmentalists and hydropower can also
present problems for endangered species. [NHTSA-2010-0131-0166-A1, pp. 3-4]
Replacing every car and truck on the road with a hydrogen fuel cell powered vehicle would
reduce GHG emissions by only 41% at a cost of $2.5 trillion not counting the fuel infrastructure
cost. Hydrogen is one of the most difficult fuels to transport because of the corrosive effect of
hydrogen on most metals. [NHTSA-2010-0131-0166-A1, p. 4]
2-25
-------
EPA Response to Comments
Agency Was Arbitrary and Capricious In Its Selection of Standards
The Agency suggests the proposed standards of 50 miles per gallon could be achieved at a cost
of about $2000 per vehicle. Even a cursory look at the data from EPAs 2012 model year fuel
economy mileage guide demonstrates this review was arbitrary and capricious. [NHTSA-2010-
0131-0166-Al,p. 5]
Only seven of the 900 plus models listed in the 2012 model year fuel economy guide would meet
the 2025 model year proposed standards; one hydrogen fuel cell vehicle, three battery electric
vehicles and three hybrid electric vehicles. As demonstrated above, hydrogen and electric
vehicles cannot achieve the necessary greenhouse gas emissions and cost substantially more than
$2000 per vehicle. [NHTSA-2010-0131-0166-A1, p. 6]
The median MSRP price increase for a hybrid electric vehicle in the 2011 model year was over
$7000. Using the EPAs own fuel economy benefit and annual fuel costs published in the fuel
economy guide it would take over 273,000 miles of driving to pay off the initial price premium
for the average hybrid 10 not counting the battery 11 replacement every 10 years. The breakeven
mileage for the highest selling hybrid electric vehicle, the Toyota Prius, is over 226,000 miles
not counting the battery replacements. The second highest selling hybrid electric vehicle, the
Honda Civic, never reaches its breakeven mileage. Over half the hybrid electric vehicles in the
market last year would never 12 reach their breakeven point according to EPA annual fuel costs
not factoring in the cost of replacement batteries. More than half (60%) of 2012 model year
hybrid electric vehicles (Table 3) were more than 10 miles per gallon below their 2025 model
year target and all the hybrid electric vehicles have 6 or more forward gears. The average
shortfall for all hybrid electric vehicles was over 9 miles per gallon. [Table 3 can be found on p.
24 of Docket number NHTSA-2010-0131-0166-A1] [NHTSA-2010-0131-0166-A1, p. 6]
Hybrid electric vehicles have been in the market for fourteen years and still represent less than
2.5% of sales despite generous subsidies. There were 26 hybrid electric vehicles in the market in
2011 yet over half the sales were a single model. Hybrids are having a difficult time gaining
acceptance in the marketplace likely due to the economic reality that they do not save consumers
money. [NHTSA-2010-0131-0166-A1, p. 6]
The median price increase for a diesel engine in the 2012 model year is over $5000. Using the
EPA fuel economy benefit and annual fuel costs it would take over 214,000 miles of driving to
pay off the initial price premium. Eighty-five percent of 2012 model year diesel equipped
vehicles (Table 4) were more than 10 miles per gallon below their 2025 model year target despite
having six or more forward gears. The average shortfall was over 12 miles per gallon. Thus
advanced technology diesel and hybrid technology as currently deployed in the market are
insufficient to meet the projected standards and cost substantially more than the Agency
estimates. [Table 4 can be found on p. 25 of Docket number NHTSA-2010-0131-0166-
Al] [NHTSA-2010-0131-0166-A1, p. 6]
Ninety percent of the 50 most fuel efficient non-hybrid 2012 model year trucks (Table 7) were
more than 10 miles per gallon short of their 2025 model year target. The average shortfall was
2-26
-------
CO? Emissions Standards
over 23 miles per gallon. [Table 7 can be found on p. 27 of Docket number NHTSA-2010-0131-
0166-A1] [NHTSA-2010-0131-0166-A1, p. 7]
Ninety-four percent of the 50 most fuel efficient non-hybrid 2012 model year passenger cars
(Table 8) were more than 10 miles per gallon short of their 2025 model year target. The average
shortfall was over 15 miles per gallon. [Table 8 can be found on p. 28 of Docket
number NHTSA-2010-0131-0166-A1] [NHTSA-2010-0131-0166-A1, p. 7]
Collectively, the 2012 model year data clearly demonstrates that the proposed targets cannot be
achieved at the costs assumed by the Agency or with conventional technology. [NHTSA-2010-
0131-0166-Al,p. 7]
Applying the technology already present in the 2012 model year mileage guide to the Agencies
projected penetration rates result in a sizable shortfall to the proposed standards. Even using the
best available hybrid technology in the market today, a manufacturer would have to have a
penetration rate of over 70% hybrid electric vehicle and 3% electric vehicles to achieve the
proposed standards. This is substantially higher than the rates projected by the Agency. [See
Table 2 on p. 8 of Docket number NHTSA-2010-0131-0166-A1] [NHTSA-2010-0131-0166-A1,
pp. 7-8]
7 Wind power is the fastest developing source of energy in the United States and can be an
important part of the solution to climate change. However, wind farms can kill birds through
collisions with turbines and associated structures, and also harm them through the loss of habitat
that birds need for survival. A 2008 Department of Energy report calls for the U.S. to generate
20% of its electricity from wind by 2030. By then, wind turbines are expected to be killing at
least one million birds each year, and probably significantly more, depending on the final scale
of wind build-out. Wind farms are also expected to impact almost 20,000 square miles of
terrestrial habitat, and over 4,000 square miles of marine habitat by 2030, some critical to
threatened species. (American Bird Conservancy)
10 Comparisons are to gasoline counterpart similar to consumers' purchase decisions; the
proposal counts fuel savings from the fleet average and does not use a comparable vehicle as the
basis for fuel saving.
11 The Agency values the battery at about $4000; requiring over 150,000 miles of additional
driving to pay back; Honda also lists the battery at about $4000
12 Defined as having a breakeven mileage in excess of 300,000 miles
Organization: Ferrari
We believe that it is right to propose now a CAFE regulation that covers the entire 9-year period
MYs 2017-25, but it is necessary to make a mid-term review, to verify the consistency of the
2-27
-------
EPA Response to Comments
proposed standards, due to the many uncertainties that are implicit in the technical and economic
assumptions that form the basis for the proposed standards. In case of any changes or mores\
stringent requirements, enough lead-time should be allowed. It is important for vehicle
manufacturers to have clear and stable regulations, and enough lead-time before they are first
adopted or modified. [EPA-HQ-OAR-2010-0799-9535-A2, p. 14]
Organization: Ford Motor Company
The standards that have been proposed by EPA and NHTSA through the 2025 model year
represent the most significant federal action ever taken by the US federal government to improve
fuel economy and reduce greenhouse gas emissions - nearly doubling the standards that were in
place for the 2010 model year. To meet these requirements throughout the 2017-2025 period,
substantial capital investments will be necessary to meet consumer demand for more fuel-
efficient vehicles, to incorporate new technologies that consumers want, and to compete against
other automakers in the marketplace. Some examples of the major planned investments include
converting three truck and SUV plants to build small cars, re-tooling our powertrain facilities to
manufacture fuel-efficient EcoBoost engines, offering more advanced six-speed transmissions,
leveraging our global platforms, increasing our hybrid offerings and production, and moving
forward with an aggressive electrification strategy. [EPA-HQ-OAR-2010-0799-9463-Al, p. 8]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 33.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 86.]
The proposed rules extend through the 2025 model year, which is an unprecedented time frame
in the context of fuel economy regulations. This presents a significant challenge for
manufacturers. While the establishment of longer-term standards provides manufacturers with
targets for future product planning and investment, the longer time frame leads to greater risk
that the assumptions underlying the standards do not come to fruition. For example, if the lack of
adequate infrastructure hinders the introduction of new fuel-saving technologies, or if fuel prices
turn out to be substantially lower than anticipated, it might be necessary to change the standards
in order to avoid damage to American auto jobs and the U.S. economy.
Organization: Growth Energy
The fuel economy and GHG standards proposed by the Agencies sent ambitious targets for the
automobile industry. The standards and other requirements that the Joint NPRM propose, along
with other safety and emissions programs, will determine how the U.S. automobile industry
allocates its human and financial resources for the next decade. The new-vehicle market will
determine whether the automobile industry's efforts to comply with the Agencies' GHG and fuel
economy standards are successful. Greenhouse gas standards of the type being proposed by EPA
are, for all practical purposes, fuel economy standards, and like fuel economy standards such
standards affect nearly every attribute of vehicle design and performance, as well as vehicle
retail and operating costs. One of the most ambitious aspects of the Joint NPRM is that it would
2-28
-------
CO? Emissions Standards
set standards for the industry over a much longer time frame than any previous fuel economy
standards established by NHTSA, including the model-year ("MY") 2012-2016 GHG standards
recently promulgated by EPA. [EPA-HQ-OAR-2010-0799-9505-A1, p. 1]
Programs that try to force the market to purchase electric vehicles that the public does not want
to buy require public subsidies, increases in the prices of conventional vehicles to subsidize the
manufacturers' cost, or both. While California may have some discretion under the Clean Air
Act to experiment with its own new-vehicle market, and while the Joint NPRM's approach may
have the support of some stakeholders in addition to California, NHTSA and EPA have
independent duties to determine whether the standards it adopts are economically practicable and
take proper account of the state of technology, including the costs of technology. See 49 U.S.C. §
32902(f); 42 U.S.C. § 7521 (a)(2). If the reliance on electric vehicles is misplaced, because there
is no statutory mandate for such vehicles in federal law nor any requirement that the Agencies
rely on such vehicles in writing GHG or fuel economy standards, the proposed standards in the
Joint NPRM need to be scaled back to conform to levels that are economically practicable and
also technologically feasible after accounting for costs. [EPA-HQ-OAR-2010-0799-9505-A1, p.
2]
Organization: Haroldson, C
The proposed standards are too strict [EPA-HQ-OAR-2010-0799-11137-A1, p. 1]
Organization: Honeywell International, Inc.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 257.]
The program should instead remain technology neutral and recognize all significant performance
improvements.
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 209-210.]
Manufacturers must have confidence in a regulatory approach to take the risks necessary to
innovate and world's most pressing environment and energy security challenges. We believe that
better regulatory approaches are performance-driven, technology neutral, and provide some
flexibility, and they must reflect the best available data and signs incorporating the most up-to-
date research and technical information.
Organization: Honeywell Transportation Systems
Honeywell strongly endorses a performance-based, technology-neutral approach to regulating
emissions and fuel consumption. Honeywell believes that government policy should promote all
technology in the same way. Even at the end of the MY 2025 timeframe, internal combustion
engine vehicles will continue to dominate the new light duty fleet. Proven, cost-effective
2-29
-------
EPA Response to Comments
technologies that use the nation's current infrastructure and numerous breakthroughs in many
internal combustion engine technologies will become available in the years ahead, substantially
improving the environmental performance of the vehicle fleet. Yet those benefits could be lost or
diminished if the government directs investment towards electric vehicles without
simultaneously encouraging continued investment in advanced ICE technologies. [EPA-HQ-
OAR-2010-0799-9474-A1, pp. 1-2]
Although we recognize that the overall stringency of the regulations encourages investment and
improvement throughout the fleet, it is also true that an OEM may gain significant compliance
advantage from EVs and PHEVs — a compliance advantage that would be further enhanced if the
credit multipliers are finalized. Much of the technology utilized to obtain that advantage is
limited to the battery technology so that the technological advancement does not necessarily
transfer to other vehicles. [EPA-HQ-OAR-2010-0799-9474-A1, p.5]
Organization: Howard, P.
One thing I would like to see is that these standards only apply to newly manufactured vehicles
and that there will be absolutely no provisions or punishments requiring people to get rid of their
perfectly good and operating older vehicles. [EPA-HQ-OAR-2010-0799-10063-Al, p. 1]
Organization: Hrin, S.
It would be good for our national security if cars were required to get more miles to the gallon.
I'm not talking about a few miles per gallon more, but much more. [EPA-HQ-OAR-2010-0799-
1568, p.l]
I believe car makers should be required to get 100/gallon by 2025. Anything less would be a
travesty. [EPA-HQ-OAR-2010-0799-1568, p.l]
Organization: Hyundai America Technical Center
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 22.]
In our discussions with the agencies on this rulemaking, we have consistently supported the
standard in excess of 50 miles per gallon.
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 24.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 23.]
Finally, Hyundai appreciates a substantial lead time for these regulations which will
provide stability for long-term product planning.
2-30
-------
CO? Emissions Standards
Organization: International Council on Clean Transportation (ICCT)
The ICCT has two overall objectives for our comments. First, given the accelerating pace of
technology development and cost reduction, the proposed standards are not pushing the limits of
technology and it will not be difficult or expensive for manufacturers to meet them. Second,
many cost effective technologies may not be adopted should the stringency be weakened due to
unwarranted credits. Our comments are focused on ensuring that the final rule is as robust as
possible, including data and information on technology and consumers and suggestions for
improvements to the credits. [EPA-HQ-OAR-2010-0799-9512-A1, p. 2]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 196.]
ICCT strongly supports the overall program stringency. However, we are concerned some cost-
effective reductions may not be achieved due to certain elements found in the performance rule.
Organization: Jackson, F.W.
10. Equating a 54.5 mpgge average EPA proposal 'mix' to 54.5 mpgg vehicle performance, they
are not interchangeable because the 'mix' vehicles need to consider each vehicles 'weight' while a
54.5 mpgge average implies no 'weighting'; e.g. to show the point, a 54.5 mpgge vehicle
performance calcs to 1.835 gge to go 100 miles; whereas one 60 mpgge Volt and one 49 mpg
HEV also average 54.5 mpgge but the 49 mpg uses 2.04 gg per 100 miles and the 60 mpgge uses
1.67 gge per 100 miles for 2 vehicles using 3.71 gge for 200 miles or an average of 53.9 gge, i.e.,
not 54.5. Clearly not equivalent, and the farther the vehicles are from the average the more
impact, e.g., use one Leaf at 97 mpgge and one 12 mpg 'guzzler' and average is still 54.5 but
'guzzler' alone for 100 miles is by itself 8.33 gge! Then add the 1.03 gge for the Leaf for a 200
mile total of 9.36 gge, or per 100 miles 4.68 gge (21.4 mpgge), or 155% more gge than a 54.5
vehicle. While EPA ref 2 shows 6 vehicle mix scenarios, plug in penetrations minor in all 6,
however the option for manufacturers to sell plug-ins to obtain credits and/or multipliers to allow
more profitable 'guzzlers' is available and where profitable I expect the profit motive will prevail;
yet in EPA's Ref. 2 scenarios I did not find a 2025 model year scenario with high plug-in
penetration! [EPA-HQ-OAR-2010-0799-8041-A1, pp. 5-6]
2. EPA Draft Regulatory Impact Analysis 'Proposed Rulemaking for 2017-2025 Light-Duty
Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards'
EPA-420-D-11-004 November 2011
Organization: Manufacturers of Emission Controls Association (MECA)
The Manufacturers of Emission Controls Association (MECA) is pleased to provide comments
in support of the U.S. EPA's proposed rulemaking to establish 2017 and later model year light-
duty vehicle greenhouse gas emission standards and corporate average fuel economy standards.
2-31
-------
EPA Response to Comments
We believe an important opportunity exists to significantly reduce greenhouse gas emissions and
improve fuel economy from passenger cars, light-duty trucks, and medium-duty passenger
vehicles. [EPA-HQ-OAR-2010-0799-9452-A3, p.l]
Controlling greenhouse gas emissions from the transportation sector is essential to the overall
efforts to alleviate long-term impacts on the climate. As detailed in EPA's proposal, there are a
large set of technology combinations that are available to reduce greenhouse gas emissions from
passenger vehicles and light-duty trucks, including fuel efficient, state-of-the-art and future
advanced gasoline and diesel powertrains. [EPA-HQ-OAR-2010-0799-9452-A3, pp. 1-2]
In summary, there are significant opportunities to reduce greenhouse gas emissions from the
transportation sector through the design of fuel efficient powertrains that include advanced
exhaust emission controls for meeting even the most stringent criteria pollutant standards.
MECA believes that advanced emission control systems have a critically important role in future
policies that aim to reduce mobile source greenhouse gas emissions. These emission control
technologies allow all high efficiency powertrains to compete in the marketplace by enabling
these powertrains to meet current and future criteria pollutant standards. In nearly all cases, these
fuel-efficient powertrain designs, combined with appropriate emission controls, can be optimized
to either minimize fuel consumption impacts associated with the emission control technology, or,
in some cases, improve overall fuel consumption of the vehicle. This optimization extends
beyond carbon dioxide emissions to include other significant greenhouse gases such as methane,
nitrous oxide, and black carbon. [EPA-HQ-OAR-2010-0799-9452-A3, p.6]
MECA commends EPA for taking important steps to reduce greenhouse gas emissions and
improve fuel economy from light-duty vehicles. Our industry is prepared to do its part and
deliver cost effective, advanced emission control technologies to the market. [EPA-HQ-OAR-
2010-0799-9452-A3, p.6]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 180.]
MECA, like many commented already today, supports performance-based standards that are
technology neutral.
Organization: Marlinghaus, E.
The stakes are too high. We must dramatically reduce our consumption of fossil fuels - imported
or domestic - if we are to prevent catastrophic climate change. Although I support the proposed
rule to increase fuel economy for new passenger vehicles to an average of 54.5 miles per gallon
by 2025, personally I feel that the date for reaching this standard should be moved forward to at
least 2020. [EPA-HQ-OAR-2010-0799-1581-A1, p. 1]
This spring, you set a goal of reducing oil imports by one-third this decade, and in November
you proposed fuel efficiency standards that will effectively double current requirements. I
commend your efforts, but urge you to set your goals even higher. I believe it is important to
increase U.S. investment in fuel efficient technologies, save consumers money at the pump, help
2-32
-------
CO? Emissions Standards
this country break its dependence on oil & all fossil/carbon based fuels, and most importantly,
protect the environment. Do NOT let these standards be watered down—protect and finalize the
new fuel efficiency rules. [EPA-HQ-OAR-2010-0799-1581-A1, p. 1]
Organization: Marshall, C
Promulgating the standard might best be done by also implementing companion federal
programs involving other agencies, e.g., a financing program allowing U.S. auto manufacturers
to retool plants and re-train workers. [EPA-HQ-OAR-2010-0799-5917-A2, p. 1]
Organization: Mass Comment Campaign (10) (National Wildlife Federation Action Fund-1)
President Obama pledged to reduce our oil imports by one-third by 2025. Setting strong vehicle
efficiency and emissions standards is the most effective, common-sense step we can take to
reduce our dependence on oil. [EPA-HQ-OAR-2010-0799-1244-A1_MASS, p.l]
These standards would also deeply cut US global warming pollution, and help speed the
adoption of technology domestically and globally to cut emissions even further. The deep cuts in
oil use that result from setting the strongest standards are also critical to reducing the need to
drill for oil in increasingly risky, environmentally destructive and higher emitting locations.
[EPA-HQ-OAR-2010-0799-1244-A1_MASS, p.l]
From more advanced engines to stronger lightweight materials, automakers have the technology
to reach standards of at least 60 miles per gallon by 2025 and achieve the President's goal. Strong
standards would also spur American innovation to help our auto industry compete and thrive in a
global marketplace, while helping households and businesses save money. [EPA-HQ-OAR-
2010-0799-1244-A1_MASS, p.l]
The difference between the strongest and weakest standards you are considering would cost
Americans $370 billion at the pump (with most of the money ending up outside of the U.S.), and
add twice as much global warming pollution to the atmosphere. [EPA-HQ-OAR-2010-0799-
1244-A1_MASS, p.l]
We need your leadership to set strong fuel economy standards that will break our dependence on
oil, curb global warming pollution and provide consumers with more choices of fuel efficient our
cars and trucks. [EPA-HQ-OAR-2010-0799-1244-A1_MASS, p.l]
Organization: Mass Comment Campaign (4,505) (Unknown Organization)
All but one of the alternative standards discussed in the rules would allow greenhouse gas
emissions from cars and light trucks to increase through 2025; but dangerous climate change
cannot be avoided unless greenhouse gases actually decrease. The rules should adopt the
alternative that actually decreases carbon pollution every year through 2025. [EPA-HQ-OAR-
2010-0799-9595-Al_MASS, p.l]
2-33
-------
EPA Response to Comments
The rules do not push car makers to look for technological innovation; they allow manufacturers
to simply rely on small improvements to technology that already exists. As a result even 13 years
from now, in 2025, the U.S. fleet would still do no better than what some cars can already
achieve today. By 2025 the United States should do better than the European Union, China and
Japan, not continue to lag behind them. [EPA-HQ-OAR-2010-0799-9595-Al_MASS, p.l]
Organization: Mass Comment Campaign (61) (The Social Justice Group)
We, the undersigned, applaud the proposed 54.5 miles per gallon carbon and fuel efficiency
standards for cars and light trucks. We urge you to maintain these strong standards and make
them final in July of this year. [EPA-HQ-OAR-2010-0799-7406-A1_MASS, p.2]
Organization: Massachusetts Institute of Technology (MIT)
In our Report, we have shown that the proposed regulations are highly demanding on both
technological and market deployment fronts. Strong coordinated policies in addition to stringent
CAFE requirements will thus be required to incentivize aggressive development of greatly
improved propulsion system and vehicle technologies as well as the rapid market penetration of
that technology, along with increasing deployment of alternative vehicles and fuels, into actual
use. [NHTSA-2010-0131-0229-Al,p.l]
We are submitting our Report titled "U.S. CAFE Standards: Potential for Meeting Light-duty
Vehicle Fuel Economy Targets, 2016-2025" which we have prepared as our response to the joint
NHTSA and EPA proposal for extending the U.S. National Program to further improve light-
duty vehicle fuel economy and reduce greenhouse gas emissions, for model years 2017 through
2025. It is based on our research of the past year or so, using a forwardlooking stochastic fleet
assessment model for analyzing the impact of uncertainly on projected future light-duty vehicle
fuel use and greenhouse gas emissions (Bastani, P. Heywood, J.B., Hope, C., SAE paper 2012-
01-0647, SAE 2012 World Congress, Detroit, MI), with appropriate assumptions for future
average car and light-truck operating characteristics and sales volumes. [NHTSA-2010-0131-
0229-A1, p.l] [[ See Docket Number NHTSA-2010-0131-0229-A1, pp3-35 for the report.]]
We quantitatively analyze three different scenarios. First, we define an "operational space"
within which we evaluate specific scenarios, using evolving upper and lower bounds on the
assumed vehicle characteristics, sales volumes of each major technology, and anticipated travel
demand. Within this context we show that:
1. With our "plausible yet ambitious" scenario, (see Bastani, P., Heywood, J.B., & Hope, C.,
Transportation Research Part A, vol. 46, pp. 517-548, 2012) the likelihood of exceeding the 2016
fleet average targets is moderate for passenger cars, but very low for the combined car plus light-
truck new vehicle fleets. The prospects of meeting the 2025 targets with this scenario are
extremely low. [NHTSA-2010-0131-0229-A1, p.l]
2. With a more optimistic scenario where, for example, vehicle performance remains unchanged
(a significant departure from the history of the last two or so decades), the prospects for meeting
the 2016 fleet targets with passenger cars rises to some 50% but for the combined cars and light
2-34
-------
CO? Emissions Standards
trucks sales are still only a few percent. The potential for the combined car and light truck sales
meeting the 2025 targets on time is very low indeed. [NHTSA-2010-0131-0229-Al,p.l]
3. With the proposed EPA/DOT preferred alternative scenario, as spelled out in the proposed rule
making, the prospects for meeting these targets are better: some 20% for the combined car and
light truck fleet meeting the 2016 CAFE fleet-average targets, but still only about 15% for the
2025 targets. [NHTSA-2010-0131-0229-A1, p.l]
We hope that this probabilistic analysis with the logic behind its assumptions carefully explained
(and referenced), with it's detailed results and findings, will prove useful to you in your
deliberations of these proposed CAFE requirements. [NHTSA-2010-0131-0229-A1, p.2]
Organization: Mercedes-Benz USA, LLC
Despite this overall support, the continuing stringency increases in the proposal are extremely
aggressive, especially for a company that traditionally sells in the luxury car market and with
modest volumes over which to spread its compliance obligations. As more fully explained in the
Attachment to this letter, DAG suggests the following additional flexibilities and provisions.
These measures would assist companies in overcoming market barriers, bringing new and
advanced vehicles to market and combining advancements in crash avoidance technology with
the fuel consumption reduction and emissions benefits they produce: [EPA-HQ-OAR-2010-
0799-9483-A1, p. 2]
The final regulation will impose a set of aggressive and challenging standards. As a technology
leader, DAG will continue to employ in its fleet all available technological advancements and
will gain real world CC>2 and fuel economy benefits through off-cycle technologies. DAG
appreciates the opportunity to comment upon the proposal and looks forward to continuing to
work with the agencies during fmalization and implementation of the regulations. [EPA-HQ-
OAR-2010-0799-9483-A1, p. A-19]
• DAG supports establishing an alternative compliance pathway for companies to choose more
stringent standards in the later model years to allow more lead time to diversify their U.S.
product line-ups and to bring additional advance technology vehicles, such as fuel cell vehicles,
to the U.S. market. [EPA-HQ-OAR-2010-0799-9483-A1, p. 2]
DAG supports a concept introduced in the proposal to provide an alternative compliance
pathway to allow manufacturers additional lead time to reconstitute the light duty vehicle fleet.
This suggestion was raised in the context of explaining that the agency would not extend the
Temporary Leadtime Allowance Alternative Standard ('TLAAS'). The agency requested
comments on whether the intermediate-volume, limited-line manufacturers should receive
additional flexibility in the latter years of the proposal, and whether the phase-in should be
spread over more years for lower volume manufacturers. [EPA-HQ-OAR-2010-0799-9483-A1,
p. A-l]
2-35
-------
EPA Response to Comments
DAG understands the agency's decision not to extend the TLAAS beyond its original terms.
However, DAG agrees that manufacturers be accorded an option to adopt an alternative
compliance pathway. The alternative would reduce the grams per mile reduction requirements
during earlier model years and then make up most, or all of those carbon reductions in later
model years.3 [EPA-HQ-OAR-2010-0799-9483-A1, p. A-l]
The alternative pathway would be available to all manufacturers. We anticipate, however, that
most manufacturers, who are able to spread compliance costs across a broader fleet, would
continue to choose the basic option since doing so would allow those manufacturers more
consistency across model years. The alternative pathway would likely be utilized primarily by
the small number of manufacturers with more concentrated product line-ups in order to diversify
their U.S. market fleets and to bring more long-ranging advanced technology vehicles, such as
fuel cell or dedicated CNG vehicles, to market. [EPA-HQ-OAR-2010-0799-9483-A1, pp. A-l-
A-2]
DAG looks forward to discussing this option with the agencies and to developing an alternative
compliance pathway that is likely to provide the necessary assistance while maintaining similar
or equal overall levels of CO2 reduction. [EPA-HQ-OAR-2010-0799-9483-Al, p. A-2]
3 One possibility within the first four model years, MYs 2017-2020, would be to adjust the
grams per mile reductions during the first two model years with corresponding increases in the
latter two model years. Another possibility would be to spread the alternative pathway across the
eight model years covered by the overall rulemaking.
Organization: Miller, P.
This rule should be moved to 2020 with an addition of a separate part which provides far more
federal R&D for cars that don't use fossil fuels at all — including hydrogen and advanced electric
cars, funds for plug ins, etc. This would help global warming by reducing carbon emissions
while it developed entire new industries that keep our energy dollars in the US = lasting
industries. [EPA-HQ-OAR-2010-0799-1755-A1, p. 1]
Organization: National Association of Clean Air Agencies (NACAA)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 42.]
And go to finally, NACAA urges that EPA and NHTSA ensure that this final rule is promulgated
by July 2012 as planned, and encourages EPA upon promulgation of this rule to begin assessing
the efficacy of another phase of standards to apply to post 2025 model year vehicles.
Organization: National Automobile Dealers Association (NADA)
2-36
-------
CO? Emissions Standards
These comments do not devote much attention to technological feasibility, largely taking on faith
the proposal's assumptions in that regard. Likewise, little attention is paid to the proposal's
assumptions regarding program benefits, except to stress that if and to the extent vehicles
covered by the program rule are not sold and used as predicted, those benefits will be reduced.
[EPA-HQ-OAR-2010-0799-9575-A1, p. 3]
The proposal seeks to establish CAFE and GHG mandates which would take effect with MY
2017. No statutory mandate requires that standards be set so far in advance, for so long a period
of time. In fact, the 35.5 mpg standard recently promulgated for MY 2016 will kick in some four
years earlier than Congress contemplated in EISA. [EPA-HQ-OAR-2010-0799-9575-A1, p. 11]
Absent a specific statutory direction, NHTSA and EPA should be guided by three principal
factors. First, a timetable should be designed to provide adequate lead-time for manufacturers to
achieve technologically feasible standards. Statutory language on lead-time is found in both the
Energy Policy and Conservation Act and the Clean Air Act. CAFE standards must be issued at
least 18 months prior to the model year in question and for no more than 5 model years. In
addition, new GHG standards may not take effect sooner than the model year commencing 4
years after they are promulgated. Technological feasibility directly relates to what manufacturers
can do and when they can do it. The longer out into the future standards are set, the less likely
NHTSA and EPA will have credible information to accurately predict technological feasibility.
This is one of the key lessons taught by the heavy-duty truck emissions look-back discussed
above and found in Exhibit B. Setting standards too far in advance dramatically increases the risk
that those standards will prove to be technologically infeasible. [EPA-HQ-OAR-2010-0799-
9575-Al,p. 11]
Proposed standards also must be economically practicable. Although NADA has considerable
confidence that vehicle manufacturers will be able to research, design, manufacture, and
incorporate technologies and designs aimed to meet the proposed standards, serious questions
exist regarding whether they will be able to do so in a cost effective or economically practicable
manner. As discussed at length above, regulatory benefits will not attain unless and until vehicles
subject to the proposal are bought. And, to the extent they prove unaffordable, they will not be
bought. There are simply too many variables involved with the reasonable modeling of economic
practicability to warrant the setting of standards unnecessarily too far in advance. Fuel costs,
materials costs, general economic conditions, and interest rates are but a few of these very hard
to forecast, yet critical variables. In short, NHTSA and EPA have no justification for setting
standards for longer than the statutory five year period. [EPA-HQ-OAR-2010-0799-9575-A1,
pp.11-12]
Prospective light-duty vehicle purchasers, and the dealers who sell to them, will be directly
impacted by the vehicle production mandates under consideration. If no rule were to issue, in-use
passenger car and light truck fuel economy and GHG performance would continue to improve,
as older, less fuel-efficient vehicles are replaced by newer ones offering comparable performance
with improved fuel economy. NHTSA and EPA must preserve this trend by avoiding mandates
which, through product compromises or high costs, would impede fleet turnover. [EPA-HQ-
OAR-2010-0799-9575-A1, p. 13]
2-37
-------
EPA Response to Comments
The automobile industry has traveled a steep technology path over the last century, resulting in
astounding improvements to light-duty cars and trucks. Today's vehicles are lighter and more
powerful, yet safer and more fuel efficient than ever in history. Fuel economy/GHG standards
should encourage manufacturers to continue along this technology path, but only if it allows
them to deliver to new vehicle showrooms products that are acceptable by and affordable to
consumers. Future light-duty vehicles must be affordable up-front, and must also offer a total
value package that includes fuel economy, but with no safety or performance trade-offs. Unless
and until new vehicles sell, regulatory benefits will be unrealized. [EPA-HQ-OAR-2010-0799-
9575-Al,p. 13]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11786, p. 69.]
Secondly, NADA wants the highest fuel economy that we can get as long as the mandates are
feasible and affordable as customers do have choices.
Organization: National Wildlife Federation (NWF)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11786, p. 32.]
A recent survey by Consumers Reports found that 93 percent of the public is in support of
stricter fuel economy standards. The public understands how the fuel standards work. They work
for wildlife, they work for American families and they work for the auto industry and
autoworkers and for the overall economy.
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Annual Rates of Emissions Reductions
EPA's proposed rule would incorporate a carbon dioxide equivalent standard that requires annual
average reduction rates of 5 percent for passenger cars and 3.5 percent for light trucks in model
years (MY) 2017 to 2021 and 5 percent for all light-duty vehicles for MY 2022 to 2025. For
reasons set forth herein and in our November 1, 2010 letter (attached), NESCAUM believes a 6
percent rate for passenger cars is technically feasible and economically practicable. We strongly
encourage EPA to consider incorporating a more stringent rate of improvement in this
rule.[EPA-HQ-OAR-2010-0799-9476-A1, p. 1]
EPA's technology analysis projects that battery electric vehicles (BEVs) and plug-in hybrid
electric vehicles (PHEVs) will account for as little as 1 percent of sales in 2021 and 3 percent of
sales in 2025. EPA and the NHSTA previously estimated that a 6 percent annual rate of
improvement for the combined passenger car and truck fleet could be achieved with as little as 4
percent combined sales share of BEVs and PHEVs in 2025, provided that sales of conventional
hybrids continue to increase. Given the proposed rule initially establishes a less stringent
standard for light trucks (3.5 percent reduction rate from MY 2017 to 2021), achieving a 6
percent reduction rate for passenger cars alone would likely require even lower penetration rates
2-38
-------
CO? Emissions Standards
than EPA's previous estimates. The majority of major auto manufacturers will be selling BEVs
or PHEVs as part of their offering of passenger cars, beginning with MY 2013. Forecasts of
significant reductions in the weight and cost of electric vehicle technologies further support our
conclusion that the modest increase in sales of these advanced technology vehicles required to
achieve a fleet-wide 6 percent annual rate of improvement for passenger cars is viable.4 [EPA-
HQ-OAR-2010-0799-9476-A1, pp. 1-2]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 70-74.]
The proposed rule before us today incorporates carbon dioxide emissions reduction at average
annual rates in model years 2017 through 2021 of five percent for passenger cars and three point
five percent for light trucks.
For model years '22 through 2025 the rate is set at five percent for all light-duty vehicles.
NESCAUM states continue to affirm our previous position that a six-percent rate is technically
feasible and economically practical and encourage EPA to strongly consider incorporating this
more stringent rate of improvement into the rule.
NESCAUM states encourage EPA to consider the six-percent annual rate of improvement.
4 MIT Energy Initiative. Electrification of the Transportation System. April, 2010.
Organization: RVIA
EPA and NHTSA should closely examine whether they have appropriately considered future
light vehicle towing trends in setting standards for light duty passenger cars, cross-over vehicles,
minivans and other vehicles that will be used more in the future to tow RV trailers and similar
towable products. [EPA-HQ-OAR-2010-0799-9550-A2, p.5]
Organization: Smith, Frank Houston
Please note that the current 40 UK gasoline vehicle configurations rated >60 mpg(Imperial)
combined are generally similar in size to the Fiat 500 or for two. This suggests something more
than "advanced" gasoline ICE technologies are necessary to accomplish fuel economies above
45-50 mpg(US) combined for machines currently considered mid and compact sized light
passenger vehicles in the US. [NHTSA-2010-0131-0240-A1, p.2]
Here are the 20 US vehicles that have broken the 50 mpg highway barrier since 1984:
http://www.fueleconomy.gov/feg/Power...g=50&maxmpg=70 [NHTSA-2010-0131-0240-A1,
p.2]
2-39
-------
EPA Response to Comments
51-53 mpg - Chevy Sprinter ER 1986-1987
51 mpg - Chevy Sprint Metro 1988
52 mpg - Chevy Sprint Metro 1989-1994
51 mpg - Civic CRXHF 1986-1987
50 mpg - Civic HB VX 1994-1995
58-61 mpg - Honda Insight 2001-2006
A total of 20 vehicles in the last 28 years, with nothing post 2006. [NHTSA-2010-0131-0240-
Al,p.2]
And, here are the only 11 vehicles recognized by
http://www.fueleconomy.gov/feg/powerSearch.jsp to have achieved > 50 mpg(US) combined
since 1984:
50 mpg(US) combined - Toyota Prius C 2012 & Prius 2010 through 2012
52-53 mpg(US) combined - Honda Insight 2000 through 2006 [NHTSA-2010-0131-0240-A1,
p.3]
Organization: Society of the Plastics Industry, Inc. (SPI)
SPI supports the aim to preserve consumer choice in vehicles, and likewise seeks for
manufacturers to have a fully captured and incentivized range of technological options to reduce
emissions and increase fuel efficiency. [EPA-HQ-OAR-2010-0799-9492-Al, p.2]
Organization: Susan R.
Please increase the minimum MPG. If auto makers will routinely offer vehicles that offer a 50+
MPG, the gas savings alone would pay for an upgrade in vehicle. PLEASE - for our environment
and just plain common sense, increase the minimums! [EPA-HQ-OAR-2010-0799-10792-A1, p.
1]
Organization: Tarazevich, Yegor
There should be one target for everyone (by 2025 it will be CAFE 54.5 MPG which is equal
EPA 40 MPG). Every new car that does not meet the target should pay a penalty of $500 per
every MPG under the standard. If one wants to buy a huge 20 MPG gas guzzler he will pay a
$10,000 penalty for air pollution and oil dependency. This is the only way to eliminate all
loopholes. [NHTSA-2010-013l-0199,p.l]
2-40
-------
CO? Emissions Standards
Organization: Toyota Motor North America
The 163 grams per mile (54.5 miles per gallon equivalent) proposed standard for 2025 model
year is truly groundbreaking and will provide significant environmental and energy savings
benefits. While Toyota feels confident that our leadership in advanced technology vehicles
provides a strong foundation, meeting the proposed standards poses a formidable challenge for
our engineers and product planners. [EPA-HQ-OAR-2010-0799-9586-A1, p.2]
The overall level of the proposed standards in 2025 model year is consistent with the agreement
signed by Toyota last July and the joint Supplemental Notice of Intent (NOT) published last
August. These standards will pose a substantial challenge our engineers and product planners,
but Toyota is prepared to make every effort to comply. [EPA-HQ-OAR-2010-0799-9586-A1,
p.5]
Further, subject to specific comments provided later in this document, Toyota generally supports
the added flexibilities proposed by EPA in the form of the following provisions: (1) sales
multipliers for advanced technology vehicles; (2) unlimited transfer of credits between fleets; (3)
A/C system leakage credits; and (4) one-time carry forward of 20102016 model year GHG
credits through the 2021 model year. Unfortunately, NHTSA does not believe it can propose or
adopt these same flexibility provisions for the CAFE regulations. To account for these
differences, NHTSA has proposed to set the CAFE target curves at different (lower) 'MPGe'
levels than EPA's GHG target curves for a given model year. However, Toyota's understanding
is that NHTSA's target curves have only been adjusted to account for the lack of sales multiplier
and A/C system leakage credits in the proposed NHTSA regulations, while no adjustments have
been made to account the lack of unlimited credit trading and one-time carry forward in the
proposed NHTSA regulations. The result of this difference in flexibility is a difference in
.stringency between the programs. Granted, the one-time carry forward is a temporary flexibility
that has no impact beyond 2021 model year, so the long-term effect of this difference is less
material. However, the difference in credit trading and transferring is a significant and long-term
(fixed) difference that substantively affects stringency. [EPA-HQ-OAR-2010-0799-9586-A1,
pp.5-6]
We request that the agencies further evaluate this potential stringency gap and take measures to
address this gap, either through increased flexibility in the NHTSA program or by adjusting the
NHTSA curves to account for the difference in stringency. [EPA-HQ-OAR-2010-0799-9586-A1,
p.6]
Organization: Union of Concerned Scientists (UCS)
(a) Overall Stringency & Technical Feasibility
In the proposed rule, EPA presents standards yielding a projected fleetwide greenhouse gas
average of 163 g/mi in model year 2025. NHTSA is proposing a harmonized CAFE standard
yielding a projected fleet average of 40.9 mpg in MY2021 and 49.6 mpg in MY2025 - due to its
statutory limitations requiring rulemakings no longer than five model years. While the proposed
2-41
-------
EPA Response to Comments
standards represent significant progress, the technology exists to establish even more stringent
standards consistent with the agencies' statutory obligations. [EPA-HQ-OAR-2010-0799-9567-
A2, p. 5]
The agencies' original TAR laid out four scenarios ranging from a 3-6% annual reduction in
greenhouse gas emissions. As stated in our original comments to the NOT, the data continue to
support a 6% annual reduction (143 g/mi in MY2025) as technically feasible and increasing the
net societal benefits as demonstrated by our joint technical analysis with the Natural Resources
Defense Council that has already been submitted to the docket. [EPA-HQ-OAR-2010-0799-
9567-A2, p. 5]
Current market conditions reflect that more stringent standards are achievable. According to
UCS analysis, 39 models sold today - including conventional, hybrid, and advanced technology
- are already sold in a version that meets their MY2017 proposed targets. Of these models,
nearly two dozen meet the target for MY2020.26 An analysis in the Draft Joint Regulatory
Impact Analysis confirms these findings, and identifies another 33 nameplates sold today that
nearly meet their MY2017 targets, missing them by five percent or less.27 These data, as well as
the agencies' data on technology potential, indicate that higher stringencies should be set -
particularly in the light-truck fleet, where the proposed annual rate of improvement is
exceedingly weak for large footprint models. We provide further detail regarding our concerns
on the light truck standards in Section II(b) below. [EPA-HQ-OAR-2010-0799-9567-A2, pp. 6-
7]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 215.]
UCS urges the agencies to finalize strong vehicle standards with the attention paid to susceptible
provisions in the proposal that if exploited by auto makers would reduce the programs
anticipated benefits.
19 Union of Concerned Scientists. Comments Concerning EPA's and NHTSA's Notice of Intent
to Conduct a Joint Rulemaking, 2017 and Later Model Year Light Duty Vehicle GHG Emissions
and CAFE Standards. November 3, 2010. p. 4 [EPA-HQ-OAR-2010-0799-9567-A2, p. 5]
26 http://blog.ucsusa.org/the-future-is-now-39-models-meet-tomorrow%e2%80%99s-fuel-
economy-requirements-today
27 Draft Joint Regulatory Analysis, Table 3.12-1
Organization: United Automobile Workers (UAW)
The UAW believes strongly that the proposed regulations are sensible, achievable and needed.
They are good for the auto industry and its workers, good for the broader economy, good for the
environment and good for our national security. Adopting the proposed rules will give an
2-42
-------
CO? Emissions Standards
additional boost to the ongoing revitalization of the auto industry, and for those reasons we
recommend adoption of these proposals in the final rules. Thank you for considering the views of
the UAW on these important issues. [EPA-HQ-OAR-2010-0799-9563-A2, p.8]
Organization: Van Coppenolle, J. and L.
The need for stringent vehicle performance standards is critical. Vehicles are a major cause of
poor air quality and adverse climate conditions, and the larger the vehicle, the greater the effect.
[EPA-HQ-OAR-2010-0799-1284-A1, p. 1]
1) The higher standards do not apply to all vehicles across the board, allowing automakers a
potential loophole if they decide to reclassify cars as SUVs, pick up trucks, etc., which have
lower proposed standards. [EPA-HQ-OAR-2010-0799-1284-A1, p. 1]
2) The new standards take effect only in 2017, though automakers are fully capable of
implementing them far sooner than that. The effective date should be moved forward, to 2015 at
the very latest. Please do not allow automakers to deceive you into believing they cannot meet an
earlier deadline. [EPA-HQ-OAR-2010-0799-1284-A1, p. 1]
Please revise the standards so that the highest ones apply to all vehicles and they take effect
within the next three years. [EPA-HQ-OAR-2010-0799-1284-A1, p. 1]
Organization: Volkswagen Group of America
Volkswagen provided a framework of what we believe to be an achievable and balanced
regulatory program aimed at advancing environmental and energy objectives while maintaining
market feasibility and customer acceptance. In general Volkswagen put forward a concept for a
regulation with equitable CO2 reductions amongst all segments and sizes of vehicles. We
combined this with broad incentives targeted at advancing interest by consumers into more
efficient, lower emitting vehicles. We further proposed incentives to promote use of bio-based
fuels which would help drive low emitting technology into vehicles while also advancing the
goals of the US Renewable Fuels Standards. [EPA-HQ-OAR-2010-0799-9569-A1, letter p. 2]
Volkswagen remains predominantly a passenger cars manufacturer. We believe that cars offering
a balanced mix of premium features, advanced safety, and invigorating dynamics can deliver a
first order reduction in CC>2 emissions versus other common choices made for daily consumer
use. [EPA-HQ-OAR-2010-0799-9569-A1, letter p. 2]
The SNOI and sub sequent NPRM outline an aggressive advancement of CC>2 emission targets.
However Volkswagen disagrees with details of the framework, primarily the imbalanced
distribution of burden and the inclusion of targeted, segment and technology specific incentives.
As such, we were not in a position to endorse the proposal as did many of our industry
counterparts. Instead, Volkswagen will offer within these comments a suite of proposals aimed at
improving the overall balance of the proposal. [EPA-HQ-OAR-2010-0799-9569-A1, letter p. 2]
2-43
-------
EPA Response to Comments
Volkswagen markets a broad range of fuel efficient passenger cars and light trucks in the US.
We understand the importance of increasing fuel economy with standards that are:
- Aimed at reaching aggressive environmental targets
- Achievable with an assortment of conventional and advanced technology
- Flexible and feature a broad package of flexibility
- Most importantly, affordable for consumers [EPA-HQ-OAR-2010-0799-9569-A1, p. 3]
We are committed to continually offering fuel efficient vehicles, such as the new mid-size, clean
diesel Passat TDI, available to the U.S. market.
- Built in our new LEED Platinum Certified factory in Chattanooga, TN
- Passat TDI achieves 43 mpg highway and can travel almost 800 miles on a single tank of fuel
- Volkswagen anticipates that over 30% of our customers will select the fuel-saving TDI Passat
[EPA-HQ-OAR-2010-0799-9569-A1, p. 3]
In addition, Volkswagen continues to develop vehicles featuring a broad array of fuel saving
technologies. It is our overall goal to offer a competitive suite of market viable technologies for
our customers to choose from. We recognize that a full range of affordable technologies and
vehicles will be needed to fit the diverse needs of our customers. [EPA-HQ-OAR-2010-0799-
9569-A1, p. 3]
Volkswagen actively engaged with the agencies at a technical level to provide estimates of future
emissions reduction and fuel economy technology. During this time, Volkswagen outlined a
series of key principles to help define a balanced regulatory program for 2017+. However,
following our review of the 2010 Supplemental Notice of Intent (SNOI) and subsequently the
Notice of Proposed Rulemaking (NPRM), Volkswagen was concerned that the proposed
regulation contained elements which would eventually produce an unbalanced, inequitable
rule. [EPA-HQ-OAR-2010-0799-9569-A1, p. 3]
Organization: Volvo Car Corporation (VCC)
VCC believes that the current classification framework, the footprint attribute, and the footprint
cut-points are reasonable and should be retained. Moreover, any changes to these fundamental
elements of the program could have a major impact on the stringency of the standards
themselves, and would require extensive reevaluation. [EPA-HQ-OAR-2010-0799-9551-A2, p.
12]
Response:
2-44
-------
CO? Emissions Standards
The majority of comments received on the topic of the stringency of the standards were
supportive, with many commenters noting that the standards are challenging but achievable, and
will result in significant reductions in GHG emissions and significant fuel savings. Comments
on the topic were also received requesting modifications to the stringency of the proposed
standards, either increasing or decreasing the year-to-year reduction in target emissions, and
either increasing or decreasing the lead time provided for manufacturers to adopt new
technologies. A detailed description of the selection of the curve shapes, stringency, and
alternatives considered are provided in sections II.C, III.B.2, and III.D.6 of the preamble, and
section 2.5.3 of the joint TSD. These sections contain detailed responses to most of the
comments received on the topic of stringency and curve shape, while a summary of these
responses, along with additional information, is provided below.
Response to comments that standards should be more or less stringent
EPA considered standards that were less stringent and more stringent than those adopted.
The analysis of technology penetration rates and costs of these alternative standards is described
in section III.D.6 of the preamble. EPA believes the final standards are preferable to the more
stringent alternatives based on considerations of cost - both to manufacturers and consumers -
and the potential for exceeding feasible penetration rates with sufficient lead-time for advanced
technologies, especially given the unknown degree of consumer acceptance of both the increased
costs and of the technologies themselves. EPA's analysis of more stringent alternatives as set
out in section III.D.6 of the preamble, which encompass the alternatives suggested by
commenters, supports these conclusions. At the same time, EPA believes the final standards are
preferable to the less stringent alternatives EPA examined, given that the final standards provide
significant reductions in GHG emissions and save consumers significant fuel - and thereby,
money - that far exceed the costs. These benefits would be foregone with less stringent
standards.
ACEEE stated that the alternative standards demanding higher penetration rates of
advanced technologies are preferable because "[tjhese alternatives adhere to technology
penetration rates that fall within the caps set by EPA to ensure feasibility." EPA agrees with the
observation, but disagrees that this (by itself) is a justification for increasing the stringency of the
standards. This is because EPA believes that ACEEE has misinterpreted the purpose of the
technology caps, which are discussed in detail in chapter 3.4.2 of the joint TSD and section
III.D.6 of the preamble. As a modeling tool, EPA imposes upper limits on the penetration rates
allowed under our modeling. These maximum penetration rates are intended to account for the
physical limits of technical capability in light of conditions such as supplier capacity, up-front
investment capital requirements, manufacturability, and other factors. While they may reflect
technical judgments about technology feasibility and availability, consumer acceptance, lead
time, and other factors, these caps are not meant to imply that rates below that cap are a priori
practical or reasonable. That so many manufacturers are pushing up against those limits for the
alternative standard advocated by the commenter raises legitimate issues of not only lead time
and cost, but consumer acceptance as well.
ACEEE further commented that EPA did not take into account the various proposed
flexibilities, such as credits for plug-in vehicles and hybrid credits for large pickups. EPA has
2-45
-------
EPA Response to Comments
certainly considered carefully the role of incentives and flexibilities for advanced technologies
versus adopting standards predicated on wide-scale use of those technologies. We explained in
sections III.C.3 and III.D.6 of the preamble that there is a legitimate policy decision to be made
regarding whether to potentially jeopardize much of the rule's benefits due to lack of consumer
acceptance of trucks with advanced technologies (for example due to cost, or discomfort with
power train electrification on hauling vehicles). EPA has reasonably chosen instead to adopt
aggressive standards which nonetheless do not force such technologies' use as sharply but rather
promote penetration of these technologies by means of incentives and flexibilities. We note the
comments of the U.S. Coalition for Advanced Diesel Engines, among others, which documented
the low rates of penetration of hybridization in large footprint trucks in the current fleet as
evidence of a lack of consumer demand for these technologies. We note further that we have
incorporated the credits for use of hybrid technologies on pickup trucks into the OMEGA
modeling (see preamble section III.D.5). Our analysis shows that on a fleet-wide basis, the
impact of these pickup truck flexibilities in 2025 is small, as shown in Table III.2 of the
preamble. Therefore, EPA believes it is reasonable to rely on incentives, rather than rely
exclusively on potentially overly-aggressive standards, to obtain market penetration of these
potentially game-changing technologies.
Some commenters (CBD, J. Capozzelli, Mass Campaign) expressed concern that the
standards will not result in an overall reduction in greenhouse gas emissions over the rulemaking
timeframe. However, CBD's observation that "[t]he alternative the Agencies prefer would
continue to increase greenhouse gas emissions through 2025" is incorrect. EPA believes that the
commenters incorrectly read Table 5.4.1-2-B of the DEIS, which shows that even when future
projected VMT growth is accounted for, net greenhouse gas emissions from light-duty vehicles
are reduced under the preferred alternative through 2040. As shown in Table 111-60 in the
preamble, without these standards, overall emissions from light-duty vehicles in the U.S. would
increase from 1,100 MMTCO2 eq. per year in 2010 to 1,600 in 2050. In the analysis conducted
for this rule, total light-duty vehicle emissions in 2050 are calculated to be reduced by 569
MMTOCO2 eq. per year, as shown in Table 111-61. This will result in total light-duty vehicle
emissions of 1,031 MMTCO2 eq. per year in 2050 - a reduction from the 2010 level.
CBD, a mass comment campaign, and several individuals commented that these
standards are not as stringent as certain other standards internationally, specifically those in the
European Union, Japan, and China. EPA notes that the standards in this rule are not directly
comparable to foreign fuel economy or emissions standards because 1) the standards are based
on a footprint attribute whereas foreign standards are based on other attributes, 2) the
measurement test cycles are different than foreign standards, and 3) the composition of each
country's vehicle fleet reflects the unique consumer preferences and vehicle usage patterns of
that country. Regarding the last point, as a result of differences in consumer preference and
vehicle usage, the fleet make-up in other nations is quite different than that of the United States.
These regions cited by the commenters have a large fraction of small vehicles (with lower
average weight, and footprint size) when compared to vehicles in the U.S. Also the U.S. has a
much greater fraction of light-duty trucks. When looked at from a technology-basis, with the
exception of the existing large penetration of diesels and manual transmissions in the European
fleet - there is no unique technology in the European and Japanese markets which leads to lower
fleet-wide CO2 emissions. The commenters have not provided any detailed analysis of what
2-46
-------
CO? Emissions Standards
technologies are available in these regions which EPA is not considering - and indeed, there are
no such "magic" technologies. The vast majority of the differences between the current and
future CO2 performance of the Japanese and European light-duty vehicle fleets are due to
differences in the size and current composition of the vehicle fleets in those two regions - not
because EPA has ignored technologies which are available for application to the U.S. market
during the rulemaking time frame.
CBD commented that more stringent standards are possible, stating "it is clear that 69
mpg by 2025 is technically feasible 14 years from now. Indeed, it is beyond question that a fleet-
wide average of 62 mpg (representing approximately a 6% annual increase) can be achieved
based mostly on existing, off-the-shelf technologies ...". CBD went on to advocate that the
agencies adopt the most stringent alternative from the DEIS, which would require a 7 percent
annual increase for the car and truck fleets. UCS proposed more stringent standards of 6 percent
for cars and trucks, while NESCAUM proposed higher stringency for the car standard only,
stating that they believe "a 6 percent rate for passenger cars is technically feasible and
economically practicable". In support of its position, CBD cited as evidence two of the most
efficient vehicles currently available (the Toyota Prius and the Nissan Leaf). EPA agrees that
technologies are currently available that will enable significant reductions in fuel use and
emissions under this rule. However, EPA does not agree, as the commenter suggests, that
feasible improvements in smaller footprint cars are representative of gains that can be achieved
in a cost-effective manner by all vehicles, noting that this rule promulgates standards for
manufacturers' fleets which consist of a wide range of vehicles and footprints.
In the analysis conducted for this rule, among the alternatives considered were
Alternatives 2 and 4, both of which have higher stringencies than the standards being finalized
by this rule. While EPA believes that the technology penetration required for these more
stringent alternatives are, in the narrow sense, technically achievable, they were not selected.
EPA explains in detail in sections III.D.6 and 7 of the preamble to the final rule that our analyses
have shown that increasing the stringency beyond the promulgated levels would add significant
cost with diminishing additional benefit, and for light trucks, potentially leading to overly
aggressive penetration rates of certain advanced technologies, raising issues of lead time, costs,
and consumer acceptance, as well as creating incentives to comply by reducing vehicle utility.
As explained in section III.D.6.d of the preamble, the more stringent alternatives we considered
would affect penetration rates of MHEVs, HEVs, EVs, and PHEVs, especially in MY2025.
Alternative 4, which would require a similar increase in car stringency to the NESCAUM's
proposed 6 percent, would lead to penetration rates of 7 percent for PHEVs and EVs, and much
higher penetration (up to 45 percent) for some individual manufacturers, as shown in Table III-
54 of the preamble. The UCS and CBD proposals for 6 and 7 percent increases, respectively, for
both cars and trucks would be more stringent than both Alternatives 2 and 4 considered by the
EPA, with correspondingly higher penetration of PHEVs and EVs. These increases in
technology penetration rates raise serious concerns about the ability and likelihood
manufacturers can smoothly implement the increased technology penetration in a fleet that has
so far seen limited usage of these technologies. While this is more pronounced for 2025, lead
time issues would also exist for MY 2021 and earlier years. As such, EPA has not made changes
2-47
-------
EPA Response to Comments
to increase or decrease the overall stringency across the car and truck fleets from the levels of the
proposal, as advocated by these commenters.
CBD also expressed concern that agencies have "selected standards that value purported
consumer choice and the continued production of every vehicle in its current form over the need
to conserve energy: as soon as increased fuel efficiency begins to affect any attribute of any
existing vehicle, stringency increases cease." EPA disagrees with this comment. It is important
to note that the standards do not apply to individual vehicles, so that manufacturers can produce,
and consumers can purchase, vehicles with attributes that differ from those of existing vehicles.
Furthermore, in evaluating the costs of the rule, the agencies have included costs to preserve
vehicle utility (see EPA RIA 1-40) but have not "ceased ... increases in stringency" in the face
of those costs. Indeed, were the commenter correct, the standards for cars and trucks would not
increase in stringency at all, much less in each model year. Furthermore, EPA acknowledges
that multiple pathways exist for manufacturers to come into compliance. One way is through the
reduction of some vehicle attribute. That attribute may be content, acceleration performance,
hauling, towing, all wheel drive, NVH, ride height, etc. However, EPA has not captured these
options in the analysis as we are showing compliance choosing pathways through the addition of
technology that maintain these consumer desirable attribute(s). A more detailed response to
CBD's comment is provided in the introductory portion of section HID of the preamble.
Several commenters referred to an "SUV loophole" in expressing their concern that these
standards will encourage the production of more trucks, thereby diminishing the benefits of the
rule (CBD, J. Capozzelli, J. and L. Van Coppenolle). EPA disagrees with these comments. As
discussed in section III.D.6 of the preamble and section 2.2.2 of this document, EPA believes the
car and truck curves appropriately reflect the differences in cost between the car and truck fleets
for adding efficiency technologies. Moreover, intentional "gaming", whereby a manufacturer
modifies a design so that a car can be reclassified as a truck, comes at significant cost to the
manufacture, with added production and component costs, and to the consumer in the form of
reduced fuel savings and a higher purchase price. Therefore, EPA does not agree that
manufacturers will shift production to trucks as a result of this rule.
EPA recognizes that a challenge faced by manufacturers of luxury vehicles will likely be
higher compliance costs than other manufacturers. BMW commented that the "significant
penetration of these advanced conventional technologies in our existing fleet will make it even
more challenging for BMW to achieve compliance." However, compliance challenges should
not be interpreted to mean that the standard is unreasonable or infeasible. Furthermore, EPA
recognizes that each manufacturer's unique combination of vehicle types, sizes, and previously
adopted technologies may result in variation among manufacturers in the technologies available
for achieving compliance and their associated costs. EPA notes that some of this variation is the
result of product decisions made by the manufacturers to offer consumers additional vehicle
features and enhanced attributes, such as higher engine power. Some of the variation also
reflects that these manufacturers for years paid fines (or civil penalties) in lieu of compliance
with CAFE standards and now have further improvements to make to attain the same level of
control as other manufacturers. See 75 FR at 25414. In the analysis conducted for this rule, and
described in section III.D.6 and 8 of the preamble and chapter 3.4.1 of the RIA, we considered
that manufacturers have already adopted, to varying degrees, some of the advanced technologies
2-48
-------
CO? Emissions Standards
that will enable emissions reductions, and demonstrate that a feasible compliance path exists for
all manufacturers.
ECM commented that "achieving carbon neutrality through tailpipe emission standards is
not within the realm of possibility". EPA notes that the objective of this rule is not to achieve
"carbon neutrality", but rather to reduce GHG emissions through technology-based standards,
while considering issues of technical feasibility, cost, and available lead time, as discussed in
section LA. l.b of the preamble. See Coalition for Responsible Regulation v. EPA, No. 09-1322
(D.C. Cir. June 26, 2012) slip op. p. 43 (in setting section 202 (a) standards, EPA is not required
to adopt standards that mitigate a specific quantum of the endangerment caused or contributed to
by vehicular GHG emissions). Nevertheless, in the context of the standards in this rule, ECM's
observations about some of the obstacles to the development of low-carbon technologies for
electricity generation are still relevant. However, the availability of these electricity generation
technologies will not have a major impact on a manufacturer's ability to comply with the
standard. EPA's Integrated Planning Model (IPM) predicts that only a small fraction of the
incremental electricity generation will come from renewable sources in 2030, as described in
section III.C.2.c.vi. Furthermore, EPA's analysis shows that manufacturers will be able to
achieve compliance with relatively modest penetrations of PHEV and EV technologies. At the
same time, EPA recognizes that the accelerated development of low-carbon electricity sources
will result in emissions reductions beyond what are projected by the analysis for this rule.
EPA does not agree with the comments that the proposed targets cannot be achieved
primarily through improvements in gasoline ICE technologies (Frank Houston Smith) or that
MY 2012 fuel economy and purchase price data show that "the proposed targets cannot be
achieved at the costs assumed by the Agency or with conventional technology" (ECM). As
described in section III.D.8 of the preamble, a significant number of MY 2012 vehicles achieve
or surpass targets for MYs 2017-2022. The compliance pathways for each manufacturer set
forth in section III.D.6 of the preamble likewise are predicated largely on improvements to
internal combustion engines, indicating that 'conventional technology' compliance pathways are
not only feasible, but expected. Additionally, further advancements in technology are likely that
will enable more manufactures to adopt technologies that currently exist, but are not yet
implemented in full production, for compliance in the latter years of the rulemaking. For this
reason, EPA does not agree with ECM's conclusion that, as evidenced by the low number of
MY2012 vehicles that comply with MY2025 standards, the standards are not achievable using
conventional technologies. In the latter years of the rule making, vehicle designs will certainly
be different from those of today, and manufacturers are expected to adopt additional technologies
as a result of this rule - indeed that is the primary mechanism of a technology-based standard.
We also disagree with ECM's statement that compliance will require a "penetration rate
of over 70% hybrid electric vehicle and 3% electric vehicles". According to our technology
penetration analysis, HEVs, PHEVs, and EVs will comprise only 7 percent of the fleet in
MY2025, while diesel engines will comprise less than 1 percent, as shown in Table 111-52 of the
preamble and Table 3-25 of EPA's RIA. Finally, we do not believe that most of major vehicle
manufacturers would support the standards if basic feasibility was at issue. See, e.g. Comments
2-49
-------
EPA Response to Comments
of the Alliance quoted above ("Given that many of our member companies support the standards
as proposed....").
ECM also argued that the agencies underestimated the costs of the rule, and provided
their own calculations for payback periods for selected hybrid and diesel vehicles. As noted
above, our technology penetration analysis concludes that compliance for these standards can be
achieved primarily through the adoption of technologies applied to internal combustion engines,
such as turbo downsizing. In cases where more advanced technologies are applied, we do not
believe the MSRP values used by the commenter in these calculations accurately represent the
actual costs that will be paid by consumers, now or in the future. For example, while the
commenter assumes a cost of $7000 for hybrid technology, EPA reasonably has estimated a cost
of $2,861 for a midsize car in MY2025 (in 2010 dollars, see Table 111-23). This basis for this
estimate is set out in detail in joint TSD section 3. 3.3.6. Furthermore, as discussed in section
III.H.5 of the preamble, although payback analysis in this rule considers the average number of
vehicle miles traveled per year, in reality, drivers who travel more than average will incur fuel-
related savings more quickly, and therefore, the payback will come sooner. For these reasons,
EPA does not agree with the commenter's assertion that a long payback period for efficiency
technologies for some drivers will present an obstacle to their adoption.
Several private citizens commented that the standards are too stringent, while the
environmental and regional planning organizations mentioned above and private citizens
requested that the NPRM stringency be increased. As stated earlier, EPA believes that the final
standards will result in significant reductions in GHG emissions and fuel savings at a reasonable
cost, and are preferable to the more stringent alternative standards EPA considered (which bound
the ranges of more stringent standards requested by commenters), taking into account costs,
manufacturer lead time, product development cycles, and consumer acceptance. See Preamble
sections III.D.6 and 7 for more details.
Response to comments that lead time is too long or too short
EPA's analysis of the technologies that will enable manufacturers to achieve the
emissions reductions required by this rule includes technologies that are either currently
commercially available, or (for a few technologies) projected to be commercially available
during the rulemaking timeframe. EPA agrees with comments expressing support for the lead
time and period covered by this rule (ACC, CFA, Ecology Center, Ferrari, Hyundai), and those
commenters who noted that the rule provides a reasonable amount of time for manufacturers to
plan for and implement technologies for reducing emissions (CFA, Consumers Union, Ecology
Center).
A number of commenters noted that the long lead time and number model years covered
by this rule will provide a level of certainty that will allow manufacturers to plan and adjust
future product. While EPA agrees with these commenters, we also recognize the difficulty of
2-50
-------
CO? Emissions Standards
forecasting consumer preferences into the future (Mitsubishi, Suzuki, Chrysler, NADA1), and the
greater uncertainty in the assumptions used for future production planning and investment (Ford,
Global Automakers) that arise from the longer lead time covered by the rules. The mid-term
evaluation is planned as the chief mechanism to address uncertainties like those noted by the
commenters, and at that time, EPA will evaluate the assumptions upon which the rules are based.
Mercedes-Benz proposed an alternative compliance pathway, which would reduce the
emissions target levels in early years of the rule, and make up most or all of the reductions in
later years. EPA agrees that flexibility is an integral part of the standard setting in order to help
manufacturers phase-in technologies given their typical redesign schedules. In this rule, these
flexibilities are provided, in part, through the Averaging, Banking, and Trading Provisions
(ABT) described in detail in section III.B.4 of the preamble. These ABT provisions achieve the
aim of the commenter, which is to provide additional lead time as necessary without reducing the
GHG emissions reductions and fuel savings benefits of the rule. For example, ABT provides
three year credit carry-back provisions which allow a manufacturer to run a deficit and cover that
deficit with future credits (i.e., carry back credits to a previous year). This is conceptually very
similar to the alternative pathway approach suggested by the commenter. Therefore EPA,
believes that additional flexibilities are not justified.
Porsche, Jaguar Land Rover, and Suzuki raised concerns about feasibility and adequate
lead time for intermediate volume, limited line manufacturers. As discussed in section III.B.6,
EPA is providing intermediate volume manufacturers with additional lead time to meet the
principal standards in response to these comments.
Response to other comments on stringency
RVIA suggested that the agencies "closely examine whether they have appropriately
considered future light vehicle towing trends in setting standards...". EPA agrees with the
commenter that towing is an important attribute for many consumers, and notes the technology
penetration and cost analyses for this rule were all conducted with the underlying requirement
that vehicle utility be maintained. EPA believes that there is no contradiction between the
adoption of certain efficiency technologies to reduce GHG emissions, and the preservation of
other vehicle attributes, such as towing capability. For example, turbo-downsizing can be
adopted without reducing performance, as evidenced by the MY2012 Ford F150, for which the
optional 3.5L EcoBoost® V6 has a higher maximum towing capacity than the 5.0L V8.
EPA appreciates the work done by the faculty and students of MIT, and their
probabilistic analysis of the impact of uncertainty on projecting fuel use and GHG emissions.
We recognize the importance of considering uncertainty, and for that reason conduct sensitivity
analyses, which is described in chapters 3.11, 4.5, and 8.1 of the EPA RIA.
1 NADA cited the 2007/2010 heavy-duty emissions rule as an example of how setting standards with a long-lead
time can cause difficulty in estimating costs. A detailed response to this comment is provided in chapter 18.2 of this
document.
2-51
-------
EPA Response to Comments
EPA agrees with the suggestion of the Alliance of Automobile Manufacturers to
"examine [the] approach to adjusting the curves for year-over-year stringency." As discussed in
sections II.C.4 and III.D.7 of the preamble, we plan to review the estimation and selection of the
target curves during the mid-term evaluation. We also plan on reviewing the fleet data as it
becomes available: this includes footprint distribution, technology content, safety, changes in
attributes (such as acceleration performance), credit balances etc. to determine what strategies
manufacturers are employing to come into compliance with the standards.
2.2.2. Car and Light Truck Footprint Curve Shapes and Level of the Standards
Organizations Included in this Section
American Council for an Energy-Efficient Economy (ACEEE)
American Honda Motor Co., Inc.
Anonymous Public Citizen 1
Association of Global Automakers, Inc. (Global Automakers)
Capozzelli, J.
Center for Biological Diversity
Chrysler Group LLC
Consumers Union
Ford Motor Company
General Motors Company
Institute for Policy Integrity, New York University School of Law
Insurance Institute for Highway Safety (IIHS)
International Council on Clean Transportation (ICCT)
Mass Comment Campaign (20,500) (Union of Concerned Scientists-3)
Mass Comment Campaign (375) (Union of Concerned Scientists-2)
Mass Comment Campaign (4,505) (Unknown Organization)
Mass Comment Campaign (9,570) (Unknown Organization)
National Association of Clean Air Agencies (NACAA)
Natural Resources Defense Council (NRDC)
Nissan North America, Inc.
RVIA
Salinas, A.
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Smith, Frank Houston
South Coast AQMD
Toyota Motor North America
Union of Concerned Scientists (UCS)
United Automobile Workers (UAW)
Volkswagen Group of America
Weiner, L.
Whitefoot, K. and Skerlos, S.
Organization: American Council for an Energy-Efficient Economy (ACEEE)
2-52
-------
CO? Emissions Standards
We do have concerns regarding the structure of the proposed rule, especially its lenient treatment
of large light trucks in the early years and the resulting increase in the slope of the light truck
target curves. Below we provide comments and recommendations on these issues, among others.
While we take issue with a few aspects of the analysis, on the whole the process and the analysis
were thorough, transparent, and well documented. [EPA-HQ-OAR-2010-0799-9528-A2, p.l]
The concluding argument regarding the superiority of the proposed standard (NPRM p.75084) is
not compelling, and Table 111-53 begs the question of how the compliance cost differential
between cars and trucks in 2017-2020 can be justified. This concern would presumably be
amplified by further disaggregation, showing that in fact incremental costs for large trucks are
negligible in those years. The proposal appears to favor (in the near term) manufacturers with
disproportionate production of large trucks during those years. EPA should show compliance
costs by manufacturer, not just for 2021 and 2025, but for all years. The small improvements
required of large trucks in 2017-2020, followed by a larger improvement in 2021 is of particular
concern given the agencies' plan to conduct a midterm evaluation. This situation raises the
possibility that the more significant improvements proposed for large trucks in the period 2021-
2025 will never be realized, because manufacturers may allow technology development for these
vehicles to stagnate in the early years of the rule and use this to influence the outcome of the
midterm evaluation. [EPA-HQ-OAR-2010-0799-9528-A2, p.8]Shape of the Light Truck Target
Curves
An issue of particular concern in the proposal is the lenient treatment of large light trucks. In
2017-2020, emissions reductions required of the heaviest light trucks are small. This reflects the
agencies' recognition of "manufacturers' technical concerns regarding their abilities to comply
with a similarly shallow curve after MY2016 given the anticipated mix of light trucks in MYs
2017-2025." We have not, however, been able to find a clear technical explanation of the
justification for these concerns, or of the approach taken, in the proposed rule or in related
documents. [EPA-HQ-OAR-2010-0799-9528-A2, p.3]
The agencies refer to the possibility of compromising load-carrying and towing capability of
full-size pickups (NPRM p.74915), but neither evidence nor quantification of such a problem is
provided. Similarly, section 2.4.2.2 of the TSD discusses the decision to increase the slope of the
light truck curve at length, yet the justification remains unclear. The agencies' methodologies for
generating the curves and for simulating manufacturers' compliance strategies are quite capable
of taking into account any such constraints to the extent that they actually exist. The agencies do
explain that the aggregation of models in some cases results in treating non-towing vehicles as
towing vehicles, and vice versa; but this appears to apply mostly to smaller vehicles, and
certainly not to the large pickups that have prompted the agencies to increase the slopes of the
target curves. [EPA-HQ-OAR-2010-0799-9528-A2, p.3]
The agencies also state: "Flatter standards (i.e., curves) increase the risk that both the weight and
size of vehicles will be reduced, compromising highway safety" (NPRM p.74915). What the
agencies have proposed, however, is to increase the slope of the truck curve, relative to what it
would have been using the curve-fitting approach used for MY2012-2016. We do not believe,
2-53
-------
EPA Response to Comments
and presumably the agencies do not believe, that the curves in the rule now in place are
dangerously flat. [EPA-HQ-OAR-2010-0799-9528-A2, p.3]
Technical basis for curve / rate of improvement
The approach to selecting the target curves in the current proposal deviates from the approach
used for the 2012-2016 rule in several respects that substantially alter the relative stringencies of
small truck and large truck standards. The most significant change is that the agencies have
adjusted the technology-corrected data points for "density", i.e., weight-to-footprint ratio. This
results in a steeper slope for the light truck curve, because pickup trucks, and in particular the
large pickups that dominate the high end of the footprint spectrum, have low densities due to
their flat beds (TSD p.2-17). Adjusting the data to reflect this means that large pickup data points
are pushed up vertically on a footprint vs. emissions/consumption curve to reflect the higher
weight (and hence higher fuel consumption) that would be expected based on the footprints of
those trucks. [EPA-HQ-OAR-2010-0799-9528-A2, p.3]
The rationale offered for this adjustment is as follows: "The agencies agree with manufacturers
of full-size pick-up trucks that in order to maintain towing and hauling utility, the engines on
pick-up trucks must be more powerful, than their low 'density' nature would statistically suggest
based on the agencies' current MY2008-based market forecast and the agencies' current
estimates of the effectiveness of different fuel-saving technologies" (TSD 2043). This suggests
that the reference fleet, after all available gasoline technologies have been added, is incorrect and
shows unrealistically low pickup truck fuel consumption, due to the overstatement of the benefits
of certain technologies. If that is the case, the agencies should revisit the adjustments made to
generate the reference fleet and remove technologies from pickups that are not suited to those
trucks. This would be a far more satisfactory approach than the speculative and non-quantitative
approach of adjusting for vehicle density. [EPA-HQ-OAR-2010-0799-9528-A2, pp.3-4]
Indeed, it is important to note that the fuel consumption trend that the density adjustment is
meant to correct appears in the unadjusted fleet as well as the technology-adjusted fleet of light
trucks (TSD Figures 2-1 and 2-2). That is, the flattening of fuel consumption at higher footprints
is not a byproduct of unrealistic technology adjustments, but rather a reflection of actual fuel
economy trends in today's market. That being the case, adjusting fuel consumption of "low-
density" trucks upwards before fitting the curve simply does not make sense. It is also puzzling
that the agencies' analysis shows that trucks' HP-to-weight ratio increases only slightly with
footprint (TSD p.2-17), yet "pick-up trucks must be more powerful, than their low 'density'
nature would statistically suggest." If pick-up trucks have high horsepower and low weight, their
HP-to-weight ratios should be especially high. An explanation of this apparent contradiction
would be helpful. [EPA-HQ-OAR-2010-0799-9528-A2, p.4]
The agencies explored a similar adjustment to the curve to reflect increasing HP-to-weight ratios,
but did not adopt it. This adjustment is effectively the approach used to develop weight-based
CO2 targets in the EU and results in flatter curves (Mock 2011). In the EU, the adjustment was
made to ensure that the standards do not provide an incentive to increase vehicle weight. In the
U.S., the agencies' decision not to apply this correction in the proposed rule yields steeper curves
than the alternative choice, as does the decision to apply the correction for density. Both help to
2-54
-------
CO? Emissions Standards
ensure that the proposed curves will provide an incentive to upsize vehicles. [EPA-HQ-OAR-
2010-0799-9528-A2, p.4]
After adjusting the data based on density, the agencies fit lines to the adjusted data. This process
differs from that used for MY2012-2016 rule, in that the data is sales-weighted and the fit uses
an ordinary least squares (OLS) method instead of minimum absolute deviation (MAD). In that
case, the agencies were "concerned that the steeper curves resulting from weighted least-squares
analysis would increase the risk that energy savings and environmental benefits would be lower
than projected, because the steeper curves would provide a greater incentive to increase sales of
larger vehicles with lower fuel economy levels" (MY2012-2016 TSD p.2-13). That concern
remains valid for the current rulemaking. While we agree with the agencies' position that either
method of fitting is technically sound, we note that in this NPRM, the agencies have consistently
made choices that have the effect of increasing the slopes of the light truck curves, namely to
adjust for density and not to adjust for HP-to-weight ratio, as well as to alter the curve-fitting
method, as just mentioned. [EPA-HQ-OAR-2010-0799-9528-A2, p.4]
Large truck cutpoint
The problems created by increasing the slope of the truck curve are aggravated by the decision to
move the right-hand cutpoint (i.e., the point at which the curve becomes flat) out to 74 square
feet, up from 66 square feet in the MY2012-2016 rule. Not only will targets be less stringent for
large trucks than they should be, but also the target emissions will continue to rise with truck
footprint well beyond the point at which they flattened out in the MY2012-2016 rule. [EPA-HQ-
OAR-2010-0799-9528-A2, p.4]
In the MY2012-16 rule, the agencies rejected the requests of auto manufacturers to raise the
right-hand truck cutpoint from 66 square feet: [EPA-HQ-OAR-2010-0799-9528-A2, p.4]
The agencies also disagree with comments by the Alliance and several individual manufacturers
that the cut-off point for light trucks should be shifted to 72 square feet (from the proposed 66
square feet) to ease compliance burdens facing manufacturers serving the large pickup market.
Such a shift would increase the risk that energy and environmental benefits of the standards
would be compromised by induced increases in the sales of large pickups, in situations where the
increased compliance burden is feasible and appropriate. Also, the agencies' market forecast
suggests that most of the light trucks models with footprints larger than 66 square feet have curb
weights near or above 5,000 pounds. This suggests, in turn, that in terms of highway safety, there
is little or no need to discourage downsizing of light trucks with footprints larger than 66 square
feet. Based on these energy, environmental, technological feasibility, economic practicability,
and safety considerations, the agencies conclude that the light truck curve should be cut off at 66
square feet, as proposed, rather than at 72 square feet. (2012-2016 Final Rule p.25363) [EPA-
HQ-OAR-2010-0799-9528-A2, pp.4-5]
Yet this time, the discussion of policy considerations in developing the target curves includes the
following: "If cutpoints are adopted, given the same industry-wide average required fuel
economy, moving large-vehicle cutpoints to the right (i.e., down in terms of fuel economy, up in
2-55
-------
EPA Response to Comments
terms of CC>2 emissions) better accommodates the unique design requirements of larger
vehicles—especially large pickups—and extends the size range over which downsizing is
discouraged." (NPRM p.74915). While the agencies note that they had previously
"underestimate[d] the impact of the different pickup truck model configurations above 66 square
feet on manufacturers' fleet average fuel economy and CO2 levels" (NPRM p.74919), this is
unrelated to the sound reasons they had previously offered for keeping the cutpoint at 66 feet. In
particular, they previously noted that there is no safety-related reason to discourage downsizing
of these large trucks. Indeed, given that vehicle compatibility is a major determinant of the
severity of two-vehicle crashes, reducing the size and weight differential across the vehicle fleet
should be a priority to improve highway safety. Thus, for environmental, energy, and safety
reasons, the final rule should restore the 66 square foot cutoff for MY 2017-2025. [EPA-HQ-
OAR-2010-0799-9528-A2, p.5]
Potential consequences of lenient standards for large light trucks
The agencies seek comment on whether their adjustments to the slope of the target curves "may
encourage changes other than encouraging the application of technology to improve fuel
economy and reduce CC>2 emissions" (TSD 2-27). The weakness of the standards at the large
footprint end of the light truck spectrum not only will result in a direct loss in GHG reductions
relative to what would have been saved with a uniform five percent annual emissions reduction
across all classes, but also runs the risk of pushing production towards that larger end. Such a
shift raises safety concerns as well. This concern applies across all large light trucks, including
SUVs, even though difficulty in reducing emissions at a higher rate was alleged for large pickups
only. According to agency projections (NOI TAR Appendix), pickups will account for only one-
quarter of large truck sales in MY 2025. [EPA-HQ-OAR-2010-0799-9528-A2, p.5]
A recent analysis appearing in the journal Energy Policy concludes that the curves defining fuel
economy standards for MY2011-2016 already create an incentive for upsizing, and as a result it
will likely increase vehicle emissions by 5-15 percent (Whitefoot and Skerlos 2011). This
analysis found that, assuming "consumer preferences for vehicle size, fuel efficiency, and
acceleration performance are all at their midpoints," the slope of light truck curve for MY 2014
would need to be reduced by !/2 to avoid promoting vehicle upsizing. This result suggests that the
proposed light truck curve for 2025, for example, will provide a strong incentive to upsize and
will lead to major losses in benefits for the program. In order to avoid this outcome, the curves
for 2025 and earlier years would need to be much flatter. Figure 1 shows the MY2014 light truck
target curve and the flatter curve (dotted blue) that the Whitefoot and Skerlos analysis indicates
would be necessary to avoid upsizing. The red curves represent the proposed MY2025 targets
and a curve (dotted red) scaled down from the adjusted MY2014 curve, which could reasonably
be taken to approximate the slope necessary to avoid upsizing in 2025. The difference in slopes
between the two 2025 curves is very large. [EPA-HQ-OAR-2010-0799-9528-A2, p.5] [For
Figure 1 please refer to EPA-HQ-OAR-2010-0799-9528-A2, p.6]
The integrity of the analytical basis for the standard depends upon a clear and consistent basis for
the treatment of all vehicles. In the case of large light trucks, we find that i) the deviations from
the analytical approach previously adopted are not justified with data provided in the NPRM, and
ii) the resulting ad hoc adjustments to the curve-fitting process detract from the agencies'
2-56
-------
CO? Emissions Standards
argument for their proposals. Thus, in addition to reducing the fuel and GHG savings that the
rule will bring, the weakening of standards for large light trucks undermines the technical
foundation for the rule going forward. The treatment of this issue in the NPRM and related
documents unfortunately gives the impression that the analytical components of the development
the target curves are subjective and can be used to justify a very wide range of outcomes.
Introducing this degree of subjectivity to the technical analysis invites unnecessary challenges to
the standard-setting process. [EPA-HQ-OAR-2010-0799-9528-A2, p.6]
Regardless of whether the agencies change the truck curve in the final rule, we believe that
adjusting the analytical approach to yield curves satisfying certain policy considerations is
inadvisable. It would be preferable to choose the most robust analytical approach, and then to
make exceptions as needed for a limited period to accommodate those policy considerations, and
to explain the targets in those terms. [EPA-HQ-OAR-2010-0799-9528-A2, p.6]
Inflating the slope of the truck is counterproductive from a policy perspective as well. The
domestic auto industry owes its strength today in part to its having been induced by the federal
government to improve fuel economy, which in turn has enabled it to better compete with the
other manufacturers. These same domestic manufacturers, by demanding lenient treatment for a
subset of their products, are repeating their earlier mistake and will suffer the consequences in
the long run of slowing technological improvement of their large light trucks. [EPA-HQ-OAR-
2010-0799-9528-A2, p.6]
We strongly support the agencies' plan to revisit the choice of curve-fitting options in the final
rule (TSD p.2-44). [EPA-HQ-OAR-2010-0799-9528-A2, p.6]
Recommendations
• Do not apply the density adjustment to the reference fleet data before fitting the light
truck curve. If necessary to ensure that towing and hauling capability is maintained,
revisit the process of adding technologies to the reference fleet to ensure that only
technologies consistent with the functional requirements of the vehicle are added.
• Starting in 2017, apply the same annual percentage reduction to light trucks as to cars.
Restore the 66 square foot cutoff for MY 2017-2025 (Figure 2, dotted green).
• If no such changes are possible in the final rule, introduce a provision to ensure the
standards do not promote upsizing as follows: once sales of light trucks of 66 square feet
and above in a given year reach MY 2008 sales of pickups 66 square feet and above, the
upper bound for the light truck targets should be fixed at the 66 square foot target (Figure
2, dotted purple). This would ensure that automakers do not increase sales volume at this
end by producing lower cost, inefficient vehicles. [EPA-HQ-OAR-2010-0799-9528-A2,
pp.6-7] [For Figure 2 please refer to EPA-HQ-OAR-2010-0799-9528-A2, p.7]
Organization: American Honda Motor Co., Inc.
Honda is concerned that the relative stringency between small footprint light trucks and large
footprint light trucks diverge dramatically from one another, and the stringency increases fall
2-57
-------
EPA Response to Comments
disproportionately on the smaller foot-print light trucks. One example is comparing the Omega
package 807 and with package 1804. [See table on p. 1 of Docket number [EPA-HQ-OAR-2010-
0799-9489-A1] [EPA-HQ-OAR-2010-0799-9489-A1, p. 1]
These similar technology packages respectively are applied to a small footprint light truck and a
large footprint light truck. While the 2021 costs of these two package sets are relatively similar,
with the cost/1% CO2 reduction and flat costs both slightly higher for the smaller light truck, the
increased stringency of the standards for these two vehicles are significantly dissimilar. A small
footprint light truck such as the Honda CR-V (footprint of 44 square feet) has a proposed
increased stringency of 18%, while a large truck, like a Ford F150 (footprint of 72.8 square feet)
has a proposed increased in stringency of less than 5%. [EPA-HQ-OAR-2010-0799-9489-A1, p.
1]
This pattern repeats elsewhere within the light truck category, all showing that the stringency
increases are falling disproportionately on small light trucks like the Honda CR-V and its
competitors. [EPA-HQ-OAR-2010-0799-9489-A1, p. 2]
As noted above in #1, above, the stringency for the larger footprint light trucks is very low,
compared to the smaller footprint light trucks. The combination of the lower stringency and the
"game changing" credits cannot be justified as a matter of science, in furtherance of social goals
and objectives or as a matter of simple fairness and equity. Not only are large footprint pick up
trucks required to do very little (no stringency increase for a number of years), they are overly
rewarded if they do increase their performance: in other words, required to do nothing, and
highly rewarded for doing something. [This comment can also be found in section 5.1 of this
comment summary.] [EPA-HQ-OAR-2010-0799-9489-A1, p. 2]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 119-120.]
EPA and NHTSA propose for the 2017 to 2025 periods to radically alter the light-duty truck
curves from their '12 to '16 slopes. The agencies have proposed dramatically increased
stringency for the smaller footprint truck and little or no stringent increases for the larger
footprint trucks. Honda previously shared data with the agencies indicating that if any change
were to be made to the curves, it was more appropriate to flatten out the curves or moderate the
increase in stringency for the smaller footprint trucks and to increase the stringency for the larger
trucks. In other words, Honda believes that smaller light trucks are being unfairly singled out for
increases in their standards, especially compared to the larger vehicles. This obvious — this is
obviously because the smallest trucks will have an annual increase of around 4 percent while the
largest truck will have an annual increase of less than 1 percent.
Subsequent to the publication of the NPRM, on December 7th, 2011, the University of Michigan
issued a study by Whitefoot and Skerlos. Honda agrees with their conclusion. And I'm quoting:
'In the near term, the analysis suggests that the slope of the function determining fuel economy
targets based on vehicle footprint should be flattened for both passenger cars and light trucks and
even further for light trucks.
2-58
-------
CO? Emissions Standards
Additionally, the agencies' own data show this to be true. Simply looking at the EPA's and
NHTSA's estimates for the compliance cost differences between passenger cars and trucks, both
agencies estimate lower compliance costs for trucks than passenger cars, and this is primarily
due to an imbalance in the light truck slope and a much more stringent burden being placed on
the lower sales volumes of the smaller light trucks and little to no additional stringency being put
on the larger light trucks.
EPA and NHTSA believe that full-sized pickup trucks have unique challenges in improving fuel
economy and GHG emissions due to payload and towing requirements. Honda believes that
vehicles other than full-size pickup trucks should receive similar consideration in preserving
their utility. SUVs and minivans, for example, are often fully loaded by families resulting in
expectations or coming from expectations of 7- or 8-passenger seating capabilities while
maintaining payload and towing functionality. Similarly situated vehicles ought to be treated the
same.
Organization: Anonymous Public Citizen 1
Close the loophole for SUVs. This rule will be only very mildly effective without that loophole
being closed. [NHTSA-2010-0131-0231, p.l]
Organization: Association of Global Automakers, Inc. (Global Automakers)
A. Lower "cutpoint" of light truck standard curve
We note that the lower "cutpoint" of the truck standards curve is set at the same footprint point
(41 square feet) as the passenger car standard. In our view, it would be more appropriate to set
that cutpoint at the same sales point (i.e., representing approximately 10 percent of sales) as the
passenger car curve. In this way, the same portion of the respective fleets would fall within the
flat portions of the footprint curves. The same arguments advanced by the agencies in support of
the selection of the lower cutpoint of the passenger car curve apply as well to trucks (small
market segment, minimal incentive to downsize, possible disincentives for manufacturers to
offer small vehicles if the curve continues to slope downward at the low end). See 76 Federal
Register (FR) 74919. We believe that this change should be made for consistency of
methodology and that it should have minimal impact on the standards for light trucks. Therefore,
we recommend that EPA and NHTSA incorporate this change in the final rule. [EPA-HQ-OAR-
2010-0799-9466-A1, p. 2]
Organization: Capozzelli, J.
The proposed rules allow light trucks to increase their fuel efficiency at a much slower rate than
cars. For many years; this problem led automakers to build bigger vehicles so they could take
advantage of these weaker standards, which caused efficiency standards in the United States to
stagnate. We should not make the same mistake twice, and should strengthen the standards for
light trucks on par with cars. We cannot afford to skew the rules in favor of gas-guzzling SUVs.
[NHTSA-2010-0131-0221-A1, p.l]
2-59
-------
EPA Response to Comments
Organization: Center for Biological Diversity
In setting maximum feasible fuel economy standards, Congress instructed NHTSA to prescribe
separate standards for passenger and non-passenger vehicles based on one or more vehicle
attributes related to fuel economy and to express each standard in the form of a mathematical
function.40 In the NPRM, the Agencies set forth separate targets based on vehicle size, or
footprint. Using a projected make-up of the nationwide fleet, NHTSA estimates the average fuel
efficiency for passenger cars and light trucks in each model year (MY).41 [EPA-HQ-OAR-2010-
0799-9479-A1, p. 8]
[See Table 1 on p. 8 of Docket number EPA-HQ-OAR-2010-0799-9479-A1] [See Table 2 on p.
9 of Docket number EPA-HQ-OAR-2010-0799-9479-A1]
The fleet-wide fuel economy standards actually achieved in any year, however, depend on each
individual manufacturer's choice of vehicles and production volume. Once a manufacturer
determines its models and production volume for a MY, fuel economy standards for that
manufacturer are determined using the attribute-based formula of the fleet that has been built
during the year; every manufacturer must meet only the fuel economy standard that correlates to
its own fleet mix. Because manufacturers control the size and number of the vehicles they
produce, their choices also control their fuel economy targets, and the aggregate choice of all
manufacturers determine the actual fleet-wide fuel economy achieved in any one year. [EPA-
HQ-OAR-2010-0799-9479-A1, p. 9]
The proposed standards substantially and improperly favor light trucks, particularly the largest
and least fuel efficient trucks, and they provide an economically compelling incentive to upsize
vehicle footprint. Because the NPRM, without a backstop, creates a system that incentivizes
manufacturers to produce larger, less fuel efficient vehicles, the Agencies' mileage projections -
especially over a time span of a decade and a half- are likely to be wrong. These errors must be
corrected in the final rulemaking. [EPA-HQ-OAR-2010-0799-9479-Al, p. 9]
1. The proposed increases for light trucks are back-loaded rather than ratable, contravening
Congressional intent [EPA-HQ-OAR-2010-0799-9479-Al, p. 9]
As the tables above demonstrate, the standards the Agencies propose to set for light trucks are
dramatically less stringent than the standards for passenger cars. While passenger cars'
efficiency increases by 4.3% annually, the increase for light trucks is only 2.9%. In addition, the
light truck standards increase at a significantly slower rate than the passenger car rate.44
Together, the minimal increases for light trucks for the first four years of the covered period and
the overall decreased stringency exacerbate the historical "advantage" enjoyed by SUVs and
pickup trucks, delay gains in fuel efficiency for the overall fleet, and incentivize gamesmanship
and an ever-increasing SUV loophole. [EPA-HQ-OAR-2010-0799-9479-Al, p. 10]
Title 49 U.S.C section 32902 requires NHTSA to prescribe "annual fuel economy standard
increases that increase the applicable average fuel economy standard ratably." 45 "Ratably" is
defined as "in a proportional, well-proportioned or proportionate manner."46 In other words, the
statute requires not only that fuel efficiency increase every year, but also that it do so
2-60
-------
CO? Emissions Standards
proportionally. The legislative history of the provision demonstrates that Congress intended fuel
economy standards to "make rapid and consistent annual progress."47 In requiring "ratable"
increases, Congress sought "relatively consistent proportional increases in fuel economy
standards eachyear."48 [EPA-HQ-OAR-2010-0799-9479-A1, p. 10]
Flatly contravening Congressional intent, the Agencies have proposed inconsistent, slow, and
disproportionally small average fuel economy increases for light duty trucks during the first
years of the covered period. They propose a mere .6 mpg average increase per year from 2017
through 2020. As further discussed below, this disproportionality is exacerbated by the fact that
the heaviest "light" trucks are required to increase their fuel efficiency by the least amount. The
increase then jumps to 2.1 mpg in 2021, a near four-fold increase, and stays in a higher range for
the remaining rulemaking period - not coincidentally, the period when of time the Agencies
propose for a de novo rulemaking review, an event that presents another chance for industry to
convince the Agencies that the higher standards during the latter period of the rulemaking must
once again be watered down. 49 These proposed average increases are neither rapid and
proportional when compared to the increases proposed for passenger cars or to the later
rulemaking period [see Tables 1 and 2] nor consistent given the sudden jump in 2021. The total
percentage increase for trucks also is not consistent or proportional with the increase for
passenger cars. Rather, light cars and trucks will be left even further behind passenger vehicles.
The Agencies' own interpretation of "ratable" contradicts their proposed treatment of light
trucks. They interpret "ratable" to mean that "annual increases should not be disproportionately
large or small in relation to each other." Yet the Agencies propose minimal annual increases for
the first part of the rulemaking, followed by a three- to four-fold jump after 2021. Rather than
being rapid, consistent or proportional, the proposed light truck increases are overwhelmingly
backloaded into later years. [EPA-HQ-OAR-2010-0799-9479-A1, p. 10]
The effect of allowing minimal efficiency increases early and demanding larger increases later is
only to delay efficiency gains that could be achieved much sooner, at a much lower price. As we
have frequently stated (see our comments to the DEIS), because greenhouse gases remain in the
atmosphere for centuries and their warming effect is delayed for decades, it is essential to
decrease their emissions as soon as possible; the benefits of avoiding the emission of a ton of
carbon today by far exceed the benefits of avoiding the release of the same ton of carbon several
years from now. The Agencies recognize this to some extent as they increase the social cost of
carbon over time (though insufficiently so). Conversely, remedial efforts get more expensive the
longer action is delayed. Even setting aside the triggering of catastrophic events by crossing
tipping points and assuming arguendo that the social cost of carbon grows by no more than the
Agencies currently assume, it is undoubtedly vastly preferable to remove a given ton of carbon in
year 1 rather than year 4, when it has wrought that much more damage. From the CAFE
perspective, something similar can be said: the longer vehicles retain the same, rather than
increased, fuel efficiency standards, the more fuel, a finite commodity that Congress mandates
must be conserved, is wasted. Thus, the Agencies' failure to comply with the Congressional
mandate to devise ratable fuel efficiency increases, and its decision to backload achievable gains
instead, has the additional pernicious effect of increasing the rulemaking's cost. [EPA-HQ-OAR-
2010-0799-9479-A1, p. 11]
2-61
-------
EPA Response to Comments
The Agencies seek to justify the anemic annual rate of improvement for trucks by referencing the
"unique challenges in improving the fuel economy . . . of full-size pick-up trucks, while
preserving the utility of these trucks." Specifically, they explain that due to characteristics such
as 4WD and towing and hauling capacity, "the vehicles in the current light truck fleet are
generally less capable of achieving higher fuel economy levels as compared to vehicles in
passenger car fleet." While this reasoning may address the fact that stringency for trucks is
currently lower than that of cars, it does nothing to explain the lack of the required ratable annual
increases - i.e., increases that are proportional, lead to rapid and consistent progress, and do not
create incentives to upsize cars to light trucks and lighter trucks to heavier ones. [EPA-HQ-
OAR-2010-0799-9479-A1, p. 11]
In any event, the explanation lacks merit. Studies show that trucks are indeed capable of
maintaining towing and hauling capacity with higher fuel economy standards.53 The claim that
the "unique challenges" faced by trucks justify a slower and disproportional increase in fuel
economy standards, or any of the other regulatory leniencies the Agencies provide for them in
the NPRM, fails in light of the fact that technologies exist that fully enable trucks to improve fuel
efficiency while retaining utilities like hauling and towing. [EPA-HQ-OAR-2010-0799-9479-Al,
p. 11]
The Agencies also cite cost concerns as a reason for setting lower stringencies for trucks than for
cars. This justification does not withstand scrutiny. It ignores that U.S. manufactured light truck
models have been the most profitable vehicle for manufacturers since 1990. 54 Moreover, in
general, because small cars cost almost as much as large cars to design, build and distribute,
small cars generate small gross margins, while light trucks earn manufacturers greater profit. 55
Ironically, the rulemaking demands the least from the most profitable segment of the automotive
industry. This result is arbitrary and capricious, and contrary to law. [EPA-HQ-OAR-2010-0799-
9479-Al,p. 11]
The Agencies further reason that the different standards for passenger cars and trucks will
preserve consumer choice and "should not affect consumers' opportunity to purchase the size of
vehicle that meets their needs."56 As discussed above, although the Agencies can consider
consumer demand, "it would clearly be impermissible for NHTSA to rely on consumer demand
to such an extent that it ignored the overarching goal of fuel conservation."57 The Agencies here
have elevated purported consumer choice for larger, heavier, less efficient vehicles over energy
conservation and thus violated Congressional intent. Moreover, this choice, improper in itself,
cannot justify overriding the Congressional mandate to set fuel efficiency standards that increase
ratably every year. As discussed below, manufacturers created consumer demand to use larger,
less efficient, and more profitable light trucks as passenger vehicles,58 and a wide range of
consumer options exist in this category. Consumers who desire to purchase the most fuel
efficient and least polluting vehicles, on the other hand, are left with far fewer options, and the
U.S. is left in last place in passenger vehicle and light truck fuel economy. [EPA-HQ-OAR-
2010-0799-9479-A1, p. 12]
We note here the Agencies' assertion that the NPRM "will not create significant incentives to
produce vehicles of particular sizes, and thus there should be no significant effect on the relative
availability of different vehicle sizes in the fleet due to the proposed standards, which will help
2-62
-------
CO? Emissions Standards
maintain consumer choice during the rulemaking timeframe." This assertion is insupportable.
Lower efficiency standards for trucks have caused their manufacture and sale to balloon for
decades, and these differences would be exacerbated by the proposed rule, which goes so far as
to demand almost no increases of the most inefficient and polluting vehicles in the fleet. The fact
that incentives for upsizing would be created simply cannot be disputed. The Agencies come
close to admitting this fact: "[A] steeper slope [in compliance curves] relaxes the stringency of
targets for larger vehicles relative to those for smaller vehicles, thereby shifting relative
compliance burdens among manufactures based on their respective product mix." Indeed. And a
further shift to the least efficient vehicles in the fleet is inevitable. [EPA-HQ-OAR-2010-0799-
9479-A1, p. 12]
Moreover, we strongly disagree with the Agencies' belief that their regulatory efforts should
have no effect (and have no effect) on consumer choice or market forces that drive auto sales in
general. It is EPCA and EISA's very purpose to change those forces toward the conservation of
energy. And, in the context of their safety discussion, even the Agencies admit that, "[f]or full
size (i.e. 3/4- and 1-ton) pickups, risk increases as mass increases." Thus, the more heavy
vehicles are built, the more risk. Far from having no effect on consumer choice and market
forces, the NPRM proposes regulations that will create the market forces that drive increased
production of the least energy efficient vehicles on our highways. [EPA-HQ-OAR-2010-0799-
9479-A1, pp. 12-13]
Creating different (and for some years, next to no) efficiency standards for the heaviest trucks
also plays havoc with the footprint-based attribute system the Agencies have, until now,
staunchly defended. Tellingly, the Agencies admit as much - they state that they had rejected
allowing different standards for light pickup trucks based on different attributes, such as power,
because doing so would introduce' multi-attribute standards' that the Agencies had "judged . . .
to be more subject to gaming than a footprint-only standard." Influenced by industry comments,
they abandoned that previously-held line in the sand because the "challenges faced by
manufacturers of large pickups currently outweigh[] these prior concerns." As shown above,
however, the "challenges" allegedly facing these most profitable and least energy efficient
vehicles in the fleet are bogus. If abandoning the footprint-based attribute system to create this
loophole was a price for the "agreement" between the regulators and the regulated in July 2011,
it was too high a price to pay. [EPA-HQ-OAR-2010-0799-9479-Al, p. 13]
The minimal increases proposed by NHTSA become even more problematic when combined
with carry-forward credits. Congress allows manufacturers to utilize credits earned after model
year 2010 for five subsequent years.63 There is a 1.5 mpg credit cap for model year 2017, and a
2 mpg credit cap for model years 2018 and beyond.64 Given the small increases proposed here,
the amount of credit that can be carried forward by manufacturers is now greater than the
average estimated increase for light duty trucks for the first years of the covered period.
Accordingly, manufacturers with credits available from efficiencies obtained from other
automobiles can use these credits to avoid implementing any fuel saving technologies on certain
trucks with larger footprints. [EPA-HQ-OAR-2010-0799-9479-A1, p. 13]
2-63
-------
EPA Response to Comments
Congress intended that use of credits "not in any way reduce the oil savings achieved by the
standards set for any year."65 Light duty trucks, and particularly the largest trucks within this
sector, consume the highest amounts of fuel. Setting minimal increases that can be satisfied with
available credits provides a disincentive for manufacturers to design more fuel efficient trucks
and runs counter to statutory mandates. [EPA-HQ-OAR-2010-0799-9479-A1, p. 13]
The Agencies' decision to backload increases in fuel efficiency for trucks - as well as for
passenger vehicles, though to a lesser extent - is arbitrary and capricious. That trucks historically
have been exempted from proportional efficiency increases does not justify continuing the
practice and so as to exacerbate the efficiency inequality between the two types of vehicles
throughout the covered period, providing even more incentive for manufacturers to produce
more "light trucks." Moreover, letting consumer choice trump fuel conservation violates the
statute. A ratable footprint curve for light trucks that contains proportional annual increases and
is proportional to the passenger car curve is necessary to comport with Congressional
intent. [EPA-HQ-OAR-2010-0799-9479-A1, p. 14]
2. The NPRM creates an SUV loophole that is contrary to Congress' purpose in enacting EPCA
- energy conservation
The National Academy of Sciences ("NAS") found that from 1970 to 1982, CAFE standards
helped contribute to a 50 percent increase in fuel economy for new light trucks.68 This progress
soon stalled, however. Light trucks became ever more popular in the ensuing decades because
less stringent CAFE standards for light trucks provided incentives for manufacturers to invest in
vehicles like SUVs and minivans and to promote them to consumers.69 NAS found that this
market shift had a "pronounced" negative effect on overall fuel economy.70 [EPA-HQ-OAR-
2010-0799-9479-A1, p. 14]
The NPRM would continue and exacerbate this market shift. Light trucks are disproportionately
favored in the NPRM; starting off with lower fuel efficiency targets, their targets increase at a
lower rate than passenger cars, and the heaviest and dirtiest light trucks are near-exempt during
the first two years of the covered period, making them even more profitable. The Agencies
repeatedly claim that the attribute-based standards discourage changes in vehicle size.71 Focused
on safety concerns that have now been largely dispelled, the Agencies state that attribute-based
standards are laudable because they prevent manufacturers from gaming the system by building
too many light vehicles.72 That concern, however, has no basis in fact: historically it is the SUV
segment, not the segment for small and efficient cars, which has shown the largest growth. The
manufacture of too many fuel efficient cars sadly has never been the problem. Instead, the
NPRM incentivizes the manufacture of too many gas guzzlers. [EP A-HQ-OAR-2010-0799-
9479-Al,p. 15]
3. The NPRM must require ratable fuel efficiency increases for all light trucks
As shown in the tables above, the Agencies provide an estimate of the average fuel economy
standards per year for all light trucks. In fact, however, the Agencies are proposing the smallest
increases for the largest and dirtiest trucks for the first two years of the covered period. 73 [EPA-
HQ-OAR-2010-0799-9479-A1, p. 15]
2-64
-------
CO? Emissions Standards
Not only does this proposal quite obviously remove any incentive to improve the gas mileage of
these largest vehicles, it may also result in an additional statutory violation. Given the long lead-
time between the final rule and 2017, manufacturers have substantial time to adjust to this
scheme by manufacturing larger light trucks with less stringent fuel economy standards. Because
the actual national fuel efficiency level is determined not by the standards themselves but by
what manufacturers decide to build, it is possible that this predictable shift toward larger, less
fuel efficient cars could prevent the nationwide fleet from reaching the statutory minimum of 35
mpg in 2020.74 The near-exemption for larger trucks must be dropped for this reason
alone. [EPA-HQ-OAR-2010-0799-9479-A1, p. 15]
4. The NPRM should tighten the definition of light trucks to prevent incentives to reclassify
As has been recognized for some time, because there are separate curves for passenger cars and
light trucks, manufacturers have incentives to reclassify passenger cars as light trucks to render
them subject to less stringent fuel economy goals.
The EPCA defines passenger automobiles as follows: [EPA-HQ-OAR-2010-0799-9479-Al, p.
15]
[A]ny automobile that the Secretary decides by regulation is manufactured primarily for
transporting not more than 10 individuals, but does not include an automobile capable of off-
highway operation that the Secretary decides by regulation -
(A) has a significant feature (except 4-wheel drive) designed for offhighway operation; and
(B) is a 4-wheel drive automobile or is rated at more than 6,000 pounds gross vehicle
weight.75 [EPA-HQ-OAR-2010-0799-9479-Al, p. 16]
Light trucks are defined by exclusion as automobiles that are not passenger automobiles or work
trucks.76 NHTSA has further defined light trucks as automobiles with greater cargo-carrying
than passenger-carrying volume, and as automobiles that permit expanded use of the automobile
for cargo-carrying purposes through removal of seats or stowing of foldable seats.77 [EPA-HQ-
OAR-2010-0799-9479-A1, p. 16]
This statutory definition can already incentivize upsizing as it allows manufacturers to add 4WD
technology plus any other "off-highway" feature to a vehicle to automatically fall within the less
stringent light truck classification. The Agencies themselves recognize that this incentive exists
if the fuel economy standard for a truck with a given footprint is less stringent than that for
passenger car with the same footprint.78 The issue is particularly significant where a vehicle is
built with both a 4WD and a 2WD version. The 2WD drive version, if it does not otherwise
qualify as a truck, is subject to the passenger car curve. The same version with 4WD and some
other off-road feature such as higher ground clearance, however, becomes subject to the truck
curve. These circumstances create different fuel economy standards for vehicles with the same
footprint. Manufacturers thus have incentive to redesign 2WD vehicles by adding 4WD and
some off-road feature. The even greater disparity in mileage standards between trucks and
2-65
-------
EPA Response to Comments
passenger cars created by the NPRM provides even larger incentives for this type of abuse of the
statutory scheme. [EPA-HQ-OAR-2010-0799-9479-A1, p. 16]
The Agencies have addressed this concern by noting that "despite comments in prior
rulemakings suggesting that any vehicle that appears to be manufactured 'primarily' for
transporting passengers must be classified as a passenger car, the statute as currently written
clearly provides that vehicles that are off-highway capable are not passenger cars."79 Congress,
however, intended that "passenger automobiles be defined as those used primarily for the
transport of individuals." 80 And, as the Ninth Circuit noted, "many light trucks today are
manufactured primarily for transporting passengers."81 Indeed, "[Consumers use light trucks
primarily for passenger-carrying purposes in large part because that is precisely the purpose for
which manufacturers have manufactured and marketed them."82 EPCA's drafters surely never
intended manufacturers to be able to manipulate their products for the sole purpose of escaping
higher efficiency standards. Accordingly, the Agencies must remove the SUV loophole.
Moreover, we urge the Agencies to create a single footprint for both passenger vehicles and light
trucks because that change would eliminate the gamesmanship that has played out historically
and is sure to continue without it. [EPA-HQ-OAR-2010-0799-9479-Al, pp. 16-17]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 214-216.]
Rather than promoting technological innovations, these rules rely on small improvements in
existing technology. And, also, rather than pushing industry to make more efficient smaller
vehicles, these rules create what we're calling an SUV loophole by incentivizing industry to build
more trucks and SUVs that won't have to increase their fuel efficiency standards at the same rate
as passenger vehicles. And those are our three very big points of concerns for us in these rules.
And the result of these problems with the rules are they actually could end up with an increase in
overall greenhouse gas emissions from our transportation center rather than a decrease.
So in regards to what we would like to see done in the final rule, we would like to see these rules
significantly strengthened.
One of our main concerns is the fact that the proposed rules allow light-duty trucks and SUVs to
increase their fuel efficiency at a much slower rate and pace than cars, and for many years this
problem has caused automakers to build bigger vehicles so they could take advantage of these
weaker standards that have caused our efficiency to stagnate behind the efficiency across the
world.
And we should not make the same mistake twice; we should strengthen those standards for light-
duty trucks and put them on a par with cars, and we can't afford to skew the rules in favor of
more gas-guzzling SUVs and light trucks.
40 See 49 U.S.C. 32902(b)(3)(A). [EPA-HQ-OAR-2010-0799-9479-A1, p. 8]
2-66
-------
CO? Emissions Standards
41 See Tables 1 & 2. [EPA-HQ-OAR-2010-0799-9479-Al, p. 8]
44 Compare Tables 1 & 2. [EPA-HQ-OAR-2010-0799-9479-Al, p. 10]
45 49U.S.C. § 32902(b)(2)(C)(emphasis added). [EPA-HQ-OAR-2010-0799-9479-A1, p. 10]
46 Webster's Online Dictionary, http://www.websters-online-dictionary.org (Search 'rateably')
(last visited Feb. 9, 2012). [EPA-HQ-OAR-2010-0799-9479-A1, p. 10]
47 153 Cong. Rec. HI6659, 16750 (emphasis added) (daily ed. Dec. 19, 2007). [EPA-HQ-OAR-
2010-0799-9479-A1, p. 10]
48 Id. (emphasis added). [EPA-HQ-OAR-2010-0799-9479-A1, p. 10]
49 See Table 2. [EPA-HQ-OAR-2010-0799-9479-A1, p. 10]
53 See Ricardo, Inc., Computer Simulation of Light-Duty Vehicle Technologies for Greenhouse
Gas Emission Reduction in the 2020-2025 Timeframe, EPA-420-R-11-020, at 66-67 (Nov. 29,
2011). [EPA-HQ-OAR-2010-0799-9479-Al,p. 11]
54 Max Warburton, et al., Bernstein Research, "Euro Autos: What Are the 10 Most Profitable
Cards of Modern Times?, p. 4 (Nov. 15, 2011) (concluding that the top ten most profitable
vehicles of modern time are led by pick-up trucks manufactured by Ford and GM, due to the
large volume sold and because they have not undergone frequent technology upgrades). [EPA-
HQ-OAR-2010-0799-9479-A1, p. 11]
55 Id. at 2. [EPA-HQ-OAR-2010-0799-9479-A1, p. 12]
56 NPRM, 76 Fed. Reg. at 74,860. The Agencies' overemphasis of consumer choice also
overlooks the fact that each consumer's choice of a low-efficiency vehicle affects the overall
fleet's standards and thus decreases the benefits to society as a whole. The statutes set fuel
efficiency standards that counteract individual choices that prevent energy conservation. [EPA-
HQ-OAR-2010-0799-9479-A1, p. 12]
57 CBD v. NHTSA, 538 F.3d at 1195 (quoting Center for Auto Safety v. NHTSA, 793 F.2d
1322, 1338 (D.C. Cir. 1986). [EPA-HQ-OAR-2010-0799-9479-A1, p. 12]
58 See CBD v. NHTSA, 538 F.3d at 1207. [EPA-HQ-OAR-2010-0799-9479-A1, p. 12]
68 National Research Council. Effectiveness and Impact of Corporate Average Fuel Economy
(CAFE) Standards, p. 14, Washington, DC: The National Academies Press, 2002. [EPA-HQ-
OAR-2010-0799-9479-A1, p. 14]
2-67
-------
EPA Response to Comments
69 Id. at 18. The fact that domestic manufacturers faced less competition in this category and
could generate greater profits also contributed to the growth in SUV production. [EPA-HQ-
OAR-2010-0799-9479-A1, p. 14]
70 Id. at 19. [EPA-HQ-OAR-2010-0799-9479-A1, p. 14]
71 See, e.g., NPRM, 76 Fed. Reg. at 74,875; 74,913. According to Kate S. Whitefoot and Steven
J. Skerlos, "NHTSA constructed the foot-print based CAFE standards using a quantitative
analysis but did not study whether manufacturers would have an incentive to change vehicle size
as a result of the standards". See Kate S. Whitefoot and Steven J. Skerlos, Design I incentives to
Increase Vehicle Size Created from the U.S. Footprint-Based Fuel Economy Standards, 41
ENERGY POLICY 402, 403 (2012). [EPA-HQ-OAR-2010-0799-9479-Al, p. 15]
72 Indeed, the Agencies admit that safety considerations that could support any provision of a
disincentive for downsizing as a compliance strategy "apply weakly, if at all, to the very largest
vehicles." 76 Fed. Reg. 74918. [EPA-HQ-OAR-2010-0799-9479-Al, p. 15]
73 See NPRM, 76 Fed. Reg. at 74,872, Figure 5-2. Through 2021, the annual fuel economy
increase for light trucks is 4.0% for these smallest trucks, 2.3% for larger SUVs, and only 0.4%
for the largest pickup trucks. [EPA-HQ-OAR-2010-0799-9479-A1, p. 15]
74 "Increasing vehicle footprint leads to a reduction in fuel economy and acceleration
performance of the vehicle due to the increase in vehicle weight." Whitefoot, 41 ENERGY
POLICY at 404. [EPA-HQ-OAR-2010-0799-9479-A1, p. 15]
75 49 U.S.C. § 32901(a)(18). [EPA-HQ-OAR-2010-0799-9479-A1, p. 16]
76 See id. at (a)(17). [EPA-HQ-OAR-2010-0799-9479-A1, p. 16]
77 49 C.F.R. 523.5(4)-(5). [EPA-HQ-OAR-2010-0799-9479-Al, p. 16]
78 See NPRM, 76 Fed. Reg. at 75,337. [EPA-HQ-OAR-2010-0799-9479-A1, p. 16]
79 NPRM, 76 Fed. Reg. at 75,337, n. 218. [EPA-HQ-OAR-2010-0799-9479-A1, p. 16]
80 See 68 Fed. Reg. 74,908, 74926 (Dec. 29, 2003). [EPA-HQ-OAR-2010-0799-9479-Al, p. 16]
81 See CBD v, NHTSA, 538 F.3d at 1207. [EPA-HQ-OAR-2010-0799-9479-A1, p. 16]
82 Id. at 1208. [EPA-HQ-OAR-2010-0799-9479-A1, p. 16]
Organization: Chrysler Group LLC
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 54.]
2-68
-------
CO? Emissions Standards
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 60-61.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 26.]
Chrysler agrees with setting the truck performance requirements based on the underlying physics
of these types of vehicles. We believe the proposed 2017 through 2025 standards support this
premise and correct the deficiencies in the 2016 model year rule, which overlooked these factors.
The 2017 to 2025 truck standards are challenging while respecting the utility of these vehicles
and their importance to the nation's economy.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 54.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 61.]
The truck standards for 2012 through '16 model year were not supported by fundamental science.
Accommodating that science will seem to be restricted by statutory direction to not backslide on
standards from previous years.
Organization: Consumers Union
It is counterintuitive and counterproductive to let the least fuel efficient models improve more
slowly than more efficient models, and Consumers Union recommends that the light truck
standard should be made more stringent, particularly in the cross-over range. A delta of 10-15
mpg by 2025 between passenger cars and light trucks of the same footprint is unreasonable,
given the range of technologies and designs available for improving fuel economy. The gap in
the proposed standards grows over time because light trucks are required to improve at a lesser
rate, in addition to being subject to lower targets in absolute terms. [EPA-HQ-OAR-2010-0799-
9454-A2, p.6]
IV. A stricter standard would deliver even greater consumer benefits
The proposed standards will likely save consumers billions of dollars and provide additional
national security and environmental benefits. However, a higher CAFE target is achievable and
would save consumers even more money on fuel at a reasonable investment cost. Especially
given the regulatory flexibility and discrepancy between real-world and test results, a higher
CAFE target is both achievable and desirable. [EPA-HQ-OAR-2010-0799-9454-A2, p.6]
As noted in prior comments, Consumers Union believes that allowing manufacturers to avoid
stringent fuel economy standards by reclassifying passenger vehicles as light trucks as a way to
game the system erodes consumer and oil saving benefits.18 The current proposal's use of
footprint-based curves that require vehicles of all size to improve in fuel economy is a significant
2-69
-------
EPA Response to Comments
improvement from letting light trucks off the CAFE hook. Indeed, vehicle "footprint" is a
desirable attribute on which to base standards, for reasons noted in on pages 115-116 of
NHTSA's Preliminary Regulatory Impact Analysis (PRIA). However, the gap between the
curves is too large, especially in the cross-over SUV (approximately 42-50 sf) segment. [EPA-
HQ-OAR-2010-0799-9454-A2, p.6]
There are several strong indicators that the gap between the curves is too large. First, the cost-
per-vehicle to achieve the proposed standards is much lower for light trucks ($1,500) than for
passenger cars ($1,950). This significant discrepancy indicates that light trucks have additional
room for improvement at a reasonable cost. In addition, since passenger cars tend to be cheaper
than light trucks, light trucks get off even easier in terms of compliance cost as a percentage of
purchase price. [EPA-HQ-OAR-2010-0799-9454-A2, p.6]
Secondly, fuel economy savings are logarithmic, so allowing a lower percentage of improvement
for vehicles that already have the lowest mpg is counterproductive for maximizing fuel savings
and other benefits. The greatest potential for fuel savings is at the least efficient end of a fleet,
but the vehicles at the bottom are provided the least stringent targets, even as a percentage of
their current dismal performance. Third, the large gap provides a greater incentive to game the
system by altering a vehicle to put it in the light truck category (increasing clearance or adding
4WD). For some vehicles, the compliance cost could be less than simply altering the vehicle to
switch categories. Adding all-wheel or four-wheel drive does not generally warrant the extra
leeway afforded under the proposed rules, especially in the cross-over market segment.19 [EPA-
HQ-OAR-2010-0799-9454-A2, p.7]
Negative consequences could result from the large gap. Cross-over vehicles are a growing
market segment, and allowing cross-over vehicles to be counted in the light truck category
significantly boosts a manufacturer's achieved CAFE average for light trucks. As a result, the
larger and heavier vehicles will not need to make as much improvement as they would otherwise,
even though the greater investment needed to make these improvements in the larger vehicles is
the reason for a segmented standard in the first place. If the growing cross-over trend continues,
the large gap between the curves will have deleterious effects on projected consumer savings and
oil reduction.20 [EPA-HQ-OAR-2010-0799-9454-A2, p.7]
As long as the light truck-passenger vehicle distinction remains in place, our recommended
course of action is to alter the slope and floor values of the compliance curves so that there is less
incentive to switch categories and to preserve the projected consumer savings. At the very least,
the gap between the curves should be narrowed for the cross-over segment, and the gap should
decrease, instead of increase, overtime. The Union of Concerned Scientists has done extensive
analysis on this topic, and we agree with their analysis and conclusion that a "backstop" would
be an effective tool to preserve expected consumer savings and prevent exploitation of loopholes.
If the agencies do not address this potential problem in the current rulemaking, we would urge
them to perform rigorous analysis of this issue during the mid-term review to make sure that
consumer benefits are indeed on track and that potential savings are not being squandered
through manipulation of the standard. [EPA-HQ-OAR-2010-0799-9454-A2, p.7]
2-70
-------
CO? Emissions Standards
18 - See Appendix F: 'Comments of Consumers Union of the U.S., Inc. In response to Advance
Notice of Proposed Rulemaking Docket No. 2003-16128 on Reforming the Automobile Fuel
Economy Standards Program.'
19 - See Appendix G Comparison of Price and Operating Costs for 2WD and 4WD for real
world examples of fuel economy differences between 2WD and AWD/4WD.
20 - NHTSA notes on page 71 of the PRIA that indeed, the market is expected to shift towards
light trucks.
Organization: Ford Motor Company
The truck standards previously established for the 2012-2016 model years underestimated the
unique challenges posed by the standards for the larger trucks, which have unique loadcarrying
and towing capabilities that can be compromised by the fuel efficiency improvements more
successfully applied on smaller vehicles. The current proposal will better enable manufacturers
to develop and apply fuel economy technologies to light trucks without sacrificing the utility for
which these vehicles are designed. [EPA-HQ-OAR-2010-0799-9463-Al, pp. 2 and 5]
Car and Truck Stringencies: The proposed fuel economy and GHG standards for 2017 and
beyond take into account the particular attributes, needs and customer expectations for light
trucks relative to passenger cars, and this must carry through to the final rule. [EPA-HQ-OAR-
2010-0799-9463-A1, pp. 2 and 5]
Ford also believes that the relative stringency levels for the car and truck fleets, as proposed by
the agencies, are appropriate. [EPA-HQ-OAR-2010-0799-9463-Al, p. 8]
Although the proposed 2017 - 2021 model year truck standards may appear to be less stringent
than the car standards for the same years, this is not the case. In terms of the product actions
necessary to comply, the proposed car and truck standards are roughly equivalent in stringency.
This is attributable to the unique attributes expected from trucks—particularly the larger work
trucks that constitute a significant portion of our full-line vehicle fleet offering—and also to the
overly stringent standards imposed on light duty trucks in the 2012-2016 model year regulation.
[EPA-HQ-OAR-2010-0799-9463-A1, p. 8]
Heavier pick-up trucks are expected to deliver even more cargo carrying and towing capacity not
required from passenger vehicles. Such vehicles are used by consumers and small business
owners for activities such as towing or hauling construction goods and machines, farm goods,
landscape material, lawn maintenance equipment, home furnishings, animals, vehicles and
trailers. Ford survey data shows up to 82% of F-150 customers use their vehicles for hauling. Up
to 41% haul on at least a monthly basis; and 72% of F-150 customers use their vehicles for
towing. Up to 28% tow on at least a monthly basis. [EPA-HQ-OAR-2010-0799-9463-Al, p. 8]
2-71
-------
EPA Response to Comments
To achieve this capability, vehicles equipped with trailer tow packages include additional
features that clearly distinguish them from passenger cars, and can negatively impact fuel
economy:
• Auxiliary transmission oil coolers
• Upgraded radiators
• Trailer hitch connectors and wiring harness equipment
• Different steering ratios, upgraded rear bumpers and different springs for heavier tongue
load (for upgraded 'max' trailer tow packages)
• Body on frame (vs. unibody) construction to support capability and an aggressive duty
cycle
• Lower axle ratios for better pulling power/capability
in addition, vehicles with towing capability generally have increased aerodynamic drag caused
by a modified frontal area, increased rolling resistance, and a heavier frame and suspension to
support this additional capability.
We are seeing a continuing trend that our customers are purchasing these vehicles for work
purposes. Based on 2011 segmentation models for our full size pick-up trucks, Business users
account for approximately 30% of the market. The Business category includes fleet and work
trucks (e.g. small business owner, farmer, foreman), as well as those customers who use their
truck for occupational purposes during the week and personal use on the weekend. About 58% of
the market is comprised of Recreational users, including hunters, boaters, fisherman, etc. These
consumers rely on their vehicles for hauling and towing to support their recreational activities.
Only a relatively small segment (12%) of the market is comprised of consumers who do not
make significant use of the towing/ hauling/off-road capabilities of the truck. Based on the trends
we have seen in the market, we fully anticipate that such buyers will continue to be a shrinking
portion of our market. We believe that within a few years, the Business category will increase to
over 40% of the market, and the combined Business/Recreational users will increase to over 90%
of the market for full size pick-up trucks.
And to further demonstrate the importance of these vehicles to the American economy, the
following graph demonstrates that new home construction, a key financial indicator, and the
sales of the trucks needed to help this industry, go hand in hand. [EPA-HQ-OAR-2010-0799-
9463-A1, p. 9]
In order to be fair to all manufacturers and avoid creating market imbalances, the stringency of
the car and truck standards needs to be comparable in terms of the effort and level of investment
necessary to comply. The imbalance in the relative stringency of the car/truck standards in the
2012-2016 rules needed to be corrected. In light of the above, we believe that the agencies'
proposal with respect to car/truck stringency is sound and should be carried through to the final
rule. [EPA-HQ-OAR-2010-0799-9463-Al,p. 10]
In the proposal, EPA makes reference to the fact that it "underestimated the impact of the
different pickup truck model configurations" in the model year 2012-2016 rule, and that the
"very largest light trucks have significant load-carrying and towing capabilities that make it
2-72
-------
CO? Emissions Standards
particularly challenging for manufacturers to add fuel economy-improving/CO2-reducing
technologies in a way that maintains the full functionality of those capabilities." (76 Fed. Reg.
74919). We agree with this observation. The 2012-2016 truck standards did not fully account for
the consumer-driven attributes of larger trucks, which, due to the technology trade-offs discussed
above, created particular challenges for full-line truck manufacturers. [EPA-HQ-OAR-2010-
0799-9463-A1, p. 10]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 45-46.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 35.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 87.]
In particular, EPA acknowledged it had underestimated the impact of the different pickup truck
model configurations in the model year 2012 to 2016 rule. They further acknowledged that the
Very largest light trucks have significant load-carrying and towing capabilities that make it
particularly challenging for manufacturers to add fuel economy-improving technologies in a way
that maintains the full functionality of those capabilities.' We concur with the agencies' analysis
and conclusions
Organization: General Motors Company
GM supports the target standard curve shapes, the relative car and truck stringency, and the
statistical analysis used to analyze the fleet. [EPA-HQ-OAR-2010-0799-9465-A1, p.2]
GM also urges careful consideration of two key issues raised in the Alliance comments that
would affect the implementation stringency of the proposal, namely whether NHTS A should
change the current definition of what constitutes a passenger car and a light truck and whether
NHTS A needs to further adjust the stringency of its proposed curves to more fully harmonize
with the EPA proposed requirements and flexibilities. [EPA-HQ-OAR-2010-0799-9465-A1, p.
2]
Organization: Institute for Policy Integrity, New York University School of Law
The second justification offered is that a footprint-based approach will avoid negative safety
impacts. To start, the footprint-based approach does not completely eliminate the incentive to
build smaller cars to comply with the rule. The mathematical formulas that set the standards are
only strictly increasing along the range from 40 square feet to either 55 square feet for cars or 75
square feet for trucks; at other points, the curve is flat. Admittedly, that central range covers most
vehicle models.88 However, at least several dozen models (mostly subcompacts and sports cars)
fall in the 30-40 square feet range,89 which are all subject to the same standards. At a minimum,
the manufacturers of these models may have an incentive to decrease footprints as a compliance
2-73
-------
EPA Response to Comments
strategy, since doing so would not trigger more stringent standards. [EPA-HQ-OAR-2010-0799-
9480-A1, p. 14]
Organization: Insurance Institute for Highway Safety (IIHS)
IIHS does have some concern regarding the "breakpoint" of the fuel economy curve at the lower
extreme where footprint is the smallest (see Figure 1-1 on page 74871 of the notice). This
"breakpoint" is the leveling-off point on the fuel economy curve where the fuel economy
requirement ceases to increase as footprint decreases. Moving this breakpoint farther to the left
so that even smaller vehicles have increasing fuel economy requirements would reduce the
chance that manufacturers would downsize the lightest vehicles for further fuel economy credits.
[NHTSA-2010-0131-0222-Al,p. 1].
Organization: International Council on Clean Transportation (ICCT)
17. Separate footprint curves for cars and light trucks distort the requirements by making it easier
for vehicle classified as light trucks to comply. Unlike the 20122016 requirements, the 2017-
2025 rule increased the gap between cars and light trucks, providing stronger incentives for
manufacturers to reclassify cars as light trucks and potentially undermining the benefits of the
rule. A single footprint function would still give larger trucks a less stringent target to meet,
while avoiding vehicle classification games. [EPA-HQ-OAR-2010-0799-9512-A1, p. 4]
The proposed 2022-25 standards would set consistent improvements for all cars and light trucks,
with annual CAFE increases of 4.7% per year and annual GHG reductions of 5.0% per year.
However, both EPA and NHTSA proposed a lower annual rate of improvement for light-trucks
in the early years of the program. EPA is proposing an annual GHG reduction for cars of 5%, but
only 3.5% for light trucks. Similarly, NHTSA is proposing an annual fuel economy increase of
4.3% for cars, but only 2.9% for light trucks. The required reductions for light trucks are also
tilted, such that the smallest light trucks have larger increases (but still less than cars), while the
larger light trucks have smaller increases. Figure 4 illustrates this effect. The annual fuel
economy increases from 2016 to 2021 for cars is almost flat and ranges from 4.2% to 4.4%. The
annual fuel economy increase for light trucks starts at 4.0% for the smallest trucks, drops to 2.3%
for larger SUVs, and falls off to only 0.4% for the largest pickup trucks. Note that the 2012-16
standards also imposed smaller increases on the larger vehicles than they did on smaller
vehicles. [Figure 4 can be found on p. 49 of Docket number EPA-HQ-OAR-2010-0799-9512-
Al] [EPA-HQ-OAR-2010-0799-9512-A1, pp. 48-49]
Footprint systems are designed to encourage the use of lightweight materials (unlike weight-
based standards) without affecting the mix of vehicles sold in the market. Under a footprint-
based system, selling more small vehicles does not necessarily help manufacturers meet the
standards, as smaller vehicles are subject to more stringent targets. However, the slope of the
footprint curve and the difference between the car and light truck curves matter. The steeper the
slope of the footprint curve, the more incentive manufacturers have to increase the size of their
vehicles. And the larger the difference between the car and light truck curves, the more incentive
a manufacturer has to add four-wheel drive and jack the vehicle up just enough to meet the
ground clearance criteria so that the vehicle can be reclassified as a light truck. These are
2-74
-------
CO? Emissions Standards
perverse incentives, as increasing the size of the vehicle or reclassifying cars as light trucks
makes it easier for a manufacturer to meet the requirements while also increasing the fuel
consumption and CO2 emissions from the vehicle. [EPA-HQ-OAR-2010-0799-9512-A1, p. 49]
The tilt in the increase in light truck stringency, as illustrated in Figure 4, increases the incentive
for manufacturers to increase the size of light trucks, especially pickup trucks. [Figure 4 can be
found on p. 49 of Docket number EPA-HQ-OAR-2010-0799-9512-A1] [EPA-HQ-OAR-2010-
0799-9512-A1, p. 49]
More importantly, the lower requirements for all light trucks would increase the incentive to
reclassify cars as light trucks. As illustrated in Figure 5, the 2012-2016 standards and the 2022-
2025 standards have almost no impact on the relationship between the stringency of the car and
the light truck targets. However, during the 2017 to 2021 timeframe, when the annual efficiency
gains for light trucks are much lower than for cars, the difference in stringency between cars and
trucks grows dramatically. As proposed, the 2017-2021 standards will increase the incentive to
reclassify cars as light trucks, with a small additional incentive for the smallest cars and
gradually increasing for larger cars. Fortunately, few cars have a footprint larger than about 54
sq.ft at present. [Figure 5 can be found on p. 50 of Docket number EPA-HQ-OAR-2010-0799-
9512-A1] [EPA-HQ-OAR-2010-0799-9512-A1, p. 50]
Single footprint curve
The proposed rule maintains separate footprint curves for cars and light trucks. This subjects
light trucks with the same footprint to much less stringent standards and gives manufacturers a
tremendous incentive to reclassify cars as light trucks. In the future it is likely to cause
manufacturers to drop many 2wd versions of their small SUVs and make less efficient 4wd
versions standard, so that they can be classified as light trucks instead of cars. This will actually
increase overall real world fuel consumption and CC>2 emissions in two ways. First, it will
increase 4wd installation and directly increase the fuel consumption of the fleet. Second, it
makes it easier for manufacturers to meet the standards, so that they do not have to implement as
much technology on other vehicles. [EPA-HQ-OAR-2010-0799-9512-A1, p. 50]
The large majority of light trucks today are based on car platforms with unibody construction.
All minivans use unibody construction and cab-and-chassis construction for SUVs is rapidly
disappearing. Except for pickup trucks, full-size cargo vans, and a few relatively low volume
SUVs, such as the Jeep Wrangler and the Suburban, in the 2017-25 timeframe of the rule all light
trucks will be based on car platforms. In addition, due to the empty pickup bed and empty cargo
box, pickup trucks and cargo vans are considerable lighter than SUVs with the same footprint
and fit well on a single footprint line. Thus, there is no technical reason to maintain separate
footprint lines for cars and light trucks. [EPA-HQ-OAR-2010-0799-9512-A1, pp. 50-51]
EPA recognized the importance of this issue when it established a single Tier 2 emission
standard for all cars and light trucks. The issue here is just as important. It is time to begin the
process to end this artificial distinction between cars and light trucks for fuel efficiency and
greenhouse gas emissions. The ICCT recommends a single footprint function, which will still
2-75
-------
EPA Response to Comments
give larger trucks a less stringent target to meet, while avoiding vehicle classification games and
helping to ensure fuel consumption and GHG emission goals are actually met. [EPA-HQ-OAR-
2010-0799-9512-Al,p. 51]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 197.]
The separate footprint curve to cars and light trucks also distort the requirements by making it
easier for vehicles classified as light trucks to comply. A single footprint function would still
give larger trucks a less stringent target to meet while avoiding vehicle classification games.
Organization: Mass Comment Campaign (20,500) (Union of Concerned Scientists-3)
The proposed standards for light trucks are significantly weaker than for cars. In the past,
automakers made vehicles bigger to qualify for weaker standards. Light truck standards should
be strengthened to prevent automakers from gaming the system. [EP A-HQ-OAR-2010-0799-
10166-A2_MASS, p.l]
Organization: Mass Comment Campaign (375) (Union of Concerned Scientists-2)
The proposed standards for light trucks are significantly weaker than for cars. In the past,
automakers made vehicles bigger to qualify for weaker standards. Light truck standards should
be strengthened to prevent automakers from gaming the system. [EP A-HQ-OAR-2010-0799-
1246-A1_MASS, p.l]
Organization: Mass Comment Campaign (4,505) (Unknown Organization)
The proposed rules allow light trucks to increase their fuel efficiency at a much slower rate than
cars. For many years, this problem led automakers to build bigger vehicles so they could take
advantage of these weaker standards, which caused efficiency standards in the United States to
stagnate. We should not make the same mistake twice, and should strengthen the standards for
light trucks on a par with cars. We cannot afford to skew the rules in favor of gas-guzzling
SUVs. [EPA-HQ-OAR-2010-0799-9595-Al_MASS, p.l]
Organization: Mass Comment Campaign (9,570) (Unknown Organization)
The proposed standards for light trucks are significantly weaker than for cars. In the past,
automakers made vehicles bigger to qualify for weaker standards. Light truck standards should
be strengthened to prevent automakers from gaming the system. [EPA-HQ-OAR-2010-0799-
9578-Al_MASS, p.l]
Organization: National Association of Clean Air Agencies (NACAA)
First, NACAA understands that EPA and NHTSA are proposing that passenger cars have an
average rate of improvement of 5 percent for MYs 2017 to 2025. However, light-duty trucks will
2-76
-------
CO? Emissions Standards
start with an average rate of improvement of 3.5 percent for MYs 2017 through 2021 and 5
percent for MYs 2022 through 2025. These proposed rates of improvement are envisioned to
result in an average CO2 emissions rate of 163 grams per mile (g/mile) with an average fleet
performance of 54.5 miles per gallon (mpg) if every manufacturer incorporates enhanced engine
technologies. In addition, the proposal provides only a conditional approval of the standards by
NHTSA for MY 2022 to 2025 vehicles. [EPA-HQ-OAR-2010-0799-8084-A1, p. 3]
NACAA supports EPA's and NHTSA's goal of a fleetwide performance that will result in 54.5
mpg fuel efficiency. We are concerned, however, that the approach taken in the proposal may
undermine achievement of this goal. In fact, in a recently published study, researchers at the
University of Michigan consider whether allowing a more lenient 3.5-percent rate of
improvement requirement for larger vehicles creates an incentive for the manufacture of larger
vehicles to the extent that it could lower the overall fleet performance standard by as much as
four miles per gallon, thus undermining the goal of a 54.5-mpg fuel economy standard.12
Accordingly, NACAA urges EPA and NHTSA to ensure that the full measure of the reductions
envisioned by EPA and NHTSA is achieved. In addition, NACAA requests that EPA and
NHTSA respond to the issues raised in the University of Michigan study. [EPA-HQ-OAR-2010-
0799-8084-A1, p. 3]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 39-40.]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 34-35.]
1 9
Kate S. Whitefoot and Steven J. Skerlos, "Design Incentives to Increase Vehicle Size Created
from the U.S. Footprint-based Fuel Economy Standards," January 2012, available at
http://designscience.umich.edu/alumni/katieAVhitefoot_Skerlos_Footprint.pdf. [EPA-HQ-OAR-
2010-0799-8084-A1, p. 3]
Organization: Natural Resources Defense Council (NRDC)
NHTSA should revise truck definitions to reduce the incentive for cars to be reclassified as
trucks and take advantage of a less stringent compliance regime. [EPA-HQ-OAR-2010-0799-
9472-A2, p. 3]
2. Fuel Consumption and Pollution Reductions are Undermined by Large Gap between Car and
Truck Curves; Agencies Should Revise Truck Definitions to Prevent Gaming
The large gap between the car and light truck curves creates an incentive that threatens to
undermine the predicted oil and GHG reductions of the program. Automakers could have a
strong incentive to modify vehicles classified as cars today to be reclassified as trucks because
the truck curve has substantially less stringent compliance levels for the same footprint. NHTSA
2-77
-------
EPA Response to Comments
previously recognized that many crossover vehicles had been inappropriately classified as trucks.
Starting with MY 2011, NHTSA required two-wheel drive crossovers that were previously
subject to truck fuel economy standards to be shifted to the car fuel economy compliance
requirements. NHTSA estimated that over a million vehicles required reclassification from
trucks to cars.33 It is our concern that many automakers will modify vehicles or shift sales from
crossovers currently on the car curve to the truck curve. [EPA-HQ-OAR-2010-0799-9472-A2, p.
10]
One way to make the curve shift is by the addition of four-wheel drive (4WD) capability. Adding
four-wheel drive technology could classify a car into a truck yet have minimal impact on the
actual fuel efficiency and emissions of the vehicle. By making the shift, a vehicle was previously
complying with the car curve would immediately overcomply on the truck curve. The
automaker's decision to add 4WD capability will largely be influenced by whether or not the
cost to add the 4WD technology is less than adding the fuel efficiency and emissions technology
necessary to stay compliant on the car curve. [EPA-HQ-OAR-2010-0799-9472-A2, p. 10]
Consider the case of the popular Toyota RAV4 crossover and compliance with GHG emission
standards. With a footprint of 44.6 square feet (ft2), the two-wheel drive RAV4 car requirement
in 2016 is 223 g/mi. Adding 4WD will increase emissions by about 5 g/mi to 228 g/mi. If
reclassified as a truck, the 4WD RAV4 would subject to less stringent compliance standards and
at 228 g/mi, it would meet the meet the MY 2020 requirement for trucks at the 44.6 ft2
footprint. [EPA-HQ-OAR-2010-0799-9472-A2, p. 10]
By immediately complying with the MY 2020 standard, Toyota could avoid adding technologies
to cut emissions from 2016 to 2020, and save approximately $1000. If Toyota can add 4WD
technology for less than $1000, then they would have an incentive to shift RAV4 models from
car classification to truck classification. The difference in MSRP between 2WD and 4WD
models of the 2012 RAV4 is $1400 but actual costs could be less than $1000. [EPA-HQ-OAR-
2010-0799-9472-A2, p. 10]
NHTSA and EPA should reduce the incentive to reclassify vehicles from the car to truck curves.
The gap between the car and truck curves should be reduced, especially for footprints of
crossovers similar to the RAV4. The emissions and fuel efficiency difference between 2WD and
4WD crossovers on the market today is often less than 10 g/mi yet the car and truck curves differ
by over 40 g/mi. The agencies should also revise truck definitions to better distinguish truck-only
capabilities. For example, trucks should be required to have technologies that are necessary for
true off-road capability vs. typical all-wheel on-road driving. [EPA-HQ-OAR-2010-0799-9472-
A2, p. 10]
33 74 FR 14196 at 14204. [EPA-HQ-OAR-2010-0799-9472-A2, p. 10]
Organization: Nissan North America, Inc.
2-78
-------
CO? Emissions Standards
The standards applicable to the light-duty truck fleet for MYs 2022-2025 are particularly
challenging. Especially for automakers with more limited volumes in the light truck segment, the
cost feasibility of implementing more advanced technology is limited. As manufacturers re-
evaluate their commitment to these market segments, the broad industry-wide investment in
truck technologies that can be spread through the industry is uncertain. Moreover, the
willingness of the market to absorb substantial additional costs to ensure achieving the proposed
standards is questionable as the light-duty truck segment is a cost-sensitive market. [EPA-HQ-
OAR-2010-0799-9471-A1, p.8]
Organization: RVIA
Towing considerations for full size pickups
RVIA has commented in the past on the importance of considering towing when setting future
GHG and CAFE standards for full size pickups. RVIA is pleased to see that the proposed
standards for full size pickups do indeed take towing into consideration and we therefore support
the standards proposed for the 2017-2021 model years. However, we are concerned that the costs
associated with the standards proposed for the 2022-2025 model years could potentially hurt full
size pickup truck sales. This would in turn have a negative effect on sales of towable RVs
because when a person shopping for a new towable RV cannot afford to buy the vehicle capable
of towing it, they will not purchase the RV. [EPA-HQ-OAR-2010-0799-9550-A2, pp. 1-2]
Towing considerations for large passenger cars, small SUVs and crossover vehicles
With the price of gasoline hovering around four dollars per gallon today, consumers are buying
SUVs that ride more like a car, get better fuel economy, but have a greatly diminished towing
capacity. For example, the consumer who several years ago might have purchased a Chevy
Tahoe (3 rows of seats and towing capacity of 8,500 Ibs) might instead today purchase a Chevy
Traverse which also has three rows of seats but has a maximum towing capacity of only 5,200
Ibs. Similarly, consumers that previously might have purchased an SUV like a Volkswagen
Toureg now consider smaller SUVs like the Tiguan, a minivan or even a station wagon. As this
downsizing trend progresses, consumers (as they are already) will demand that these vehicles
offer more towing capability than offered today. Therefore, we recommend that EPA and
NHTSA closely examine whether they have appropriately considered this future light vehicle
towing trend in setting standards for light duty passenger cars, cross-over vehicles, minivans and
other vehicles that will be used by consumers to tow RV trailers, boats, ATVs, utility trailers, U-
Haul rental trailers and the like. [EPA-HQ-OAR-2010-0799-9550-A2, p.2] [There are also
images associated with this paragraph, please refer to EPA-HQ-OAR-2010-0799-9550-A2, pp.2-
3]
Organization: Salinas, A.
SUVs are being allowed to improve gas-mileage standards later than passenger vehicles, and that
has spurred the production of even more SUVs. These standards leave the United States behind
Europe, Japan, and China in fuel efficiency. [EPA-HQ-OAR-2010-0799-7119-Al, p. 1]
2-79
-------
EPA Response to Comments
Auto makers are being coddled into taking only baby-steps to improve already-existing
technology. We are much better than that. At this pace, 2025 will not see much more fuel-
efficiency than what some cars already have. By 2025 the United States should do better than
the European Union, China and Japan, not continue to lag behind them. [EPA-HQ-OAR-2010-
0799-7119-A1, p. 1]
We need better, stronger rules to make real progress in the fight to reduce greenhouse gas
emissions and improve fuel efficiency, and we need for SUVs to be made adhering to the same
standards as passenger vehicles. [EPA-HQ-OAR-2010-0799-7119-A1, p. 1]
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
Take steps to address weaker standards for light trucks: Closing the gap between cars and trucks
has been a long-term concern for our organizations. We remain deeply concerned about the
lower rate of improvement the light truck curve requires overall, driven by the much less
stringent curve at the large footprint end of the light truck spectrum. The EPA is proposing lower
annual emissions reductions of 3.5 percent per year for MY 2017-2021 light duty trucks.
NHTSA is also proposing a low annual increase in fuel economy for light trucks for the first
phase of standards which include MY 2017-2021 to be 2.9 percent per year on average (even
lower for larger light trucks). The proposed rule presumes that additional increases will be
achievable after 2021 - 5% emissions reductions for trucks and 4.7% annual efficiency
improvements. This treatment results in the direct loss of greenhouse gas reductions relative to
reductions that would have been achieved with a uniform 5% annual emissions reduction across
all classes, and may undermine the benefits of the program. The lower rate of improvement in
the early years could undermine the mid-term review and achieving the long term stringency of
the National Program. [EPA-HQ-OAR-2010-0799-9549-A2, p. 6]
The agencies are continuing to use an attribute based curve for model years 2017-2025. While
the car curve is the same as from the 2012-2016 standards, the agencies are changing the light
truck curve. The proposed changes will increase the slope and extend the large footprint cut off
point to larger footprints. By increasing the slope the rule will create an incentive to upsize
vehicles that would continue through MY2025. The agencies consider this factor in the NPRM,
noting that a "steeper footprint based standards may incentivize vehicle upsizing, thus increasing
the risk that the fuel economy and greenhouse gas reduction benefits will be less than expected.
Extending the slope part of the target curve will have adverse consequences for both emissions
and safety. [EPA-HQ-OAR-2010-0799-9549-A2, p. 6]
We appreciate the agencies efforts to structure a program to encourage and reward application of
"game-changing" hybrid technology to the largest pickups. To limit the impact of the proposed
curves and treatment of light trucks, even with the incentive program in place, we recommend
that the agencies provide an alternate emissions target for light trucks of 60 sq. feet and above
that exceed the sales projected in the rule. This alternate emissions target will come into effect in
the year that sales exceed the projected sales in the rule. By setting an alternate emissions target
level representing a 4.8 percent annual reduction from the maximum 2016 truck target of 349 g
2-80
-------
CO? Emissions Standards
of CC>2 per mile, automakers will be discouraged from increasing sales volumes at this end by
producing lower cost and inefficient vehicles. [EPA-HQ-OAR-2010-0799-9549-A2, p. 6]
The gap between average car and truck emissions would widen due to the differing rates of
improvements for cars and trucks under the proposed standards. This may further encourage
manufacturers to reclassify certain large-footprint cars as trucks and/or change the balance of
two-wheel drive and four wheel-drive SUV production, reducing the emissions benefits of the
2017-2025 standards. [EPA-HQ-OAR-2010-0799-9549-A2, p. 6]
In the past, the light truck loophole resulted in manufactures producing greater numbers of
trucks. We are concerned that in the early years of the program automakers will take advantage
of the weaker standards for light trucks, which will make it difficult to produce higher efficiency
vehicles in the later years of the program setting automakers up for failure. [EPA-HQ-OAR-
2010-0799-9549-A2, p. 7]
Automakers are already gearing up to take advantage of this loophole. A New York Times article
reported in 2011 that sales of larger vehicles were up by 28.5% compared to an increase in car
sales of 7% from 2010 sales in the same month.22 [EPA-HQ-OAR-2010-0799-9549-A2, p. 7]
Therefore we also urge the agencies to revisit the light truck definition as set by NHTSA in the
2011 fuel economy rule to further discourage reclassification of cars as trucks and substitution of
two wheel drive with four wheel drive SUVs, simply to avoid the more stringent car
standards. [EPA-HQ-OAR-2010-0799-9549-A2, p. 7]
22 http://www.nytimes.com/201 l/02/02/business/02auto.html
Organization: Smith, Frank Houston
Data is also available for 1472 UK Light 4X4s, Pickups, and Vans rated Euro Step IV Emissions
and above at http://vanfueldata.dft.gov.uk/Default.aspx. [NHTSA-2010-0131-0240-A1, p. 3]
There are currently 402 Euro Step V certified vans and pickups ... only 9 gasoline, 14 CNG, and
379 diesel fueled configurations with gross weights capabilities from 1690 up to 4,560 kg
providing fuel economies from 19.5 to 78.3 mpg(Imperial) combined based on the NEDC test
cycle. [NHTSA-2010-0131-0240-A1, p.3]
Organization: South Coast AQMD
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 69.]
In addition, we want to emphasize that additional assurances are needed to ensure that the overall
fleet performance of 5 percent is met. The proposal rule allows light-duty trucks produced in
2-81
-------
EPA Response to Comments
2017 to 2021 to improve at a rate of only 3.5 percent. If sales of light-duty trucks during this
time period exceeds expectations, then the overall fleet performance will be further reduced.
In addition, the use of early credits may lead to the production of light-duty vehicles that do not
necessarily have to meet the 5 percent improvement rate.
Organization: Toyota Motor North America
While Toyota understands that the utility provided by larger trucks is a factor driving the lower
overall target increases for trucks as a whole, and the lack of improvement required for larger
trucks for 2017-2021 model years, the agencies must ensure that purchasers of affordable and
fuel efficient smaller cars (and smaller trucks) do not bear a disproportionate burden as a result.
As proposed, the standards may drive manufacturers of smaller footprint cars to add technology
and cost to vehicles that are already among the most fuel-efficient and price sensitive in the
market, while requiring little improvement of the largest vehicles on the road. This dilemma
appears to be an unintended consequence of the shift to an attribute-based fuel economy and
greenhouse gas regulation scheme and must be considered as standards are increased in this
rulemaking and in the future. [EPA-HQ-OAR-2010-0799-9586-A1, p.2]
In particular, NHTSA should take steps to modify its target curves to account for the limited
credit trading and transferring allowed under its authorizing statute. [EPA-HQ-OAR-2010-0799-
9586-A1, p.2]
Nonetheless, we remain concerned about two aspects of the proposed standards. First, the targets
for trucks require a lower average rate of improvement than for cars. And second, the targets for
larger trucks require a lower average rate of improvement than smaller trucks. In fact, the target
curves for the largest trucks remain flat for several years before increasing at all. This
discrepancy is exacerbated by the availability of several credit opportunities - discussed later in
these comments - that are applicable to certain large trucks at the exclusion of all other market
segments. [EPA-HQ-OAR-2010-0799-9586-A1, p.5]
While Toyota understands that the utility provided by larger trucks is a factor driving the lower
overall target increases for trucks as a whole, and the complete lack of improvement required for
larger trucks for 2017-2021 model years, the agencies must ensure that purchasers of affordable
and fuel efficient smaller cars (and smaller trucks) do not bear a disproportionate burden as a
result. The target curves as proposed will drive manufacturers of smaller footprint cars to add
technology and cost to vehicles that are already among the most fuel efficient in the market, and
which are also among the most price-sensitive in the market, while requiring virtually nothing of
the largest vehicles on the road. This dilemma appears to be an unintended consequence of the
shift to an attribute-based fuel economy and GHG regulation scheme and must be considered as
standards are increased in this rulemaking and in the future. [EPA-HQ-OAR-2010-0799-9586-
Al,p.5]
Organization: Union of Concerned Scientists (UCS)
(b) Loss in Benefits from Increased Vehicle Size and Car/Truck Reclassification
2-82
-------
CO? Emissions Standards
In the proposed rule, the agencies project a sales mix in MY2025 of 66.9% passenger cars and
33.1% light trucks. This represents a significant consumer shift towards passenger cars from
today's sales mix. While we agree that a variety of market and regulatory factors will move sales
in this direction, the magnitude of this shift will strongly influence the actual outcome of these
standards. This mix could shift for a host of reasons, including market forces, or because of
compliance strategies adopted by automakers to either (a) reclassify cars as light trucks or (b)
add size to vehicle footprints to qualify for weaker standards. According to the California Air
Resources Board, "the extent to which the future fleet trends move toward larger average vehicle
sizes and/or more trucks than projected in this analysis could significantly undermine the
expected GHG benefits."29 CARB goes on to quantify how as much as a 16 percent loss in
emissions reduction could result from even a modest shift to larger vehicles and an increase in
market share of light trucks. And this concern is not without evidence. As Tom Cackette, Chief
Deputy Executive Officer of the California Air Resources Board, noted at a recent public
hearing, "We have some insight into the [auto industry's] business plans that suggest that we
should worry about this."30 This concern is also consistent with past efforts by automakers such
as Chrysler and Subaru to reclassify cars as "trucks" as well as the overall shift to SUVs during
the 1990s as automakers took advantage of the significant difference in the car and light truck
standards. [EPA-HQ-OAR-2010-0799-9567-A2, p. 7]
Modifying crossover-type vehicles currently defined as cars in order to qualify them as 'non-
passenger vehicles' may pose an attractive strategy to automakers, as they could generate a
windfall of credits due to weaker trucks standards. The fastest growing segment of vehicles over
the past decade has been the crossover vehicle segment, growing from less than 5% in 2000 to
nearly 25% of light-duty vehicles in 2010. The most popular of these vehicles are offered in 2wd
and 4wd configurations, such as the Ford Escape, Toyota RAV4, and Honda CR-V. Consistent
with current federal definitions, the 2wd variants of these vehicles are classified as cars while the
4wd versions are classified as light trucks. If the size of the gap between car and light truck
standards at a given vehicle footprint is large enough, it alone can provide an incentive to
automakers to modify the 2wd variant of crossover vehicles to meet the light truck definition.
Today's popular 4wd versions of mid-size crossover vehicles emit 2 to 3 percent more global
warming emissions than their 2wd counterparts. Yet the gap in the proposed standards between
cars and trucks ranges from about 16 to 19 percent. This large gap presents a sizable loophole in
the regulation and could result in a large loss in program benefits should manufacturers find it
more economical to reclassify and migrate models to the less-stringent truck standard. [EPA-
HQ-OAR-2010-0799-9567-A2, p. 8]
An even more troubling, though equally plausible scenario, is that a manufacturer could modify a
halo vehicle to meet the truck definition with the express intent of minimizing obligations on the
rest of its light truck fleet. At a January 19, 2012 public hearing in Philadelphia, PA on the
proposed MY2017-2025 standards, a representative of Toyota Motor North America referred to
the company's new Prius V as a crossover vehicle. This model is classified as a station wagon in
EPA's fuel economy guide, and should be appropriately held to the more stringent passenger
vehicle ('car') standard. However, if Toyota chose to apply a third row of seats, or to add a 4wd
transmission and increase the vehicle's ground clearance, the Prius V would be close to, if not
already, meeting the non-passenger ('light truck') definition. Doing so could have a profound
2-83
-------
EPA Response to Comments
effect on Toyota's remaining truck fleet. According to fueleconomy.gov, the Prius V's
unadjusted 2-cycle fuel economy is 58.7 mpg; even assuming a 10 percent loss in (unadjusted)
fuel consumption from applying 4wd and other modifications, the model would still achieve 53.4
mpg - more than 20 mpg over the 2017 target specified for the Prius V's 46.1 ft2 footprint. At a
reasonable sales volume, this would create a massive windfall of credits, allowing Toyota to
remain compliant while making very few improvements to the remainder of its light truck
fleet. [EPA-HQ-OAR-2010-0799-9567-A2, p. 8]
With examples such as the one above, it is clear that the set of criteria used to differentiate
passenger and non-passenger vehicles is inadequate, providing automakers ample opportunity to
game the system and undermine the benefits of the program. One solution is to adjust the target
curves, particularly in the 45 (+/- 3) ft2 footprint range seen by many crossover vehicles, to
minimize the gap between car and light truck targets. [EPA-HQ-OAR-2010-0799-9567-A2, p. 8]
Though I strongly support these standards, I am concerned about possible loopholes that
automakers could exploit. Specifically: The proposed standards for light trucks are significantly
weaker than for cars. In the past, automakers made vehicles bigger to qualify for weaker
standards. Light truck standards should be strengthened to prevent automakers from gaming the
systems. [EPA-HQ-OAR-2010-0799-9713-A2, p. 2]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 218-219.]
We're also very concerned that significantly weaker standards for light trucks could give auto
makers an incentive to reclassify passenger vehicles as non-passenger vehicles.
For example, the gap of roughly six to ten MPG exist between car and light truck target
stringencies in the footprint range seen by many crossover vehicles.
This gap is much larger than the fuel economy loss a crossover would face from adding four-
wheel drive, which could enable it to qualify it for a weaker standard as a non-passenger vehicle.
Gaming of the system like this will cut down on the anticipated program benefits giving the
sizable and growing popularity of the crossover vehicle segment. The agencies cannot afford to
dismiss this issue.
Organization: United Automobile Workers (UAW)
In particular the UAW supports the aspects of the proposals that recognize the importance of
balancing the challenges of adding fuel-economy improving technologies to the largest light
trucks with the need to maintain the full functionality of these vehicles across a wide range of
applications. Second, the UAW believes that the agencies made reasonable determinations
regarding the shape and slope of the curves that describe the proposed requirement for any
particular size vehicle. Third, the UAW is pleased that the proposed CAFE regulations maintain
the alternative minimum standard for domestically manufactured passenger cars. This
requirement was maintained in EISA as an express mechanism to ensure a certain level of
2-84
-------
CO? Emissions Standards
efficiency for the domestically-produced passenger car fleet. [EPA-HQ-OAR-2010-0799-9563-
A2, p.2]
Organization: Volkswagen Group of America
Through these comments, Volkswagen will outline our main concerns and will define the
implications of key elements which will lead to the inequitable treatment amongst
manufacturers. Volkswagen will conclude the comments with a series of proposals aimed at
improving the overall balance of the rule. [EPA-HQ-OAR-2010-0799-9569-A1, p. 3]
It was Volkswagens' position that all segments of vehicles within each compliance fleet should
be capable of carrying an equitable burden in CC>2 reduction per year. [EPA-HQ-OAR-2010-
0799-9569-A1, p. 5]
a. Equal stringency for cars and trucks in the range of 4%/year for 2017-2021
It was Volkswagen's position based on predictions for technical readiness and consumer
affordability that an annual reduction in the range of 4% COz promoted a balanced regulation for
both cars and trucks for 2017-2021. An equal stringency equitably distributes the burden for
reduction across all segments within the fleet. [EPA-HQ-OAR-2010-0799-9569-A1, p. 5]
Further, Volkswagen explained that there are many uncertainties regarding the market
acceptance, cost and benefits of technologies such as hybrids, plug-in hybrids, lightweight
materials and advanced combustion engines. It was also Volkswagen's position that stringency
in the later phase of 2022-2025 could possibly be adjusted upward or downward following a
midterm review that would provide more certainty over the cost, benefit and market forces
surrounding more advanced technology. [EPA-HQ-OAR-2010-0799-9569-A1, p. 5]
In summary, Volkswagen's principles offered an equitable regulation driving aggressive
reductions from the entire light-duty vehicle market. Importantly, the Volkswagen framework
did not penalize an auto manufacturer who is more focused on the passenger car market versus
large work trucks. We also believed that footprint curves based on equal stringency regardless of
footprint size did not penalize smaller trucks. [EPA-HQ-OAR-2010-0799-9569-A1, p. 5]
Volkswagen contends that a regulation with equal stringency for both cars and trucks and with
equal stringency across all footprints would result in a regulation that does not encourage
manufacturers to increase footprint or change vehicle classifications. Achieving equal
distribution would help assure that manufacturers focusing on passenger cars would continue to
market or even expand this segment. Volkswagen also contends that a regulation structured in
this manner does not place additional burden on affordable high volume vehicles that already
save the most CO2 per market segment. [EPA-HQ-OAR-2010-0799-9569-A1, pp. 5-6]
a. Requires a stringency only for passenger cars that exceeds what Volkswagen predicted as a
would be a both feasible and balanced requirement;
2-85
-------
EPA Response to Comments
b. Fails to provide equal treatment for all vehicles by requiring higher stringency for cars and
lower for trucks;
c. Continues with aggressive requirements beyond 2021 based on critical assumptions about the
market and technologies which are simply too uncertain to appropriately comprehend; [EPA-
HQ-OAR-2010-0799-9569-A1, p. 6]
With the publication of the SNOI and the subsequent NPRM, the agencies essentially followed
the Volkswagen vision for reduced stringency in the first phase of the regulation (see Section
1.1 a). However, this only applied to the highest CC>2 emitting segment of the light-duty fleet,
trucks. Larger trucks in particular were provided with minimal CC>2 reduction requirements
through the early years of the proposal. [EPA-HQ-OAR-2010-0799-9569-A1, p. 6]
The combination of lower stringency for larger trucks, combined with segment exclusive credit
opportunities has the potential to distort the future light duty vehicle market. The agencies have
disputed this claim, stating that work trucks have special needs and are challenged by the
regulation even at the proposed stringency. In fact the agencies have contended that the work
truck stringency is so great that even at the proposed levels they expect work truck
manufacturers to earn credit in the passenger car segment and transfer that credit to the truck
segment to assist truck segment compliance. If this is the case the agencies could have still
created a regulation that was more equitable with equal stringency for cars and trucks. A
regulation with stringency in the range of 4% for both segments would have resulted in extra
credit in the passenger car segment that would have afforded work truck companies additional
credit they could transfer to the truck category to offset the increased stringency of a balanced
regulation compared to the lower stringency for trucks as proposed in the SNOI and NPRM.
Volkswagen will expand on this argument in the comments that follow. [EPA-HQ-OAR-2010-
0799-9569-A1, pp. 6-7]
In summary, Volkswagen is concerned that the proposal will result in significant competitive
inequity and will create market distortions affecting consumer purchase decisions. Furthermore,
the proposal disproportionately impacts manufacturers who market primarily passenger cars
while in turn benefitting producers of higher emitting large trucks. [EPA-HQ-OAR-2010-0799-
9569-A1, p. 7]
Consumers ultimately will select a vehicle which best balances their needs and wants with
affordability. The market has evolved to include a broad set of vehicles with a wide variety of
features and emissions. In spite of the regulations, the choices people make when selecting a
vehicle will have the most influence on the overall light duty carbon emissions. [EPA-HQ-OAR-
2010-0799-9569-A1, p. 7]
Volkswagen understands that many consumers will continue to demand the utility provided by
large trucks and pick-ups, either due to work or family requirements. Indeed, once again, two of
the top-selling vehicles in the United States remain full-size pick-up trucks. Far into the future,
the utility of these vehicles will continue to make them attractive to consumers. However
Volkswagen feels that trucks and cars should be held to an equal percent burden for CO2
2-86
-------
CO? Emissions Standards
reduction. Large trucks and pick-ups should not be singled out and provided a lesser
requirement. [EPA-HQ-OAR-2010-0799-9569-A1, p. 7]
Volkswagen contends that the policy reflected in the NPRM may disproportionately drive cost
into passenger cars versus trucks and may ultimately discourage customer consideration of lower
CC>2 emitting passenger cars. Market segments should compete on the merits of their utility and
affordability. Environmental regulations such as this CC>2 and fuel economy proposal should not
at the very least create an unintended benefit for higher emitting trucks. This seems
counterintuitive to environmental and energy goals. [EPA-HQ-OAR-2010-0799-9569-A1, p. 7]
Volkswagen will further expand upon our positions within these comments and will offer a series
of amendments aimed at improving the overall framework of the proposal. Clearly, we would
like to see a more balanced approach that equalizes the compliance burden across the industry. In
addition we will offer proposals to modify the flexibilities to recognize a broader set of
technologies and be available to other market segments. [EPA-HQ-OAR-2010-0799-9569-A1, p.
7]
As discussed previously, the Volkswagen Group maintains that the stringency and credit
inequities within this proposal create a serious competitive disadvantage for Volkswagen. The
framework of the proposal does not align with our key principles for a balanced program. [EPA-
HQ-OAR-2010-0799-9569-A1, p. 7]
The following sections highlight the implications of such an inequitable proposal. Much of the
competitive disadvantage for Volkswagen stems from the fact that Volkswagen as a group has
the highest percentage car/truck split of any larger manufacturer (80% cars/20% trucks) in the
US market. As a result, our fleet will be subjected to the most stringent standards, without the
benefit of several key credits being offered to higher-emitting segments. This is in spite of the
fact that due to the high percentage of passenger cars, Volkswagen has some of the
lowest corporate emissions. Volkswagen remains unconvinced that a fleet composed primarily of
lower-emitting passenger cars should be subjected to the most stringency standard, and carry
such a disproportionate burden for CO2 reduction. [EPA-HQ-OAR-2010-0799-9569-A1, pp. 7-8]
Volkswagen is concerned that the differences in stringency levels between passenger cars and
trucks as proposed within the NPRM creates an inequity in the projected corporate targets that
each manufacturer must meet. What is immediately evident is that manufacturers who market a
larger percentage of passenger cars versus light trucks will face a more challenging compliance
outlook. The practical effect is that passenger car focused manufacturers will face a higher cost
of compliance and will be at a price disadvantage in the marketplace. The resulting disparity
amongst manufacturers is illustrated in some of the analysis included within the RIA. [EPA-HQ-
OAR-2010-0799-9569-A1, p. 8]
Chapter 3 of EPA's RIA provides projections for car and truck targets for major manufacturers
for the proposal and several other alternative scenarios. Volkswagen analyzed Table 3.8-3 from
the RIA which provides EPA's projections through 2021. Disregarding several niche
manufacturers (Aston Martin, Lotus, etc) it is apparent from the table that the proposal creates a
2-87
-------
EPA Response to Comments
higher burden on Volkswagen compared to many of the larger manufacturers, especially those
with truck-centric fleets such as Ford or GM. [EPA-HQ-OAR-2010-0799-9569-A1, p. 8]
As shown below in Table 2-1, Volkswagen's 2021 car target is projected by EPA to be 167 g/mi
CO2 which is 6 g/mi less than the fleet average. When compared to manufacturers such as GM or
Ford, Volkswagen's target is expected to be 9-10 g/mi more stringent. Volkswagen's truck target
shows a similar situation. [See Table 2-1 on p. 8 of Docket number EPA-HQ-OAR-2010-0799-
9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1, p. 8]
However analyzing the car and truck fleet separately does not show the full extent of the
disparity. Table 2-1 also shows the combined sales weighted average target projected by EPA
and further calculates the car/truck sales mixture. The car/truck split was not shown in the RIA,
but can be derived from the individual compliance fleet and combined fleet target. [EPA-HQ-
OAR-2010-0799-9569-A1, p. 8]
Table 2-1 shows Volkswagen having a combined sales weighted target of 184 g/mi. EPA is
estimating Volkswagen to continue into the future with an 80% PC and 20% light truck share.
This is consistent with Volkswagen's sales history and current projection. [EPA-HQ-OAR-2010-
0799-9569-A1, p. 8]
Ford and GM are shown to have approximate sales weighted targets of 205 and 218 g/mi
respectively. This is 21 and 34 grams less stringent when compared to Volkswagen.
Furthermore, it appears that the combined fleet averages for these two OEMs were made
assuming only 49% truck penetration for GM and 33% truck penetration for Ford. Volkswagen
notes that these levels of truck penetration are far less than GM and Ford's current and historic
sales split between PC and LT. For example, Ford's 2011 truck share was approximately 63% of
their total sales, nearly one-third of which is the F150. GM's truck market share was estimated at
65% based on 2011 sales data. Projections for major manufacturers are illustrated below in
Figure 2-1. [See Figure 2-1 on p. 9 of Docket number EPA-HQ-OAR-2010-0799-9569-A1]
[EPA-HQ-OAR-2010-0799-9569-A1, p. 8]
Volkswagen is concerned that the car/truck split assumed for different manufacturers may be
unlikely to prove accurate. As illustrated in Table 2-2, had the EPA RIA calculation applied a
truck estimate more consistent with market trends for both Ford and GM, the combined sales
weighted fleet average would have approached 232 and 227 g/mi. This would further expand the
disparity between corporate standards, resulting in Volkswagen being held to a 46 g/mi more
stringent standard. This is 25% disparity in corporate target levels. This additional 46 g/mi
translates into approximately 9 metric tons of additional CC>2 emissions per vehicle sold by these
manufacturers than by Volkswagen. [See Table 2-2 on p. 9 of Docket number EPA-HQ-OAR-
2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1, p. 9]
Volkswagen recognizes that the agencies are privy to confidential product plans supplied by
manufacturers and that the agencies rely on this data to support future projections. However, the
US has been averaging a near 50/50% split between cars and trucks for many years. Even at
times of peak gasoline prices experienced during the past few years, interest in light trucks may
have waned, however not to such a drastic extent as indicated by this radical shift in future
2-88
-------
CO? Emissions Standards
product plans. Most disturbing is the recent trend back to light trucks even with fuel prices
stabilizing near record highs. Volkswagen sees no evidence that would suggest a near 30%
decline in truck market share from domestic OEMs. [EPA-HQ-OAR-2010-0799-9569-A1, p. 9]
Volkswagen is not privy to strategic plans by competitors, but we find it unlikely for OEMs
historically focused on truck sales to so readily abandon what has proven to be a successful and
profitable market segment. Dropping 30% truck share for a company like Ford would be
equivalent to Ford cancelling their entire line-up of F 150s, a vehicle which has remained a top, if
not the top, seller in the US for many years. In addition, the proposals preferential treatment for
large trucks and pick-ups further makes it unlikely that manufacturers would now prefer to
market cars. [EPA-HQ-OAR-2010-0799-9569-A1, pp. 9-10]
NHTSA states in the NPRM that 'the increases in technology application necessary to achieve
the projected improvement in fuel economy will entail considerable monetary outlays'.
Volkswagen agrees. NHTSA further estimates that the program will require a combined
car/truck industry outlay of approximately $157 billion for 2017 through 2025. What is lost in
the broad statement is the disparity in investment required for cars versus trucks. As shown in
below in Table 2-3, the outlay for passenger cars far outweighs the investment required by light
trucks. [See Table 2-3 on p. 10 of Docket number EPA-HQ-OAR-2010-0799-9569-A1] [EPA-
HQ-OAR-2010-0799-9569-A1, p. 10]
It is again important to stress that even within the truck segment, the stringency varies
significantly. The investment data was not disaggregated to reflect investment requirements
within the truck segment. Given the minimal requirement on larger trucks, Volkswagen must
assume that the bulk of the truck investment shown in Table 2-3 is most likely concentrated
amongst smaller trucks and SUVs. [EPA-HQ-OAR-2010-0799-9569-A1, p. 10]
The resulting cost increase disparity amongst manufacturers further illustrates the inequity of the
program. As shown in Table 2-4, by 2021 the cost to Volkswagen per car as a result of the 2012-
2016 and 2017+ regulation will exceed over $3300 per car. This is more than double the
expected price increase for the fleet as a whole. [See Table 2-4 on p. 10 of Docket number EPA-
HQ-OAR-2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1, p. 10]
Volkswagen continues to support a 4% per year stringency reduction from both passenger cars
and light trucks as being the best balance between environmental objectives and market
acceptance. However, given the commitments made by stakeholders to the overall framework
provided within this proposal, Volkswagen offers the following amendments. [EPA-HQ-OAR-
2010-0799-9569-A1, p. 26]
Volkswagen continues to support the concept that equal percent reductions in the order of 4%
per year can be applied to both the car and truck fleet. In addition, the percent reduction for each
fleet can also be equally applied across all footprint sizes. However, as mentioned above, given
the extensive commitments made by stakeholders to the SNOI, Volkswagen finds it unlikely that
the agencies will incorporate our principle for equal reductions from all cars and trucks. [EPA-
HQ-OAR-2010-0799-9569-A1, p. 27]
2-89
-------
EPA Response to Comments
Provide an alternative CO2 reduction pathway for passenger cars which could provide needed
flexibility and incentives to the segment of the fleet being most challenged with the highest
annual CO2 percent reductions (5% per year for Cars); [EPA-HQ-OAR-2010-0799-9569-A1, pp.
2 and 4]
The NPRM requires on average a 5% annual improvement in CC>2 emissions from passenger
cars. This task is spread equitably across the footprint range of cars. Figure 2-2 illustrates yearly
CC>2 targets for cars at the upper cut-point (56 ft2), lower cut-point (41 ft2) and EPA projected
average car footprint (45 ft2). During the course of technical discussions with agency staff,
Volkswagen supported a 4% annual percent reduction for passenger cars. Volkswagen based this
position on both technical and market evidence. [See Figure 2-2 on p. 11 of Docket number
EPA-HQ-OAR-2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1, p. 11]
EPA has predicted that over the lifetime of passenger cars covered by this rulemaking, the
increasingly more stringent targets for cars will offset upwards of 1.2 billion metric tons of CC>2.
Light duty trucks which on average face 3.5% annual CC>2 reduction will contribute
approximately 800 million metric tons of reduction. [EPA-HQ-OAR-2010-0799-9569-A1, p. 11]
EPA predicts that during the 2017-2025 timeframe, the fleet will comprise of roughly 65%
passenger car and 35% light truck. This is according to vehicle classification as defined by
NHTSA. Figure 2-3 illustrates an example of EPA's projected MY2020 fleet distribution along
with the accompanying CC>2 inventory by segment. [See Figure 2-3 on p. 12 of Docket number
EPA-HQ-OAR-2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1, p. 11]
When normalized on a percent basis of per vehicle emissions (including VMT), passenger cars
are expected to carry a higher burden of reduction as shown in Table 2-5. [See Table 2-5 on p. 12
of Docket number EPA-HQ-OAR-2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1,
p. 12]
What is apparent in this data is that passenger cars are underweighted in emissions relative to
their market share and trucks are overweighed in emissions. There is a value to the environment
in promoting passenger cars and not incentivizing a move towards trucks. Incentivizing a shift
away from cars and towards trucks will have a contradictory effect on the overall program GHG
reductions. [EPA-HQ-OAR-2010-0799-9569-A1, p. 12]
The NPRM extends aggressive reductions for passenger cars into the 2017+ timeframe. Less
demanding reductions are required for trucks. As discussed previously, Volkswagen contends
that this will create market distortion and an incentive for a manufacture to reconsider future
plans. In order to minimize the impact that this inequity could have within the market, an
alternative pathway could be tailored to encourage manufacturers to continue offering cars,
especially economy models which may otherwise have become less attractive in the
marketplace. [EPA-HQ-OAR-2010-0799-9569-A1, p. 26]
Volkswagen proposes that EPA and NHTSA supplement the NPRM by including an alternative
passenger car percent annual CC>2 reduction pathway. This pathway could consist of a series of
annual reductions applied throughout the time period of the rule in lieu of the 5% per year
2-90
-------
CO? Emissions Standards
currently proposed. Volkswagen believes that a combination of annual percent reductions can be
determined which could help provide additional flexibility for passenger car fleets. [EPA-HQ-
OAR-2010-0799-9569-A1, p. 26]
In principle, the concept of an alternative pathway would include a combination of lower percent
reductions in early years coupled with increasing reductions in later years should technology and
market factors make this feasible. Indeed this is similar to the treatment being afforded to the
truck fleet. Volkswagen asks that a similar approach be offered for cars. [EPA-HQ-OAR-2010-
0799-9569-A1, p. 26]
In addition to the alternative pathway being a compliance flexibility, Volkswagen believes it
could also serve as an incentive to promote and provide support for the passenger car fleet.
Volkswagen believes that a pathway could be developed which would provide support to low-
emitting passenger cars to the same degree that other market segments, are being incentivized
through their unique credit programs. As an example, the agencies could benchmark the degree
of support being provided to full-size trucks. We contend that this is a reasonable approach and
would not amount to an excessive 'loophole' or 'give-away' since it would be consistent with
flexibilities found to be useful elsewhere. [EPA-HQ-OAR-2010-0799-9569-A1, pp. 26-27]
d. Requires unequal % CC>2 reductions across the truck fleet —large trucks are benefited with
minimal requirements; [EPA-HQ-OAR-2010-0799-9569-A1, p. 6]
Volkswagen maintains our original position that 4% per year for both cars and trucks has the
most potential to create a balanced, effective proposal. Further, our suggestion is that the 4%
reduction be equally applied to all sizes of vehicles within each compliance category. EPA
claims that the average truck stringency for 2017-2025 is approximately 3.5% per year. This is
less than the average reduction suggested by Volkswagen. In addition the 3.5% is a broad
characterization of the burden being applied to the truck category as a whole. Volkswagen points
out that upon closer examination the 3.5% is not equally applied across the whole category. As
illustrated in Table 2-7, it is clear that large light trucks are provided significantly lower percent
reduction stringencies when compared to the projected average sized truck, or a small truck with
a footprint closer to the lower curve cut-point. [See Table 2-7 on p. 19 of Docket number EPA-
HQ-OAR-2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1, p. 18]
This is especially evident within the first several years of the program when the stringency for
larger trucks hovers around or even less than 1%. The least efficient vehicles offered in the
market will be given at three years before any significant increases in efficiency are
required. [EPA-HQ-OAR-2010-0799-9569-A1, p. 19]
The result is inequitable compliance obligations for various types of trucks. Figure 2-8 illustrates
the decreasing CO2 targets in g/mile CO2 for trucks at the lower and upper footprint ranges. The
dashed lines illustrate a forward trending projection of the 2012-2016 stringencies carried
forward into the 2017-2025 timeframe. [See Figure 2-8 on p. 19 of Docket number EPA-HQ-
OAR-2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1, p. 19]
2-91
-------
EPA Response to Comments
In general for the smaller trucks, the reductions for 2017-2025 are roughly in line with the
reduction trend from 2012-2016. However, for the larger light trucks, the proposed targets
deviate away from the 2012-2016 trend line becoming less stringent on a percent basis. The blue
shaded area is a representation of the pullback in the stringency provided for these vehicles.
Further, the green shaded area in Figure 2-8 includes the additional credits available explicitly to
'game changing' full-size pick-up trucks that compose the majority of vehicles populating this
footprint range, i.e. the full-size trucks credits. These credits further expand the area of the
shaded region, increasing the gap between small and large trucks even further. [EPA-HQ-OAR-
2010-0799-9569-A1, p. 20]
It is important to note that the top two selling vehicles for 2011, the Ford F150 and Chevrolet
Silverado, with combined sales of nearly 1 million vehicles (approximately 8% of the entire US
market light duty market) will be eligible to reside within the blue and green region of Figure 2-
8. [EPA-HQ-OAR-2010-0799-9569-A1, p. 20]
The shaded region in Figure 2-8 not only represents competitive inequity, but also lost
opportunity for CC>2 reduction from the very segment of the fleet with the highest emissions.
Volkswagen acknowledges that vehicles within this footprint range may feature duty-cycles
which may preclude adoption of certain fuel saving technologies or features, i.e. heavy duty
towing or off-road capability. This however is not a unique challenge limited to vehicles with
larger footprints. Smaller SUVs or trucks in some cases may feature near equal capability and
consumers are no less demanding to this segment versus others. [EPA-HQ-OAR-2010-0799-
9569-A1, p. 20]
Some stakeholders have claimed that the latter half of the 2012-2016 rule created an excessive
stringency on larger light trucks, and that these vehicles were somehow more challenged than
other vehicles. The lower stringency being proposed for 2017-2025 is intended to provide
'breathing room' to allow time for the larger trucks to catch up with the requirements.
Volkswagen disagrees. We again refer to Table 2-7 which clearly shows for 2012-2016 that
larger trucks already benefited from lower percent requirements compared to less-emitting
smaller trucks and SUVs. In addition, the RIA indicates that a leading full-size truck already
available in 2011 is close to being compliant with standards for the 2017+ timeframe. [EPA-HQ-
OAR-2010-0799-9569-A1, p. 20]
Table 3.12-1 in the EPA RIA showcases vehicles which are at or near compliance with the
2017+ expected targets. Included in this list is a non-hybridized version of a large pick-up truck
which remains the number one selling vehicle in the US, selling over 500,000 units per year.
EPA's data indicates that the 2011MY of this vehicle achieves 372 g/mi and has about a 4% gap
from complying with its 2017 targets. EPA included assumptions regarding A/C credit usage in
making this determination. [EPA-HQ-OAR-2010-0799-9569-A1, p. 20]
Volkswagen created an internal model to project the CC>2 performance of this vehicle. The model
disaggregated the sales into various powertrain and wheelbase (affects footprint) combinations as
shown in Figure 2-9. For simplification, all the pathways are not shown. The model then applies
publically available EPA fuel economy and CO2 emissions data for each of the resulting
pathways and compares them with the resulting footprint target which varies based on
2-92
-------
CO? Emissions Standards
wheelbase. Some of the combinations earn credits, while others earn debits. The compliance of
the model as a whole was then determined assuming credit transfer amongst the
powertrain/footprint combinations. [See Figure 2-9 on p. 21 of Docket number EPA-HQ-OAR-
2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1, p. 20]
The RIA compares current model year performance with the expected footprint target for 2017
and beyond. For this sample vehicle, EPA claims that the truck will fall short of its target by 4%.
This assumes that the vehicle receives no fuel saving technology upgrades from 2011 to 2017.
Volkswagen's calculations confirms the claim that the stringency imposed on this vehicle by the
2012-2016 program indeed is challenging in the later years and results in a debit for 2015 and
2016. However, it should be noted that the vehicle earns credits in 2012 and 2013 sufficient to
cover the debits in 2015 and 2016. Regardless, the credits would be consumed and the vehicle
still faces a shortfall beginning in 2017. [EPA-HQ-OAR-2010-0799-9569-A1, p. 21]
What is important to consider is that the RIA shortfall assumes no application of fuel saving
technology from 2011 to 2017, a full seven years. Volkswagen exercised the model by using two
pathways to apply fuel saving technology. The first was to apply an average annual improvement
for each model year, using the average of 1-2% per year as has been claimed in the past as a
reasonable annual improvement in fuel economy. The other pathway recognizes that
improvements may not necessarily be made on an annual basis and instead are applied in
incremental steps at regular redesign intervals. For this pathway Volkswagen applied a suite of
low-cost technologies4to the vehicle using EPA assumed costs and effectiveness and waited until
2017 to make the update. This provides a five year design cycle assuming the sample truck was
potentially redesigned in 2011. An additional application of technologies is made in 2022, again
providing for a 5-year design cycle. The approach results in an average year-over-year reduction
of 1.2%. [EPA-HQ-OAR-2010-0799-9569-A1, p. 21]
Furthermore, Volkswagen refrained from assuming any adoption of HEV technologies for this
vehicle. Assuming that the minimum deployment thresholds are met, this would have triggered
the 'game changing' technology credit of 10 or 20 g/mi COz depending on the degree of
hybridization. Volkswagen did not include the HEV incentive because the model showed that the
credits were simply not needed. Either of the conventional technology pathways provided
significant compliance margins resulting in the pick-up truck generating credits throughout most
of the 2012-2025 timeframe. The HEV incentive would have only 'piled on' to the credits being
earned resulting in a windfall for this vehicle. Unless the credits were needed in another segment
of the fleet, they would not be worth the investment required to earn them. [EPA-HQ-OAR-
2010-0799-9569-A1, p. 21]
However, EPA has stated in the NPRM that it is their understanding that credits will only be
transferred from cars to trucks and not vice-versa. Therefore, one can expect limited to no
hybridization of this full-size truck. This does create doubt regarding the need to create the full-
size truck credit incentive for 'game-changing' technologies. [EPA-HQ-OAR-2010-0799-9569-
Al, p. 22]
2-93
-------
EPA Response to Comments
Modest application of conventional technologies to full-size pick-ups, coupled with the benefit
of low annual CC>2 reduction requirements, more than provides for a comfortable compliance
margin for this segment of the fleet. Volkswagen questions why the other segments of the truck
fleet, let alone the car fleet, must then be taxed with the role of carrying the more significant CC>2
reduction burden? [EPA-HQ-OAR-2010-0799-9569-A1, p. 22]
As discussed in Section 2.7, Volkswagen predicts that credits will be accumulated within the
large truck and full-size truck segment due to the combination of lower stringency and segment
exclusive benefits. Should this occur, then the fundamental premise upon which the reduced
stringencies and unique credits are based will need to be reevaluated. [EPA-HQ-OAR-2010-
0799-9569-A1, p. 27]
On the other hand, the NPRM and other stakeholders have claimed that large trucks face the
most challenging reductions. Volkswagen disagrees. However, even if this proves to be true,
then large trucks would be at or above their CC>2 g/mi targets, and would be mired in debits.
Credits earned by this segment simply would not exist. Therefore there is no need for non-
existent credits to be bankable or transferable to other segments. [EPA-HQ-OAR-2010-0799-
9569-A1, p. 27]
Either way, large trucks, by claiming to be more uniquely challenged than any other segment of
vehicles covered by this regulation are being afforded significant benefits not awarded anywhere
else. It is therefore reasonable that the agency confine the reach of the benefit within the large
truck segment which is demanding it. What is unreasonable is to claim such a degree of
excessive hardship as to warrant less than one-fifth the stringency requirement of other segments
and then expect that benefit to be transferable. [EPA-HQ-OAR-2010-0799-9569-A1, p. 27]
2 EPA projects the average footprint for trucks at approximately 53.5 sq-ft for MY2017-2025.
3 The upper cut-point of the Light Truck curve changes throughout 2017-2025, therefore VW
used 72 sq-ft as a representation of vehicles near or above the upper cut-point. This is the
footprint of a major large pick-up truck representative of vehicles within this class.
4 The technologies include electric power steering (EPS) + improved accessories (IAAC1) +
aggressive shift logic (ASL-1) + low rolling-resistance tires (LRRT) + and low-drag brakes
(LDB). Total cost was less than $300 and VW expects that this selection of technologies is
neither complicated by synergy effects nor degrades towing and off-road capability, except
possibly for the LRRT which may then be an option. MY2022 applies level-1 mass reduction
(MR-1) and a high efficiency gearbox (HEG).
Organization: Weiner, L.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 107.]
2-94
-------
CO? Emissions Standards
Additionally, in the early years of the proposed standards, pickup trucks are not required to
improve with the same rate as passenger cars, but there are incentives for manufacturers to apply
advanced technologies to pickup trucks. So it's critical that the efficiency of the trucks not lag
behind cars.
Organization: Whitefoot, K. and Skerlos, S.
To reduce the incentives to upsize the passenger car and light truck fleets, the slopes of the fuel
economy curves for passenger cars and light trucks should be flattened with corresponding
changes made to the CO2 curves. [EPA-HQ-OAR-2010-0799-9447-A1, p. 1]
Our recent analysis (attached) suggests that manufacturers likely have a profitable incentive to
upsize their vehicle fleets in response to the footprint-based standards, through a combination of
adjusting prices to shift production to larger vehicles and increasing vehicle footprint during
redesign. [See the attachment in Docket number EPA-HQ-OAR-2010-0799-9447-A2] [EPA-
HQ-OAR-2010-0799-9447-A1, p. 1]
NHTSA and EPA should develop a model to analyze profitable incentives to upsize the vehicle
fleet in response to the footprint-based standards. [EPA-HQ-OAR-2010-0799-9447-A1, p. 1]
The analysis also indicates that the incentive to upsize is greater for light trucks than for
passenger cars, encouraging a further divergence of the sizes of these two classes. [EPA-HQ-
OAR-2010-0799-9447-A1, p. 1]
The slope for the light truck curves should be flattened by a larger percentage than the slope of
the passenger car curves to reduce the incentive to upsize light trucks to a larger extent than
passenger cars. [EPA-HQ-OAR-2010-0799-9447-A1, p. 1]
Minimum standards for light trucks should be set at a high-enough level to ensure that fuel
economy improvements in the total fleet are close to projected levels even if the production of
light trucks increases relative to passenger cars. [EPA-HQ-OAR-2010-0799-9447-A1, p. 1]
NHTSA and EPA should conduct sensitivity analyses of consumer preference scenarios on
projected improvements of fuel economy and GHG emissions. [EPA-HQ-OAR-2010-0799-
9447-A1, p. 1]
Incentives to upsize the vehicle fleet
While we understand that NHTSA and EPA wish to reduce incentives to downsize the vehicle
fleet, we believe that the proposed standards overshoot that goal and actually create incentives to
upsize the fleet. We recently conducted an analysis, published in Energy Policy, which tests the
hypothesis that the footprint-based fuel economy standards do not create a profit incentive for
manufacturers to increase the average size of their vehicle fleet (attached). The analysis
considered a very large range of average consumer preferences for vehicle size, fuel economy,
and acceleration performance so that the set of plausible scenarios of consumer preferences are
2-95
-------
EPA Response to Comments
captured in the analysis. The findings indicate that the incentive for manufacturers to upsize their
fleets exists over almost all of these scenarios. Only in the scenarios where average consumer
preference for footprint is very low ($340 per sq ft) and average preference for acceleration
performance is very high ($5,500 per 0.01 hp/lb) do the results indicate an incentive to slightly
downsize the fleet. In all other scenarios, the incentive to upsize the fleet leads to substantially
(5-15%) higher fuel consumption and GHG emissions than would have otherwise been achieved
without an incentive to upsize the fleet. Furthermore, the analysis indicates that the incentive to
upsize is larger for light trucks than for passenger cars, increasing the divergence of sizes of
these two classes. This finding needs to be considered from the traffic safety perspective since
the relative size of vehicles in collisions is an important risk factor. [See the attachment in
Docket number EPA-HQ-OAR-2010-0799-9447-A2] [EPA-HQ-OAR-2010-0799-9447-A1, p.
2]
The results of our study suggest that the risk of backsliding during MYs 2017-2025 is
substantial. Therefore, we encourage NHTSA and EPA to revise the standards to reduce the
incentives to upsize the U.S. vehicle fleet. The slopes of the fuel economy curves for passenger
cars and light trucks should be flattened (with corresponding changes made to the CO2 curves) to
reduce incentives for manufacturers to upsize their passenger car and light truck fleets. [EPA-
HQ-OAR-2010-0799-9447-A1, p. 2]
Furthermore, the fuel economy curve for light trucks should be flattened to a larger extent than
the passenger car curve to reduce the incentive to upsize light trucks even further than passenger
cars, thereby increasing the divergence of vehicle size between these two classes. [EPA-HQ-
OAR-2010-0799-9447-A1, p. 2]
Unfortunately, the proposed rule increases the risk of backsliding by making the MY2017-2025
light truck curves steeper than the MY2011-2016 curves. These steeper curves further raise the
incentives to produce more light trucks overall (compared to passenger cars) and more large light
trucks (compared to small light trucks). NHTSA and EPA state that the light truck curve was
made steeper because large pickup trucks would be less capable of achieving further
improvements in fuel efficiency without compromising load carrying and towing capacity.
However, because the standards are fleet average standards, no specific vehicle must meet its
target as specified by the curve. Therefore, efficiency improvements in smaller light trucks could
offset the difficulties of improving fuel efficiency of larger light trucks. We encourage NHTSA
and EPA to revise the light truck curves so that the risks of upsizing are reduced. [EPA-HQ-
OAR-2010-0799-9447-A1, p. 2]
Improve analysis of incentives to upsize the vehicle fleet.
The risk of upsizing the vehicle fleet warrants a greater level of analysis. While NHTSA and
EPA state that the fuel economy and CO2 curves were chosen to minimize any incentive to
increase or decrease vehicle size, no quantitative analysis is presented to support this. Potential
incentives for automakers to upsize their vehicle fleet—by increasing sales of larger vehicles, or
making vehicle models larger during redesign, or some combination—need to be carefully
analyzed to ensure that the projected improvements in fuel economy and GHG emissions are
realized. [EPA-HQ-OAR-2010-0799-9447-Al, p. 3]
2-96
-------
CO? Emissions Standards
NHTSA and EPA state that they do not consider any incentives to upsize the vehicle fleet in their
analysis because they believe (1) that production shifts toward larger vehicles would run counter
to market demand and (2) that redesigning vehicles to increase their footprint would be
significant enough to be unattractive as a measure to take solely to reduce compliance burdens.
However, the agencies do not provide any data to support that average vehicle footprint has been
decreasing over time. By EPA's own data, production of small cars has been decreasing since the
1990's and production of large trucks has been increasing. 2 Furthermore, it is clearly difficult to
predict future consumer preferences for vehicle size and other relevant vehicle attributes.
Therefore, sensitivity analyses are needed to assess the impact of changes in consumer
preferences on the projected improvements in fuel economy and GHG emissions. [EPA-HQ-
OAR-2010-0799-9447-A1, p. 4]
We encourage NHTSA and EPA to develop a model to assess the risks of vehicle upsizing. The
model should analyze manufacturers' profitable incentives to adjust vehicle dimensions as well
as adjust the prices of their vehicles to shift production among their fleet. [EPA-HQ-OAR-2010-
0799-9447-A1, p. 4]
1 Attribute-based standards can guarantee that the average fuel economy of the total fleet is at
least as great as the lower-bound fuel economy of the light truck standard (the minimum fuel
economy target assigned to any light-duty vehicle). However, in the proposed standards this
value is only 25.25 mpg for MY2020. Requirements to set the standards such that they are
technically feasible and economically practicable preclude raising this value to 35 mpg for
MY2020. Therefore, the only way to ensure that the total fleet has a combined fuel economy
average of 35 mpg by 2020 is to establish additional "backstops" in the standards.
2 U.S. Environmental Protection Agency. Light Duty Automotive Technology, Carbon Dioxide
Emissions, and Fuel Economy Trends: 1975 through 2009. EPA420-R-09-014. pp. 23-24.
Available at http://www.epa.gov/otaq/cert/mpg/fetrends/420r09014.pdf
Response:
EPA received a significant number of detailed comments on the shape of the curves -
many of which questioned the relative stringency of the car and truck curves, and maintained that
they favor trucks at the expense of cars. Others commented that the slope of the curves will
create incentives for manufacturers to upsize the fleet, or that the location of cutpoints will
encourage downsizing of the smallest vehicles. Descriptions of the agencies' methods for
determining curve slope, cutpoints, and relative car and truck stringencies are provided in
sections II.C.4 and 5, section III.B.2, and sections III.D.6 and 7 of the preamble, and chapters
2.4.2, 2.5.1, and 2.5.2 of the joint TSD. Detailed responses to most of the comments received on
these topics are provided in these sections, while a summary of these responses, along with
additional information, is provided below.
Response to comments that the curves are too steep
2-97
-------
EPA Response to Comments
ACEEE objected to the agencies' adjustments to the truck curves based on density, which
together with the revised curve-fitting methodology (revised from the MYs 2012-2016 rule) had
the result of increasing the truck curve slope for this rule. The commenter further stated that in
the proposal, the EPA did not provide evidence that load-carrying and towing capability of full-
size trucks might be compromised. The agencies have added an in-depth explanation of the
justification for revising the curve fitting methodology in chapter 2.4.2.4 of the Joint TSD and
III.D.6.C. The main points of this explanation are summarized here: In discussions with large
truck manufacturers prior to the proposal, they expressed their belief (and EPA agrees) that the
light truck standard should be somewhat steeper after MY 2016, primarily because, after more
than ten recent years of progressive increases in the stringency of applicable CAFE standards,
manufacturers of large pickups would have limited options to comply with more stringent
standards. Given the relatively few platforms which comprise the majority of the sales at the
largest truck footprints, inappropriately stringent standards for this important segment of the
truck fleet would require overly aggressive advanced technology penetration rates. See preamble
Table 111-35 , where under alternative 2, we project that 20% of the light truck vehicle fleet will
be MHEV or HEV (the projection is 18% MHEV) in MY 2021; . By comparison, the final rule
is projected to be 13% MHEV & HEV (11% MHEV). In MY 2025, the rate of strong hybrid
(HEV) technology more than doubles in the 20g more stringent alternative standard compared to
the final standard (Table 111-37)., The agencies were concerned at proposal, and remain
concerned, about issues of lead time and cost with regard to manufacturers of these work
vehicles. EPA further believes that inappropriately stringent standards could create an incentive
for these manufacturers to choose to downpower, modify the structure, or otherwise reduce the
utility of these work vehicles. Therefore, the agencies revised the curve-fitting methodology,
and thus changed the slope of the truck curve from the curve shape in the MY 2016 standards, in
order to provide a clearer path toward compliance for manufacturers of these vehicles, and
reduce the potential that new standards would compromise utility characteristics such as load-
carrying and towing capability.
While the comments do not dispute the validity of the curve-fitting method, or the
appropriateness of considering the unique requirements of trucks, ACEEE objected to the
contribution that these analysis techniques make towards achieving a policy objective, stating
"we believe that adjusting the analytical approach to yield curves satisfying certain policy
considerations is inadvisable. It would be preferable to choose the most robust analytical
approach, and then to make exceptions as needed for a limited period to accommodate those
policy considerations, and to explain the targets in those terms." ACEEE also stated that
"subjectivity to the technical analysis invites unnecessary challenges to the standard-setting
process". EPA notes that a curve fitting process such as the one conducted for this rule will
inevitably involve choices between various reasonable approaches. EPA maintains that the
approach used for this rule is both reasonable and appropriate. EPA appropriately considered
factors of technology cost, feasibility, lead time, and consumer acceptance in applying the
density adjustment to the truck curve, in order to achieve the policy goal of avoiding incentives
for manufacturers to reduce the utility of their work vehicles. A more detailed response to
ACEEE's comments on this topic are provided in section II.CAd of the preamble and chapter
2.4.2.4 of the Joint TSD.
ACEEE requested further clarification on specific text in chapter 2.4.2.10 of the Joint
TSD, stating "It is also puzzling that the agencies' analysis shows that trucks' HP-to-weight ratio
2-98
-------
CO? Emissions Standards
increases only slightly with footprint (TSD p.2-17), yet "pick-up trucks must be more powerful,
than their low 'density' nature would statistically suggest." If pick-up trucks have high
horsepower and low weight, their HP-to-weight ratios should be especially high. An explanation
of this apparent contradiction would be helpful". In response, EPA's statistical analysis does
indeed show that the HP-to-weight rations are especially high. This is not in contradiction with
the observation that pick-up trucks must be more powerful than would otherwise be expected for
a low density vehicle.
Whitefoot and Skerlos submitted their findings supporting commenters' contention that
the proposed (and now final) curve shapes create an inherent incentive to upsize the fleet (which
would dilute the rules' benefits), and recommended that the curve slopes be flattened to reduce
this perceived incentive. This paper was referenced by other commenters (ACEEE, CBD,
NACAA, Honda) in support of their comments urging a flattening of the curves. EPA
recognizes the significant amount of effort that went into the analysis of Whitefoot and Skerlos,
and considers that the concepts presented have potential merit. However, EPA notes that the
authors assumed different inputs than the agencies actually used in the MYs 2012-2016 rule
regarding the baseline fleet, the cost and efficacy of potential future technologies, and the
relationship between vehicle footprint and fuel economy. Were the agencies to use the
Whitefoot and Skerlos methodology with the actual inputs to the MYs 2012-2016 rules, it is
likely that different results would be obtained from those in the Whitefoot and Skerlos study.
Whitefoot and Skerlos acknowledged the potential uncertainty when interpreting their results:
"designing footprint-based fuel-economy standards in practice such that manufacturers have no
incentive to adjust the size of their vehicles appears elusive at best and impossible at worst."
EPA recognizes that based on economic and consumer demand factors that are external to this
rule, the distribution of footprints in the future may be different (either smaller or larger) than
what is projected in this rule. However, EPA continues to believe that there will not be
significant shifts in this distribution as a direct consequence of this rule.
CBD, in addition to citing the Whitefoot and Skerlos study, commented that the previous
shift in the fleet from cars to trucks was the result of previous difference in car and truck
stringencies, and that in this rule, "the fact that incentives for upsizing would be created simply
cannot be disputed". EPA disagrees. While no single vehicle need meet its emissions target, for
manufacturers to comply with these standards, efficiency improvements will be required of all
vehicles, cars and trucks, large and small. The current standards are different from previous
standards in terms of stringency, the use of a footprint attribute, and the lack of a provision
allowing manufacturers to pay a penalty for noncompliance. We therefore do not believe it is
justifiable to draw conclusions about manufacturers' responses to this rule based upon responses
to previous flat CAFE standards.
IPI also maintained that the standards would encourage upsizing, and proposed that the
curves should be flat. IPI is therefore suggesting that the GHG standard should not be attribute-
based, although they acknowledged that EPCA/EISA expressly requires that CAFE standards be
attribute-based and defined in terms of mathematical functions. For purposes of harmonization
(in addition to the reasons articulated in TSD 2.1 and 2.2), EPA has also issued an attribute based
standard. The agencies have concluded that a properly designed footprint-based approach
provides the best means of achieving the basic policy goals, as outlined in section II.C.2 of the
2-99
-------
EPA Response to Comments
preamble, while not creating inappropriate incentives to increase or reduce vehicle size in ways
that could increase fuel consumption and GHG emissions, or impact overall safety.
Response to comments that the cutpoints should be adjusted
IIHS expressed some concern that the location of the cutpoint at the lower extreme curve
where footprint is smallest would encourage manufacturers to downsize vehicles at or below the
cutpoint in order to gain additional credits. The commenter proposed that the cutpoint be moved
further to left to reduce the likelihood of this type of downsizing. Global Automakers proposed
setting the cutpoint for the smallest light trucks at approximately ten percent of sales (as for
passenger cars) rather than at 41 square feet. The comments from IIHS and Global Automakers
represent two opposing positions on the placement of the left cutpoints. EPA agrees with IIHS
that moving the 41 square foot cutpoint to an even smaller value would additionally discourage
downsizing of the smallest vehicles. However, as discussed in section Il.C.S.a of the preamble,
EPA believes that consumer preferences are likely to remain such that manufacturers will be
unlikely to deliberately respond to today's standards by downsizing the smallest vehicles. For
manufacturers, very small footprint vehicles create additional design challenges for the
packaging of components and occupants, as well as the need for additional safety equipment to
compensate for reduced crush spaces. In EPA's judgment, placing the lower cutpoints at 41
square feet for both car and truck curves continues to strike an appropriate balance between (a)
not discouraging manufacturers from introducing new small vehicle models in the U.S. and (b)
not encouraging manufacturers to downsize small vehicles. EPA will review trends in footprint
size in the car and truck markets and reassess the appropriateness of the lower cutpoint position
during the mid-term evaluation.
Several commenters maintained that placing the right cutpoint for trucks at 74 square feet
(compared to 66 square feet in the MYs 2012-2016 rule) would reduce stringency for these
vehicles (ACEEE) and possibly encourage upsizing (Sierra Club, Volkswagen), even though
there is no safety-related reason to discourage downsizing of these trucks. ACEEE went on to
point out that in the MY2012-2016 rule, the agencies rejected requests to increase the cutpoint
from 66 square feet. EPA agrees that the approach used in this rule is different from the curve
fitting approach used in the MY2012-2016 rule. As a result of this revised curve fitting
approach, we now account for more truck models that have footprints greater than 66 square feet.
Specifically, as described in chapter 2.4.2.10 of the Joint TSD, some models of pickup trucks
which, for example, are available in different cab configurations with different wheelbases, have
been disaggregated for this rule and are represented individually, which leads to a slightly
different outcome in the regression results than had they remained aggregated.
Two commenters suggested that the agencies provide an alternate emissions target for
light trucks larger than 60 square feet (Sierra Club) or 66 square feet (ACEEE) that exceed the
sales projected in the rule. In response, in EP A's judgement, there is minimal risk that
manufacturers would respond to this upward extension of the cutpoint by deliberately increasing
the size of light trucks that are already at the upper end of marketable vehicle sizes. Such
vehicles have distinct size, maneuverability, fuel consumption, storage, and other characteristics,
and are likely not suited for all consumers in all usage scenarios. Further, larger vehicles
typically also have additional production costs that make it unlikely that these vehicles will
become the predominant vehicles in the fleet. For this reason, and others described in section
2-100
-------
CO? Emissions Standards
Il.C.S.b of the preamble and chapter 2.5.2 of the joint TSD, the EPA does not expect that
gradually extending the cutpoint to 74 square feet will create incentives to upsize large trucks.
Therefore, EPA does not believe that the suggested provision of an alternate emissions target for
the largest light trucks that exceed projected sales is warranted.
Response to comments on the difference in car and truck stringencies
The comments on the relative car and truck stringency were largely divided between
NGOs and OEMs that were concerned with the shape and relative rate of increase of the truck
curve, and OEMs who expressed concern about their ability to comply with a large truck
standard that continued to increase in stringency at the rate of the MY 2016 standard.
ICCT and CBD commented that the lower annual rate of improvement for light trucks
from MYs 2017 to 2021 will potentially undermine the benefits of the rule. CBD went on to
state that the consideration of the unique attributes of trucks "does nothing to explain the lack of
the required ratable annual increases", and that "the rulemaking demands the least from the most
profitable segment of the automotive industry". CBD further stated that there is no showing that
light trucks, including pickups, cannot both preserve hauling and towing utility and achieve
aggressive fuel economy. Toyota similarly commented the standards require "virtually nothing
of the largest vehicles on the road". EPA disagrees with this assessment for the reasons below.
First, as explained in preamble section III.D.6.b, we project relatively little trading
between the car and truck fleets (and vice versa). From the reference case emission level for
combined car and truck fleets (sales weighted average of approximately 250 g/mile) to the
control case (sales weighted average of approximately 163 g/mile) is a drop of approximately 90
g/mile. In this context, 4 g/mile of credits transferred from the truck fleet to the car fleet is
relatively small. Disproportionate credit transfers would indicate a lack of balance in relative
stringencies of the standards, but we see the opposite. This demonstrates an appropriate balance
between car and truck stringencies. Moreover, in response to CBD, we agree that fuel economy,
GHG emissions control, and preserving hauling and towing utility are not mutually exclusive.
Indeed, EPA's methodology for assessing costs includes costs to preserve those utilities and to
implement emission control/fuel economy technology. However, EPA remains concerned about
adopting standards creating strong incentives for manufacturers to choose to reduce hauling and
towing capacity as a compliance strategy. Of equal or greater significance, EPA has identified
legitimate concerns with available lead time, especially through MYs 2017-2021, reflecting that
the large truck segment is dominated by relatively few vehicle platforms with relatively large
sales, and this limited number of vehicle platforms makes rapid technology changes a greater
challenge than in other market segments. This is partly due to the lack of platform sharing, a
flexibility that smaller vehicles have.2 The pick-up trucks also tend to have longer redesign
2 Although certain intermediate volume manufacturers, especially in the luxury car
market, also have a relatively smaller number of platforms (relative to larger manufacturers),
EPA believes the concerns are more acute with respect to work trucks, in part because these
vehicles serve special needs (small businesses, ranchers, farmers, etc.) and that it is important
2-101
-------
EPA Response to Comments
cycles, as discussed in section III.D.6.C of the preamble. The utility requirements of pick-up
trucks relative to smaller vehicles results in longer development times for validation of a new
platform. Pick-up truck product validation occurs across a broader range of gross vehicle
weights for each platform due to a relatively large payload capacity and can include validation of
trailer towing capability for multiple trailer configurations. There are also issues of consumer
acceptance of the most advanced technologies in the larger light trucks. See generally preamble
section III.D.6.
Second, as described in section III.D.6.C of the preamble, the year-to-year stringency of
the standards were set with consideration of the technical challenges involved in applying
efficiency technologies to these vehicles as well as lead time concerns in the early years of the
programs. Additionally, even with these considerations, the trend of a gradually widening gap in
the early model years of the rule is reversed during the MY 2021-2025 period, as described in
detail in section III.D.7 of the preamble. EPA believes that the increase in stringency for the
truck standard in the latter phase of the rule is a reasonable approach for avoiding a large gap
between car and truck curves while also taking account of the challenges of implementing
efficiency technologies in trucks during the first phase of the rule. Furthermore, the promulgated
standards promote similar levels of emission reductions for smaller trucks and for cars of the
same size. For example, the average year-to-year increase in the target level over the entire MY
2017-2025 period is identical for cars and trucks at the 41 sq. ft. curve cutpoint (5.1 percent per
year), and is nearly the same over the initial MY 2017-2021 period (4.8 and 4.5 percent per year,
for cars and trucks, respectively.) In addition, as shown in preamble Table 111-57, by MY 2025
the gap for larger footprint vehicles is at levels similar to the MY 2012-2016 rule, while for
smaller footprint vehicles, the gap is less than during the MY 2012-2016 rule.
ACEEE, citing Table 111-53 in the NPRM, also questioned how the proposed standards,
finalized by this rule, could be superior to the alternatives given the cost differential between cars
and trucks in MYs 2017-2020. Similarly, Honda and Consumers Union cited the lower fleet
average compliance cost for trucks as evidence that the truck standard is not stringent enough (or
from Honda's comments, for large trucks, in particular).
EPA does not agree that it is necessarily preferable to have equal compliance costs for
cars and trucks in each model year. EPA notes that while compliance costs are initially lower for
trucks than for cars, the costs increase relatively faster for trucks in the latter phase of the
rulemaking, as shown in Table 111-56 and Figure III-5 of the preamble. The lower initial cost for
trucks is a reflection of the lower initial stringency (relative to cars), which as discussed above,
and in sections III.D.6.b and III.D.7 of the preamble, is due to considerations of the technical
challenges and lead time concerns involved in applying efficiency technologies to these vehicles.
As Ford Motor Co. noted in its comments: vehicles equipped with trailer tow packages include
that this basic market demand not be jeopardized. See International Harvester v. EPA, 478 F. 2d
615, 640 (D.C. Cir. 1973) (EPA required to consider issues of basic demand for passenger
vehicles in making technical feasibility and lead time determinations; however, EPA need not
accommodate every single model type )
2-102
-------
CO? Emissions Standards
additional features that clearly distinguish them from passenger cars, and can negatively impact
fuel economy:, including auxiliary transmission oil coolers, upgraded radiators, trailer hitch
connectors and wiring harness equipment, different steering ratios, upgraded rear bumpers and
different springs for heavier tongue load (for upgraded 'max' trailer tow packages), body on
frame (vs. unibody) construction to support capability and an aggressive duty cycle, lower axle
ratios for better pulling power/capability, and greater aerodynamic drag. Even for trucks with
the same or similar footprint to cars, these features result in greater costs and technical
challenges to apply GHG emission control/fuel economy technology.
Therefore, EPA does not agree with the commenters that lower compliance costs will
favor manufacturers with a large proportion of trucks, noting that in the early years, these
manufacturers will need to invest more in technology development, while in later years,
compliance costs for trucks are similar to (or even slightly higher than) costs for cars. ACEEE
requested that EPA provide these cost estimates for all years for each manufacturer's car and
truck fleets. This information was available in chapter 5.1 of the draft RIA, and is also provided
in chapter 5.1 of the final RIA.
Referring to the lower initial stringency for trucks, ACEEE expressed concern that that
manufactures will use the initially lower truck standards to delay implementation of efficient
technologies, and then use this circumstance to argue in the mid-term evaluation for relaxed
standards. EPA does not believe this concern in justified. Manufacturers must comply with the
standards on their entire fleet; thus a given vehicle is not required to meet any specific GHG
standard. Therefore, delaying technologies on any portion of a full-line manufacturer's fleet will
hurt their ability to comply across their fleet and thus be non-competitive in other portions of the
market. Moreover, while we believe that the stringencies of the program can be met (and are
thus feasible), EPA acknowledges that they will be challenging for all manufacturers and that
they will all incur significant costs. The likelihood that a manufacturer will slow down the
implementation of technology on a certain fraction of their (large sales) fleet just prior to
entering the 2022-2025 period where stringencies are increasing at 5% per year, seems extremely
unlikely. More likely, if there are cost effective technologies that have not yet been applied, the
manufacturer will implement them in advance in order to earn credits for the 5%/yr period (this
is the principle of "multi-year planning"). EPA will carefully monitor this issue during the mid-
term evaluation.
Others commented more generally that throughout the rulemaking timeframe, the
difference between car and truck curves is too large, which places manufacturers which mainly
produce passenger cars at a disadvantage (Volkswagen, Toyota, Honda, and Mercedes). These
comments are not supported by the analysis conducted for this rule. As just explained there are
no indications in EPA's analysis that either the truck or car standards will encourage
manufacturers to choose technology paths that lead to significant over or under compliance for
cars or trucks, on an industry wide level. A consistent pattern across the industry of
manufacturers choosing to under or over comply with a car or trucks standard could indicate that
the car or truck standard should be evaluated further to determine if the relative stringency is
appropriate in light of the technology choices available to manufacturers, and the costs of those
technology choices. As detailed in section III.D.6.b of the preamble, that is not the case for the
final car and truck standards, for which we project only a relatively small overall degree of net
2-103
-------
EPA Response to Comments
credit transfers from the truck fleet to the car fleet. EPA's evaluation of the alternative standards
led to the same conclusions. EPA thus continues to believe that the relative stringency of the car
and truck curves is reasonable and appropriate.
Several commenters maintained that the lower stringency of truck standards would
encourage manufacturers to "game" the rule by adding features such as 4WD for the primary
purpose of satisfying the requirements for classification as a truck (ICCT, NRDC, UCS). EPA
recognizes that significant differences in the year-to-year stringency for cars and trucks could
increase the incentives to reclassify cars as light trucks. However, this reclassification comes at
significant cost to the manufacture, with added production and component costs, as NRDC
acknowledged in their comments, and to the consumer in the form of reduced fuel savings and a
higher purchase price (for example, NRDC quoted an additional cost of $1,400 for the 4WD
option on the RAV4). EPA thus does not agree with these comments. In any case, EPA believes
the car and truck curves appropriately reflect the differences in cost between the car and truck
fleets for adding efficiency technologies, as supported by the analysis conducted for this rule.
In comments related to the topic of "gaming", CBD expressed concern that the difference
in stringencies would encourage consumers to shift purchases from cars to trucks (as opposed to
the comments addressed above that the standards create incentives for manufacturers to "game").
EPA does not believe the relative stringencies will result in a shift of this type, given the
increased costs to the consumer mentioned above, and that the vehicle attributes associated with
the truck classification may not be desirable to car buyers. Currently, there are many consumers
that prefer the 2WD car version over the more costly and less fuel efficient 4WD truck version.
EPA believes that manufacturers will continue to offer the variety of vehicles that satisfy the
range of attributes that consumers demand, rather than limiting the choices (for example by only
offering 4wd truck versions of a model), which could in turn lead to loss of customers and
market share. At the same time, as discussed in the introductory text of section HID of the
preamble, EPA acknowledges that manufacturers may decide to alter the utility of the vehicles
which they sell, but this would not be a consequence of the rule but rather a matter of automaker
business choice. Finally, on the issue of "gaming", EPA plans to review trends in the fleet mix
during the mid-term evaluation (see section III.B.3 of the preamble; see also RTC section 15.3
response to POP Diesel).
Honda commented about the relative stringencies of small and large footprint trucks, and
proposed that "vehicles other than full-size pickup trucks should receive similar consideration in
preserving their utility". EPA notes that the technology penetration analysis conducted for this
rule considered the costs of preserving utility for not only full-size pickup trucks, but for vehicles
of all footprint sizes. At the same time, EPA believes that pickup trucks are often used in ways
that are fundamentally different from the typical use of minivans and smaller SUVs cited by the
commenter. For example, Ford, in its comments, provided data for the usage of the F150: "up to
82% of F-150 customers use their vehicles for hauling. Up to 41% haul on at least a monthly
basis; and 72% of F-150 customers use their vehicles for towing. Up to 28% tow on at least a
monthly basis". The particular type of vehicle usage is significant, since the additional engine
power requirements will be greater for vehicles intended to tow and carry heavy loads than for
vehicles designed for high volume (but lower density) passenger spaces, such as an 8 passenger
minivan.
2-104
-------
CO? Emissions Standards
Honda also commented on the cost per percent CO2 reduction of some of the vehicle
technology packages in our proposal. Honda uses the comparison of packages to argue that we
have been unfair to smaller footprint trucks relative to larger footprint trucks. However, the
packages chosen by Honda were not really appropriate for the specific vehicle models compared
by Honda—the packages that Honda thought represent the Honda CR-V and the Ford F150
(among other similar/competing models). Better vehicle types and package choices would have
been those shown in the table below since, in our proposal, we placed the CR-V in vehicle type 7
and the higher sales F150s in vehicle types 10 and 14. As shown, the $/% CO2 reduction for the
CR-V is far more favorable than the F150 at $41 versus $62-$67, respectively. Similarly, in our
final rule where we place the CR-V in vehicle type 7 and the F150 in vehicle types 17 and 18,
the $/% CO2 reduction is again far more favorable for the CR-V than the F150 at $39-$43 and
$61-$64, respectively. This indicates that on a dollars per percent GHG reduction metric, it is
more cost effective to add technology and improve efficiency on the smaller vehicle type 7
(small SUV and Multi-Purpose Vehicle) than the larger vehicle type 17 or 18 (pickup trucks).
NPRM
NPRM
NPRM
FRM
FRM
FRM
FRM
FRM
FRM
FRM
FRM
Veh Class
Minivan
Minivan
Large
truck
Small
MPV
Small
MPV
Small
MPV
Truck
Truck
Truck
Truck
Truck
Tech
Pkg#
707
1013
1411
7.03904
7.05313
7.05202
17.05319
17.04006
18.05319
18.04006
18.05310
Mass
Red
10%
15%
10%
10%
10%
10%
10%
10%
10%
10%
10%
Engine
4V DOHC 14 +EFR2 +LDB +ASL2 +IACC2 +EPS +Aero2
+LRRT2 +HEG +DCP +GDI +TDS18
4V DOHC V6 +EFR2 +LDB +ASL2 +IACC2 +EPS +Aero2
+LRRT2 +HEG +DCP +GDI +SAX +TDS18
4V DOHC V6 +EFR2 +LDB +ASL2 +IACC2 +EHPS +Aero2
+LRRT2 +HEG +DCP +GDI +SAX +TDS18
MPVnt 4VDI4 +LUB +EFR1 +ASL2 +IACC2 +EPS +Aero2 +LDB
+LRRT1 +DCP +GDI +TDS18 +WR10% +6sp
MPVnt 4VDI4 +EFR2 +ASL2 +IACC1 +EPS +Aerol +LDB
+LRRT2 +HEG +DCP +GDI +SAX +TDS18 +WR10% +8sp
MPVnt 4VDI4 +LUB +EFR1 +ASL2 +IACC2 +EPS +Aero2 +LDB
+LRRT2 +HEG +DCP +GDI +TDS18 +WR10% +8sp
PU 4VDV6 +EFR2 +ASL2 +TORQ +IACC2 +EHPS +Aero2 +LDB
+LRRT2 +HEG +DCP +GDI +SAX +TDS18 +WR10% +8sp
PU 4VDV6 +LUB +EFR1 +ASL2 +TORQ +IACC1 +EHPS +Aerol
+LDB +LRRT1 +DCP +GDI +SAX +TDS18 +WR10% +6sp
PU 4VDV6 +EFR2 +ASL2 +TORQ +IACC2 +EHPS +Aero2 +LDB
+LRRT2 +HEG +DCP +GDI +SAX +TDS18 +WR10% +8sp
PU 4VDV6 +LUB +EFR1 +ASL2 +TORQ +IACC1 +EHPS +Aerol
+LDB +LRRT1 +DCP +GDI +SAX +TDS18 +WR10% +6sp
PU 4VDV6 +LUB +EFR1 +ASL2 +TORQ +IACC2 +EHPS +Aero2
+LDB +LRRT2 +HEG +DCP +GDI +SAX +TDS18 +WR10% +8sp
Trans
8sp DCT-
dry
8spAT
8spAT
6sp DCT-
dry
8sp DCT-
dry
8sp DCT-
dry
8spAT
6spAT
8spAT
6sp AT
8spAT
Cost
$1,794
$2,953
$2,587
$1,366
$1,696
$1,747
$2,654
$2,020
$2,615
$1,982
$2,519
CO2
%
43%
44%
42%
35%
39%
41%
42%
32%
42%
32%
41%
$/%
$41.40
$67.52
$62.16
$39.18
$43.45
$43.12
$63.78
$62.94
$62.84
$61.73
$61.35
ICCT commented that with the exception of pickup trucks, full size cargo vans, and a few
SUVs, the construction of cars and trucks are similar, and there is therefore no technical reason
to separate car and truck curves. EPA notes that ICCTs list of "exceptions" make up the
majority of the truck market. However, we acknowledge that there are a number of vehicle
nameplates that are classified as both car and truck and that their primary attribute difference is
the 2WD vs the 4WD option (there are other attribute differences such as ground clearance,
approach angles, etc.). As noted above, the 4WD attribute has a significant impact on fuel
efficiency, cost, and consequently consumer choice. Ford provided an example of how towing
requirements can result in differences in fuel efficiency and cost, commenting, "the Ford Edge
and the Ford Taurus have the same footprint, but vastly different capabilities with respect to
cargo space and towing capacity. Some of the key features incorporated on the Edge that enables
the larger tow capability include an engine oil cooler, larger radiator and updated cooling fans."
2-105
-------
EPA Response to Comments
The cost and efficiency differences that arise from differences in the utility of cars and trucks are
real and measureable. Thus, at this time, EPA believes that the classification of these vehicles on
two separate curves is justifiable and reasonable.
2.2.3. Backstop Standards
Organizations Included in this Section
Alliance of Automobile Manufacturers
Center for Biological Diversity
Mercedes-Benz USA, LLC
Natural Resources Defense Council (NRDC)
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Toyota Motor North America
Union of Concerned Scientists (UCS)
Whitefoot, K. and Skerlos, S.
Organization: Alliance of Automobile Manufacturers
Backstop Standards [EPA-HQ-OAR-2010-0799-9487-A1, p.87]
The NPRM requests comments on whether minimum CAFE levels (so called "backstop
standards") should be adopted for import passenger car and light duty truck fleets. The need for
backstop standards had been assessed during the MY 2012-16 GHG and fuel economy standards
regulatory process. The agencies noted that substantial comments had been provided on both
sides of the issue, but in the end determined that backstop standards would not be necessary.
That decision was primarily based on the confidence the agencies had in their fleet modeling and
the lack of incentives for manufacturers to "game" their product line-up in such a way to
undermine the anticipated gains of the program. [EPA-HQ-OAR-2010-0799-9487-A1, p. 87]
Concerns about backstop standards that were raised by the Alliance in the context of the MY
2012-2016 rules remain in place today. The concept of backstop standards is inconsistent with
Reformed CAFE, which is intended to allow manufacturers to build the full range of vehicles
that consumers demand. Backstop standards are unlikely to come into play in the first place, but
if they did, they could have the effect of unduly limiting consumer choice and hampering the
industry's ability to achieve the goals of continuing the national program as cost-effectively as
possible. Further, we continue to believe that NHTSA does not have legislative authority to
adopt backstop standards for the import passenger car and light duty truck fleets. [EPA-HQ-
OAR-2010-0799-9487-A1, p.87]
Notwithstanding NHTSA's previous decision to forego backstop standards, the question whether
backstop standards should be reassessed in the context of the MY 2017-2025 rulemaking is
raised on the basis that NHTSA "recognize[s] that given the time frame of the current
rulemaking, the agency cannot be as certain about the unlikelihood of future market changes."
[EPA-HQ-OAR-2010-0799-9487-Al,p.87]
2-106
-------
CO? Emissions Standards
The Alliance concurs that there is increasing uncertainty with respect to market conditions,
technological advances, consumer demand, etc., as we look further and further into the future. It
is this uncertainty that gave rise to the mid-term evaluation provisions, which we believe are an
essential element of the MY 2017-2025 National Program rules. Any necessary adjustments to
the standards based on market shifts or other unforeseen developments should be addressed
pursuant to the mid-term evaluation process (for EPA) and the concurrent process of setting
final, enforceable CAFE standards (for NHTSA). Apart from that, it is not helpful or desirable to
layer additional requirements on top of the Reformed CAFE standards, since this would only
serve to reduce flexibility and add complexity to the manufacturers' product planning efforts. We
therefore oppose any consideration of additional backstop standards at this time and recommend
that the agencies rely on the mid-term evaluation and the CAFE standard-setting process as their
primary means for making any necessary adjustments to the stringency and structure of the
program. [EPA-HQ-OAR-2010-0799-9487-A1, pp.87-88]
Organization: Center for Biological Diversity
D. NHTSA Should Adopt a Backstop to Ensure the Nationwide Fleet Moves Towards Greater
Fuel Efficiency.
As noted above, the rulemaking is currently structured so that the fuel economy standard actually
reached in each MY depends entirely on each manufacturer's fleet mix during that year. If
manufacturers shift towards a greater percentage of light trucks, or increase the size of their
vehicles to trigger less stringent fuel economy standards, the overall fuel efficiency of the
nationwide fleet will decrease. But Congress tasked NHTSA with prescribing ratable fuel
economy standards for passenger automobiles and light trucks, not with merely estimating them.
Attribute-based standards "plus a backstop would prevent manufacturers from upsizing their
vehicles or producing too many large vehicle footprint vehicles, if the backstop were set high
enough."83 We believe that, without a backstop, the NPRM does not comply with the statutory
mandate to prescribe ratable increases, particularly given the free pass for the largest trucks and
the added incentive to shift toward the least efficient vehicles. The Center proposes that the
Agencies adopt a backstop to rein in shifts towards manufacturing larger vehicles and to ensure
the standards continue to move the nationwide fleet towards energy conservation. [EPA-HQ-
OAR-2010-0799-9479-A1, p. 17]
NHTSA has resisted adopting a backstop for years, despite losing the argument in Center for
Biological Diversity v. NHTSA. In that case, the court observed, "Petitioners raise well-founded
concerns (given the historical trend) that a floating feet mix-based standard would continue to
permit upsizing - which is not just a function of consumer demand, but also a function of
manufacturer's own design and marketing decisions." 84 The court found that NHTSA had not
considered fuel conservation in deciding not to adopt a backstop, and had not shown that a
backstop would be either technologically infeasible or economically impractical. It remanded the
rulemaking with instructions for NHTSA to "reconsider under the proper standard whether to
adopt a backstop based on the factors in the statute."85 [EPA-HQ-OAR-2010-0799-9479-A1, p
17]
2-107
-------
EPA Response to Comments
In subsequent rulemakings, NHTS A justified its continuing refusal to set a backstop based on
various reasons, including its belief that it could successfully prognosticate fleet mix shifts, that
its footprint attribute-based standard would prevent gamesmanship and backsliding, that the lack
of lead time and a growing preference for smaller cars weighed against adopting a backstop, and
that backstops created inequitable burdens on manufacturers who exceeded the backstop.86
However, the Agencies did recognize the potential need for a backstop in the current NPRM:
"[W]e recognize that given the time frame of the current rulemaking, the agency cannot be as
certain about the unlikelihood of future market changes. Depending on the price of fuel and
consumer preferences, the 'kind of industry-wide situation' described in the MYs 2012- 2016
rule is possible in the 2017-2025 time frame, particularly in the later years."87 [EPA-HQ-OAR-
2010-0799-9479-A1, pp 17-18]
The Agencies are correct. They cannot possibly predict future market changes or "consumer
preference" with any degree of certainty over a period spanning some 14 years. Moreover, the
justifications NHTSA provided in the MY 2011 and MY 2012-2016 final rules for failing to
adopt backstops are incorrect or no longer apply, and do not in any event consider the relevant
statutory factors as required by CBD v. NHTSA. [EPA-HQ-OAR-2010-0799-9479-A1, p 18]
First, the hypothesis that the attribute-based system does not provide an incentive to increase the
size of vehicles has been refuted by studies showing the opposite. In fact, considering multiple
variables, including consumer preferences, a recent study of the MY 2012-2016 final
rulemaking concluded that under most scenarios, the attribute-based standards "create an
incentive to increase vehicle size that undermines gains in fuel economy."88 In all but two
simulations, "the sales-weighted average vehicle size increases by 2-32%, undermining gains in
fuel economy by 1-4 mpg (0.6-1.7km/L). Carbon-dioxide emissions from these vehicles are 5-
15% higher as a result. . . which is equivalent to adding 3-10 coal-fired power plants to the
electricity grid each year. Furthermore, results suggest that the incentive is larger for light trucks
than for passenger cars, which could increase traffic safety risks."89 Moreover, the same study
found that the incentive to increase vehicle size is greater for light trucks than for passenger cars
due to the larger impact of the CAFE standards for light trucks on manufacturers' profits:
"Because the light truck standard causes larger profit losses than the passenger car standard,
firms increase the sales-weighted average footprint of light trucks more than passenger cars." 90
Thus, the Agencies' claim that the attribute-based standards serve as backstops and prevent
backsliding is simply incorrect. The already existing incentives to upsize would now be
substantially increased. Without a backstop, it is not credible to assume that the fleet will not
shift to lower efficiency vehicles. [EPA-HQ-OAR-2010-0799-9479-Al, p 18]
Second, the claim of insufficient lead time to adjust to backstops is inapplicable to the MY 2017-
2025 NPRM. Manufacturers will have unprecedented lead time to adjust their future fleets to the
new regulations. The amount of lead time also refutes the argument that the backstop will create
an inequitable burden on manufacturers currently above it: this problem can be remedied in the
intervening years. [EPA-HQ-OAR-2010-0799-9479-A1, p 18]
Lastly, the Agencies have not based their refusal to implement a backstop on any analysis of the
statutory factors they must consider: technological feasibility, economic practicability, the effect
of other motor vehicle standards of the Government on fuel economy, and the need for the
2-108
-------
CO? Emissions Standards
United States to conserve energy.91 We believe that none of the first three factors could be cited
as a reason for foregoing a backstop, while the latter convincingly demands one. In short, the
Agencies must supply annual or at least periodic backstops to comply with statutory mandates
and dissuade manufacturers from "gaming" the attribute-based curves and avoiding
implementation of fuel saving technology. [EPA-HQ-OAR-2010-0799-9479-A1, pp 18-19]
We also note that the NPRM allows manufacturers to rely on a variety of flexibilities and credits,
discussed below, to meet annual fuel economy standards. The Agencies prognosticate that these
features will decrease actually achieved mileage by less than 3 mpg by 2025 (see further
discussion of credits below); but given the long time span covered by the rulemaking, this
prediction is, by necessity, highly uncertain. A backstop would also ensure that the various
credits and flexibilities will not be abused to the detriment of fuel conservation. [EPA-HQ-OAR-
2010-0799-9479-A1, p 19]
We agree with the Agencies' approach to extend exemptions only to small businesses as defined
by the Small Business Administration and to limit the small volume manufacturers' exemption to
business with U.S. annual sales of less than 5,000 vehicles. Given the long lead times of the
current rulemaking, no further exemptions are warranted. [EPA-HQ-OAR-2010-0799-9479-A1,
p!9]
Congress has effectively set a backstop of 35 mpg in 2020 for the overall fleet. The Agencies'
estimated fuel economy standards, however, demonstrate that the fleet can more than meet this
standard; it can exceed it before 2020 even under the preferred alternative. In setting the
maximum feasible standards, the Agencies should prescribe annual or at least periodic backstops
designed to move the fleet to higher standards based on maximum feasible levels. [EPA-HQ-
OAR-2010-0799-9479-A1, p 19]
83 See CBD v. NHTSA, 538 F.3d at 1204.
84 CBD v. NHTSA, 538 F.3d at 1206.
85 Id.
86 See, Average Fuel Economy Standards Passenger Cars and Light Trucks Model Year 2011,
74 Fed. Reg. 14,196, 14,412 (March 30, 2009); see also Light-Duty Vehicle Greenhouse Gas
Emission Standards and Corporate Average Fuel Economy Standards; Final Rule 75 Fed. Reg.
25,324 25,368-70 (May 7, 2010).
87 NPRM, 76 Fed. Reg. at 75,228.
88 See Whitefoot at 41 ENERGY POLICY 402, 410 (2012).
89 Id. at 402.
2-109
-------
EPA Response to Comments
90 See id. at 409.
91 See CBD v, NHTSA, 538 F.3d at 1205.
Organization: Mercedes-Benz USA, LLC
Minimum 'Backstop' Standards for Imported Passenger Cars and Light Trucks
NHTSA once again raises the possibility of minimum 'backstop' CAFE standards for the
imported passenger car and light truck compliance categories. Such 'backstop' standards,
however, are both contrary to NHTSA's statutory authority and inconsistent with the
Congressional mandate to regulate fuel economy through an attribute based program. [EPA-HQ-
OAR-2010-0799-9483-A1, p. A-18]
When amending the EPC A in 2007, Congress both mandated the use of an attribute-based
program for the CAFE program and created a backstop for the domestic passenger car fleet.
NHTSA construes the fact that Congress did not include the other compliance categories as
legislative 'silence.' However, the fact that Congress included only the domestic passenger car
fleet is determinative evidence that Congress intended not to allow a backstop to be applied to
the imported passenger car fleet or the light truck fleet. [EPA-HQ-OAR-2010-0799-9483-A1, p.
A-18]
This is especially true where, as here, the imposition of a backstop is inherently inconsistent with
attributes standards. The attribute based system was established as a replacement for a corporate
average system with one numeric requirement. The proposed standards are aggressive and will
require extensive technology adoption and market advancements for manufacturers to meet
them. Manufacturers have no incentive to 'backslide.' The development of a trading market,
moreover, creates a yet further incentive to continue to advance, especially in light of the overall
stringency of the standards, because doing so creates a valuable and marketable asset. [EPA-HQ-
OAR-2010-0799-9483-A1, p. A-18]
There is no reason for the agencies to consider a backstop in the context of an aggressive and
carefully constructed attribute based program. Congress continued the concept of a minimum
standard for the domestic passenger car compliance category and made it clear through omission
that such a backstop standard was not intended to be applied to the other compliance
categories. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-18]
Organization: Natural Resources Defense Council (NRDC)
EPA and NHTSA should establish manufacturer-specific 'backstop' standards to ensure that
environmental objectives are not undermined by shifts in sales mix and average vehicle size.
[EPA-HQ-OAR-2010-0799-9472-A2, p. 4]
E. Compliance and Enforcement Requirements
2-110
-------
CO? Emissions Standards
1. GHG Standards Need 'Backstop' Standards to Ensure Environmental Objectives Are Not
Undermined by Shifts in Sales Mix
The proposed GHG and fuel economy standards lack a regulatory 'backstop' mechanism to
ensure that the 2025 fleetwide average emission level reaches 163 g/mi and that the targeted
cumulative greenhouse gas and oil consumption reductions are met. Such mechanisms are
necessary because under an attribute-based system that has separate car and light truck standards,
the fleet sales mix could shift to larger, higher-emitting vehicles and to a greater proportion of
light trucks, resulting in greater fleetwide emissions and oil consumption. [EPA-HQ-OAR-2010-
0799-9472-A2, p. 17]
Achieving the pollution and oil reduction goals of the program are dependent on the overall
market achieving the agencies' forecasted sales and size mixes. To reach a fleetwide average of
163 g/mi and 49.6 mpg in MY 2025, the agencies have set the individual car and light truck
standards on the assumption of a specific car/light truck sales split. However, if the automakers
shift their product mix to more light trucks or if they change the vehicle designs to classify fewer
models as cars and more models as light trucks, this car/light truck split would be changed and
the GHG and oil savings goals of the program would be undermined. [EPA-HQ-OAR-2010-
0799-9472-A2, p. 17]
To prevent intentional and unintentional market shifts from undermining the environmental and
oil savings benefits of the National Program, we recommend EPA and NHTSA adopt
manufacturer-specific backstops on the combined car and light truck standards that bar an
individual automaker from exceeding its forecast GHG emission levels by more than 2 gCO2-
equivalent/mi and forecast fuel economy levels by approximately 0.5 mpg. Manufacturer-
specific backstop standards would ensure that specific manufacturers can be held accountable if
the overall fleet emission targets are missed. A manufacturer should be allowed no more than
three years to make up any exceedance in its manufacturer-specific backstop standard. [EPA-
HQ-OAR-2010-0799-9472-A2, p. 17]
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
As we did in our comments on the 2012-2016 standards, we urge both agencies to consider
including what we consider necessary "backstops" to the program. The draft rule fails to include
measures sufficient to ensure that the fleet-wide targets in the rule are met. The draft rule relies
upon attribute-based curves, whose efficacy will vary with the composition in the fleet. As
currently written the draft rule would allow shifts in fleet composition to undermine greenhouse
gas and oil reduction targets. A "backstop," in the form of a hard fleet-wide limit under-girding
the attribute curves, should be incorporated in the final rule to insure that the program meets
President Obama's stated goals. [EPA-HQ-OAR-2010-0799-9549-A2, p. 5]
Both NHTSA and EPA are granted broad authority and stern directives to incorporate backstop
regulatory structures into fuel efficiency rules. For example, NHTSA is required to promulgate
fuel efficiency regulations in terms of absolute standards, as opposed to mere targets that may or
2-111
-------
EPA Response to Comments
may not be by the regulatory program. 15 Similarly, EPA is directed under the Clean Air Act to
take measures to that pollution from vehicles is actually prevented. 16 Rules promulgated under
EPA authority, accordingly, should not be undermined by increasing vehicle footprint to dilute
the overall intent and benefit of the standards. [EPA-HQ-OAR-2010-0799-9549-A2, p. 5] [EPA-
HQ-OAR-2010-0799-9549-A2, p. 5]
Here, achievement of the target fuel economies and greenhouse gas reductions depend on the
mix of vehicle classes on the road in the U.S. years in the future. The law governing both
NHTSA and EPA requires that the uncertainty in those targets be resolved into enforceable
standards through employment of a backstop. The draft rule should be revised to include such a
backstop before it becomes final. Backstop mechanisms should be considered during the
midterm review. [EPA-HQ-OAR-2010-0799-9549-A2, pp. 5-6]
15 See 42 U.S.C. § 32902(a) (standards "shall be the maximum feasible average fuel economy
level") (emphasis added); id. at § 32901(a)(6) (defining "average fuel economy standard" as the
"performance standard specifying a minimum level of average fuel economy applicable to a
manufacturer") (emphasis added); see also Center for Biological Diversity v. National Highway
Traffic Safety Admin., 538 F.3d 1172, 1204-06 (9th Cir. 2008) (concluding that NHTSA acted
arbitrarily and capriciously in dismissing inclusion of a backstop in issuing reformed CAFE
standards). [EPA-HQ-OAR-2010-0799-9549-A2, p. 5]
16 42 U.S.C. § 7521(a)(l) (EPA shall propose "standards applicable to the emission of any air
pollutant" from vehicles that "cause, or contribute to, air pollution which may reasonably be
anticipated to endanger public health or welfare"); 42 U.S.C. § 7401(c) ("primary goal" of the
Clean Air Act is "pollution prevention"). [EPA-HQ-OAR-2010-0799-9549-A2, p. 5]
Organization: Toyota Motor North America
Potential Expansion of Domestic Passenger Car Anti-Backsliding Standards [EPA-HQ-OAR-
2010-0799-9586-A1, p.6]
Toyota opposes any expansion of anti-backsliding provisions beyond the domestic passenger car
fleet in the CAFE program. The clear intent of Congress has been that NHTSA should only
establish anti-backsliding standards for the domestic car fleet. As such, EPCA (as modified by
EISA) requires NHTSA to establish anti-backsliding standards for domestic passenger cars and
does not authorize NHTSA to establish additional anti-backsliding standards for import cars and
trucks. [EPA-HQ-OAR-2010-0799-9586-A1, p.6]
In the case of EPA and the CAA, there is no explicit statutory authority that either compels or
authorizes EPA to establish anti-backsliding standards for any class of light duty vehicles. While
EPA's authority may be ambiguous, it is clear that any EPA-issued anti-backsliding standards
would create new inconsistencies between the NHTSA and EPA programs, rather than support
the goal of harmonization. NHTSA's anti backsliding standards are limited to domestic passenger
cars, and the CAA cannot be used to duplicate a similar outcome since EPA's fleet definitions do
2-112
-------
CO? Emissions Standards
not distinguish between domestic cars and import cars. The most 'harmonized' outcome is for
NHTSA to proceed with the required domestic car anti-backsliding standard for the CAFE
program, and for EPA to forego any attempt to set anti-backsliding standards under the CAA.
[EPA-HQ-OAR-2010-0799-9586-Al,p.6]
Notwithstanding the legal constraints described above, Toyota outlined in its November 25, 2009
comments in response to the 2012-2016 model year rulemaking a variety of additional factors
describing why anti-backsliding standards are unnecessary. Please refer to those comments.
[EPA-HQ-OAR-2010-0799-9586-Al,p.6]
Organization: Union of Concerned Scientists (UCS)
Finally, the attribute-based system employed in the proposed rule does not guarantee that
automakers will actually achieve the 163 g/mi and 49.6 mpg standard in MY2025. The agencies
base these fleetwide projections on a variety of assumptions, including the vehicle footprint of
future vehicles and the relative sales mix between cars and light-trucks. If these assumptions are
wrong or if automakers adopt compliance strategies that either reclassify passenger cars as light
trucks or add size to vehicle footprints in order to qualify for weaker standards, the projected
benefits of the standards could be sizably eroded, particularly in the first five model years of the
program, which have the largest gap in car/truck stringency. [EPA-HQ-OAR-2010-0799-9567-
A2, p. 7]
In order to ensure that model year 2017-2025 vehicles yield anticipated consumer savings, oil
savings and greenhouse gas reductions, the standards must include a backstop mechanism. Under
the current attribute-based system, no mechanism exists to adjust individual manufacturers' fleet
requirements in the event that product plans or manufacturer-specific performance diverges from
anticipated levels. Because of these risks and because the model year 2017-2025 standards will
be finalized before compliance data can be gathered under the new attribute-based system, it is
critical to include a backstop mechanism to ensure that the fleet maintains its projected fuel
economy and greenhouse gas emissions trajectory. A backstop could take numerous forms; UCS
suggests one that includes an automatic re-computation or "ratchet" of stringencies for
subsequent years, such that the National Program's cumulative emissions reductions and oil
savings goals are fully achieved in 2025, even if falling short in early years of the program.
[EPA-HQ-OAR-2010-0799-9567-A2, p. 7]
Finally, in addition to the gap between the car and truck standards, the relative stringency of the
truck standards decreases as vehicle size increases. For the largest pickup trucks, total reductions
in emissions required between 2016 and 2021 amount to less than 5% versus nearly 18% for the
smallest trucks. Automakers may find it more economical to add footprint size to qualify for less
stringent standards rather than add emission control technologies, further eroding benefits.
To prevent a loss in benefits, the agencies should adopt a backstop mechanism to ensure the
anticipated global warming pollution reductions and oil savings benefits are achieved. [EPA-HQ-
OAR-2010-0799-9567-A2, p. 8]
2-113
-------
EPA Response to Comments
Organization: Whitefoot, K. and Skerlos, S.
Additional minimum fuel economy standards are warranted due to the substantial risks of
backsliding. We encourage NHTSA to establish minimum standards across the combined fleet of
passenger cars and light trucks to provide a limit to backsliding. [EPA-HQ-OAR-2010-0799-
9447-A1, p. 1]
Below, we respond to NHTSA's request for comments on additional minimum standards and
how they should be structured.
As NHTSA indicates in the proposed rule, the Energy Policy and Conservation Act of 1975
(EPCA), as amended by the Energy Independence and Security Act (EISA) of 2007 explicitly
requires NHTSA to establish a minimum standard for domestic passenger cars but is silent as to
whether the agency should or could establish other minimum standards. We believe that the
requirement in EPCA (as amended by EISA) that the standards "achieve a combined fuel
economy average for model year 2020 of at least 35 miles per gallon for the total fleet of
passenger and non-passenger automobiles manufactured for sale in the United States" effectively
requires NHTSA to establish additional backstops. This is because attribute-based standards
(which are required by EPCA as amended by EISA) do not guarantee that any specific combined
fuel economy average for the total fleet will be met in any year since the attributes of the fleet
can change. 1 Therefore, additional minimum standards are needed to meet the requirement of
reaching 35 miles per gallon by 2020. [EPA-HQ-OAR-2010-0799-9447-A1, p. 3]
The minimum standards for light trucks and imported passenger cars presented in the proposed
rule for comment would help to limit the risk of backsliding and are warranted. However, these
minimum standards do not reduce incentives to increase the production of light trucks relative to
passenger cars, which would lead to higher fuel consumption and GHG emissions. We
recommend that NHTSA establish a minimum standard across the combined fleet of passenger
cars and light trucks for each year to limit incentives to increase production of light trucks in
response to the regulation. Furthermore, we encourage NHTSA to establish minimum standards
for light trucks at a high-enough level to ensure that fuel economy improvements in the total fleet
are close to projected levels even if the production of light trucks increases. [EPA-HQ-OAR-
2010-0799-9447-A1, p. 3]
Further backstops in the standards are warranted due to the substantial risks of backsliding
during MYs 2017-2025. NHTSA has proposed minimum standards for domestically
manufactured passenger cars in the proposed rule. We believe this is not enough to ensure that
actual fuel economy improvements are close to the expected levels that NHTSA projects. [EPA-
HQ-OAR-2010-0799-9447-A1, p. 3]
Response:
One undeniable feature of the footprint-based GHG emissions (and fuel economy)
standard is that the fleet-wide GHG emissions reductions actually realized will depend on the
average and distribution of vehicle footprint levels in future model years, and those footprint
levels will not be known with certainty until months after the end of each model year. EPA
2-114
-------
CO? Emissions Standards
projections of the average vehicle GHG emissions compliance level and societal GHG emissions
savings in the future, for example, might prove to be either high or low depending on whether
the average and distribution of vehicle footprint levels change relative to current projections. In
response to the inherent uncertainty associated with footprint-based standards, one regulatory
concept that has emerged is the concept of an emissions "backstop" that would move GHG
emissions target values lower if vehicle footprint levels increase in the future. See 75 FR 25368-
25370.
The agencies received comments both in support of and in opposition to the concept of a
GHG emissions backstop.
The Center for Biological Diversity (CBD), Natural Resources Defense Council (NRDC),
Sierra Club et al, Union of Concerned Scientists (UCS), and the researchers Whitefoot and
Skerlos all supported the concept of a GHG emissions (and/or fuel economy) backstop. These
commenters expressed concerns about vehicle footprint levels increasing ("upsizing") over time,
as well as a future increasing truck market share. NRDC made a specific proposal for a
manufacturer-specific backstop that would limit an individual manufacturer's combined car and
truck CC>2 emissions level to no more than a 2 g/mi increase over that projected by EPA in this
rulemaking. UCS supported an industry-wide "rachet" backstop approach that would build into
the final regulations a provision for automatically making future years' CO2-footprint curves
more stringent if the data from early years shows higher footprint levels and higher average
GHG emissions performance than projected by EPA. Other supporters strongly supported the
concept of a GHG emissions backstop, but did not endorse specific designs. Whitefoot and
Skerlos have published an academic study, using certain assumptions about key parameters, that
projects that the MY 2014 footprint-based standards were likely to promote "upsizing" and
therefore yield lower GHG emissions and oil savings than projected by EPA and NHTSA.
The Alliance of Automobile Manufacturers (AAM), Mercedes-Benz, and Toyota
opposed GHG emissions (and/or fuel economy) backstops. AAM and Mercedes-Benz both
stated that the concept of a backstop is inconsistent with an attribute-based standard, which by
definition is intended to be flexible with respect to consumer demand, and AAM suggested that
any necessary adjustments based on unforeseen developments should be addressed in the mid-
term evaluation.
EPA is rejecting GHG emissions backstops in this final rule. Explicit and implicit in
many of the comments is that there is an inherent tension between a footprint-based standard and
certainty of GHG emissions reductions, and the agency recognizes this tension as well. The
agency recognizes that factors related to specific design features of the final rule (shape of car
and truck curves, relative stringency between car and truck curves) as well as factors unrelated to
specific design features of this final rule (fuel prices, consumer preferences) could affect the
average and distribution of vehicle footprint levels and therefore average GHG emissions
requirements. Of course, footprint levels could increase or decrease relative to current
projections, and GHG emissions reductions could therefore be either lower or higher than
projected.
2-115
-------
EPA Response to Comments
With respect to the design of the CO2-footprint curves, EPA believes we have developed
curves that maintain a reasonable level of neutrality with respect to technological feasibility
across different vehicle classes and footprint levels. As discussed in Preamble Section III.D.6.b,
EPA projects a relatively small overall net credit transfer from the truck fleet to the car fleet,
which suggests that the relative stringency between the car and truck curves is relatively neutral.
Accordingly, the agency believes that our projections of future footprint levels are reasonable,
and that any future changes in average footprint or the distribution of footprint levels due to the
design of the CO2-footprint curves are not likely to lead to more than modest changes to
projected GHG emissions reductions. See RTC Section 2.2.2 and joint TSD section 2,4 for a
longer response to the Whitefoot and Skerlos study.
The agency believes it is more likely that changes unrelated to the design of this rule,
such as fuel prices or consumer preferences, will affect future vehicle footprint levels and GHG
emissions requirements. In this regard, we note that AEO2012 Early Release projects relatively
stable gasoline prices over the next 13 years. The average actual price in the U.S. for the first
four months of 2012 for regular gasoline was $3.68 per gallon3 with prices approaching $4.00 in
March and April.4 The AEO2012 Early Release reference case projects the regular gasoline
price to be $3.87 per gallon in 2025, only slightly higher than the price for the first four months
of 2012.5 As explained in preamble section HID. La, this factor strongly supports using a flat
baseline (no significant voluntary GHG emissions improvement over the MY 2016 standard
absent further regulation). However, for the same reason, this projection militates against the
need for a backstop in this rule since no significant shift in fleet mix would be expected under
these circumstances. Of course if oil prices were to drop to the levels of the 1990s, it is almost
certain that vehicle footprint levels would rise and GHG emissions requirements would increase
as well, while if oil prices were to increase significantly above today's level (and the level
projected for MY 2025 based on AEO 2012 Early Release), it is quite likely that vehicle
footprint and GHG emissions requirements would both decrease, (although no such decreases or
increases are projected by AEO)
There are other drawbacks to adopting backstops (including backstops with ratchets, as
UCS advocates). As explained in detail in the MYs 2012-2016 rule preamble, stringent
backstops can compromise some of the advantages of attribute-based standards, especially with
respect to manufacturers above a backstop, and especially under conditions where the entire
industry's performance, taken as a whole, remains consistent with the emissions levels projected
for the standards. See 75 FR at 25369; see also EPA Response to Comment Document for MY
2012-2016 rule at pp. 3-99 to 3-102. Under these circumstances, manufacturers would again (as
under the flat CAFE regime) have the incentive to downsize as a compliance strategy,
undermining the safety and across-all-footprint improvement objectives of an attribute-based
standard. These concerns remain here. . EPA notes further that the questions about the potential
need for a backstop, and if so, the best design of such a backstop, are very complex and difficult
3 In 2012 dollars. As 2012 is not yet complete, we are not relating this value to 2010 dollars. SeeRIAlfor
additional details on the conversion between dollar years.
4 http://www.eia.gov/petroleum/gasdiesel/ and click on "full history" for weekly regular gasoline prices through
May 7, 2012, last accessed on May 8, 2012.
5 http://www.eia.gov/forecasts/aeo/er/ last accessed on May 8, 2012.
2-116
-------
CO? Emissions Standards
to assess as we are at the beginning stages of a 14-year program of more stringent GHG
emissions standards
For all of these reasons, both related and unrelated to the CCVfootprint curves in this
final rule, EPA believes it unnecessary to establish a backstop in this rule. EPA commits to
monitoring vehicle footprint data, and that data will form the basis for an analysis of the potential
need for a GHG emissions backstop (or different GHG standards) in the mid-term evaluation.
2.3. Additional Flexibility for Intermediate Volume
Manufacturers
Organizations Included in this Section
Alliance of Automobile Manufacturers
American Suzuki Motor Corporation
Fisker Automotive, Inc.
Jaguar Land Rover North America, LLC (JLRNA)
Natural Resources Defense Council (NRDC)
Porsche Cars North America, Inc. (PCNA)
Volkswagen
Organization: Alliance of Automobile Manufacturers
The program flexibilities in the Notice of Proposed Rulemaking (NPRM) will help
manufacturers introduce new technologies that produce concrete environmental and fuel
consumption benefits. The Alliance supports the flexibilities in the proposal and understands the
needs of lower volume, limited line manufacturers. The program flexibilities in the NPRM will
encourage early investment in technologies that produce concrete environmental and fuel
consumption benefits that will be necessary to meet these challenging and increasingly stringent
standards over the longer term. [EPA-HQ-OAR-2010-0799-9487-A1, p.4]
Organization: American Suzuki Motor Corporation
Suzuki is concerned, however, that the proposed standards do not adequately recognize the lead
time needs of low-volume, limited-line manufacturers like Suzuki. [EPA-HQ-OAR-2010-0799-
9523-Al,p.l]
California has long recognized that companies with small sales volumes and a limited number of
models face unique challenges in complying with stringent standards that rely on the
implementation of advanced technologies. As a result, California has created different
manufacturer size categories1, and has used these categories to provide additional
implementation lead time for smaller-volume manufacturers. This approach helps to address, to
some extent, the disadvantages that small-volume manufacturers have, compared to larger-
2-117
-------
EPA Response to Comments
volume manufacturers, in introducing advanced technologies across their product lines. Suzuki
requests that the Environmental Protection Agency (EPA) and National Highway Traffic Safety
Administration (NHTSA) adopt a similar approach in regulating GHG emissions and corporate
average fuel economy. [EPA-HQ-OAR-2010-0799-9523-A1, p.l]
Suzuki Proposal
Suzuki proposes that EPA and NHTSA (1) establish a Limited Line Manufacturer (LLM) size
category that approximates the California Small Volume Manufacturer (SVM) category scaled
up to a national level, and (2) establish a three-year implementation lead time allowance for
LLMs. [EPA-HQ-OAR-2010-0799-9523-A1, p.l]
Suzuki suggests that a national average annual sales volume such as 50,000 vehicles (calculated
as a three-year average) would roughly approximate, on a national level, the threshold to qualify
as an SVM in California. Suzuki proposes that LLMs be given a three-year implementation lead
time allowance which does not require LLMs to comply with the 2017 model year standards
until the 2020 model year, and requires LLMs to comply with the 2018-2025 model year
standards in model years 2021-2028. Under this proposal, LLMs would meet the same GHG/fuel
economy standards as large manufacturers, but with a moving three-year lead time allowance.
[EPA-HQ-OAR-2010-0799-9523-Al,p.l]
Reason for Suzuki's Proposal
When small-volume manufacturers need to develop new technology and develop a new
model/new engine to make the significant improvements necessary to comply with the proposed
standards, the per-vehicle cost for the special development that is needed specifically for the U.S.
market is much higher than for manufacturers with larger sales volumes. [EPA-HQ-OAR-2010-
0799-9523-A1, p.2]
Adoption of Suzuki's proposal would have an insignificant impact on nationwide GHG
emissions, as the combined GHG emissions from vehicles produced by small-volume
manufacturers are an extremely small percentage of the fleet-wide total. [EPA-HQ-OAR-2010-
0799-9523-A1, p.2]
Organization: Fisker Automotive, Inc.
Likewise, manufacturers seeking to participate in the expanded Temporary Lead-Time
Allowance Alternative Standards (TLAAS) "must secure credits to the extent they are reasonably
available from other manufacturers to offset the difference between their emissions reductions
obligations under the base TLAAs program and the expanded TLAAS program." Fisker
Automotive strongly encourages EPA to hold to the spirit of these provisions. As the only entity
with complete knowledge of every automaker's credits and deficits, it is incumbent upon EPA to
ensure that this provision is fairly enforced. [EPA-HQ-OAR-2010-0799-9266-A1, p. 4]
Organization: Jaguar Land Rover North America, LLC (JLRNA)
2-118
-------
CO? Emissions Standards
Jaguar Land Rover will meet the 2012-2016MY GHG program by a number of significant
product actions and through use of the Expanded TLAAS program. [EP A-HQ-OAR-2010-0799-
8102-Al,p. 1]
The Unique Challenge Facing Jaguar Land Rover in the Transition to the 2017MY Standard
Even though our company will make substantial CC>2 reductions during the 2012-2016MY
period, the proposed 2017MY standard poses very significant challenges. First, as the Expanded
TLAAS program comes to a close in 2016MY, companies which participated in this program
will start 2017MY with either no CC>2 credits banked or CC>2 debits carrying forward. We
understand the rationale in this structure but the resulting transition does not allow lower volume,
limited line manufacturers the same flexibilities as afforded large volume manufacturers. [EPA-
HQ-OAR-2010-0799-8102-A1, p. 1]
Given this situation, JLR requests that EPA consider a range of flexibilities aimed at creating a
fair standard for lower volume, limited line manufacturers. Included amongst these ideas is a
proposal to phase in the base standard for lower volume, limited line manufacturers toward full
compliance in 2022MY. [EPA-HQ-OAR-2010-0799-8102-A1, p. 1]
As a result of this dramatic impact, JLR is inviting the EPA to consider phasing-in the GHG
program for lower volume, limited line manufacturers, starting in 2017MY and ending with
2021MY production. We propose that manufacturers in this program be required to come into
full compliance with the base program from 2022MY. [EPA-HQ-OAR-2010-0799-8102-A1, p.
2]
In the NPRM, EPA requested comments on additional lead-time for lower volume, limited line
manufacturers. In response to this invitation, Jaguar Land Rover requests that EPA consider
phasing in the 2017MY+ program for lower volume, limited line niche manufacturers when the
Expanded TLAAS ends. This proposed alternative GHG standard would be designed to ensure
fair but very stringent CO2 reductions in excess of the industry average. [EP A-HQ-OAR-2010-
0799-8102-Al,p. 2]
JLR will be delivering very significant CO2 reductions well in excess of industry averages.
However the required rates of reduction implied by the proposed NPRM curves between
2016MY and 2017MY are very challenging for lower volume, limited line manufacturers
coming out of the Expanded TLAAS. JLR's fleet of passenger cars would be required to deliver
circa [ ] CO2 reduction as required by the NPRM. JLR's fleet of light trucks would be required to
deliver circa [ ] CO2 reduction as required by the NPRM. [Note: CBI information - [ ] - was
omitted.] [EPA-HQ-OAR-2010-0799-8102-A1, p. 2]
Organization: Natural Resources Defense Council (NRDC)
4. Temporary Leadtime Allowance Alternative Standards Should Not be Extended to Model
Years 2017-2025
2-119
-------
EPA Response to Comments
NRDC agrees with the EPA proposal to end the Temporary Leadtime Allowance Alternative
Standards with the 2016 model year. This exemption from the established 2012-2016 ramp-up—
along with a generous early credit proposal, inclusion of FFV credits for MY 2012-2015,
transferring credits between car and truck fleets, and 3-year carry forward of deficits—was
provided so that all manufacturers had a pathway to comply with 2016 GHG standards. [EPA-
HQ-OAR-2010-0799-9472-A2, pp. 13-14]
Organization: Porsche Cars North America, Inc. (PCNA)
Introduction:
On behalf of Dr. Ing, h.c. F. Porsche Aktiengesellschaft ("Porsche AG"), Porsche Cars North
America Inc. ("PCNA," and, collectively with Porsche AG, "Porsche") is pleased to provide the
following comments on the Notice of Proposed Rule Making (NPRM) regarding 2017 and Later
Model Year Light Duty Vehicle GHG Emissions and CAFE Standards.
Porsche submits these comments in view of the fact that it has been recently announced that it is
no longer realistic to achieve the once-planned merger between Volkswagen AG and Porsche
Autornobil Holding SE ('"Porsche SE") within the framework and timeframe of the basic
agreement from 2009. Porsche AG is a wholly owned subsidiary of Porsche Zwischenholding
GmbH, which in turn is held by Porsche SE (50.1 percent) and Volkswagen AG (49.9 percent).
Nonetheless, Porsche SE and Volkswagen AG each also have reconfirmed their intention by
some means to become part of an integrated automotive group. Both companies are currently
examining whether alternatives to the measures provided for in the 2009 basic agreement are
available. To the extent that such an alternative transaction is identified, and to the extent that
such a transaction would materially change Porsche's status such that a supplement to these
comments would be in order, Porsche reserves the possibility that it may do so.
2. Unequal burden: The goal of overall GHG reduction for the industry requires contribution
from all manufacturers, but must account for the trajectory required for particular manufacturers.
Transition from TLAAS to the base standards is a disproportionate burden for niche car makers.
That transition cannot be accomplished by gradual incremental improvements. [EPA-HQ-OAR-
2010-0799-9264-A1, p. 7]
3. Economy of scale: Porsche faces cost challenges due to its size (less than 0.25% of U.S.
industry sales). Our development costs for new technology cannot be spread over a large fleet to
take advantage of natural economies of scale. There is a disproportionate financial impact on
small manufacturers, due to higher per unit cost. [EPA-HQ-OAR-2010-0799-9264-A1, p. 7]
4. Skewed competition: Porsche's positioning among our direct competitors in the sports car
segment is a disadvantage. Our larger competitors can support sports car sales by fleet averaging
over abroad range of products. EPA has also proposed that our smallest competitors can request
alternate 'lowest feasible' CO2 standards. Porsche cannot employ either of these options. Thus,
the playing field is not level. [EPA-HQ-OAR-2010-0799-9264-A1, p. 7]
2-120
-------
CO? Emissions Standards
5. Availability of credits: We expect that many manufacturers will forego credit banking in order
to expand sales of more profitable non-compliant models. Further, uncertainty will encourage
other manufacturers to retain unused credits as insurance against the risk of catastrophic
noncompliance in future years. Therefore, we believe it is unlikely that GHG credits will be
readily available for sale on the open market. In fact, during the 2012-2016 GHG rulemaking, the
Agencies acknowledged that experience shows that manufacturers do not sell credits. A business
case cannot be built around such uncertainties that threaten our very existence. [EPA-HQ-OAR-
2010-0799-9264-A1, p. 7]
In the absence of alternative standards, current TLAAS manufacturers would face a 25%
reduction in GHG standards at the expiration of TLAAS following MY 2016. Due to Porsche's
unique position in the market, we believe that those standards as proposed would create a hurdle
that would drive us from the marketplace. We urge the agencies to consider alternatives which
do not unjustly punish small specialty car manufacturers.
Porsche AG is a low volume manufacturer of premium high performance sports vehicles,
targeted to a very small niche market. To assume that a performance car is in the same category
as an economy sedan is to impose requirements that ignore the constraints of the laws of physics.
It is certainly well accepted that it would be inappropriate for SUVs and light trucks to be subject
to the same standards as passenger cars with similar footprints. Similarly, we believe it is not
appropriate to set identical GHG standards for small economy vehicles and specialty
performance machines, because of their vastly different design criteria and different market
segments. [EPA-HQ-OAR-2010-0799-9264-Al, p. 7]
The consequence of setting uniform standards is illustrated in the following tables taken from the
NPRM, showing technology penetration for Model Years 2021 and 2025, As these tables show,
Porsche would be expected to employ far greater electrification than any other manufacturer.
This absurd compliance path would place us at a severe competitive disadvantage with respect to
development costs, and in the consumer market. [The tables can be found on p. 8 of Docket
number EPA-HQ-OAR-2010-0799-9264-A1] [EPA-HQ-OAR-2010-0799-9264-A1, p. 8]
It is essential that a regulatory framework strive to accomplish its goals without interfering with
natural free-market competition, Fair trade and free commerce demand a rule book that does not
favor one business model over another. For the rules to be marketplace neutral, accommodation
is needed for the unique challenge facing low volume niche manufacturers, yet without
precipitating an unfair advantage over larger manufacturers who compete in those same niche
markets. [EPA-HQ-OAR-2010-0799-9264-Al, pp. 8-9]
Porsche recommends three possible approaches for setting niche vehicle standards: fixed
alternative standards, competitive standard setting, and alternate phase-ins. All three models
would force Porsche to make significant GHG improvement equaling or exceeding the rest of the
industry, but without imposing unrealistic targets likely to put us out of business.
Alternative Standards
2-121
-------
EPA Response to Comments
Porsche suggests that a limited low volume alternative standards model similar to TLAAS is
appropriate for the niche car market. We applaud the current TLAAS provisions, which require
Porsche to make an annual GHG improvement comparable to the broader industry, without
requiring wholesale restructuring of our market presence and without imposing an unfair
competitive disadvantage either to us or to our competitors. [EPA-HQ-OAR-2010-0799-9264-
Al,p.9]
We estimate that the size of the industry's TLAAS fleet is on the order of 2% to 3% of total sales.
The use of TLAAS standards at 125% of the base standards therefore has a minimal net effect on
industry GHG performance in the 2012-2016 period. We believe that by further reducing the size
of the TLAAS fleet (e.g., by 50% to 25,000 vehicles per manufacturer per year), the impact on
industry-wide GHG would be negligible. A program like TLAAS is a sensible approach to
achieving significant GHG benefits without interfering with the marketplace. We urge the
agencies to continue to include alternative standards for the niche offerings of both small and
large manufacturers. [EPA-HQ-OAR-2010-0799-9264-A1, p. 9]
Alternatively, we believe it would make sense to set GHG targets based on a sliding scale in
proportion to market share / sales volume. This model would account for the relative ability of
each manufacturer to weather increasing stringency, and to realize a return on the required
technology investment. Conversely, as an OEM's sales and/or market share increase over time, it
would make sense to adjust to more stringent GHG targets to reflect its increased capabilities.
[EPA-HQ-OAR-2010-0799-9264-A1, p. 9]
Competitive Standard Setting
Standards for small volume niche manufacturers should not be more stringent than the GHG
performance of their competitors' comparable models. Porsche proposes that small volume
OEMs would have standards for each model set to the average GHG performance of competitor
vehicles with similar horsepower, power/weight ratio, and type of technology employed (Diesel,
Y-6 Turbo, conventional hybrid, PHEY, etc.). This will ensure a level playing field in
competition with larger manufacturers which are using fleet averaging. [EPA-HQ-OAR-2010-
0799-9264-A1, pp. 9-10]
This approach would be modeled after provisions for lower volume car makers described in
California's LEY-II / Pavley I model, and in the successful "Top Runner' model used in other
countries. It is an apples-to-apples variable standard that guarantees a neutral application of
standards among all competitors. By definition, this strategy will force smaller manufacturers to
make annual GHG improvements equaling or exceeding the improvement of comparable models,
and without disrupting healthy competition. The following text outlines LEY-II provisions for
lower volume manufacturers: [EPA-HQ-OAR-2010-0799-9264-A1, p. 10]
[§ 1961.1. Greenhouse Gas Exhaust Emission Standards and Test Procedures (D) Requirements
for Small Volume Manufacturers and Independent Low Volume Manufacturers.
1 [EPA-HQ-OAR-2010-0799-9264-A1, p. 10]
2-122
-------
CO? Emissions Standards
2. At the beginning of the 2013 model year, each small volume manufacturer and independent
low volume manufacturer shall identify all 2012 model year vehicle models, certified by a large
volume manufacturer that are comparable to that small volume manufacturer or independent low
volume manufacturer's 2016 model year vehicle models, based on horsepower and horsepower to
weight ratio. The small volume manufacturer and independent low volume manufacturer shall
demonstrate to the Executive Officer the appropriateness of each comparable vehicle model
selected. Upon approval of the Executive Officer, s/he shall provide to the small volume
manufacturer and to the independent low volume manufacturer the CO2- equivalent value for
each 2012 model year vehicle model that is approved. The small volume manufacturer and
independent low volume manufacturer shall calculate an average greenhouse gas emissions value
for each its greenhouse gas vehicle test groups based on the CO2-equivalent values provided by
the Executive Officer. [EPA-HQ-OAR-2010-0799-9264-A1, p. 10]
3. In the 2016 and subsequent model years, a small volume manufacturer and an independent
low volume manufacturer shall either: a. not exceed the fleet average greenhouse gas emissions
value calculated for each GHG vehicle test group for which a comparable vehicle is sold by a
large volume manufacturer, in accordance with section 1961. Hal(l)(D12: J [EPA-HQ-OAR-
2010-0799-9264-A1, p. 10]
Porsche believes that such a standards framework upholds the spirit of worldwide GHG policy,
in that all participants are expected to contribute to the overall emission reduction goals. Even
niche players in the high powered sports car segment will contribute to innovation and efficiency
improvement. Indeed, such a framework would ensure a thriving, competitive performance car
segment, leading to innovations applicable to the entire industry. [EP A-HQ-OAR-2010-0799-
9264-A1, p. 10]
Alternate Phase-In
If long-term alternate standards or competitive standards are unacceptable, we suggest an
alternate phase-in to the base standards. This would mitigate the potential 25% drop in GHG
standards at the expiration of TLAAS. It is important to consider that the length of Porsche's
product cycles is 2- to 3- times the typical industry product cycle, in order to allow recovery of
investment costs over small annual volume. An extended phase-in would be critical to Porsche's
survival. [EPA-HQ-OAR-2010-0799-9264-Al, p. 11]
The phase-in suggested below is a linear trajectory, starting from MY 2015 TLAAS, and ending
at the MY 2025 base standards. This example illustrates GHG targets for one subset of Porsche's
portfolio (small footprint sports cars). Similar curves can be drawn for other TLAAS products.
[EPA-HQ-OAR-2010-0799-9264-A1, p. 11 ]
It should be emphasized that this alternate phase-in would require an average 5.2% annual GHG
reduction for these models, compared to 4.0% for vehicles which are already subject to the base
standards in MY 2015. While such a phase-in would be a challenge, it does accommodate the
long range planning needed to develop entire new product lines. [EPA-HQ-OAR-2010-0799-
9264-Al,p.ll]
2-123
-------
EPA Response to Comments
Organization: Volkswagen
Volkswagen also submitted comments noting a gap in the MYs 2012-2016 TLAAS provisions
involving a situation where TLAAS-eligible companies not participating in TLAAS merge with
a TLAAS participant and the merged entities sales remain less than 400,000 units. VW
requested that in such circumstances the companies should have the same administrative options
as the rules provide for non-TLAAS participants merging with TLAAS participants where the
merged entities sales exceed 400,000 units.
Response:
EPA did not propose to and is not extending the Temporary Leadtime Allowance
Alternative standards (TLAAS) program per se. EPA received supportive comments regarding
not extending TLAAS along the lines of the MYs2012-2016 program and received no comments
recommending that the full-scale TLAAS program be extended.
EPA requested comments on whether there is a need to provide some type of additional
lead time flexibility for intermediate volume, limited line manufacturers. EPA received
supportive comments regarding providing some flexibility to intermediate volume
manufacturers. Three manufacturers, Suzuki, Jaguar Land Rover, and Porsche provided specific
recommendations and supporting rationale. EPA has carefully considered the comments
regarding the need for additional flexibility for intermediate volume manufacturers. These
manufacturers are eligible for the expanded TLAAS provisions in the MYs 2012-2016 rules
which provide less stringent CC>2 standards through MY 2016 for manufacturers with U.S. sales
below 50,000 vehicles. EPA understands the feasibility concerns raised by the manufacturers
with regard to the significant increase in stringency represented by the change in standards under
the TLAAS program in MY 2016 and the MY 2017 primary program standards. EPA is
providing additional lead-time flexibility to these intermediate volume manufacturers through
MY 2020 to help ease the transition to the MY 2017-2025 program. A more detailed review of
the comments and EPA's response is provided in preamble Section III.B.6. The feasibility of the
standards is discussed in Section III.D.6 of the preamble. As shown there, these intermediate
manufacturers do face disproportionate compliance challenges in the early model years of this
program. See Table III- 28 (JLR projected to require 23 % HEV, 2% PHEV, and 7% EV to meet
MY 2021 combined fleet standard; these technology penetrations are considerably more
challenging than for larger manufacturers; see also EPA RIA table 5.1.6 showing similarly
disproportionate costs to meet the MYs 2019-2021 standards, even after the additional lead time
afforded by the final rule.
Porsche notes that the company submitted comments under the assumption that they
would remain independent from Volkswagen and that if the status of their relationship changed
such that a supplement to their comments would be in order, Porsche reserved the possibility that
it may submit such comments. On August 1, 2012, VW completed its acquisition of 100 percent
of Porsche's automotive business.6 While Porsche has not submitted follow-up comments, it is
6 "Volkswagen and Porsche finalize creation of Integrated Automotive Group," Volkswagen news release,
August 1, 2012.
2-124
-------
CO? Emissions Standards
EPA's expectation that Porsche will no longer be eligible for the expanded TLAAS program or
the leadtime provisions discussed above since it will no longer be an intermediate volume
manufacturer. EPA expects that Porsche's fleet will be absorbed into VW's fleet for purposes of
determining compliance with the GHG standards. Nevertheless, EPA has considered Porsche's
comments and recommendations with regard to intermediate volume manufacturers.
Fisker comments that manufacturers using the expanded TLAAS provisions are required
to make a good faith effort to purchase credits and strongly encourages EPA to hold to the spirit
of these provisions. In response, although the comments are on the implementation of the MY
2012-2016 program and not the MY 2017-2025 proposal, EPA understands the commenters
concerns. The requirements for expanded TLAAS manufacturers to make a good faith effort to
purchase credits remains in place as a regulatory requirement. EPA notes that the expanded
TLAAS provisions will not be accessed by eligible manufacturers until the base TLAAS
program maximum allowance has been reached. The base TLAAS program allows
manufacturers to place a cumulative total of 100,000 vehicles into TLAAS in MYs 2012-2015.
Finally, EPA agrees with VW that the TLAAS provisions on mergers contain an
inadvertent gap, and is clarifying those provisions in response to the comment. See preamble
section III.E.T.h.
2.4. Mid-term Evaluation
Organizations Included in this Section
Alexandria Hyundai
Alliance of Automobile Manufacturers
American Honda Motor Co., Inc.
American Medical Association of California
Association of Global Automakers, Inc. (Global Automakers)
BMW of North America, LLC
Center for Biological Diversity
Chrysler Group LLC
Consumer Federation of America (CF A)
Ecology Center
EcoMotors International, Inc.
Ferrari
Ford Motor Company
General Motors Company
Honeywell International, Inc.
Honeywell Transportation Systems
House of Representatives, Congress of the United States
Hyundai America Technical Center
Institute for Policy Integrity, New York University School of Law
International Council on Clean Transportation (ICCT)
Johnson Controls, Inc.
Kia Motors
2-125
-------
EPA Response to Comments
Marshall, C.
Mass Comment Campaign (20,500) (Union of Concerned Scientists-3)
Mass Comment Campaign (375) (Union of Concerned Scientists-2)
Mass Comment Campaign (9,570) (Unknown Organization)
Mercedes-Benz USA, LLC
Mitsubishi Motors R&D of America, Inc. (MRDA)
Motor & Equipment Manufacturers Association (MEMA)
National Association of Clean Air Agencies (NACAA)
National Association of Manufacturers (NAM)
National Automobile Dealers Association (NADA)
Natural Resources Defense Council (NRDC)
Nissan North America, Inc.
Northeast States for Coordinated Air Use Management (NESCAUM)
Pew Charitable Trusts
Porsche Cars North America, Inc. (PCNA)
RVIA
Securing America's Future Energy (SAFE)
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Toyota Motor North America
U.S. Chamber of Commerce
Union of Concerned Scientists (UCS)
United Automobile Workers (UAW)
United States Senate
University of Michigan
Volvo Car Corporation (VCC)
Weiner, L.
Organization: Alexandria Hyundai
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 66.]
As a contingency, if consumers in fact reject these vehicle offerings, it is my understanding the
midterm review provides an opportunity to reset the goals if the needed technology cannot be
provided at a reasonable price.
Organization: Alliance of Automobile Manufacturers
The Alliance supports the proposal to include an in-depth mid-term evaluation. [EPA-HQ-OAR-
2010-0799-9487-A1, p.3]
This rulemaking reaches an unprecedented 13 years into the future. A mid-term evaluation
process will allow the agencies to review a broad range of factors and make appropriate
adjustments. It will provide better data and insight on a range of issues relevant to the
appropriateness of the MY 2022-2025 standards, including consumers' willingness to buy the
vehicles that are required to comply with the standards; future fuel pricing; and technology and
2-126
-------
CO? Emissions Standards
raw materials costs. The Alliance comments on the mid-term evaluation include additional topics
that the agencies should review. We recommend that, in addition to the proposed formal mid-
term evaluation, the agencies continue their open dialogue and also conduct a series of smaller,
focused technical evaluations - or "check-ins" - on the key assumptions of the proposal. The
Alliance also requests a more specific description of the mid-term evaluation process and the
specifics to be reviewed, including the timeline and procedures for assuring that the studies the
agencies rely on are appropriately peer reviewed. [EPA-HQ-OAR-2010-0799-9487-A1, p.3]
The Alliance Supports the Proposal to Include an In-Depth Mid-Term Evaluation. [EPA-HQ-
OAR-2010-0799-9487-A1, p.6]
The MY 2017-2025 GHG proposal includes provisions requiring EPA to conduct a mid-term
evaluation of the MY 2022-2025 light-duty GHG standards to determine whether those standards
remain appropriate in light of technological and other changes that may have occurred since the
time of proposal. This evaluation process will be coordinated with NHTSA's effort to set final,
binding CAFE standards for the 2022-2025 model years. The mid-term evaluation will include
consideration of up to date information, a "holistic assessment of all of the factors considered by
the agencies in setting standards" and the "expected impact of those factors on the
manufacturers' ability to comply." To facilitate the evaluation, EPA (along with NHTSA and
CARB) will publish a draft Technical Assessment Report (TAR), which will be peer-reviewed
and made available for public comment. EPA also will request comment on whether the MY
2022-2025 standards remain appropriate under section 202(a) of the Clean Air Act (CAA) and
whether the standards should be made more or less stringent. No later than April 1, 2018, EPA
will make a final determination whether the MY 2022-2025 standards, as adopted in 2012, are
appropriate. This process also is intended to guide NHTSA's decision-making regarding its MY
2022-25 CAFE standards. If EPA concludes that the standards are not appropriate, the agency
will then initiate a rulemaking to adopt standards that are appropriate under section 202(a). Both
EPA and NHTSA have stated that that they would issue a joint rulemaking at least 18 months
prior to the beginning of the 2022 model year, consistent with the statutory directive in the
Energy Policy and Conservation Act of 2005 (EPCA). [EPA-HQ-OAR-2010-0799-9487-A1,
p.6]
The Alliance consistently has advocated that a mid-term evaluation is more than just appropriate;
it is a critical component of this rulemaking package if these GHG and CAFE standards are to be
successful. This rulemaking will govern vehicle production 13 years from now, a particularly
long time period when predicting technologies, costs, infrastructure, fuels and consumer
behavior. It comes on the heels of a five-year rulemaking that will, according to the agencies,
cost automakers almost $52 billion - the highest cost of any rulemaking imposed to date on the
auto industry. The agencies estimate the additional GHG reductions and fuel economy gains
from this rule will cost automakers an additional $133-157 billion, bringing the combined cost of
the MY 2012-25 rules to somewhere between $185 and $209 billion. This unprecedented effort
and expense will further our country's energy and environmental goals, but only if consumers
choose to purchase these fuel-efficient, climate-friendly vehicle technologies. [EPA-HQ-OAR-
2010-0799-9487-A1, p.6]
2-127
-------
EPA Response to Comments
By necessity, the GHG and CAFE standards proposed here are predicated on significant
assumptions regarding the future - including such factors as the pace of technological innovation,
deployment of supportive infrastructure for alternative fuels and advanced vehicles, rates of
market penetration for new vehicle technologies, future costs of emerging technologies, fuel cost
and availability and consumer acceptance. The agencies have attempted to make reasonable
projections based on recent data. Nevertheless, the proposed standards cover an unusually long
time horizon, governing the production of vehicles over a decade into the future. The mid-term
evaluation will allow the agencies to determine whether the CAFE and GHG standards should be
adjusted as a result of customers' willingness to buy vehicles that are required to comply with the
standards, developments in technology, costs, safety, fuels, infrastructure and other relevant
factors. [EPA-HQ-OAR-2010-0799-9487-A1, p.7]
Thirteen years into the future, consumer purchasing patterns will be the biggest unknown.
Besides fuel economy, we know that consumers demand affordability, safety, convenience,
performance and utility. One challenge we face is that fuel economy considerations often rank
below these other attributes. Fuel prices, which are especially difficult to project, have a huge
impact on how consumers weigh fuel economy at the dealership. All of this explains why the
final rule should include a rigorous mid-term evaluation. [EPA-HQ-OAR-2010-0799-9487-A1,
p.9]
Adherence to the Mid-Term Evaluation Process and Timing is Critical. [EPA-HQ-OAR-2010-
0799-9487-A1, p.7]
EPA has proposed that the MY 2022-2025 GHG standards "will remain in effect unless and until
EPA changes them by rulemaking." EPA has not specifically provided for expedited judicial
review of the results of the final mid-term evaluation or any final rule setting revised MY 2022-
2025 GHG standards. [EPA-HQ-OAR-2010-0799-9487-A1, p.7]
The Alliance would like to stress how important it is that both agencies follow the mid-term
evaluation process laid out in the regulations, including strict adherence to the deadlines.
Following the process as proposed should enable the agencies to consider all relevant issues,
make an informed decision about the appropriateness of the MY 2022-2025 standards, and allow
sufficient time for the promulgation of different standards and/or judicial review, if necessary.
The purpose of the mid-term evaluation provision is to ensure that the assumptions underlying
the MY 2022-2025 standards remain valid; to the extent that the assumptions are incorrect and
the standards are inappropriate, the burden is likely to fall primarily on vehicle manufacturers. If
EPA fails to follow the mid-term evaluation process or fails to meet the deadlines, it is probable
that EPA will not have complied with the Section 202(a)(2) mandate to provide adequate time
for the development and application of the technology required to comply with such standards.
Moreover, failure to conduct the midterm evaluation or to meet the deadlines would constitute a
failure to perform a nondiscretionary duty and/or final agency action. [EPA-HQ-OAR-2010-
0799-9487-A1, pp.7-8]
In making this comment, we wish to stress that the Alliance does not assume that EPA or
NHTSA intend to deviate from the mid-term evaluation process or ignore its deadlines. We
believe that all parties, including the agencies, will work in good faith to follow the process. We
2-128
-------
CO? Emissions Standards
merely wish to stress that the success of the mid-term evaluation depends on close adherence to
the process and the deadlines. If anything is allowed to undermine or delay the process, it creates
a significant potential for disputes and difficulties in the future, something we all hope to avoid.
[EPA-HQ-OAR-2010-0799-9487-Al,p.8]
The Agencies Should Conduct Periodic Technical "Check-Ins." [EPA-HQ-OAR-2010-0799-
9487-A1, p.8]
In the time leading up to the mid-term evaluation - and following the completion of the
evaluation - the agencies should continue to check the validity of the assumptions upon which
their standards are based. We suggest not only one formal mid-term evaluation, as the agencies
have proposed, but also a series of smaller, focused, technical evaluations of, or "check-ins" on,
the key assumptions of the proposal. These "check-ins" will allow the agencies to consider the
latest relevant technical information, and thereby help the agencies keep the program on track
and produce the best long term results. By having these "check-ins" the agencies will be better
prepared to begin their formal mid-term evaluation and to make appropriate adjustments during
the second half of the period covered by these regulations. [EPA-HQ-OAR-2010-0799-9487-A1,
p.8]
The Alliance understands that EPA's mid-term evaluation will take place concurrently, and in
conjunction with, NHTSA's process for setting final CAFE standards for MY 2022-2025. The
agencies should jointly examine progress achieved towards compliance with the standards, and
assess the latest information available on key assumptions and trends used to develop the
standards, including the criteria set forth for determining maximum feasible fuel economy
standards in 49 U.S.C. § 32902(f). Factors that should be considered include, but should not be
limited to: [EPA-HQ-OAR-2010-0799-9487-A1, p.17]
Development of powertrain improvements to gasoline and diesel-powered vehicles; [EPA-HQ-
OAR-2010-0799-9487-A1, p. 17]
Level of employment in U.S. automotive sector; [EPA-HQ-OAR-2010-0799-9487-A1, p.17]
Availability and implementation of methods to reduce weight while assuring compliance with
state and Federal safety, emissions and equipment laws and standards, and maintaining
acceptable performance in consumer information crash testing and manufacturer due care
testing; [EPA-HQ-OAR-2010-0799-9487-A1, p. 17]
Actual and projected combined sales of alternative fuel vehicles; [EPA-HQ-OAR-2010-0799-
9487-Al,p.l7]
Actual and projected availability of public and private charging infrastructure for electric
vehicles; [EPA-HQ-OAR-2010-0799-9487-A1, p. 17]
2-129
-------
EPA Response to Comments
Actual and projected availability of low carbon and technology-enabling fuels and infrastructure,
along with adoption and implementation of clean and renewable energy standards; [EPA-HQ-
OAR-2010-0799-9487-A1, p. 17]
Costs, including average costs of technologies to ensure compliance with the standards, such as
vehicle batteries and power electronics, mass reduction, and alternative fuels, and anticipated
trends in these costs; [EPA-HQ-OAR-2010-0799-9487-A1, p. 17]
Current and expected availability of state and Federal incentives/subsidies for advanced
technology vehicles; [EPA-HQ-OAR-2010-0799-9487-A1, p.17]
Average payback periods for any incremental vehicle costs associated with meeting the
standards, as well as up-front cost and impacts on consumer affordability; [EP A-HQ-OAR-2010-
0799-9487-Al,p.l7]
Costs for gasoline, diesel fuel and alternative fuels; [EPA-HQ-OAR-2010-0799-9487-A1, p. 17]
Total light-duty vehicle sales and projected fleet mix; [EPA-HQ-OAR-2010-0799-9487-A1,
p.17]
Consumer demand for and customer acceptance of fuel-efficient technologies, and consumer
valuation of fuel savings; [EPA-HQ-OAR-2010-0799-9487-A1, p.17]
End-of-life costs associated with advanced technology vehicles; and [EPA-HQ-OAR-2010-0799-
9487-Al,p.l7]
Any other factors that may be deemed relevant to the review. [EP A-HQ-OAR-2010-0799-9487-
Al,p.l7]
Some recent studies attempt to identify opportunities for cost-effective near-term fuel economy
improvements but also raise important questions about longer-term conditions. These questions
call for information that is not yet available to EPA, NHTSA, the California Air Resources
Board or any other party, including automobile manufacturers. The Alliance recommends that
the mid-term evaluation focus on the issues as detailed below. During the evaluation, the
agencies should seek expert peer-reviewed data and analysis, including the input of the National
Academy of Sciences (NAS), to answer the following questions, among others: [EPA-HQ-OAR-
2010-0799-9487-Al,p.l7]
Given how little is known about the "energy paradox," the Alliance supports NHTSA's proposal
to develop a Consumer Vehicle Choice Model to inform the mid-term evaluation. Such a model
should also look at the other factors identified in the Preliminary RIA as having an impact on
consumer purchasing decisions: sales taxes, insurance costs, the additional cost of auto loans and
changes in resale value. To have credibility, the model needs to use real-world data, be
developed in a transparent manner with full peer review, and should assess uncertainties in its
predictions. [EPA-HQ-OAR-2010-0799-9487-A1, p. 19]
2-130
-------
CO? Emissions Standards
Given the considerable uncertainty about future technology development, cost and consumer
acceptability, the proposed mid-term evaluation is essential in order to assure that the maximum
feasible fuel economy benefits are obtained in a cost-effective and safety neutral manner. [EPA-
HQ-OAR-2010-0799-9487-A1, p.22]
Process for Conducting the Mid-Term Evaluation [EPA-HQ-OAR-2010-0799-9487-A1, p.24]
The NPRM indicates that a draft Technical Assessment Report will be completed by November
15, 2017, and that EPA will make a final determination by April 1, 2018. The Alliance believes
that a more detailed description of the process would be helpful. In particular, the final
regulatory language should indicate that the agencies intend to perform a thorough analysis of
consumer purchasing behavior, the single most important factor that will determine whether the
goals of the program are being met. [EPA-HQ-OAR-2010-0799-9487-A1, p.24]
The final regulatory language should also include the following important details: [EPA-HQ-
OAR-2010-0799-9487-A1, p.24]
start date of the evaluation and a schedule for major milestones to assure that the review is
completed in time for EPA to make a fully informed regulatory determination; [EPA-HQ-OAR-
2010-0799-9487-A1, p.24]
specific studies the agencies plan to conduct; [EPA-HQ-OAR-2010-0799-9487-A1, p.24]
details of the peer review process; [EPA-HQ-OAR-2010-0799-9487-A1, p.24]
availability of a pubic docket; [EPA-HQ-OAR-2010-0799-9487-A1, p.24]
role of NAS in the mid-term evaluation; and [EPA-HQ-OAR-2010-0799-9487-A1, p.24]
roles of other departments and agencies that provide or regulate alternative fuels and emerging
technologies. [EPA-HQ-OAR-2010-0799-9487-A1, p.24]
Further, the Alliance suggests that multipliers, like many aspects of the program, be reviewed
during the mid-term evaluation. Should the mid-term evaluation reveal continuing market
challenges with advanced technology vehicles, extending the multipliers beyond MY 2021 may
be necessary to encourage fleet penetration. [EPA-HQ-OAR-2010-0799-9487-A1, p.82]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 96-97.]
That's why it's critical that the final rule include a rigorous mid-term review with a clearly
defined process for its implementation.
During the review, the agencies should seek expert peer-reviewed information including the
input of the National Academy of Sciences to answer these questions: Are the costs of advanced
2-131
-------
EPA Response to Comments
technologies declining as expected? Are researchers making the breakthroughs anticipated?
What's happening with fuel prices, and how are consumers responding? What impact are the new
requirements having on sales and on employment? How are the new rules impacting vehicle
safety? What's happened with fuel quality? Will liquid fuels support the fuel-efficient
technologies that have been introduced? Will the new charging infrastructure be available to
enable plug-in hybrids, battery electric vehicles and fuel cell vehicles to penetrate the market at
the levels predicted?
Organization: American Honda Motor Co., Inc.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 121.]
The proposed mid-term review seems appropriate to us and we believe it will be essential to
checking progress and making necessary adjustments that cannot be foreseen from this early
date.
Organization: American Medical Association of California
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 48.]
As well as to whether any midterm program review that may be viewed by some as an
opportunity to weaken the standards previously agreed upon. The midterm review may have
ramifications for the State of California and the programs in place here. It will align with the
national standards, and it must remain clear that California maintains its own Clear Air Act
authority to enact our own rules more stringent than the federal rules due to our extreme air
quality challenges.
Organization: Association of Global Automakers, Inc. (Global Automakers)
For this reason, we support the proposed mid-term review to reassess the stringency of the
standards, including technology penetration rates, fuel costs, and most importantly, consumer
acceptance. [EPA-HQ-OAR-2010-0799-9466-A1, p. 1]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 66.]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 50-51.]
Due to the many uncertainties that are implicit in the technical and economic assumptions that
form the basis for the proposed standards, we support the proposed mid-term review of the
standards. We also support the recommendation made at the Detroit public hearing that the final
rule should specify a clearly defined process for the review, with a designated list of questions to
be addressed. In addition, we agree with the recommendation (again at the Detroit public
2-132
-------
CO? Emissions Standards
hearing) that the agencies consider a series of more narrow reviews of key aspects of the
standards. [EPA-HQ-OAR-2010-0799-9466-A1, p. 9]
The need for a mid-term review finds ample support in both EISA and the Clean Air Act, as both
statutes require the promulgation of regulations that are based on the most up-to-date information
concerning the costs and benefits of the technologies required to meet the standards. Indeed,
because EISA prohibits the promulgation of fuel economy standards past the MY 2021, a mid-
term evaluation is required before final CAFE standards can be promulgated for the 2022
through 2025 MYs. EISA provides that the Secretary shall "issue regulations under this title
prescribing average fuel economy standards for at least 1, but not more than 5, model years." 49
U.S.C. § 32902(b)(3)(b). Congress included the 5 year limit, in part, because it recognized that
the factors NHTSA must consider in adopting fuel economy standards—technological
feasibility, economic practicability, the effect of other motor vehicle standards of the
Government on fuel economy, and the need of the United States to conserve energy, see 49
U.S.C. §32902(f)—are fluid and vary over time. Consequently, any attempt to weigh these
factors today for standards that would not apply until the 2022 MY would be fraught with
uncertainty and inherently arbitrary. [EPA-HQ-OAR-2010-0799-9466-A1, pp. 9-10]
The current rulemaking being jointly undertaken by EPA and NHTSA encompasses nine model
years (MYs 2017 through 2025). Under the plain terms of the statute, any final fuel economy
standards that are issued now and are applicable to a model year after 2021 would be invalid.
The Notice of Proposed Rulemaking recognizes this concern and therefore states "[t]he second
phase of the CAFE program, from MYs 2022-2025, represents conditional proposed standards . .
." 76 FR at 74,859. NHTSA correctly recognizes that "conditional" rulemaking in this instance
"means to say that the proposed standards for MYs 2022-2025 represent the agency's current
best estimate of what levels of stringency would be maximum feasible in those model years, but
in order for the standards for those model years to be legally binding a subsequent rulemaking
must be undertaken by the agency at a later time." Id., n.7. According to NHTSA, "[t]he
passenger car and light truck CAFE standards for MYs 2022-2025 will be determined with
finality in a subsequent, de novo notice and comment rulemaking conducted in full compliance
with EPCA/EISA and other applicable law . . ." Id. at 75,166. [EPA-HQ-OAR-2010-0799-9466-
Al,p. 10]
Global Automakers supports the intent expressed in the Notice of Proposed Rulemaking
concerning the mid-term evaluation. However, we are concerned that the actual language of the
proposed regulations goes too far in adopting final regulations for MY 2022 through 2025.
Proposed 49 C.F.R. § 531.5(c) provides that "[f]or model years 2012-2025, a manufacturer's
passenger automobile fleet shall comply with the fleet average fuel economy level calculated for
that model year according to Figure 2 ..." and provides the parameters for the fuel economy
targets through the 2025 MY. Viewed in isolation, this provision would constitute final fuel
economy standards for the 2022 through 2025 MYs. The standards are ostensibly made
conditional through proposed subsection (e), which provides: "For model years 2022-2025, each
manufacturer shall comply with the standards set forth in paragraphs (c) and (d) in this section, if
NHTSA determines in a rulemaking, initiated after January 1, 2017, and conducted in
2-133
-------
EPA Response to Comments
accordance with 49 U.S.C. 32902, that the standards in paragraphs (c) and (d) are the maximum
feasible standards for model years 2022-2025. . . ." [EPA-HQ-OAR-2010-0799-9466-A1, p. 10]
Global Automakers believes that a mid-term evaluation of the GHG emission standards is
likewise not only permissible under the Clean Air Act, but also required because of the
uncertainties inherent in projecting regulatory requirements nine to twelve years into the future.
First, Section 202(a) plainly provides EPA with the authority for a mid-term evaluation. See 42
U.S.C. § 7521(a)(l) (providing that "[t]he Administrator shall by regulation prescribe (and from
time to time revise)" motor vehicle emission standards) (emphasis added). [EPA-HQ-OAR-
2010-0799-9466-A1, pp. 10-11]
Moreover, a mid-term evaluation is required under the Clean Air Act in view of the proposed
regulations' long regulatory horizon. The Clean Air Act requires that standards "shall take effect
after such period as the Administrator finds necessary to permit the development and application
of the requisite technology, giving appropriate consideration to the cost of compliance within
such period." 42 U.S.C. § 7521(a)(2). EPA's determination concerning the appropriate level of
stringency for GHG emission standards must be based upon reliable and up-to-date information.
[EPA-HQ-OAR-2010-0799-9466-A1, p. 11]
Given the extremely long time-horizon of these proposed mobile source regulations, EPA has
conceded a number of uncertainties in the analyses that underlie its current rulemaking. See, e.g.,
76 FR at 74,881 (recognizing the "uncertainties regarding the benefit and cost values presented
in this proposal"). For example, the NPRM states that EPA and NHTSA "did not consider
technologies that are currently in an initial stage of research because of the uncertainty involved
in the availability and feasibility of implementing these technologies with significant penetration
rates for this analysis. The agencies recognize that due to the relatively long time frame between
the date of this proposal and 2025, it is very possible that new and innovative technologies will
make their way into the fleet, perhaps even in significant numbers, that we have not considered
in this analysis." Id. at 74,922. Global Automakers believes that the converse may also be true,
i.e., the proposed standards are based on assumptions concerning the availability and market
penetration of technologies up to 12 years into the future that may not prove entirely accurate.
Consequently, Global Automakers believes that it would have been arbitrary and capricious for
EPA to promulgate GHG emission standards for model years as far into the future as MY 2022-
2025 without providing for a mid-term evaluation. [EPA-HQ-OAR-2010-0799-9466-A1, p. 11]
Organization: BMW of North America, LLC
An in-depth mid-term review is extremely important in order to monitor the development of
external factors such as customer acceptance of more fuel efficient vehicles. [EPA-HQ-OAR-
2010-0799-9579-A1, p. 1]
Therefore, an in-depth mid-term review is an extremely important pillar in the proposed rule in
order to monitor the development of external factors which are not under the manufacturer's
direct control. This review is critical for reassessment of what technology can deliver and what
consumers are willing to buy. [EPA-HQ-OAR-2010-0799-9579-A1, p. 3]
2-134
-------
CO? Emissions Standards
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 78-79.]
Organization: Center for Biological Diversity
H. The Agencies' Proposed Interim Rulemaking Should, at a Minimum, Be Based on a
Presumption that the Stringencies of the Standards Will Not Decrease
We have already commented on the Agencies' proposed mid-term review in our response to the
DEIS. We add here that the Agencies' proposed method of undertaking this review is faulty.
They state they intend the review to be based on "(1) a holistic assessment of all of the factors
considered by the agencies in setting standards . . ., and (2) the expected impact of those factors
on the manufacturers' ability to comply, without placing decisive weight on any particular factor
or projection." To the contrary, as fully explained above, the Agencies must place decisive
weight on energy conservation. Yet, by highlighting manufacturers' ability to comply in a
separate category, the Agencies tip their hand about a very different, and improper, weighing of
the statutory factors. We further note the irony of requests by automakers for "frequent
evaluations" of the MY 2017-2025 standards in light of their insistence that "certainty" of
standards and extreme lead times are needed if stringencies are to be increased. 110 Efforts to
water down already insufficient standards by any means must be resisted. [EPA-HQ-OAR-2010-
0799-9479-A1, pp. 24-25]
110 See Jason Plautz, Fuel Economy: Automakers Urge Frequent Evaluations of 2027-2025
Program, GREENWIRE, Jan. 17, 2012. [EPA-HQ-OAR-2010-0799-9479-Al, p. 25]
Organization: Chrysler Group LLC
This rulemaking will affect vehicles over thirteen years into the future. Many key elements such
as technology development, technology costs, fuel costs, and customer acceptance can be
difficult to accurately predict. Therefore, Chrysler strongly supports the agencies' proposal to
hold a formal mid-term review of the 2022-2025 model year standards and informal monitoring
of industry progress towards meeting the National Program goals. [EPA-HQ-OAR-2010-0799-
9495-A1, p. 2]
For this reason the proposed mid-term review of the 2022-2025 MY standards is critical.
Chrysler strongly supports this provision and encourages EPA and NHTSA (collectively, the
"Agencies") to also establish regular informal reviews leading up to and following the formal
mid-term review. [EPA-HQ-OAR-2010-0799-9495-A1, p. 5]
Chrysler notes that the Agencies have a firm legal basis to conduct the mid-term evaluation.
(Attachment 1)
2-135
-------
EPA Response to Comments
The Agencies have legal authority to conduct a formal mid-term evaluation which can affirm or
modify standards promulgated for the 2022-2025 model years. [EPA-HQ-OAR-2010-0799-
9495-A1, p. 6]
EPA and NHTSA have a firm legal basis to conduct the mid-term evaluation
EPA and NHTSA have ample authority under Section 307(d) of the Clean Air Act and the
Administrative Procedure Act to reconsider regulations based on new information. See, e.g., 5
U.S.C. § 553(e) (providing for petitions to issue, amend or repeal a rule); 42 U.S.C. § 7607(b)
(allowing petitions for review of a Clean Air Act rule based on new information); 49 U.S.C. §
32902(c) (authorizing the Secretary of the Department of Transportation to amend CAFE
standards following notice-and-comment rulemaking under 5 U.S.C. § 553 and allowing for oral,
transcribed presentations). [EPA-HQ-OAR-2010-0799-9495-A1, p. 7]
As described in the proposed rule, "NHTSA has a statutory obligation to conduct a separate de
novo rulemaking in order to establish final standards for vehicles for the 2022-2025 model years
and would conduct a mid-term evaluation as part of that rulemaking." 76 Fed. Reg. at 74,861.
Under the Energy Policy Conservation Act ("EPCA"), NHTSA must set fuel economy standards
at least 18 months before the beginning of each model year, 49 U.S.C. § 32902(a), and "must
issue regulations ... prescribing average fuel economy standards for at least 1, but not more than
5, model years." 49 U.S.C. § 32902 (b)(3)(B). Since NHTSA must go through future rulemaking
to establish the MY 2022-2025 standards, a full consideration of the standards based on the
record at the time of the rulemaking is essential. [EPA-HQ-OAR-2010-0799-9495-A1, p. 7]
EPA proposed a commitment to undertake a similar mid-term evaluation under the Clean Air
Act. See 76 Fed. Reg. at 75,370 (proposed to be codified at 40 C.F.R. § 86.1818-12 (h)) ("Mid-
term evaluation of standards. No later than April 1, 2018, the Administrator shall determine
whether the standards established in paragraph (c) of this section for the 2022 through 2025
model years are appropriate under section 202(a) of the Clean Air Act, in light of the record then
before the Administrator. An opportunity for public comment shall be provided before making
such determination. If the Administrator determines they are not appropriate, the Administrator
shall initiate a rulemaking to revise the standards, to be either more or less stringent as
appropriate.").
As it is, agencies m [EPA-HQ-OAR-2010-0799-9495-A1, p. 7]ay not violate their own rules and
regulations to the prejudice of others. See United States ex rel. Accardi v. Shaughnessy, 347 U.S.
260, 267 (1954); Steenholdt v. F.A.A., 314 F.3d 633, 639 (D.C. Cir. 2003) ("The Accardi
doctrine requires federal agencies to follow their own rules, even gratuitous procedural rules that
limit otherwise discretionary actions."). [EPA-HQ-OAR-2010-0799-9495-A1, p. 7]
The factors to be considered at the mid-term evaluation are the same as those that the agencies
are obliged to consider in initially setting standards under their respective authorities. See 76
Fed. Reg. at 75,370 (proposed to be codified at 40 C.F.R. § 86.1818-12 (h)) (listing factors EPA
must consider, including cost to producers and purchasers, as well as the feasibility and
practicability of the standards and the impact of the standards on the automobile industry). Under
EPC A, the Secretary is to consider "technological feasibility, economic practicability, the effect
2-136
-------
CO? Emissions Standards
of other motor vehicle standards of the Government on fuel economy, and the need of the United
States to conserve energy." 49 U.S.C. § 32902(f). [EPA-HQ-OAR-2010-0799-9495-A1, p. 7]
NHTSA has interpreted economic practicability to include consideration of consumer choice,
economic hardship for the automobile industry, and vehicle safety. 76 Fed. Reg. at 74,897
(footnote omitted) (discussing NHTSA approach to economic practicability under EPCA and
explaining: "Consumer acceptability is also an element of economic practicability, one which is
particularly difficult to gauge during times of uncertain fuel prices."); see also CEI I, 901 F.2d at
120, n.ll; Center for Auto Safety v. NHTSA, 793 F.2d 1322, 1340 (D.C. Cir. 1986). [EPA-HQ-
OAR-2010-0799-9495-A1, p. 7]
Under Section 202 of the Clean Air Act, EPA emissions standards:
"shall take effect after such period as the Administrator finds necessary to permit the
development and application of the requisite technology, giving appropriate consideration to the
cost of compliance within such period." 42 U.S.C. § 7521(a)(2). [EPA-HQ-OAR-2010-0799-
9495-A1, p. 8]
EPA has also acknowledged, at least as to choices among vehicles, the relevance of consumer
acceptance in evaluating these factors. See MY 2012-2016 Final Rule, 75 Fed. Reg. 25,324,
25,467 ("Consumer choice remains a pertinent factor for EPA to consider in balancing the
relevant statutory factors," citing International Harvester Co. v. Ruckelshaus, 478 F.2d 615, 640
(D.C. Cir. 1973)). In International Harvester, the court of appeals, recognizing that
"[a]significant decrease in auto production will have a major economic impact on labor and
suppliers to the [automobile] companies," concluded that the Administrator is required to
consider issues of basic demand for new passenger vehicles in making technical feasibility and
lead time determinations. Id. at 641. [EPA-HQ-OAR-2010-0799-9495-A1, p. 8]
Under Section 202, EPA also must consider safety impacts:
"... [N]o emission control device, system, or element of design shall be used in a new motor
vehicle or new motor vehicle engine for purposes of complying with requirements prescribed
under this subchapter if such device, system, or element of design will cause or contribute to an
unreasonable risk to public health, welfare, or safety in its operation or function." 42 U.S.C. §
7521(a)(4)(A) (emphasis added). [EPA-HQ-OAR-2010-0799-9495-A1, p. 8]
As it is, the factors of "the requisite technology" and "appropriate consideration to the cost of
compliance within such period" encompass the issues related to infrastructure, technology cost,
consumer acceptance, and the other factors that the proposed rule directs EPA to consider. [EPA-
HQ-OAR-2010-0799-9495-A1, p. 8]
The mid-term evaluation contemplates coordination between EPA and NHTSA, just as they have
coordinated in developing the MY 2012-2016 rule and in developing the MY 2017-2025
proposal. Indeed, the United States Supreme Court has recognized that while the agencies'
"obligations may overlap, . . . there is no reason to think the two agencies cannot both administer
2-137
-------
EPA Response to Comments
their obligations and yet avoid inconsistency." Massachusetts v. EPA, 549 U.S. 497, 532
(2007). [EPA-HQ-OAR-2010-0799-9495-A1, p. 8]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 53.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 60.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 25-26.]
We believe the midterm review is critical to determining whether the customer's buying, and will
continue to buy the technology packages needed to comply with the standards year over year.
Efforts to search for parameters that measure potential customer acceptance must not lose sight
of the most important question: Are they buying the product? Measuring whether consumers will
buy what we offer next year is already challenging. Speculating as far as 13 years in the future
holds significant uncertainty and risk. A midterm assessment of the underlying rulemaking
assumptions provides a critical and equitable mechanism o adjust standards for future consumer
and technology uncertainties and is a primary reason Chrysler supports this program.
Organization: Consumer Federation of America (CFA)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 91-92.]
And finally, sixth, the proposed rule recognizes the need to stay in touch with reality.
So we have this midterm review, which I fully support, as you've heard the auto makers insist on
it. But I actually believe when we get to the midterm review, we're as likely to increase the
standards as decrease.
Because, one, we've used the very low gasoline price. And so I think it will be higher when we
get there.
And, two, historically we've seen that the original projections of the cost of meeting technologies
in every major standard proposed by this agency and NHTSA have always been too high.
Organization: Ecology Center
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 189.]
While we do have some concerns about the proposed mid-term review providing an opportunity
to slow progress, we understand the need for potential adjustments due to many unknowns that
2-138
-------
CO? Emissions Standards
far into the future. We are hopeful that such a review will show that even more progress is
achievable.
Organization: EcoMotors International, Inc.
NHTSA is obligated to conduct a separate de novo rulemaking in order to establish final
standards for MYs 2022-2025 vehicles. The agencies are therefore proposing to conduct a
comprehensive midterm evaluation to assess the appropriateness of the MY 2022-2025
standards, based on an updated assessment of all the factors considered in setting the standards
and the impacts of those factors on the manufacturers' ability to comply.
The auto industry faces great uncertainty over future technology developments and costs,
customer acceptance of new technologies, and fuel prices. Additionally, it will require more than
just automotive production for emissions reductions from advanced technology vehicles to be
realized. There must be a national fueling and service infrastructure available to support these
technologies if they are to achieve significant market penetration. Developing and establishing
this infrastructure for the nation and establishing consumer confidence in new technologies will
take time. All of these factors make it critical that OEMs foresee the ability to cope with
unexpected events and changes. Given the uncertainty inherent in setting standards over such a
long time period, EcoMotors supports the agencies' plans to conduct a coordinated mid-term
evaluation of the standards. [EPA-HQ-OAR-2010-0799-9594-A2, pp. 13-14]
• Specific Recommendation: Conduct a coordinated mid-term evaluation, as proposed.
We look forward to further developments in this rulemaking. [EPA-HQ-OAR-2010-0799-9594-
A2, p. 14]
Organization: Ferrari
Finally, it is essential for EPA and NHTSA to conduct a comprehensive mid-term evaluation,
taking into account the long period covered by the proposed regulations, regardless the legal
obligations for NHTSA. [EPA-HQ-OAR-2010-0799-9535-A2, p. 10]
Organization: Ford Motor Company
• Mid term Evaluation: The proposal provides for a thorough mid-term evaluation, by no later
than April 2018, to assess the appropriateness of the targets for model years 2022 through 2025.
This provision is essential and must be maintained in the final rule. The market success of our
industry, and hence that of our new and innovative products, is dependent upon many factors
outside of our control, such as the price of fuel, the state of the economy, or the availability of
affordable technologies and materials (for example, to support electrification, or light-
weighting). The further we look into the future, the more difficult it is to predict these factors
with accuracy. This is why the proposed mid-term evaluation of the 2022-2025 model year
greenhouse gas standards is vital to this joint proposal. The mid-term evaluation provides an
2-139
-------
EPA Response to Comments
essential checkpoint to ensure that the standards for those model years are consistent with
evolving market conditions. [EPA-HQ-OAR-2010-0799-9463-Al, pp. 2 and 5]
Mid-Term Evaluation
The proposed rules include provisions for a mid-term evaluation of the appropriateness of the
MY 2022-2025 GHG standards. This mid-term evaluation is to be conducted concurrently with
NHTSA's actions in setting final, enforceable standards for MYs 2022-2025. Under the proposal,
EPA and NHTSA, along with CARB, will jointly prepare a draft Technical Assessment Report
('TAR') on the appropriateness and feasibility of the MY 2022-2025 GHG and Corporate
Average Fuel Economy (CAFE) standards and make the report available to the public no later
than November 15, 2017. The agencies will receive public comment on the TAR as well as the
standards themselves. EPA will then determine, by April 1, 2018, whether the MY 2022-2025
standards are appropriate, taking into account a number of factors, including but not limited to
factors specified in the regulatory language. If EPA determines the MY 2022-2025 standards are
appropriate, it will issue a final decision to that effect, which will be judicially reviewable. If
EPA determines the MY 2022-2025 standards are not appropriate, it will initiate a rulemaking to
adopt appropriate standards under Section 202(a) of the Clean Air Act, and any final rule
resulting from that process would also be judicially reviewable. Any such rulemaking would be
conducted jointly with NHTSA's de novo notice-and-comment rulemaking to set final CAFE
standards for MYs 2022-2025. Both agencies would presumably issue final standards for MYs
2022-2025 on or before April 1, 2020, which would provide the minimum allowable lead time
for the MY 2022 standards under the CAFE law. [EPA-HQ-OAR-2010-0799-9463-A1, p. 6]
Given the extended timeframe for the rules, the mid-term evaluation provisions are essential to
Ford's support of this rulemaking package. The proposed standards for model years 2022-2025
are premised on projected developments in fuel economy technology, anticipated improvements
in infrastructure to support new kinds of powertrains, the willingness of consumers to accept new
technologies, and other factors. To the extent that these assumptions turn out to be incorrect,
adjustments to the MY 2022-2025 standards may be necessary. The mid-term evaluation
provides a vital checkpoint to ensure that the MY 2022-2025 standards are realistic and that the
manufacturers have a workable pathway to compliance. It is also essential that the agency
decisions emerging from the mid-term evaluation be judicially reviewable. While we think it is
unlikely that the agency's mid-term evaluation determination will be challenged in court, the
possibility of such a challenge helps to ensure that the evaluation process will be robust and that
the agencies will give full consideration to all comments. [EPA-HQ-OAR-2010-0799-9463-Al,
p. 6]
Ford supports the mid-term evaluation provisions as proposed by EPA. We also offer the
following comments, which are fully consistent with the existing provisions: [EPA-HQ-OAR-
2010-0799-9463-A1, p. 6]
• Timing. In conducting the mid-term evaluation, it is very important that the agencies
meet (if not beat) the deadlines set forth in the proposed rules. The TAR must be issued
on time to allow for a reasonable public comment period, and the public comment period
must be completed in a timely fashion for EPA to meet its April 1, 2018 deadline for
2-140
-------
CO? Emissions Standards
making its determination. That deadline, in turn, must be met in case EPA needs to
undertake a joint rulemaking with NHTSA to set new standards for MYs 2022-2025 and
complete that rulemaking by April 1, 2020, which is NHTSA's statutory deadline for
setting MY 2022 CAFE standards. If the mid-term evaluation process is allowed to lag,
stakeholders who are concerned about the appropriateness of the MY 2022-2025
standards may have little choice but to initiate 'deadline' litigation or take other actions
they believe to be consistent with their interests. If this occurs, the goal of an orderly,
thoughtful mid-term evaluation process could be thwarted. Adherence to the timing set
forth in the proposal is critical. [EPA-HQ-OAR-2010-0799-9463-Al, pp. 6-7]
Coordination between EPA and NHTSA. Closely related to the timing issue is the
importance of close coordination between EPA and NHTSA during the mid-term
evaluation process. Consistent with the overarching goals of the One National Program
framework, the midterm evaluation process needs to result in a joint rulemaking with
harmonized CAFE and GHG standards for MYs 2022-2025. The harmonized standards
should enable manufacturers to comply with both their GHG and CAFE obligations by
building one fleet of vehicles that can be sold nationwide. In order to accomplish this, the
degree of coordination between EPA and NHTSA during the mid-term evaluation needs
to be no less than the degree of coordination involved in the pending joint rulemaking.
The mid-term evaluation should not be viewed as an opportunity for EPA and NHTSA to
go in different directions with respect to the GHG and CAFE standards. [EPA-HQ-OAR-
2010-0799-9463-A1, p. 7]
Factors to be considered. The proposed mid-term evaluation provision states that'.. .the
Administrator shall consider information available on the factors relevant to setting
greenhouse gas emission standards under Section 202(a) of the Clean Air Act for model
years 2022 through 2025, including but not limited to...' *emphasis added+. The
provision goes on to list a number of specific factors that the Administrator must
consider. In Ford's view, the 'including but not limited to' language is an essential part of
the mid-term review provisions. The factors that turn out to be most important six years
from now are not necessarily foreseeable today, and not necessarily the ones listed in the
proposed rule. As we understand the language, EPA must be open to the consideration of
relevant factors not specifically listed, including relevant factors that may be raised in
public comments received by the agencies. We urge EPA to maintain this language in the
final rule, so that the midterm evaluation is as robust and comprehensive as
possible. [EPA-HQ-OAR-2010-0799-9463-A1, p. 7]
Holistic View. As part of the mid-term evaluation, the Agencies should take a broad view
of the opportunities for reducing transportation-related CO2 emissions and fuel
consumption, with an eye toward determining whether it may be necessary to implement
measures external to the auto industry in order to support and complement the vehicle
standards. A holistic approach to GHG reduction and fuel savings has the potential to be
much more effective than a tunnel-vision focus on vehicles alone. Along these lines, we
direct your attention to comments submitted by the University of Michigan (Chock,
Gonzalez, Zeilinski) regarding the importance of considering the role of consumer fuel
usage as part of any effort to establish policies and regulations related to GHG emissions.
Ford has been, and continues to be, actively involved in dialogue with a variety of entities
(including governments, academic institutions, and NGOs) on such subjects as urban
2-141
-------
EPA Response to Comments
planning, congestion reduction, fueling infrastructure, and connectivity technologies to
facilitate more efficient public and private transport. The ability of manufacturers to
achieve the proposed vehicle standards may in part depend on the degree of progress our
society is able to achieve in one or more of these other areas. Also, market fuel quality,
particularly octane level, can have a significantly positive impact on all on-road vehicles
and should therefore be a key part of our national strategy to improve energy security.
These issues need to be on the table as part of the mid-term evaluation. [EPA-HQ-OAR-
2010-0799-9463-A1, p. 7]
On balance, we believe that the proposed mid-term evaluation provisions set forth a meaningful
and reasonable process for revisiting the appropriateness of the proposed MY 2022-2025
standards, with the benefit of the information gathered in the intervening years. Ford supports the
inclusion of these provisions in the final rule, and we pledge to work with the agencies in a
constructive manner toward final MY 2022-2025 standards that are workable and
appropriate. [EPA-HQ-OAR-2010-0799-9463-A1, p. 8]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 45.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 34.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 86-87.]
This is why the proposed midterm evaluation of the 2022 to 2025 standards is so vital to this
joint proposal. As proposed, the midterm evaluation provisions require EPA to make a fresh
determination regarding the appropriateness of the post-2021 model year standards after
considering a variety of factors and soliciting public comments. This process will take place
concurrently with NHTSA's process for setting final standards for the 2022 to 2025 model years.
The midterm evaluation is an essential checkpoint to ensure that the standards for these model
years are consistent with evolving market conditions. The existence of a robust, meaningful
midterm evaluation process is critical to Ford's support for this rulemaking package.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 44-47.]
The proposed rule extends to the 2025 model year which is an unprecedented time frame in the
context of fuel economy regulations. This presents a significant challenge for manufacturers.
While the establishment of longer-term standards provide manufacturers with targets for future
product planning investment, the longer time frame leads to greater risk that the assumptions
underlying the standards do not come to fruition.
Organization: General Motors Company
2-142
-------
CO? Emissions Standards
GM understands that the 2022-2025 standards will be evaluated further during the mid-term
review. [EPA-HQ-OAR-2010-0799-9465-A1, p. 2]
GM supports an in-depth mid-term evaluation, and urges as well, a continuing open dialogue
among industry and other affected parties, including a series of earlier, focused, technical
evaluations, or "check-ins", on the key assumptions upon which the proposed standards are
based. [EPA-HQ-OAR-2010-0799-9465-A1, p. 2]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 35-38, and 56.]
As this proposal makes many optimistic assumptions and sets goals all the way out to 2025, 13
years from today, it is imperative that we collectively check the validity of those assumptions as
we move through that extended period of time. We suggest not only one formal mid-term review
as the agencies themselves have planned for the proposal, but a series of smaller technical and
detailed focused check-ins on the key assumptions contained in this proposal. These check-ins
will allow the program to stay on track and lead to the best long-term results. Of course, the more
formal mid-term review is also essential since NHTSA must itself conduct a separate rulemaking
to set the requirements under the CAFE law for the final four years of this period.
But you have my commitment that we will provide whatever data, analysis, and input we can to
help the agencies to make judgments and course corrections along the way.
Clearly this proposal represents a dramatic attempt to advance the mutual goals of CO2 reduction
and increased energy diversity. The mid-term review is essential to make sure that we also revisit
the assumptions inherent in establishing these goals to make sure we have not overwhelmed
technology development or the needs of consumers or their willingness to accept and pay for the
associated changes in vehicles.
Organization: Honeywell International, Inc.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 258.]
As the agencies recognize, turbo technologies will contribute significantly during the model
years covered by this rulemaking, the agencies should commit during the mid-term review to
evaluate the availability of more advanced turbo technologies and to ensure an equal production
incentive as any ongoing incentive provided to battery technology.
Organization: Honeywell Transportation Systems
Honeywell also encourages the agencies to commit in the final rule to a detailed review of
emerging boosting technologies that may considerably advance vehicle emissions and fuel
economy performance during the later years of the rulemaking. The agencies have already
committed within the mid-term review to consider powertrain improvements to diesel and
2-143
-------
EPA Response to Comments
gasoline powered vehicles. New, advanced turbo technologies can facilitate those improvements
and may be ripe for regulatory consideration during the time when the agencies intend to conduct
the mid-term review. [EPA-HQ-OAR-2010-0799-9474-A1, p.6]
Honeywell's research and development into turbo advancements continues. We expect to
contribute significantly to support emissions and fuel economy improvements in both the light
duty and heavy duty fleets during the upcoming model years. We are investing in yet more
advanced approaches that we expect will allow diesel and gasoline vehicles to compete favorably
in the marketplace while substantially advancing their environmental performance. While many
of these technologies are not yet available for regulatory consideration, we anticipate that new,
additional turbo technologies will be on the technology menu during the mid-term
review. [EPA-HQ-OAR-2010-0799-9474-A1, p.6]
The agencies' consideration of additional flexibilities and credits in the mid-term review should
include such technologies. While the agencies will reconsider the viability of any incentives
provided to electric drivetrains in the upcoming final rule, the agencies at the same time should
consider providing equal treatment to ICE vehicles incorporating the boosting technologies that
may be ripe for emergence during the model year 2022-2025 timeframe. [EPA-HQ-OAR-2010-
0799-9474-A1, p.6]
Honeywell also requests that the agencies commit to ensuring that future turbocharging
technology be accorded full consideration and treatment analogous to electric drivetrain
technology during the mid-term review. [EPA-HQ-OAR-2010-0799-9474-Al, [p.6]
Organization: House of Representatives, Congress of the United States
In addition, we were pleased that the Administration intends to include a 'midterm' review for the
2022-2025 requirements. This provides an opportunity for the last set of increases to be re-
visited to see if the assumptions on technology, costs, fuel prices, consumer acceptance and
vehicle prices still support the standards that will be proposed, or whether their stringency should
be revised upwards or downwards. [EPA-HQ-OAR-2010-0799-1221-A1, p. 1]
Organization: Hyundai America Technical Center
The agencies are proposing a comprehensive mid-term review prior to the final adoption of the
MY 2022-2025 standards by NHTSA. Hyundai supports the standards as proposed and
appreciates the substantial lead time provided by the regulations which will provide stability for
long-term product planning. At the same time, the proposal covers nine model years, out to MY
2025, which makes it difficult to make accurate assumptions due to market uncertainties such as
the price and viability of different fuel types, infrastructure availability, technology availability,
technology penetration rates and cost, and consumer acceptance of technology. Therefore,
Hyundai supports the mid-term evaluation because it provides an opportunity to ensure that the
details of the program are appropriate and that the requirements are sound closer to the time of
implementation. [EPA-HQ-OAR-2010-0799-9547-A1, p.2]
2-144
-------
CO? Emissions Standards
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 173.]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 23.]
We agree with the comments by Global Automakers that the final rule should specify a clearly
defined process for the mid-term review with a set of specific questions that should be addressed.
Additionally, we also support additional informal periodic reviews to monitor areas such as the
state of technology, the effect of the proposed incentives and the viability of testing methods.
[EPA-HQ-OAR-2010-0799-9547-A1, p.2]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 173-174.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 24.]
Although we believe the proposed requirements are feasible, Hyundai recognizes that it is
difficult to accurately predict out to the 2025 time frame the technologies and the cost and
consumer acceptance of these technologies that will be necessary.
The mid-term review will help ensure that the requirements are sound closer to the time of
implementation.
Organization: Institute for Policy Integrity, New York University School of Law
Factors for the Mid-Term Evaluation Should Specifically Include Benefit Estimate Revisions
The agencies should commit to developing better estimates of non-carbon dioxide benefits
during the SCC revision process, ideally in time to incorporate such estimates in the final
rulemaking.
Periodic review of ongoing regulations is a valuable check on efficiency,73 and the practice is
now enshrined in executive order. 74 The agencies' plan to conduct a mid-term evaluation of the
rule in advance of model year 2022 is commendable. Unfortunately, EPA's list of relevant
factors to consider during this review process lacks key elements. While there is a catch-all
listing of "other factors," there is no specific mention of reviewing any changes in benefits
estimates, such as any revised SCC values. The agencies should amend their list of factors to
specifically reflect any potential changes to benefits estimates, in addition to changes to costs or
the state of technology. [EPA-HQ-OAR-2010-0799-9480-A1, p. 11]
73 See Comments from Policy Integrity to EPA and DOT on Retrospective Review (Mar. 18,
2011, Apr. 1, 2011, June 27, 2011, July 3, 2011), available at http://www.policyintegrity.org.
2-145
-------
EPA Response to Comments
74 Exec. Order 13,563 §6.
Organization: International Council on Clean Transportation (ICCT)
10. ICCT enthusiastically supports a midterm review, as we believe it will find that costs have
been significantly overstated. The criteria and analyses used for the midterm review should be
similar to those used for any CAFE or greenhouse gas rulemaking process. EPA and NHTSA
should also provide periodic status updates on technology progress and the results of additional
benefit and cost analyses. [EPA-HQ-OAR-2010-0799-9512-A1, p. 3]
10) Mid-Term Review
The ICCT enthusiastically supports a midterm review, as we believe the proposed rule
significantly overstates the cost of compliance. Continued technology advancements will both
increase the benefits of many technologies, such that not as much technology would need to be
installed, and reduce the cost of technologies that are used. Capturing these future improvements
in the midterm review will allow the agencies to increase the stringency of the 2022-2025
standards. [EPA-HQ-OAR-2010-0799-9512-A1, p. 22]
The process for the midterm review is critical to the 2022-25 standards. It is impossible to define
all the criteria for the review at this time, just as it is not possible to define all of the criteria for
any rulemaking process. EPA and NHTSA need latitude to apply their best analyses and base the
requirements on the results of these analyses. The ICCT believes that the criteria and analyses
used for the midterm review should be similar to those used for any CAFE or GHG rulemaking
process. [EPA-HQ-OAR-2010-0799-9512-A1, pp. 22-23]
The ICCT also recommends that EPA and NHTSA conduct periodic updates on technology
progress and consider periodic status reports. Tear-down cost assessments should continue in
order to assess the cost of newer technologies as they are introduced into the market. Simulation
modeling also needs to be updated to keep pace with technology development. The scope and
timing of reports should be up to the Agencies, but we see value in documenting progress in
technology improvements and implementation. Manufacturers do not release details of their
technology development, so periodic reports can summarize technology and cost developments
and technology deployment for all interested parties, including other manufacturers. The ICCT
also expects continued improvement in the science of assessing technology benefits and costs,
which can be disseminated through the periodic progress reports. Forward-looking analyses
would provide a better foundation going into the midterm review and should be updated as
appropriate. [EPA-HQ-OAR-2010-0799-9512-A1, p. 23]
Organization: Johnson Controls, Inc.
Johnson Controls also supports the agencies' inclusion of a mid-term evaluation, which, as
proposed, will provide all stakeholders with a comprehensive analysis so they may consider the
current performance and ability to realistically deliver the MY 2017-2025 standards in the public
docket. Long-term planning is an especially important factor in the battery industry as there are
likely to be uncertainties in the product development cycle that could directly impact - positively
2-146
-------
CO? Emissions Standards
or negatively - the commercial success of new products, as well as the return on investment
required to expand the U.S. manufacturing base. Providing an opportunity for a thorough
analysis is a critical and necessary component of this next National Program. [NHTSA-2010-
0131-0253-Al,pp. 2-3]
Midterm Review should be supplemented by ongoing review and analysis during the course of
the National Program. Midterm review is a critical component for this next National Program
which covers eight years. Since the commencement of the midterm 'review is in the distant
future, the industry encourages the agencies to be open to ongoing shared analysis and input to
assess if the goals of the Program are being realized and/or if there are circumstances that
drastically impact the marketplace or technology development. [NHTSA-2010-0131-0253-A1, p.
5]
Organization: Kia Motors
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 102.]
Kia appreciates these substantial lead times for these regulations which will provide stability in
long-term planning. However, Kia believes it is important for the agencies to include mid-term
evaluations to allow for revisions if some of the assumptions made in the drafting of the rule are
not proven to be correct. Even though Kia supports the standards, Kia recognizes it is difficult to
accurately predict the outcome — to accurately predict how to deliver the 2025 technology in that
time frame. Consumer acceptance of those technologies and costs will also be a challenge. The
mid-term review will help us ensure that the standards are robust for all OEMs near to the time
frame of implementation.
Organization: Marshall, C
The idea of a review of the regulation in 2021 is a good concept but I think the lead-times for the
vehicle manufacturing industry to retool are so long that I would suggest the review be held in
2019. [EPA-HQ-OAR-2010-0799-5917-A2, p. 1]
Organization: Mass Comment Campaign (20,500) (Union of Concerned Scientists-3)
The agencies are proposing a 'mid-term' review that would begin soon after the standards come
into effect. In the past, automakers have abused similar programs—turning them into off-ramps
as opposed to reviews. It is critical that this review does not undermine the program through
2025. [EPA-HQ-OAR-2010-0799-10166-A2_MASS, p.l]
Organization: Mass Comment Campaign (375) (Union of Concerned Scientists-2)
The agencies are proposing a 'mid-term' review that would begin soon after the standards come
into effect. In the past, automakers have abused similar programs—turning them into off-ramps as
2-147
-------
EPA Response to Comments
opposed to reviews. It is critical that this review does not undermine the program through 2025.
[EPA-HQ-OAR-2010-0799-1246-A1_MASS, p.l]
Organization: Mass Comment Campaign (9,570) (Unknown Organization)
The agencies are proposing a 'mid-term' review that would begin soon after the standards come
into effect. In the past, automakers have abused similar programs-turning them into off-ramps as
opposed to reviews. It is critical that this review does not undermine the program through 2025.
[EPA-HQ-OAR-2010-0799-9578-Al_MASS, p.l]
Organization: Mercedes-Benz USA, LLC
The mid-term review is critical to ensuring that the program remains feasible and is achieving
GHG and fuel economy reductions without creating unintended economic, market and/or safety
consequences. DAG strongly endorses the comments of the Auto Alliance with regard to the
mid-term review. In addition to the various 'unknowns' identified in the Alliance comments, the
mid-term review is essential to evaluate the structure of the program as applied to companies
needing to expand their product offerings beyond the addition of advanced technology vehicles.
[EPA-HQ-OAR-2010-0799-9483-A1, p. A-2]
DAG also encourages the agencies to engage in periodic evaluations, in addition to the more
formal and comprehensive mid-term review, to appraise (1) the extent to which the market has
sustained the continued growth of hybrid vehicles and has accepted electric vehicles, (2) the
extent to which the infrastructure to support battery electric, fuel cell and CNG vehicles has
grown, and (3) whether efforts to meet the standards have resulted in adverse market or
economic losses or product withdrawals. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-2]
Organization: Mitsubishi Motors R&D of America, Inc. (MRDA)
Supports the inclusion of a mid-term evaluation as fundamental for setting realistic fuel economy
and GHG stringency levels for MYs 2022 through 2025. Recommends that effects of consumer
incentives and EV charging infrastructure must be considered in the mid-term evaluation. [EPA-
HQ-OAR-2010-0799-9507-A1, p.2]
Mitsubishi Motors fully supports the mid-term evaluation, included in proposed language in
Section 86.1818-12(h), in preparation for setting fuel economy and GHG standards for MYs
2022 through 2025. This is not only necessary, but fundamental to setting informed and practical
standards that account for the realities of the U.S. market. Mitsubishi Motors believes the
following factors must be considered and incorporated into the mid-term evaluation: [EPA-HQ-
OAR-2010-0799-9507-A1, p.2]
• • What are fuel price trends as compared to what was projected? [EPA-HQ-OAR-2010-
0799-9507-A1, p.2]
• • Are consumers buying more fuel efficient vehicles in general? [EPA-HQ-OAR-2010-
0799-9507-A1, p.2]
2-148
-------
CO? Emissions Standards
• • Does sufficient EV infrastructure exist to support current and future EV adoption? Have
consumers adopted EVs in the numbers as projected by the agencies in the analysis done
fortheNPRM? [EPA-HQ-OAR-2010-0799-9507-A1, p.2]
• • Have there been any significant industry-wide economic setbacks making EV and
overall fuel economy targets as proposed in the NPRM impracticable? [EPA-HQ-OAR-
2010-0799-9507-A1, p.3]
• • Are financial and non-financial incentives and compliance flexibilities still necessary to
continue to advance adoption of EVs? [EPA-HQ-OAR-2010-0799-9507-A1, p.3]
• • Have there been significant advances in smart grid development, energy management
and battery storage? [EPA-HQ-OAR-2010-0799-9507-A1, p.3]
This is not an exhaustive list. Given our significant investment and commitment to EV
commercialization, these are important areas of concern for Mitsubishi Motors in the MY 2022
through 2025 timeframe. After a thorough analysis and consideration of all necessary factors,
CAFE and GHG stringency levels for MYs 2022 through 2025 should be set accordingly. [EPA-
HQ-OAR-2010-0799-9507-A1, p.3]
The agencies have never proposed fuel economy (or GHG) regulations that reach 13 model years
into the future. Additionally, the agencies? target for finalizing this rule will be well before
NHTSA?s statutory requirement of publishing finalized requirements at least 18 months prior to
the beginning of a MY. This unprecedented lead time lends itself to more questions rather than
providing certainty for OEMs. [EPA-HQ-OAR-2010-0799-9507-A1, p.3]
Additionally, the mid-term evaluation is necessary since the product plans for MYs 2016 through
2020 are not as well-defined as the product plans for MYs 2010-2015. And, no OEM has
detailed product plans for MYs 2021 through 2025. Although the product cycle development
begins nearly 10 years before the launch of a vehicle, the commitment to product plans does not
happen 10 years in advance. Product plans are set in general for approximately five years at a
time. Projecting beyond five years in the future presents incremental uncertainties that those
projections can be fulfilled for a number of reasons. The mid-term evaluation will help ensure
that substantive analysis, rather than incrementally uncertain assumptions, support progressive
yet realistic targets for the later years of this rulemaking. [EPA-HQ-OAR-2010-0799-9507-A1,
p.3]
Much of the uncertainty involves making realistic assumptions for consumer acceptance of
alternative fueled vehicles (AFVs) for MYs 2022 through 2025. In order to make accurate
assumptions for this timeframe, NHTSA and EPA must evaluate consumer choices made during
MYs 2017 through 2021. Given historical adoption rates of advanced technology vehicles, there
needs to be a thorough evaluation for an EV multiplier in MYs 2022 through 2025 in order to
continue to advance EV market penetration. [EPA-HQ-OAR-2010-0799-9507-A1, p.3]
To spur EV industry investment, President Obama established a national goal of 1 million
electric vehicles on the road by 2015. Localities like the twin cities of Bloomington and Normal
in central Illinois are working with Mitsubishi Motors and the Eaton Corporation through the EV
Task Force to educate consumers, install EV charging infrastructure and deploy 1,000 Mitsubishi
2-149
-------
EPA Response to Comments
"i"s by 2014. OEMs are planning for significant increases in consumer adoption rates of EVs and
PHEVs. These progressive targets and plans are noteworthy and encouraging. Ultimately
however, only consumers can fulfill these plans. EPA should account for uncertainty regarding
consumer acceptance by extending the EV multiplier in MYs 2022 through 2025. This will help
sustain progress towards establishing a mass EV market. [EPA-HQ-OAR-2010-0799-9507-A1,
p.3]
Overall, NHTSA?s Preliminary Regulatory Impact Analysis (PRIA) suggests that this
rulemaking is economically practicable for the industry as a whole. Yet, details in the PRIA
indicate that manufacturers? costs to incorporate advanced technology in vehicles vary greatly.
Specifically, Table VII-la (estimated average cost per passenger car over the adjusted baseline
for MYs 2017 through 2025) in the PRIA projects that Mitsubishi Motors? projected costs are
higher than any other manufacturer. By 2025, they are projected to be more than three times
greater than the average. [EPA-HQ-OAR-2010-0799-9507-A1, p.3]
It is evident and expected that some companies will be absorbing more incremental costs to
remain price competitive, especially manufacturers with fewer product lines. Some increased
material and component costs can be passed onto a consumer. However, Mitsubishi Motors
strives to offer competitively priced vehicles, and like other manufacturers, endeavors to limit
transferring costs to consumers. In addition, some manufacturers, because of size and product
mix, continually face unique challenges. To that end, the agencies requested comments related to
challenges that "intermediate volume limited line manufacturers" may face in meeting the fuel
economy and GHG standards for MYs 2022 through 2025. As noted in the NPRM, these
challenges include securing competitive supplier contracts and having limited product lines
across which to spread costs. Mitsubishi Motors? light duty vehicle sales account for
approximately 0.6% of the U.S. market. As a manufacturer with more limited resources than
many others in the U.S. market, adding advanced technologies to all vehicle models
simultaneously is not feasible or practical. The mid-term evaluation should include consideration
of compliance options specifically for OEMs with limited product lines. [EPA-HQ-OAR-2010-
0799-9507-A1, pp.3-4]
In the mid-term evaluation, the agencies should also review assumptions about EV market
penetration based on the availability and effect of consumer purchasing incentives. Although
outside the scope of this rulemaking, EV incentives will continue to be a pivotal factor in
spurring EV growth towards a mass market option. Mandating fuel efficiency and GHG
emissions standards will not guarantee that a consumer will choose an electric drive vehicle.
Pricing and charging infrastructure availability will be the main drivers in purchasing an EV.
Financial and nonfmancial consumer incentives at the federal/state/local levels are necessary in
the early stages of introduction for a distinct and new technology for most customers. It should
be noted that relying on government tax incentives is not and cannot be a part of a sustainable
long-term business plan for OEMs selling electric drive vehicles. However, if this technology is
to become a significant part of the overall fleet, then government tax incentives are necessary for
the beginning stages of commercialization. [EPA-HQ-OAR-2010-0799-9507-A1, p.4]
The mid-term evaluation should also consider available EV infrastructure when assessing past
and future assumptions of EV market penetration. As noted above, charging infrastructure
2-150
-------
CO? Emissions Standards
availability is key to a consumer's decision to purchase an EV. Currently, there is no national
plan for EV infrastructure development to compliment the federal government's efforts to
support EV industry growth and consumer acceptance of EVs. A national plan would help
develop regional targets to establish EV infrastructure. Specifically, Mitsubishi Motors believes
that EV charging infrastructure should be developed and prioritized according to the following:
[EPA-HQ-OAR-2010-0799-9507-Al,p.4]
1. Home charging is the top priority and permitting processes must be streamlined. [EPA-HQ-
OAR-2010-0799-9507-A1, p.4]
2. Workplace charging is the next priority because this supports increased EV adoption and
enables future Vehicle to Grid energy storage concepts. [EPA-HQ-OAR-2010-0799-9507-A1,
p.4]
3. Public Charging, especially DC quick charging, encourages adoption of EVs with smaller-
sized, more resource efficient battery packs by increasing a vehicle's effective daily range.
[EPA-HQ-OAR-2010-0799-9507-Al,p.4]
OEMs must be able to innovate while complying with practicable federal fuel efficiency and
GHG regulations to match the realities of the U.S. market. Mitsubishi Motors supports the
inclusion of a mid-term evaluation in order to realistically evaluate the assumptions for setting
fuel economy and GHG standards in MYs 2022 through 2025. [EPA-HQ-OAR-2010-0799-
9507-A1, p. 6]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 96.]
Mitsubishi Motors urges the agency to work with stakeholders well in advance of the midterm
evaluation to develop sound review process and framework.
Organization: Motor & Equipment Manufacturers Association (MEMA)
MEMA also strongly supports the agencies' inclusion of a mid-term evaluation. That way, all
stakeholders can perform a comprehensive and transparent assessment to see if the goals of the
Program are being realized and/or if there are circumstances that drastically impact the
marketplace or technology development, which may call for appropriate revisions. [EPA-HQ-
OAR-2010-0799-9478-A1, p.2]
Midterm Review is a key component of the National Program for MYs2017-2025. We support
an assessment to ensure that the goals are being realized and/or to address any circumstances that
drastically impact the marketplace or technology development to warrant revisions. [EPA-HQ-
OAR-2010-0799-9478-A1, p.2]
MEMA strongly supports the agencies' inclusion of a mid-term evaluation, which, as proposed,
will provide a complete comprehensive analysis for all stakeholders to consider the current state-
2-151
-------
EPA Response to Comments
of-play and practicability of the MY2017-2025 standards in the public docket. Long-term
planning is an especially important factor in the motor vehicle industry as there are likely to be
uncertainties in the product development cycle that could directly impact - positively or
negatively - the commercial success of new products and the return on investment required to
expand the U.S. manufacturing base. Outside of the formal midterm review, it seems reasonable
that there should be an ongoing dialogue between all of the stakeholders leading up to the
midterm review. [EPA-HQ-OAR-2010-0799-9478-A1, p.5]
MEMA supports a complete assessment of the Program to ensure that the goals are being
realized and/or if there are any circumstances that drastically impact the marketplace or
technology development to warrant revisions to the standards. Providing an opportunity for a
thorough analysis is a critical and necessary component of this next National Program. [EPA-
HQ-OAR-2010-0799-9478-A1, p.5]
Organization: National Association of Clean Air Agencies (NACAA)
Further, once this program is in place, it is critical that EPA and NHTSA closely track progress
in meeting the standards. In addition, the mid-term evaluation to be conducted in the 2021-2022
timeframe should evaluate the use of credits by automobile manufacturers and the impact of
credit use on average fleet performance. In particular, EPA and NHTSA should evaluate
whether credit use is allowing the production of a greater number of vehicles that do not meet
the 5-percent rate of improvement requirement. [EPA-HQ-OAR-2010-0799-8084-A1, p. 3]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 40-41.]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 35-36.]
Organization: National Association of Manufacturers (NAM)
The NAM submits these comments to address one specific substantive aspect of the proposed
rule: the mid-term evaluation program. As described below, the NAM supports the inclusion of a
mid-term evaluation cycle but has a number of concerns regarding the content of the review and
the procedures through which it will be implemented. We urge the EPA to clarify the content of
the evaluation and the procedural details of the evaluation and to add additional time to the
review process so that the EPA can complete a revised rulemaking with sufficient lead time to
allow regulated entities to achieve compliance. [EPA-HQ-OAR-2010-0799-9538-A2, p. 1]
The Agencies Should Adhere to the Mid-Term Evaluation Process to Ensure That Regulated
Entities Are Not Subject to Inappropriate Standards
The Associations fully support the Agencies' proposal to complete a mid-term evaluation of the
appropriateness of the Model Year 2022-2025 standards. Estimates and projections of future
costs and the pace of technological development made more than 10 years in advance are fraught
with uncertainty and the risk of significant deviation from those projections is high. Therefore, a
2-152
-------
CO? Emissions Standards
mid-term evaluation is appropriate so that the Agencies can make necessary adjustments to the
standards to ensure the standards are cost-effective and capable of implementation. The
Associations generally agree with the proposed content of the mid-term evaluation, particularly
its focus on the cost and availability of advanced technologies, the standards' impact on vehicle
safety, the effect on the economic health of the automotive industry, and "other relevant factors."
While the Agencies need not develop an exhaustive list of relevant factors in advance, they
should include those factors that will necessarily impact the automotive industry's ability to
achieve the standards. For example, the Agencies should expressly require consideration of
consumer purchasing patterns and acceptance of new technologies, the availability of alternative
fuel infrastructure, and government responses to declining gasoline tax revenue as a result of
increased fuel efficiency. [EPA-HQ-OAR-2010-0799-9538-A2, p. 2]
The Associations also have a number of procedural concerns about how the mid-term evaluation
and subsequent rulemaking will be conducted. First, the proposed timeline for the review and
promulgation of new standards is compressed and delays in the review process may threaten the
industry's ability to comply with revised standards once they are issued. The proposed rule
requires the Agencies to make a final determination regarding the appropriateness of the existing
standards a mere 4.5 months after issuing the draft Technical Assessment Report. In this short
time period, the Agencies propose to complete a peer assessment of the draft report, solicit
public comments on the draft report and the appropriateness of the existing standards, and
respond to the peer assessment and public comments. The peer and public review are critical
components of the mid-term evaluation and the Agencies must ensure that the comment process
and their response are not rushed. If the Agencies find that the existing standards are
inappropriate, they will have little more than two years to promulgate revised standards, leaving
manufacturers with only 18 months to achieve compliance with the revised standards. While the
schedule proposed by the Agencies will provide sufficient lead time to allow manufacturers to
adjust to the revised standards, history has shown that rulemaking deadlines are often missed,
meaning that manufacturers could be left with even less time to comply with the revised
standards. As a result, we urge the Agencies to consider additional mechanisms to ensure that
revised standards will be issued on schedule. For example, the Agencies could provide additional
flexibility by beginning the review process earlier. To ensure the effectiveness of the review
process, the Agencies should clarify and make judicially enforceable the proposed timeline and
details of the public and peer reviews of the draft Technical Assessment Report. We also urge
the Agencies to set a firm and judicially enforceable timeline (including a commencement date
and intermediate milestones) for the development of the draft report to ensure that it is completed
on schedule. With the addition of these procedural safeguards, we are confident that the
Agencies will be able to complete the mid-term evaluation and subsequent rulemaking while
adhering to the proposed timeline. [EPA-HQ-OAR-2010-0799-9538-A2, pp. 2-3]
Second, the Agencies should not take the default position that the existing 2022-2025 model year
standards will remain in place unless changed by rulemaking. If the Agencies determine that the
2022-2025 standards are inappropriate, there is simply no reason to leave them in place during
the subsequent rulemaking process. Instead the existing standards should be rescinded
immediately upon a determination that they are inappropriate, leaving the 2021 standards in
effect until revised standards are finalized. Otherwise, manufacturers would be required to
2-153
-------
EPA Response to Comments
comply with the inappropriate standards in the event that a subsequent rulemaking is not
finalized by 2022. As noted above, there is always a risk that agencies will be unable to meet
proposed timelines for review processes and rulemaking proceedings. Moreover, as EPA and
NHTSA recognize, both the appropriateness determination and any subsequent rulemaking
would be final agency action subject to judicial review. The proposed rule does not include an
expedited review procedure and a challenge to either final agency action would add additional
delay and threaten the Agencies' ability to complete a final rulemaking before 2022. In light of
these risks, it would be arbitrary and capricious to leave the 2022-2025 standards in effect after
they are determined to be inappropriate. [EPA-HQ-OAR-2010-0799-9538-A2, p. 3]
Organization: National Automobile Dealers Association (NADA)
The proposal contains a so-called 'mid-term evaluation' designed to allow for the reevaluation of
the key regulatory assumptions. It defies logic that the proposal sets up the need for a 'mid-term
evaluation' in the first place. In fact, NHTSA and EPA should not even be engaged in
rulemaking at this time, so soon after having set standards for MYs 2012-2016, and before
having had the benefit of learning from how those standards work in the real world. A prudent
strategy would involve engaging in rulemaking in the calendar year 2014 time frame, aimed at
setting standards for MYs 2017 through 2021 or 2022. Such a timetable would greatly reduce the
likelihood that mandates will prove to be technologically infeasible or economically impractical.
As evidenced by the truck emissions experience, NHTSA and EPA should strive to limit any risk
of foreseeable harms and unforeseeable consequences. [EPA-HQ-OAR-2010-0799-9575-A1, p.
12]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 70.]
Sure, manufacturers need adequate time to achieve compliance. And as a businessman, dealers
appreciate regulatory certainty, but we question whether setting fuel economy mandates so far
out makes sense when critical variables like fuel prices, consumer behavior and creditworthiness
are paramount. If anything, this contradicts Congress's intent that such standards be set in 5-year
or fewer intervals. Moreover, any supposed certainty may be fleeting given the proposal's mid-
term review could result in even stricter mandates for model years 2022 to 2025.
Organization: Natural Resources Defense Council (NRDC)
D. Mid-Term Evaluation Is Unnecessary but, If Used, Proposed Structure Is Appropriate
NRDC believes that the mid-term evaluation is unnecessary and potentially disruptive to
automaker product planning. The mid-term review adds uncertainty to what is otherwise a nine-
year planning horizon for the automakers. By cutting the planning time line roughly in half, the
mid-term evaluation undermines investments in technology that will improve efficiency beyond
2021 required levels. The mid-term review could also disrupt the deployment of vehicle fueling
infrastructure, for advanced vehicles such as plug-in electric vehicles and hydrogen fuel cell
vehicles that may be on the verge of a rapid market growth in the post-2020 period. [EPA-HQ-
OAR-2010-0799-9472-A2, p. 16]
2-154
-------
CO? Emissions Standards
As it is proposed, the mid-term evaluation follows an appropriate structure. There should be only
a single mid-term evaluation to consider compliance with standards for just model years 2022 to
2025. The mid-term evaluation should consider the wide-range of factors that affect the
automotive industry's ability to comply, including different technology pathways, credit
mechanisms such as banking, trading and borrowing and market conditions. However, a decision
to modify the standards should be based on weighing all factors and not mainly on a single
factor, technology or market projection. [EPA-HQ-OAR-2010-0799-9472-A2, p. 16]
NRDC agrees that mid-term evaluation should occur as close as possible to the beginning of
model year (MY) 2022 without violating the minimum 18 month leadtime. The close timing will
ensure that recent advances in technology driven by the MY 2017-2021 standards will be
considered in the evaluation. [EPA-HQ-OAR-2010-0799-9472-A2, p. 17]
We agree that an assessment of compliance and the development of a technical assessment report
for the mid-term review should include the close coordination of all three regulatory agencies
that have developed the National Program since 2009, including EPA, NHTSA and CARS. The
evaluation should also be open for public participation and comment consistent with this
proposed rule. [EPA-HQ-OAR-2010-0799-9472-A2, p. 17]
Organization: Nissan North America, Inc.
Mid-Term Review: Nissan's commitment to the program Is premised on a comprehensive mid-
term evaluation for MYs 2022-2025. The standards are extremely aggressive, particularly with
regard to the light truck fleet. The standards assume not only a significant amount of technology
advancement, but also consumer acceptance and transformation of the vehicle fleet. For both the
light truck and the passenger car fleets, the extent to which automobile manufacturers are able to
meet these standards will depend not merely on their ability to cost-effectively incorporate
additional and transformational technologies, but also on factors external to vehicle design and
engineering. The mid-term evaluation is essential to ensuring that the standards remain
technologically and economically feasible. A meaningful review, as set forth in the Notices of
Intent and the proposal, to evaluate the full range of market, technology and regulatory factors
for the later model years is not only essential, it is required by law. [EPA-HQ-OAR-2010-0799-
9471-A1, p.2]
The Mid-Term Review is Essential to Ensure that the Assumptions Underlying the Proposal are
Valid for the Later Model Years
The proposed standards are extremely ambitious. Success in meeting these standards will depend
not only on the deployment of advanced technologies and materials, but also on consumer
demand shifts and the economic vitality of the U.S. market. The technological and economic
uncertainties inherent in setting standards so far into the future make a robust mid-term review
an essential element of the program. Only through a commitment to a comprehensive mid-term
evaluation will the government, industry and stakeholders have certainty that the goals
established for MYs 2022-2025 remain appropriate and feasible. [EPA-HQ-OAR-2010-0799-
9471-A1, pp.4-5]
2-155
-------
EPA Response to Comments
Nissan will continue to provide a full range of vehicles, and to incorporate continuous
improvements throughout its vehicle fleets. This includes advances in internal combustion
engines (ICEs) as well as the continued deployment of electric drivetrains. Nissan also continues
to explore appropriate opportunities for mass reduction. A comprehensive mid-term evaluation is
critical to determining the extent to which the market accepts the additional costs associated with
more advanced internal combustion vehicles, as well as the extent to which the advanced
powertrain market develops. In addition, government regulatory programs involving both fuels
and safety requirements will directly affect future feasibility and must be considered in any
future review. [EPA-HQ-OAR-2010-0799-9471-A1, p.5]
Without a robust mid-term evaluation, manufacturers may face standards that have become
infeasible in light of market movements or economic conditions beyond their control. Investment
decisions will be focused on short term compliance rather than longer term technology
advancements. The absence of a mid-term evaluation would subvert the framework embedded
into the National Program and would create the uncertainty the agencies are trying to overcome
by providing a starting point for regulatory review covering model years into the future. [EPA-
HQ-OAR-2010-0799-9471-A1, p.5]
A comprehensive mid-term review is also necessary to review the extent to which the industry is
able to meet the aggressive light truck standards set forth for MYs 2022-2025. Nissan anticipates
that the level of improvement established for that vehicle segment will be extremely challenging,
particularly for companies selling more limited volumes in those market segments or if
companies curtail their offerings in the light truck fleet. The costs associated with the
technologies necessary to meet the standards while still providing requisite consumer utility may
render the light truck standards established for the later model years infeasible and require
adjustment. [EPA-HQ-OAR-2010-0799-9471-A1, p.5]
Nor is it feasible to rely on credits generated in the car fleet to cover deficits in the truck fleet.
While the GHG program properly allows for full credit transfers between the car and truck fleet,
the ability to generate credits in the car fleet to cover the more challenging requirements in the
truck fleet are statutorily limited in the CAFE program. It is imperative for the agencies to
engage in a meaningful mid-term evaluation to ensure that the standards remain feasible for
companies servicing this market with smaller volume light truck fleets. [EPA-HQ-OAR-2010-
0799-9471-A1, pp. 8-9]
Both the Clean Air Act and the Energy Policy & Conservation Act require that the agencies
make a determination that the standards can be met through cost-effective technologies. While
NHTSA, subject to the five year limitation, will not yet formally adopt final regulations,
consistent with the National Program the standards formally established by EPA will effectively
be adopted later and applied to the CAFE program as well. A robust mid-term review is
necessary to ensure that the standards remain consistent with the statutory underpinnings of both
programs. [EPA-HQ-OAR-2010-0799-9471-A1, p. 9]
Accordingly, a robust and comprehensive mid-term review is legally necessary to ensure that the
standards for the later model years are supported by substantial evidence and are not arbitrary
and capricious. See Motor Vehicle Mfr's Ass'n v. State Farm, 463 U.S. 29, 42 (1983) (listing
2-156
-------
CO? Emissions Standards
examples of arbitrary and capricious agency activity); Association of Data Processing Services
Organization v. Board of Governors of the Federal Reserve System 745 F.2d 677, 683-84 (D.C.
Cir. 1984). [EPA-HQ-OAR-2010-0799-9471-A1, p. 9]
Section 202(a)(2) of the CAA requires that standards promulgated under the Act 'shall take effect
after such period as the Administrator finds necessary to permit the development and application
of the requisite technology, giving appropriate consideration to the cost of compliance within
such period.' 42 U.S.C. § 7521(a). Similarly, EPCA requires that CAFE standards be established
at the 'maximum feasible' level taking into account, among other things, 'technological
feasibility' and 'economic practicability.' 49 U.S.C. § 32902(f). [EPA-HQ-OAR-2010-0799-
9471-A1, p.9]
The proposed standards assume a significant amount of market transformation, both within the
ICE fleet and with regard to the penetration of new powertrains in order to be able to meet the
levels established for the later model years. Unlike the situation in which the agencies establish
aggressive requirements with long-lead times to allow technology and market development, the
standards for MYs 2022-2025 follow a decade of increasingly stringent requirements already
demanding substantial technological deployment and market penetration. This layering of new
requirements renders it virtually impossible for the agencies to be able to determine with the
requisite level of regulatory certainty that cost-effective, economically-practicable technology
can be deployed into the fleet and enable compliance with these standards. [EPA-HQ-OAR-
2010-0799-9471-A1, p.9]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 127-128.]
Nissan's commitment to the proposed rule is premised on a robust and comprehensive mid-term
evaluation for the model years 2022 to 2025. The standards are extremely aggressive and extend
beyond current development planning periods. The agencies have assumed a significant amount
of technology advancement, consumer acceptance, and fleet shift during these model years
covered.
The ability of auto manufacturers to meet these standards will depend not only on our
commitment to incorporate additional and transformational technologies but also on factors
external to vehicle design and engineering. The mid-term evaluation is essential to ensuring that
the standards remain technologically and economically feasible during those time periods.
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
EPA should continue to evaluate the GHG effects of these technology incentives to ensure
preservation of the overall goals of the program. We also expect that EPA will monitor upstream
emissions from the power grid to ascertain whether the improvements assumed to occur do in
fact occur. In that regard, we strongly support the proposed mid-term review that will provide the
opportunity to consider appropriate revisions to these incentives and to other aspects of the
2-157
-------
EPA Response to Comments
program. [This comment can also be found in section 4 of this comment summary.] [EPA-HQ-
OAR-2010-0799-9476-A1, p. 2]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 74.]
Organization: Pew Charitable Trusts
While the proposed requirements set forth by EPA and DOT are aggressive and laudable, Pew
strongly urges the agencies not to allow the final standards to be weakened during the midterm
review period. Pew understands that fuel efficiency standards produced by DOT are limited by
statute to five year increments, and also appreciates the value of technological and cost review to
ensure that standards are achievable. However, we believe that federal fuel efficiency standards
must remain strong in order to enhance American manufacturing competitiveness in the auto
industry while protecting consumers and businesses from fuel cost volatility. [EPA-HQ-OAR-
2010-0799-9496-A2, p. 2]
Organization: Porsche Cars North America, Inc. (PCNA)
Midterm Evaluation [EPA-HQ-OAR-2010-0799-9264-A1, p. 4]
Porsche strongly supports the proposed mid-term evaluation which will allow the Agencies to
determine whether adjustment of fuel economy and GHG standards is warranted. The success of
the program depends on customer acceptance, developments in technology, costs, safety, fuels,
necessary infrastructure, and other relevant factors. Assumptions that informed the program
model include significant uncertainties due to the length of time over which the standards apply.
It is critical to evaluate whether those assumptions are still valid, and therefore whether the
standards remain appropriate in light of technological and other changes that may have occurred
since the initial setting of the standards. [EPA-HQ-OAR-2010-0799-9264-A1, p. 5]
In making this comment, we wish to stress that Porsche does not assume that EPA or NHTSA
intend to deviate from the mid-term evaluation process or ignore its deadlines. We believe that
all parties, including the Agencies, will work in good faith to follow the process, and will
perform a serious assessment of the state of the program. But we wish to stress that the success
of the mid-term evaluation depends on strict adherence to commitments and deadlines. Such
adherence is essential in order to mitigate a significant potential for disputes and difficulties in
the future. [EPA-HQ-OAR-2010-0799-9264-A1, p. 5]
Organization: RVIA
Therefore, we support the proposed mid-term review and we recommend that the agencies use
the time leading up to the mid-term review to talk to consumers to better gauge what impact the
increased costs will have on their new vehicle purchase decisions if prices are increased by the
amounts projected by EPA and NHTSA. [EPA-HQ-OAR-2010-0799-9550-A2, p.2]
2-158
-------
CO? Emissions Standards
With regard to full size pickups, EPA and NHTSA should utilize the time leading up to the mid-
term review to talk to consumers to better gauge what impact the increased costs will have on
their new vehicle purchase decisions if prices are increased by the amounts projected by EPA
and NHTSA for the 2022-2025 model year timeframe. [EPA-HQ-OAR-2010-0799-9550-A2,
p.4]
Organization: Securing America's Future Energy (SAFE)
Midstream Review: The agencies have proposed standards that extend relatively far into the
future. In contrast to the last round of regulations issued in 2011 that will affect cars that will
enter the market within five years, these regulations will affect some cars that will not be
manufactured for thirteen years. (Thirteen years ago, traditional hybrids were not yet on the
market in the United States.) [EPA-HQ-OAR-2010-0799-9518-A1, p. 11]
The thirteen years over which these regulations will remain in effect will be a period of great
uncertainty with respect to at least two factors that will have a substantial effect on the cost-
effectiveness of more efficient vehicles, particularly if traditional hybrids, PHEVs or EVs are
needed to meet the new standards: battery prices and oil prices. [EP A-HQ-OAR-2010-0799-
9518-Al,p. 11]
It appears likely that automakers will have to rely on traditional hybrids, and to a lesser degree
PHEVs and EVs, in order to meet the new standards. Throughout the period over which the
standards will be tightening, the cost of these vehicles, and their overall cost-effectiveness, will
remain a function of the price of large-format automotive grade batteries. In an area of such
rapidly evolving technology, however, it is difficult to forecast with any degree of certainty what
battery prices might look like in 2020, not to mention 2025. Higher battery prices will make it
harder to meet the standards, just as lower battery prices will make it easier, perhaps supporting
even tighter standards. [EPA-HQ-OAR-2010-0799-9518-A1, p. 11]
While battery prices are difficult to predict eight to thirteen years into the future, oil prices are
difficult to predict even months in the future. As we prepare these comments, oil is selling for
about $100 per barrel. But prices have been as high as $114 and as low as $34 over the past 36
months, and as low as $11.37 and as high as $145 over the past 13 years. Stated simply, given
the uncertainty over oil prices of the time during which these rules will be in effect, and the
consequences of oil prices for the cost-effectiveness of these rules, it is incumbent on the
regulating agencies to carefully reevaluate the cost effectiveness of the standards in light of
current oil prices and trends, and tighten or loosen the standards as appropriate at the midstream
review. [EPA-HQ-OAR-2010-0799-9518-A1, p. 11]
Of equal importance is the possibility that technological innovation over the next several years
will substantially alter the cost-effectiveness of increasing fuel efficiency or reducing oil
consumption. For instance, the 2002 National Academies of Science study on fuel economy did
not even mention plug-in hybrid technology, despite a detailed discussion of traditional hybrid
technology, yet plug-in hybrids were on the readjust eight years later. One can imagine that a
newly developed battery chemistry, for instance, might substantially alter the cost-effectiveness
2-159
-------
EPA Response to Comments
of the regulations, allowing for an adjustment of the standards. [EPA-HQ-OAR-2010-0799-
9518-Al,pp. 11-12]
Not only do these regulations extend far into the future, and not only is there substantial
uncertainty with respect to their cost-effectiveness, the regulations would require percentage
increases in fuel economy that exceed previous increases, and may be more difficult to achieve
as the lowest cost improvements in efficiency have already been made. We appreciate that the
accelerated adoption of new technology may allow automakers to meet the proposed standards
without any interruption in their product cycles, while delivering vehicles that consumers will
purchase and enjoy. However, we also recognize that this question is fundamentally one of
consumer acceptance that can be answered only once new more efficient vehicles are put into
automobile retailers' showrooms. A midstream review will enable the agencies to examine the
consumers' acceptance of new vehicles and adjust the standards upwards or downwards if and as
appropriate. [EPA-HQ-OAR-2010-0799-9518-A1, p. 12]
Given the substantial uncertainty regarding the cost of batteries and oil, SAFE believes, that the
midstream review should be a comprehensive review into which the agencies enter with an open
mind. In support of that process, the agencies should prepare a new or updated technical support
document and regulatory impact analysis. It should then affirm or adjust (upwards or downwards
as appropriate) the standards based on the results of the analyses. [EPA-HQ-OAR-2010-0799-
9518-Al,p. 12]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 152.]
Finally, I can't stress enough, as others have already said, the importance of a real midstream
review. The fuel economy regulations have never been issued so far in advance and asked so
much of automakers. We don't know where oil prices are going to be. We don't know where
battery prices are going to be. And these are critical factors in trying to see what can happen.
And just like it's possible that the rules may not prove cost-effective, it's possible that we may
find that tightening is also inappropriate. So we stress the importance of having a real review.
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
Remain strong throughout the program and not end with the midterm review and a backstop
should be considered: Our transportation system drives our addiction to oil with cars and light
trucks alone consuming more than 8 million barrels of oil every day. This addiction to oil spews
out nearly 20% of US climate disrupting pollution. The proposed standards for 2017-2025
vehicles can help Americans avoid using as much as 1.5 million barrels of oil every day in 2030
and cut carbon emissions in that year by 280 million metric tons. A consumer who buys an
average new vehicle in 2025 would keep more than $4,000 in their pocket rather than spending it
on oil - even after paying for fuel savings technologies. [EPA-HQ-OAR-2010-0799-9549-A2, p.
4]
2-160
-------
CO? Emissions Standards
But to deliver these benefits the program must remain strong through 2025. The program as
proposed includes a mid-term review that begins in 2017. While EPA's authority under the
Clean Air Act permits it to propose and finalize a program for the full nine model years,
NHTSA's authority is constrained. This factor among others created pressure for the mid-term
review which appropriately will involve all three standard setting agencies: EPA, NHTSA and
CARS. [EPA-HQ-OAR-2010-0799-9549-A2, pp. 4-5]
Automakers have suggested additional reviews in testimony at the public hearings the agencies
held in January. We strongly urge that the final rule not open up additional reviews of the
standards. As it stands, the mid-term review will occur just as this rule is taking affect and would
therefore be based up on the successful implementation of the 2012-16 program. The agencies
should ensure transparency and access to data that will allow the public to effectively and timely
monitor compliance, trends and technology application. [EPA-HQ-OAR-2010-0799-9549-A2, p.
5]
In particular, the agencies should provide the public with data, including the following:
Credit use, current balance, and method of credit generation by manufacturer,
Technology penetration, both overall and by manufacturer
Sales by vehicle footprint
Car/truck mix, both overall and by manufacturer [EPA-HQ-OAR-2010-0799-9549-A2, p. 5]
We appreciate that the proposed rule as structured offers the opportunity for a full assessment of
progress and technology development but it is necessary for mid-term review to be a check on
progress and an opportunity to strengthen standards and not become and off-ramp or stop
sign. [EPA-HQ-OAR-2010-0799-9549-A2, p. 5]
Organization: Toyota Motor North America
Also groundbreaking is the scope of the proposed regulations, covering cars and trucks the
industry will be designing, manufacturing and selling up to 13 years in the future. The agencies
have made a variety of assumptions underlying the proposed standards that may or may not
prove accurate. These assumptions include the efficacy and pace of cost reduction for certain
technologies, as well as consumers' willingness to pay for them. For this reason, Toyota fully
supports timely completion of the proposed mid-term review to assess our progress toward these
goals. [EPA-HQ-OAR-2010-0799-9586-A1, p.2]
Mid-term Review [EPA-HQ-OAR-2010-0799-9586-A1, p.7]
In proposing standards through 2025 model year, the agencies have made assumptions about
numerous key factors including technology cost, technology performance, fuel prices,
manufacturing efficiency, consumer adoption, and other factors that represent their best
2-161
-------
EPA Response to Comments
estimates of the future based on information available in 2012. The agencies acknowledge the
significant uncertainty in many of these assumptions, and have proposed a mid-term evaluation
of the 2022-2025 model year standards to determine whether those standards remain appropriate
in light of changes that may have occurred since the time of proposal.1 Toyota supports the mid-
term review but, as discussed below, we request clarifications and additional details as to how
the review will be administered. [EPA-HQ-OAR-2010-0799-9586-A1, p.7]
Key Factors/Assumptions [EPA-HQ-OAR-2010-0799-9586-A1, p.7]
The agencies proposed eight high-level areas of examination for the mid-term review and the
preamble discusses additional factors to be evaluated. The Alliance of Automobile
Manufacturers (Alliance) has submitted comments addressing the proposal, including a
recommendation to expand the factors that should be included in the mid-term review. Toyota
supports the Alliance comments in this area. Beyond the Alliance comments, the agencies should
consider two additional issues in the mid-term review. [EPA-HQ-OAR-2010-0799-9586-A1,
p.7]
First, the agencies must ensure that the proper baseline is used when determining the feasibility
of the 2022-2025 model year standards. This issue is best explained with a simple example.
Suppose the industry 'compliance level' at the time of the mid-term review (-2018 model year) is
38 mpg in CAFE space and the agencies determine that cost-effective technology exists to
support a 4 percent annual improvement rate. A logical conclusion would be that 50 mpg (in
CAFE space) is an appropriate standard for 2025 model year (a 4 percent annual compounded
increase applied to 38 mpg for seven years). However, if industry has relied on credits to achieve
the 38 mpg level, a 50 mpg target would effectively be higher than a 4 percent annual increase.
In fact, if the industry relied on credits for just 2 mpg of compliance (resulting in a true
technology baseline of 36 mpg), the annual improvement rate would be nearly 5 percent per year
- or 25 percent higher than using the 38 mpg baseline. NHTSA is precluded by law from
considering the availability of credits in establishing maximum feasible CAFE standards. Under
current law, NHTSA will also be precluded from considering the availability of credits when it
establishes 2022-2025 model year standards based on the mid-term review. While the CAA does
not appear to specifically limit EPA's authority in this regard, the shared goal of harmonization
would dictate EPA similarly not consider the availability of credits when determining the
appropriateness of the 2022-2025 model year standards during the mid-term review. [EPA-HQ-
OAR-2010-0799-9586-A1, p.7]
Second, in the course of the mid-term review the agencies should continue EPA's longstanding
practice of treating vehicles and fuels as a system. While the proposed standards are based on
currently available fuels, higher octane and/or reduced sulfur can enable additional greenhouse
reductions and fuel economy improvements from several technologies. For example- lower
sulfur gasoline would allow the use of stratified lean-burn engines. Increasing octane in gasoline
would enable engines to operate at higher compression ratios, and support technology
approaches such as heavily boosted, downsized engines. Manufacturers may find these options
increasingly necessary in the 2022 - 2025 model year time frame, and for that reason the role of
fuels and fuel specifications should be included as part of the mid-term review. [EPA-HQ-OAR-
2010-0799-9586-A1, p.8]
2-162
-------
CO? Emissions Standards
Process Details and Schedule [EPA-HQ-OAR-2010-0799-9586-A1, p.8]
The proposed regulation requires a Draft Technical Assessment Report to be completed by
November 2017, and a final determination as to whether the 2022-2025 standards remain
appropriate to be peer-reviewed and made available for public comment by April 1,2018. If the
EPA determines the standards are not appropriate as promulgated in this rulemaking, EPA stated
its intention in the preamble to establish by rulemaking new standards that are appropriate under
section 202(a) of the CAA. In any case, NHTSA must formally promulgate standards for 2022-
2025 model years by April 1, 2020. [EPA-HQ-OAR-2010-0799-9586-A1, p.8]
Toyota understands that soon after promulgating the 2017-2025 model year standards in this
rulemaking, the agencies intend to begin an ongoing dialogue with the auto manufacturers,
suppliers- and other stakeholders about progress toward meeting the joint national standards.
Toyota supports this type of information sharing because it will provide the agencies the most
accurate sense of technology advancements, consumer preferences, and economic conditions as
circumstances evolve. The information derived from this dialogue can serve as building blocks
toward the mid-term review and afford the agencies and auto manufacturers timely course
adjustments for items within their control. Toyota believes it would be helpful for the agencies to
outline this process in as much detail as possible in the preamble to final rule. [EPA-HQ-OAR-
2010-0799-9586-A1, p.8]
2022-2025 Model Year Default Standards [EPA-HQ-OAR-2010-0799-9586-A1, p.8]
Toyota appreciates the agencies' commitment to a mid-term review and EPA's stated intention to
finalize any changes in its 2022-2025 model year GHG standards at least ISmonths prior to the
beginning of the 2022 model year (e.g. by April 1, 2020). Notwithstanding the good intentions
of all parties involved to support timely completion of the mid-term review and timely
rulemaking as needed, Toyota is concerned about what happens if the agency does not take a
final agency action by April 1, 2020 to either validate the standards as originally promulgated or
to revise the standards. As proposed by EPA, the 2022-2025 model year GHG standards would
remain in effect unless and until EPA changes them by rulemaking. [EPA-HQ-OAR-2010-0799-
9586-A1, p.8]
However, if EPA misses its self-imposed deadline for final agency action, it will not have met
the requirement of Section 202(a)(2) of the CAA to provide adequate lead time for development
of requisite technology for meeting emission standards. Further, given that EPA and NHTSA
plan to work collaboratively on the mid-term review (with ARB) and to utilize the results to
jointly assess the 2022-2025 model year standards, failure by EPA to take final agency action
would likely indicate that NHTSA lacks sufficient information to promulgate its standards for
2022-2025 model year in a timely manner. In such a case, there would be no new NHTSA
standards for 2022 model year, and NHTSA would presumably be forced to adopt the 2021
model year standards for 2022 model year. It is unclear what standards ARB would pursue for
2022 model year in this case. This would result in major differences between the EPA and
NHTSA standards, and potentially different standards for ARB and Section 177 states, and
2-163
-------
EPA Response to Comments
would run completely contrary to the objective of a harmonized national program. [EPA-HQ-
OAR-2010-0799-9586-A1, p.9]
For the reasons described above, Toyota requests that, in the event EPA does not take final
agency action concerning the 2022-2025 model year standards by April 1, 2020, the 2021 model
year GHG standards remain as the 'default' standards until such time as EPA does take final
agency action providing at least 18-months of lead time prior to the applicable mode year. [EPA-
HQ-OAR-2010-0799-9586-A1, p.9]
California Air Resources Board Participation [EPA-HQ-OAR-2010-0799-9586-A1, p.9]
Toyota fully agrees that ARE, as a signatory to the national program for GHG emissions and fuel
economy standards, will be an important partner in the mid-term review process. We support the
agencies' intention to coordinate the mid-term review with ARB and condition a waiver for their
2017-2025 model year standards on ARB accepting any adjustment to the EPA 2022-2025
model year GHG standards that result from the midterm review. [EPA-HQ-OAR-2010-0799-
9586-A1, p.9]
1 - NHTSA's statutory authority prevents it from formally promulgating standards beyond 5-
model years. Toyota's comments on the mid-term review generally refer the 'review' of the
proposed EPA GHG standards, and to NHTSA's participation in, and use of, the mid-term review
results as a basis for formally establishing for 2022-2025 model year CAFE standards. [EPA-
HQ-OAR-2010-0799-9586-A1, p.7]
2 - NHTSA is required by law to finalize CAFE standards at least IS-months prior to the start of
the model year. [EPA-HQ-OAR-2010-0799-9586-A1, p.8]
Organization: U.S. Chamber of Commerce
The Chamber supports reducing emissions from automobile tailpipes, and supports greater
vehicle fuel economy when needed to address consumer demand. The Chamber is pleased that
the automobile industry is receiving the regulatory certainty it needs for long-term planning
purposes. However, given the costs the regulations will require to be built into all new vehicles
to achieve these goals, a strong 2018 midterm review will be essential. [EPA-HQ-OAR-2010-
0799-9521-A1, p. 1]
I. The 2018 Mid-Year Review Must Be Strong, Thorough and Realistic
The National Program for fuel economy proposed by EPA and NHTSA is very aggressive, and
will test the limits of the automobile industry's technological prowess. This is particularly
evident in the last four years of the program (2021-2025), when the rate of increase in light truck
fuel economy standards increases dramatically, from 3.5 percent per year to 5 percent per year.
This portion of the proposal reaches so far into the future that EPA, NHTSA and automakers
truly have no certainty as to how technologies will develop and what they will cost. However, at
2-164
-------
CO? Emissions Standards
this early juncture, EPA seems to admit that they will cost the bulk of consumers more
money. [EPA-HQ-OAR-2010-0799-9521-A1, p. 2]
Fuel economy matters to consumers, but car buyers historically have not valued fuel economy as
highly as other key attributes such as affordability, safety, convenience and utility. A car buyer's
perspective on fuel economy also fluctuates with fuel prices, which are very difficult to predict
long-term. There is therefore a very real possibility that, for one or more reasons, consumers will
not want to buy some of the new fuel-efficient vehicles that will have to be brought to market to
comply with the 2017-25 rule. [EPA-HQ-OAR-2010-0799-9521-A1, p. 2]
Moreover, conditions beyond the control of automobile manufacturers will greatly affect
automakers' ability to achieve aggressive new fuel economy standards. Gasoline prices are
virtually impossible to predict long-term. Availability of critical minerals has already become an
important issue to the automobile industry. The state of the economy certainly has an impact on
consumers' car buying habits. And infrastructure for many of the new technologies being
incentivized by the 2025 standards—such as electric vehicles, fuel cells and alternative fuels—
must actually be built. [EPA-HQ-OAR-2010-0799-9521-A1, pp. 2-3]
It is therefore of utmost importance that any final rule include a rigorous midterm review in
2018, with a clearly defined process for conducting the review. If mainstream consumers are not
buying the newer, fuel-efficient vehicles or are not likely to buy the significantly more efficient
(and expensive) vehicles slated for the 2021-25 time frame, then the agencies must be able to
change the rule.2 If conditions change that are outside the control of the automobile industry,
Federal regulators must be willing and able to take a pragmatic view of the 2021-2025 time
frame and revise the rule accordingly. [EPA-HQ-OAR-2010-0799-9521-A1, p. 3]
2 And if the agencies wish to change the rule downward, they should not be bound to the will of
California, which has shown time and again that its fuel economy goals do not represent the
national interest.
Organization: Union of Concerned Scientists (UCS)
(d) Mid-Term Evaluation
A great deal of attention to this proposal has been focused on the mid-term evaluation provision,
and with good reason. Structured properly, it can provide assurance that the nine-year
rulemaking is both equitable and based on the latest research. Structured improperly, however, it
can create regulatory uncertainty, disturb the industry's product planning efforts, and impede
technological development by undercutting industry investments in technologies slated to serve
the post-MY2021 vehicle fleet. [EPA-HQ-OAR-2010-0799-9567-A2, p. 10]
According to UCS analysis, nearly 40 percent of the MY2017-2025 Program's 2030 oil savings
and emissions reductions benefits would be lost if the mid-term evaluation foreclosed subsequent
2-165
-------
EPA Response to Comments
improvements to vehicle efficiency and GHG emissions reductions post-MY2021. Given what is
at stake, it is imperative that the agencies structure the mid-term evaluation to ensure that the
provision is used to support stronger standards moving forward, and not as an opportunity by the
industry to stall or forego regulatory obligations. [EPA-HQ-OAR-2010-0799-9567-A2, p. 10]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 218.]
For example, the proposal's midterm evaluation provision must be structured to ensure that it is
used to support strong standards moving forward, and not merely as an opportunity by the
industry to stall or forego regulatory obligations.
Automobile manufacturers have publicly stressed the importance of tracking progress leading up
to the mid-term evaluation. As UCS has stated in the past, the mid-term evaluation should occur
only one time, and it should be conducted as closely to the first year in question (MY2022) as
legally permitted, to most accurately capture the status of technology and the vehicle market for
the model years in review. While EPA and NHTSA should remain up to date on technology
developments, regularly scheduled "progress reports" between now and 2018, as suggested by
some in industry, would be both time consuming and too premature to judge technology
readiness of the Model Year 2022-2025 standards. Premature reports would increase speculation
within the industry about "prevailing winds" of the mid-term evaluation, create unnecessary
uncertainty, and undermine the intent and effectiveness of the provision itself.
That being said, UCS strongly supports the agencies continuing their work - for instance, the
impressive teardown cost analysis conducted by EPA, and other assessments documented in the
Joint Technical Support Document - during the next five years in order to feed those analyses
into the formal mid-term evaluation. [EPA-HQ-OAR-2010-0799-9567-A2, p. 10]
When the mid-term evaluation is conducted to assess possible modification (up or down) of the
2022-2025 standards, it is critical that the entire suite of factors affecting manufacturers' ability
to comply be considered in their totality. UCS agrees that "a holistic assessment of all of the
factors.. .without placing decisive weight on any particular factor or projection" is the correct
approach in conducting the mid-term evaluation. Basing latter year feasibility on an isolated set
of factors would be turning a blind eye to the reality that the industry has multiple options at its
disposal in meeting the standards. [EPA-HQ-OAR-2010-0799-9567-A2, p. 10]
Finally, UCS agrees with the agencies that the mid-term evaluation be a closely coordinated
process, conducted jointly by EPA, NHTSA, and CARB; that the evaluation be open to public
participation; and that the agencies seek, consider and respond to public comment on its
determination prior to invoking any final actions. [EPA-HQ-OAR-2010-0799-9567-A2, p. 10]
Though I strongly support these standards, I am concerned about possible loopholes that
automakers could exploit. Specifically: The agencies are proposing a 'mid-term' review that
would begin soon after the standards come into effect. In the past, automakers have abused
similar programs-turning them into off-ramps as opposed to reviews. It is critical that this
2-166
-------
CO? Emissions Standards
review does not undermine the program through 2025. [EPA-HQ-OAR-2010-0799-9713-A2, p.
2]
Organization: United Automobile Workers (UAW)
Finally, the UAW is pleased that EPA is proposing a mid-term review for the proposed standards
for model years 2022-2025, and that NHTSA will perform a full rule making procedure for those
years as required under its statutory authority to regulate fuel economy. Given the quickening
pace of technical innovation and cost reductions in the auto industry, the UAW believes that it is
wise to continue to evaluate the cost and effectiveness of fuel-saving technologies well in
advance of the formal mid-term review. [EPA-HQ-OAR-2010-0799-9563-A2, p.4]
The mid-term review is a critical structural feature of the proposed unified national program, and
a central reason the UAW can be so strongly supportive of the proposals by EPA and NHTSA.
The UAW believes that the mid-term review should be conducted with the same type of broad
stakeholder engagement and public participation that occurred in the development and
presentation of the proposed regulations for 2017-2025. The proposed standards are stronger and
more achievable because of this process, and they stand as a testament to how we can work
together to address real issues of national importance. [EPA-HQ-OAR-2010-0799-9563-A2, p.4]
Organization: United States Senate
In addition, the 'mid-term' review for the model year 2022-2025 standards will require your
agencies to evaluate whether the stringency required in the second phase of the program is still
appropriate or whether the standards should be revised upwards or downwards. [NHTSA-2010-
0131-0264-Al,p.l]
Organization: University of Michigan
A Call to EPA and NHTSA to Consider the Consumer Fuel Usage Reduction Options in the
Mid-term Evaluation of the Greenhouse-Gas Emission and Corporate Average Fuel Economy
Standards for Light-Duty Vehicles. [EPA-HQ-OAR-2010-0799-7986-A1, p. 1] [This comment
can also be found in section 12 of this comment summary.]
As both the EPA and NHTSA will be undertaking the midterm evaluation of the GHG emission
and the corporate average fuel economy standard for model year 2022-2025 vehicles in due
course, we recommend that meaningful incentives for consumer fuel usage reduction be taken
into consideration. [EPA-HQ-OAR-2010-0799-7986-A1, p. 2] [This comment can also be found
in section 11 of Docket number EPA-HQ-OAR-2010-0799-7986-A1]
Organization: Volvo Car Corporation (VCC)
VCC is sympathetic to the numerous environmental challenges that impact the agencies in trying
to reach their varied goals. However, it is of utmost importance that all agencies, as far as
2-167
-------
EPA Response to Comments
possible, collaborate to achieve common understandings, wherever possible. [EPA-HQ-OAR-
2010-0799-9551-A2, p. 3]
VCC supports a mid-term evaluation. Amid-term evaluation will allow manufacturers and the
agencies to consider whether the regulation is reasonable and on track in its assumptions. VCC
supports a mid-term evaluation because it is very difficult to predict fifteen years into the future
without making a vast number of assumptions. Customer acceptance, affordability (especially in
light of the phase-out of many of the federal and state incentives), safety, convenience and utility
should be examined in the mid-term evaluation. [EPA-HQ-OAR-2010-0799-9551-A2, p. 3]
It is therefore imperative that the industry and the agencies review and consider the outcomes of
our work in 2012 in relation to the joint plan at the midpoint of the regulated period. With regard
to the midterm evaluation, VCC emphasizes the needs and clarifications outlined in the Alliance
comments. [EPA-HQ-OAR-2010-0799-9551-A2, p. 3]
For VCC, as an intermediate manufacturer, the common understanding and harmonization of
approaches of the agencies is of great importance, and' ultimately leads to a very high level of
administrative efficiency. It is critical for smaller manufacturers to reduce administrative costs in
order to be able to focus on the relevant issues such as developing environmentally advanced
technology. [EPA-HQ-OAR-2010-0799-9551-A2, p. 3]
The following criteria should be considered for the Mid-Term Evaluation:
• Are the costs of Advanced Technology Vehicles declining as predicted in the assessment in the
NPRM?
• What impact will the new requirements have on sales of passenger cars and light duty trucks?
• How will the new rules impact vehicle safety?
• Is the needed fueling infrastructure available to enable PHEVs, BEVs and fuel cell vehicles to
penetrate the market at the levels predicted?
• Are consumers purchasing the technologies needed to achieve the goals of the rulemaking?
• Multipliers for the period 2020-2025 need to be evaluated and reevaluated
• Off cycle technology - additional innovations identified between 2012 and 2018
• Harmonization between all agencies both regarding technology demands and administration -
EPA, NHTSA and CARB [EPA-HQ-OAR-2010-0799-9551-A2, p. 3]
Organization: Weiner, L.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 107.]
2-168
-------
CO? Emissions Standards
So we ask that the midterm review be vigilant, and there should not be an opportunity to delay
full compliance or, as has occurred occasionally in history, to dismiss part of the program. But
we look at the mid-reviews to strengthen the compliance.
Response:
Section III.B.3. of the preamble provides a detailed discussion of the mid-term
evaluation. As described there, the agencies are finalizing the mid-term evaluation and agency
decision-making process as proposed. As stated in the proposal, both NHTSA and EPA will
develop and compile up-to-date information for the mid-term evaluation, through a collaborative,
robust and transparent process, including public notice and comment. The evaluation will be
based on (1) a holistic assessment of all of the factors considered by the agencies in setting
standards, including those set forth in this final rule and other relevant factors, and (2) the
expected impact of those factors on the manufacturers' ability to comply, without placing
decisive weight on any particular factor or projection. In order to align the agencies' proceedings
for MYs 2022-2025 and to maintain a joint national program, if the EPA determination is that
standards will not change, NHTSA will issue its final rule concurrently with the EPA
determination. If the EPA determination is that standards may change, the agencies will issue a
joint NPRM and joint Final Rule.
Overall support for finalizing the mid-term evaluation
Every automaker and associations representing either auto makers or suppliers who
commented on the proposed mid-term evaluation indicated that this evaluation was essential to
their support of the proposal and urged the agencies to finalize a comprehensive mid-term
evaluation. These commenters included General Motors, Chrysler, Ford, Nissan, Toyota,
Hyundai America Technical Center, Mercedes-Benz, Mitsubishi Motors, Volvo Car Corporation
Porsche, Ferrari, KIA, the Alliance of Auto Manufacturers, the Global Automakers, the Motor
& Equipment Manufacturers Association (MEMA), National Association of Manufacturers
(NAM), EcoMotors International, Inc., and Johnson Controls, Inc. Two automakers, Chrysler
and Nissan, specifically predicated their support of the MY2017-2025 National Program on the
agencies finalizing the proposed mid-term evaluation. In addition, a number of other
organizations including the United Auto Workers (UAW), the International Council on Clean
Transportation (ICCT), U.S. Chamber of Commerce, Securing America's Future Energy
(SAFE), as well as 112 members of the U.S. House of Representatives (in a letter to both agency
heads) expressed strong support for finalizing the proposed mid-term evaluation.
Many environmental and consumer organizations, as well as many private citizens, both
at the three public hearings and in written comments, expressed concern that the mid-term
evaluation might be used as an opportunity to weaken the standards or to delay the
environmental benefits of the National Program. Many stressed the expectation that the mid-
term should be used as an opportunity to strengthen the MY2017-2025 standards. These
commenters included the Pew Charitable Trust, Sierra Club, Union of Concerned Scientists
(UCS), American Medical Association of California, the National Association of Clean Air
Agencies (NAACA), Ecology Center and more 30,000 individual citizens who submitted letters
to the docket. The ICCT expressed their strong support for the mid-term evaluation and
2-169
-------
EPA Response to Comments
NESCAUM in discussing the need to evaluate technology incentives on the overall GHG goals
of the program indicated their support of the mid-term evaluation for this purpose.
As discussed in section III.B.3 of the preamble, the mid-term evaluation will be a
comprehensive and robust evaluation of all of the relevant factors. EPA is clear that any
evaluation of the appropriateness of the standards and any decision to go forward with revising
the standards will consider making the standards more or less stringent, whatever is most
appropriate under the circumstances at that time. It would be inappropriate to limit EPA's
consideration to either just increasing or just reducing the stringency of the standards. Instead,
EPA will determine the appropriate course to follow based on all of the information, evidence,
and views in front of it, including those provided during public notice and comment.
Two commenters opposed finalizing the mid-term evaluation. Natural Resources
Defense Council (NRDC) stated that it was both unnecessary and potentially disruptive to
automakers' product planning and would add uncertainty to a nine year period. The National
Automobile Dealers Association (NADA) did not support the mid-term evaluation since it did
not support the need for the underlying rulemaking "so soon after having set standards for
MY2012-2016, and before having had the benefit of learning from how those standards work in
the real world." EPA believes that the evaluation process will not be disruptive to the
automakers product planning. Instead it provides a framework that allows manufacturers the
certainty to go forward and prepare for these standards, as it both adopts them now as final
standards and establishes a mechanism to evaluate and change them in the future, if appropriate.
The common support from the manufacturers indicates that this is the case. The opposition by
NADA is premised on their opposition to adopting standards in this rulemaking, which is
addressed elsewhere.
Ensuring Coordination of Mid-term Evaluation
Ford, Toyota, NRDC and the UCS stressed the importance of a coordinated mid-term
evaluation by EPA and NHTSA that should also include the California Air Resources Board
(CARB). EPA agrees with this comment, as indicated by the discussion in section III.B.3 of the
preamble. In adopting their GHG standards the California Air Resources Board (CARB),
directed CARB's Executive Officer to, "participate in U.S. EPA's mid-term review of the 2022
through 2025 model year passenger vehicle greenhouse gas standards..." and to also, "continue
collaborating with EPA and NHTSA as their standards are finalized and in the mid-term
review."7 In addition, the Board directed CARB's Executive Officer that "It is appropriate to
accept compliance with the 2017 through 2025 model year National Program as compliance with
California's greenhouse gas emission standards in the 2017 through 2025 model years, once
United States Environmental Protection Agency (U.S. EPA) issues their Final Rule on or after its
current July 2012 planned release, provided that the greenhouse gas reductions set forth in U.S.
EPA's December 1, 2011 Notice of Proposed Rulemaking for 2017 through 2025 model year
7 See California Low-Emission Vehicles (LEV) & GHG 2012 regulations approved by State of California Air
Resources Board, Resolution 12-11 (March 22, 2012). Available at
http://www.arb.ca.gov/regact/2012/leviiighg2012/leviiighg2012.htm (last accessed June 5, 2012)
2-170
-------
CO? Emissions Standards
passenger vehicles are maintained, except that California shall maintain its own reporting
requirements." 8
Clean Air Act Authority to conduct a mid-term evaluation
A number of auto manufacturers submitted comments agreeing that section 202(a) of the
Clean Air Act (CAA) authorizes the proposed mid-term evaluation. Chrysler noted that the EPA
had a "firm legal basis to conduct the mid-term evaluation under section 307(d) of the Clean Air
Act (CAA) and the Administrative Procedures Act to reconsider regulations based on new
information as well as under section 202(a) of the CAA under which EPA proposed the mid-term
evaluation." The Global Automakers stated that a mid-term evaluation was, "not only
permissible under the Clean Air Act, but also required because of the uncertainties inherent in
projecting regulatory requirements nine to twelve years into the future," continuing that it
"would have been arbitrary and capricious for EPA to promulgate GHG emissions standards for
model years as far into the future as MY2022-225 without providing for a mid-term evaluation."
Nissan indicated support for the views expressed by the Global Automakers and stated further
that "a robust and comprehensive mid-term review is legally necessary to ensure that the
standards for the later model years are supported by substantial evidence and are not arbitrary
and capricious. (Citing Motor Vehicle Mfr's Ass'n v. State Farm, 463 U.S. 29,42 (1983) listing
examples of arbitrary and capricious agency activity)."
EPA agrees that section 202(a) provides the agency with ample authority to undertake the
mid-term evaluation. EPA does not agree that the mid-term evaluation is authorized under CAA
section 307(d), as the mid-term evaluation is not a reconsideration of the standards under that
provision. Instead the mid-term evaluation will be undertaken under EPA's general authority to
establish emissions standards under section 202(a). EPA does not agree that the mid-term
evaluation is legally required, or that the standards adopted today would be arbitrary and
capricious or without substantial evidence to support them absent such a mid-term evaluation.
The final rule and supporting information and analysis amply justify the reasonableness and
appropriateness of the final GHG standards adopted by EPA, irrespective of the provisions for a
mid-term evaluation. In any case, that issue is not before EPA as EPA is exercising its discretion
to adopt provisions for a mid-term evaluation, for the reasons discussed above.
The Center for Biological Diversity (CBD) challenged the basis for the mid-term
evaluation and specifically argued that any interim rulemaking should be based on a presumption
that the stringencies of the standards will not decrease. As discussed above, the mid-term
evaluation will be a robust and comprehensive evaluation, and it would be inappropriate to limit
EPA's consideration to either just increasing or just reducing the stringency of the standards.
Instead, EPA will determine the appropriate course to follow based on all of the information,
evidence, and views in front of it, including those provided during public notice and comment.
CBD also raised a concern that EPA would be applying a faulty weighting of the statutory
factors under the CAA. CBD stated that highlighting the manufacturers' ability to comply was
improper, and instead decisive weighting should be placed on energy conservation. EPA
Id., CARB Resolution 12-11 at 20.
2-171
-------
EPA Response to Comments
disagrees that it is improper to carefully consider the impact on manufacturers' ability to comply.
When EPA conducts the mid-term evaluation, EPA will be evaluating standards that have
already been adopted and for which manufacturers are required to comply. The ability to comply
is an important part of determining the appropriateness of these standards. For example, ability
to comply is directly tied lead time, a factor EPA is required to consider under section 202(a).
EPA does not agree that it is appropriate to assign decisive weighting to any one factor, such as
energy conservation. That is contrary to conducting a holistic assessment, where EPA carefully
considers all of the relevant factors under section 202(a) and gives them the weight that is
appropriate in light of all of the circumstances.
Recommendations for Additional "Check-ins" or Periodic Status Reports
Several automakers, auto suppliers and industry associations (General Motors, Chrysler,
Daimler Automotive Group, Hyundai, Alliance of Automobile Manufacturers, Global
Automakers, Inc and Johnson Controls) suggested that, in addition to the proposed formal mid-
term evaluation, the agencies should also undertake a series of smaller, focused technical
evaluations or "check-ins' leading up to and potentially following the mid-term evaluation. Such
check-ins, these commenters asserted, would allow the agencies to consider the latest relevant
technical information, as well as other key issues. Several environmental organizations (Sierra
Club, UCS, NRDC, and CBD) submitted comments opposing these focused technical
evaluations or "check-ins," arguing that these would be time consuming and too premature to
judge technology readiness for the MY2022-2025 standards, and would undermine the intent and
effectiveness of the mid-term evaluation. A number of environmental organizations also
supported periodic updates on technology progress and compliance trends. The Sierra Club,
while not supportive of the "check-in" concept, did urge agency transparency and access to data
that would allow the public to "effectively and timely monitor compliance trends and technology
applications." The ICCT recommended that EPA and NHTSA conduct periodic updates on
technology progress and consider periodic status reports in advance of the mid-term evaluation
so that all interested parties could have access to key data that would be important in
documenting progress in technology improvements and implementation.
As discussed above, the agencies will conduct a comprehensive mid-term evaluation and
agency decision-making process for the MYs 2022-2025 standards as described in the proposal.
The agencies expect to continue ongoing stakeholder dialogue, including in depth technical
dialogue with automakers on their confidential technology development efforts and product
plans for MYs 2022-2025. EPA does not believe that additional or more frequent reports, as
suggested by some commenters would be an efficient way to prepare for the mid-term
evaluation.
Timeline and Process for Mid-term Evaluation
Several auto companies including Ford, Toyota and Porsche noted the importance of the
agencies meeting the proposed November 15, 2017, deadline for issuing the draft Technical
Assessment Report (TAR) so that there is adequate time for a reasonable public comment period
while still insuring that EPA meet its proposed April 1, 2018 deadline for determining whether
the standards established for MY2022-2025 are appropriate under CAA section 202(a). The
Alliance of Automobile Manufacturers, Global Automakers, and the National Association of
2-172
-------
CO? Emissions Standards
Manufacturers also expressed concern with the agencies' proposed schedule for undertaking the
mid-term evaluation. These commenters recommended that additional details be written into the
final regulatory text to provide more procedural certainty including: a start date for the
evaluation, a schedule of major milestones, specific studies the agencies plan to conduct, and
details of the peer review process. Toyota, Hyundai and Mercedes-Benz in their comments noted
their support for these recommendations as well. Mitsubishi urged the agency to work with
stakeholders well in advance of the mid-term to develop a sound review process and framework.
Both the Union of Concerned Scientists and NRDC stated that the timing of the mid-term
evaluation should be conducted as close as possible to the beginning of MY2022 so that the mid-
term evaluation could most accurately capture the status of technology and the vehicle market for
those model years under review.
EPA acknowledges the timing and other concerns raised by all commenters and continues
to believe that the approach laid out in the proposal provides an appropriate balance between
certainty and needed flexibility by providing end dates by which it must issue the draft TAR
(November 15, 2017) and determine whether the MY2022- 2025 standards are appropriate under
section 202(a) of the Clean Air Act (April 1, 2018). Additional regulatory details on the timing
or content of the mid-term evaluation are not needed and would not be an efficient way to
prepare for and conduct the mid-term evaluation.
Additional Evaluation Factors Should be Considered
In its proposal, EPA indicated that it would consider a range of relevant factors in
conducting the mid-term evaluation, including but not limited to those listed in the preamble and
proposed regulatory text. Quite a few commenters suggested that EPA expand the list of these
high level factors. The Alliance of Automobile Manufactures recommended numerous additions
to the list of factors including, "current and expected availability of state and Federal
incentives/subsidies for advanced technology vehicles," "the end-of-life costs associated with
advanced technology vehicles," and "consumer demand for and acceptance of fuel-efficient
technologies, and consumer valuation of fuel savings." Honeywell encouraged the agencies to,
"commit.. .to a detailed review of emerging boosting technologies that may considerably
advance vehicle emissions and fuel economy performance during the later years of the
rulemaking." The Institute for Policy Integrity commented that the agencies "should amend their
list of factors to specifically reflect any potential changes to benefits estimates, in addition to
changes to costs or the state of technology." Mitsubishi Motors commented that the mid-term
factors must include an evaluation of the sufficiency of the EV infrastructure, including whether
there have been any significant industry-wide economic setbacks making EVs and other overall
fuel economy targets impracticable, consumer acceptance of EVs and a thorough evaluation of
an EV multiplier in MYs 2022 through 2025 in order to continue EV market penetration. Also,
Mitsubishi noted that the mid-term should include consideration of compliance options for
OEMs with limited product lines. The National Association of Clean Air Agencies (NACAA)
suggested that EPA evaluate the use of credits by automobile manufacturers and the impact of
credit use on average fleet performance. The Clean Air Association of the Northeast States for
Coordinated Air Use Management (NESCAUM) noted that it expected EPA to monitor upstream
emissions from the power grid to determine whether the improvements assumed to occur were
realized. Finally, the Sierra Club recommended that the agencies provide the public with data on
2-173
-------
EPA Response to Comments
credit use by manufacturers, technology penetration both overall and by manufacturers, and sales
by vehicle footprints.
The Alliance for Automakers also indicated that the agencies should seek expert peer-
reviewed information including the National Academy of Sciences to answer a number of
questions associated with the Mid-term reviews.
A number of other commenters, including Ford, the UCS and ICCT supported the mid-
term evaluation provisions as proposed by EPA. Ford commented that they believed the
agencies had struck an appropriate balance between an exhaustive list and a high-level approach
and pointed to proposed regulatory language "including but not limited to..." as critical language
that should be maintained in final rule. Ford further noted that factors that turn out to be most
important six years from now are not necessarily foreseeable today and not necessarily the ones
listed in the proposed rule. The ICCT noted that "it is impossible to define all the criteria for
review at this time..." And UCS agreed that "a holistic assessment of all of the factors...
without placing decisive weight on any particular factor or projects" is the correct approach in
conducting the mid-term evaluation."
EPA is finalizing the list of factors as proposed.9 We believe these factors are broad
enough to encompass all appropriate factors that should be considered during the mid-term
evaluation, and provide the agency with an appropriate balance in that the list identifies major
factors to consider and includes a clear provision for inclusion of other appropriate factors. This
avoids trying to identify in detail at this time the myriad issues and factors that will be of concern
in the mid-term evaluation. As in this rulemaking, in the mid-term evaluation EPA expects to
place primary reliance on peer-reviewed studies. Additionally, as NAS reports are published,
EPA will give careful consideration to reports and their findings as well as any reports and
findings from other scientific and technical organizations.
As discussed above, the MY2022-2025 GHG standards will remain in effect unless and
until EPA changes them by rulemaking. The National Association of Manufacturers (NAM)
commented that EPA should not take the default position that the existing 2022-2025 model year
standards will remain in place unless changed by rulemaking. Rather, they argued the existing
standards should be rescinded immediately upon a determination that they are inappropriate,
leaving the 2021 standards in effect until the revised standards are finalized. Another
commenter, Toyota, requested that "in the event EPA does not take final agency action
concerning the 2022-2025 model year standards by April 1, 2020, the 2021 model year GHG
standards remain as the 'default' standards until such time as EPA does take final agency action
providing at least 18-months of lead time prior to the applicable model year." EPA believes the
appropriate approach is what was proposed; EPA is adopting the MY2022-2025 GHG standards
at this time, and they will go into effect unless EPA revises them. The mid-term evaluation
process is an effective and timely way to address any concerns that may arise in the future
concerning the appropriateness of these standards. EPA believes this provides the right degree
of certainty to the standards that are adopted today, along with a clear and effective mechanism
9 See §86.1818-12 (h)
2-174
-------
CO? Emissions Standards
for the timely evaluation of the standards and their revision if EPA determines in the future that
they are no longer appropriate based on the circumstances at that time.
2.5. Test Procedures
Organizations Included in this Section
AAA
American Lung Association of the Mid-Atlantic
Ferrari
Ford Motor Company
Johnson Controls, Inc.
Manufacturers of Emission Controls Association (MECA)
Marz, Loren C.
Motor & Equipment Manufacturers Association (MEMA)
National Automobile Dealers Association (NADA)
Necheles, L.
Securing America's Future Energy (SAFE)
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Smith, Frank Houston
Tarazevich, Yegor
U.S. Coalition for Advanced Diesel Cars
Volvo Car Corporation (VCC)
Weiner, L.
Organization: AAA
While it is clear that substantial progress is being made to improve the program, AAA continues
to have concerns with the real world accuracy of the testing procedures utilized to determine the
mileage ratings under CAFE. [EPA-HQ-OAR-2010-0799-9484-A1, p. 1]
With this said, AAA continues to have concerns with the testing procedures used to determine
miles per gallon (mpg) ratings under the CAFE program. AAA maintains that there are existing
tests that can be used to produce more accurate fuel economy ratings. CAFE ratings in particular
continue to be based on testing methodology from the 1970s, even though it has been
acknowledged to be inaccurate. [EPA-HQ-OAR-2010-0799-9484-A1, p. 1]
In 2008, EPA adopted new testing procedures with input from the Automobile Club of Southern
California's Automotive Research Center. These procedures combined the results of three new
dynamometer tests to provide a more accurate method of estimating mpg and showed these new
ratings to be at least 30 percent lower than the unadjusted test results. In 2011, AAA worked
closely with EPA and NHTSA to develop new vehicle labels that provide consumers with the
2-175
-------
EPA Response to Comments
clear and accurate information regarding safety, fuel economy, and GHG emission scores
necessary to facilitate informed vehicle purchase decisions. [EPA-HQ-OAR-2010-0799-9484-
Al,p.2]
Unfortunately, CAFE numbers do not reflect these new testing procedures. Until testing
procedures are harmonized, the discrepancy between the two ratings will only increase. AAA is
interested in working with EPA and NHTSA to find a solution that provides the most accurate
consumer information possible. [EPA-HQ-OAR-2010-0799-9484-A1, p. 2]
AAA commends NHTSA and EPA for working diligently with auto manufacturers and other
stakeholders to reach an agreement on the proposed new standards. Having safe, energy-efficient
vehicles is in everyone's best interest, but it is equally vital to ensure that the testing used to
gauge efficiency provides accurate results. Thank you for your consideration of AAA's views.
[EPA-HQ-OAR-2010-0799-9484-A1, p. 2]
Organization: American Lung Association of the Mid-Atlantic
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11788, p. 82.]
We also support changes to testing procedures and calculations that properly reflect actual
experience.
Organization: Ferrari
2) Test procedures [EPA-HQ-OAR-2010-0799-9535-A2, p. 11]
We believe appropriate to continue to measure CO2 emissions and fuel economy using the
traditional test cycles city (FTP) and highway (HFET) for the present proposal. It is reasonable
for EPA to address different test procedures in the context of a future rulemaking. Enough lead-
time should be given in case of any change in the test procedure for manufacturers to make
necessary changes to test equipments, carry out tests, and reflect the new procedures in their
compliance plans. [EPA-HQ-OAR-2010-0799-953 5-A2, p.ll]
We also support the proposal that the 5-cycle test procedures would remain the starting point for
demonstrating off-cycle emissions reductions. [EPA-HQ-OAR-2010-0799-9535-A2, p.ll]
Organization: Ford Motor Company
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 46.]
In general, we continue to encourage the agencies to take a holistic view of the transportation
sector to encourage the implementation of technologies and strategies whose benefits might
otherwise be reflected in the formal fuel economy test procedures.
2-176
-------
CO? Emissions Standards
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 35.]
With respect to our elements of the proposal, we will continue to work with the agencies to
develop the test procedures necessary to validate off-cycle technology.
Organization: Johnson Controls, Inc.
Test cycles must be more reflective of the real-world. Johnson Controls is concerned that the
proposed standards do not address one of the core problems with the standards - outdated
city/highway drive cycle averages. Johnson Controls recognizes that the drive cycles must be a
compromise between real world driving and testing workload/complexity. That said, the driving
patterns and behaviors of American consumers have shifted dramatically in the past 40 years
since the city/highway drive cycles were developed. The mere fact that the fuel economy
labeling process for new vehicles has been adjusted twice since its inception is evidence that
customer driving patterns are no longer properly reflected in the city/highway driving cycles.
EPA's MOVES model includes an estimate that 13.5% of all driving (in terms of vehicle hours
operating) nationwide is at idle. This is 50% more idling than the time weighted average idling
time in the combined city/highway driving cycles of 9%. The Joint Technical Support Document
(JTSD) issued with this NPJAM offers giving 75% of theoretical difference in fuel economy
benefit between MOVES and the city/highway drive cycles for start-stop technology as an off-
cycle fuel economy and CO2 credit. The rationale stated in the JTSD only offers 75% of the
theoretical difference is due to engine warm-up characteristics and that start-stop functionality is
disabled during that phase of the drive cycle. Johnson Controls believes this is a good start
towards recognizing the benefit of start-stop technology. However, by placing a limit on the off-
cycle credits that can be given to start-stop technology, the regulation may unintentionally place
a limit on the level of innovation that could be employed to improve fuel economy, reduce the
country's dependence on foreign oil. and reduce greenhouse gas emissions. While not directly
involved in the business or technology of improving the warm-up characteristics of the engine,
we do believe that innovations will continue to improve start-stop operation, consistency, and
predictability. Customers recognize the tangible fuel savings benefits of start-stop technology
since they can readily recognize the engine is not running and, therefore, not consuming fuel.
This customer feedback to the OEMs will naturally drive technology and innovation to ensure
that start-stop functionality is available under more operating conditions - including wider
ambient temperature and wider engine operating temperature. Johnson Controls recommends
offering more flexibility to the OEMs for off-cycle credits for start-stop technology if they can
provide evidence of the operational characteristics of the technology performing better than 75%
of the theoretical benefits. Johnson Controls also recommends the drive cycles be revisited and
new drive cycles be developed which reflect the driving styles of today's driver. To reduce
workload, global harmonized drive cycles (aka WLTP proposed by the UNECE) should be
considered. [NHTSA-2010-0131-0253-A1, pp. 3-4]
Organization: Manufacturers of Emission Controls Association (MECA)
2-177
-------
EPA Response to Comments
Current U.S. light-duty CAFE/greenhouse gas emission requirements both use the FTP and
highway fuel economy test cycles with specified weighting to determine a vehicle's fuel
economy. The current weighting puts a larger emphasis on fuel consumption (or greenhouse gas
emissions) during urban driving (FTP test cycle) than highway driving (highway fuel economy
test cycle). EPA recently switched to a 5-cycle approach for light-duty vehicle fuel economy
labeling. The rulemaking documents associated with EPA's new fuel economy label
requirements provide important information and data that supports the choice of this 5-cycle
approach as more representative of how vehicles are driven by U.S. vehicle owners compared to
the current CAFE 2-cycle requirement. [EPA-HQ-OAR-2010-0799-9452-A3, p.3]
MECA believes that any regulatory requirements associated with greenhouse gas emissions
should be based on real-world driving or usage patterns in order to ensure that regulatory
standards reflect actual vehicle operations and deliver the greenhouse gas emission reductions
that are needed. Vehicle manufacturers and emission control technology manufacturers need a
valid test cycle for greenhouse gas emission to engineer and evaluate vehicles consistent with
how they are used by the public. The weighting of the test cycle between urban and highway
driving modes will have a significant influence on the choice and optimization of powertrain
options that will be used to meet any future greenhouse gas emission or fuel economy standards.
Work is already underway in Geneva, Switzerland under the United Nations GRPE
harmonization umbrella to bring forward a new light-duty vehicle test cycle for use in
quantifying real world greenhouse gas emissions. EPA and California should utilize test cycles
for the purpose of measuring and controlling vehicle greenhouse gas emissions that are
representative of real world driving patterns. [EPA-HQ-OAR-2010-0799-9452-A3, pp.3-4]
Organization: Marz, Loren C.
EPA needs to adjust the methodology for calculating 'combined' mileage for the purposes of
CAFE. The 55% city/45% highway mix is apparently no longer representative based on the 43%
city/57% highway mix EPA now uses in its MOVES model and also used in Argonne National
Laboratory's GREET model. Furthermore, Bosch reports that based on a recent GPS study in
California, the median driving intensity is between the highway (HWFET) and US06 cycles
(http://www.erc.wisc.edu/documents/symp09-Freitag.pdf- slide #24). Having an
unrepresentative drive cycle mix will skew how effective the results of proposed rule will be in
the real world, and inappropriately favors hybrid/EV/PHEV/FCV technology in CAFE
calculations. [NHTSA-2010-0131-0213-A1, p.5]
This is already becoming apparent based on a study by Oak Ridge National Laboratory (Lin, Z.,
and Greene, D. 'Predicting Individual Fuel Economy.' SAE Technical Paper #2011-01-0618) as
the current 5-cycle fuel mileage values underestimate hybrid fuel mileage by an average of about
10%, while the fuel mileage of diesel vehicles is underestimated by an average of about 25%.
EPA essentially acknowledged this trend in a 2006 publication ('Final Technical Support
Document - Fuel Economy Labeling of Motor Vehicle Revisions to Improve Calculation of Fuel
Economy Estimates', page 8). [NHTSA-2010-0131-0213-A1, p.5]
Organization: Motor & Equipment Manufacturers Association (MEMA)
2-178
-------
CO? Emissions Standards
Test procedures must be more reflective of the real-world. The current and proposed standards
do not address one of the core problems with the standards - outdated highway/city drive cycle
averages. Real-world benefits can only be achieved with real-world measures. [EPA-HQ-OAR-
2010-0799-9478-A1, p.2]
The current and proposed standards do not address one of the core problems - outdated
highway/city drive cycle averages (a split of 55 percent city and 45 percent highway). The EPA's
own study illustrated the switch in driving behaviors since the original averages were set.2 Real-
world benefits can only be achieved with real-world measures. Changing the approach could
have profound effects on deployment of research funds and capital investment, on the choices of
vehicle technologies, and on the real-world results for the consumer, emissions reduction, and
fuel efficiency. Otherwise, the industry will make cost-benefit decisions on technologies to
maximize the fuel economy numbers with a 55-city/45-highway split and will make long-term
technology and capital decisions without an assurance that those decisions will produce real-
world results for the consumer and the country. Moreover, by continuing to use outdated mileage
formulas for current, real-world city/highway driving averages, the result is another unintended
consequence of influencing the market toward "preferred technologies" (because it is slanted
towards city-like driving). [EPA-HQ-OAR-2010-0799-9478-A1, p.4]
While new test procedures would be beneficial for real-world evaluation of CO2 and fuel
efficiency, until such time they are implemented, off-cycle credits are a good way to ensure
manufacturers are encouraged to introduce technology(ies) that result in real-world
improvements. Although, MEMA recognizes the challenges with the tall task of changing the
FTP/HFET, we urge the agencies to continue to actively work on global harmonization efforts to
develop test cycles that better reflect real-world driving habits and performance so that,
ultimately, the root causes can be addressed, resolved and incorporated for future iterations of
this Program. [EPA-HQ-OAR-2010-0799-9478-A1, p.4]
Test procedures must be more reflective of real-world conditions. [EP A-HQ-OAR-2010-0799-
9478-Al,p.l3]
Organization: National Automobile Dealers Association (NADA)
The final rule should be as performance-based as possible and, in doing so, treat all compliance
technologies as fairly as possible. Unfortunately, the single CAFE test cycle inherently serves to
disadvantage certain technologies over others to the extent that it fails to account for how those
technologies are actually used. For example, vehicles with hybrid and plug-in technologies
benefit from test cycles that emphasize city driving, vehicles with start-stop technologies benefit
from test cycles with long idling periods, and vehicles with diesel engines benefit from cycles
with a higher proportion of highway driving. To the extent allowed by law, where NHTSA and
EPA have data showing that certain technologies are or will be used in a manner that varies from
the CAFE test, or that are off-cycle, appropriate adjustments should be made. Moreover,
appropriate adjustments should be made to the final rule to reflect that real world gasoline does
not offer as much energy potential as the fuel used in the CAFE test. [EP A-HQ-OAR-2010-
0799-9575-A1, pp. 10-11]
2-179
-------
EPA Response to Comments
Organization: Necheles, L.
I am only a Juvenile Attorney so I honestly don't have a science background. What I am
concerned about and can comment upon, as a lay person, is how the EPA calculates vehicle fuel
mileage as seen on the stickers of new cars. 'EPA estimated fuel mileage.' [EPA-HQ-OAR-2010-
0799-2487-A1, p. 1]
Based upon personal experience and observation, the current calculated gas mileage shown on
stickers does not reflect reality. The Consumer Reports or Car and Driver 'observed' fuel mileage
is the best indicator and predictor of fuel mileage that I have at my disposal. Please consider
testing vehicles under real-world, reliable conditions. For instance, for Highway Driving: [EPA-
HQ-OAR-2010-0799-2487-A1, p. 1]
1. Use ordinary fuel purchased from a local retailer-gas that might be contaminated with water or
particles or may not be 87 Octane...fill the car with gas like an everyday consumer. 2. Drive the
car at speeds of 70-75 miles per hour. 3. Use an intestate like the Pennsylvania Turnpike or
Kansas Turnpike that contain hills. 4. Use full throttle at least once to simulate overtaking a
truck. 4. Use the AC and CD player and a phone charger..load on the engine. 5. One tire at least
5 pounds under inflated. 6. 50 pounds of junk in the trunk....i.e. extra coolant, window washer
fluid, jumper cables, tire inflator, flash light, groceries, kids toys, car seats, etc. (Items people lug
around everyday) 7. Headwinds and cross winds of at least 10 mph should be factored in. 8.
Slow down and speed up for 'construction zones' and make a full stop for a simulated rest room
break:, 9. Use a front plate on the car. [EPA-HQ-OAR-2010-0799-2487-A1, p. 1]
Organization: Securing America's Future Energy (SAFE)
Vehicle Testing Procedure: The testing procedure that EPA uses to measure vehicle fuel
economy is outdated, does not reflect actual driving patterns, confuses the public, undermines
agency credibility, and ultimately discourages consumers from purchasing efficient and cost-
effective vehicles. [EPA-HQ-OAR-2010-0799-9518-A1, p. 14]
For the purpose of measuring fuel economy for fuel economy and carbon emission regulations,
EPA relies of two tests developed in the 1960s and 1970s that simulate urban and highway
driving at relatively low speeds, in moderate weather, and without operating any vehicle
accessories. In the 1980s EPA started adjusting the fuel economy measurements downward for
the purpose of calculating the fuel economy that was placed on vehicle fuel economy labels so
that the figure would more closely reflect actual driving experiences. As the gap between real
world fuel economy and the figures on the label continued to grow, the Energy Policy Act of
2005 required EPA to revise its calculation for fuel economy labels again. Beginning with MY
2008 vehicles, EPA employed an updated test procedure which added three drive cycles to the
calculation to evaluate fuel economy at high speeds, in cold weather, and in hot weather. Yet for
fuel economy and carbon emission regulations, EPA continues to rely solely on the original drive
cycles that are forty years old. They are estimated to overstate actual fuel economy by about
twenty percent. [EPA-HQ-OAR-2010-0799-9518-A1, p. 14]
2-180
-------
CO? Emissions Standards
Yet in this proceeding, the characterization of fuel economy is more complex because in addition
to calculations of fuel economy based on fuel consumption, the proposal reports calculations of
fuel economy that are really fuel economy equivalents of emission standards. In the proposed
rule and the accompanying announcements the agencies characterized the requirements that
automakers will have to achieve by MY 2025 as "equivalent to 54.5 miles per gallon (mpg) if the
vehicles were to meet this CC>2 level all through fuel economy improvements." It was this level
of fuel economy that both agencies highlighted in their press materials and which was widely
reported in the mainstream media. [EPA-HQ-OAR-2010-0799-9518-A1, pp. 14-15]
In reality, all emission reductions will not be achieved through improvements in fuel economy.
The agencies acknowledge this point, which is reflected in the fact that NHTSA stated that the
fuel economy actually required pursuant to the rule would be 49.6 MPG. NHTSA then proceeds
to explain that that estimate, however, also is overstated because it does not account for
regulatory flexibilities that it is not allowed to consider in establishing the standards. NHTSA
estimates that the achieved fuel economy under the proposed rule would yield a fleet average of
47.0 MPG. Yet even that estimate only reflects the estimated achieved fuel economy measured
using the outdated test procedures. The 47 MPG estimate probably overstates the mileage that
will be reflected on a vehicle's fuel economy label by about 20 percent, meaning that the fuel
economy label would indicate a fuel rating closer to 38-40 MPG. And, even the figure on the
label often overstates the vehicle's actual fuel economy, a point that contributed to a Honda
Civic owner successfully suing Honda because her Civic Hybrid achieved far poorer fuel
economy that indicated on the vehicle's label. [EPA-HQ-OAR-2010-0799-9518-A1, p. 15]
Therefore, in this instance, there may be as many of five different figures by which one could
characterize the fuel economy requirements in the rule, enough to confuse most any
consumer. [EPA-HQ-OAR-2010-0799-9518-A1, p. 15]
In the preamble to the rule, the agencies noted that consumers often choose not to make cost-
effective investments in efficiency. The agencies identified several reasons why consumers
might not purchase more fuel efficient vehicles that are cost effective, suggesting that consumers
might be myopic, lack information to estimate the value of fuel savings, or might associate fuel
efficiency with small poorly made cars, among other reasons. [EPA-HQ-OAR-2010-0799-9518-
Al,pp. 15-16]
The agencies should consider the extent to which multiple measures of fuel economy undermines
confidence in the accuracy of the calculations, making it difficult for reasonable consumers to
have any confidence in any single fuel economy number, or the calculations of cost-effectiveness
based on them. SAFE believes that EPA should once again revise the test procedures to more
closely reflect real world driving conditions and use the revised test in its carbon emission
regulations. Likewise, NHTSA should use an updated test procedure for lightduty trucks, though
it cannot adjust the test procedure for cars without Congress updating the statute. More
importantly, however, EPA and NHTSA should work together to determine how to simplify the
calculation of fuel economy so that it most accurately reflects real world conditions. They should
then propose to Congress the appropriate changes to the law so that they may replace outdated
and inconsistent test procedures with more accurate ones that will inspire confidence in the
2-181
-------
EPA Response to Comments
regulation system instead of undermining the public's confidence in it. [EPA-HQ-OAR-2010-
0799-9518-Al,p. 16]
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
Take steps to address testing issues: Both agencies have recognized that the standards do not
correlate with the mileage or emissions of vehicles consumers should expect to see in dealership
showrooms or experience on the road. While the standards that are proposed for 2017-2025
vehicles are anticipated to yield a fleet of new vehicles in 2025 that averages 54.5 mpg (if all
improvements are made through efficiency) and emits 163 g/mi of CC>2, there are various factors
that reduce this standard to the much lower average of 37 miles per gallon that consumers will
see on new vehicle labels. [EPA-HQ-OAR-2010-0799-9549-A2, p. 9]
In a report released last summer, Sierra Club detailed the history of CAFE standards and the
testing regime that is used to set the standards and measure compliance. This testing regime
remains as it was prescribed in the original fuel economy law. Testing for determining the
mileage and now greenhouse gas information has gone through several updates with the goal of
providing consumers shopping for new vehicles more accurate information. As a result of the
divergent testing regimes, there is a confusing set of numbers - one for standards (i.e., the
proposed 54.5 mpg and 163 g/mi CC>2 fleetwide average in 2025) and another that reflects the
on-road impact of the program (i.e., consumers should anticipate vehicles averaging 37 mpg in
2025, not 54.5 mpg). Our report detailed how we ended up with a confusing set of numbers that
persists with these proposed standards. [EPA-HQ-OAR-2010-0799-9549-A2, p. 9]
In the proposed and final rules for 2012-2016 vehicles both EPA and DOT recognized the
disparity between standards and on-road mileage and pledged to address the issue before issuing
further standards. The process for further standards launched within weeks of that those
standards were final and the MPG values used to define the standards and the discrepancy
between standards and labels is now further impacted by the accounting for AC and off-cycle
reductions in the standard setting process. In the NPRM, the "on road fuel economy gap is
recognized, and the agencies continue to apply a 20% discount to the standards to assess real
world mileage and emissions and in calculating benefits associated with the standards. [EPA-
HQ-OAR-2010-0799-9549-A2, p. 9]
The agencies are proposing in this rule to revise testing for purposes of measure compliance with
the standards to account for some changes in air conditioning systems and some "offcycle"
reductions, but this leaves the actual standards themselves still tied to outdated testing. As we
noted in our report and in comments to the MY 2012-16 rule, steps could and should be taken to
address the outdated testing used for setting the standards and to ensure that the public is fully
and fairly informed. The fact remains that today's new vehicles average in the low 20 mpg range
and new vehicles in 2025 will be nearly twice as efficient, on average. Consumers, however,
who shop for a new vehicle in 2025 should seeing label values average around 37 mpg, not 54.5
mpg. While the proposed rule indicates that adjustments will be made for testing for compliance
with fuel efficiency standards, we continue to urge both agencies to take steps to reform testing
2-182
-------
CO? Emissions Standards
for setting the standards and to take steps to inform the public about the standards and what
consumers should expect to see in dealerships. [EPA-HQ-OAR-2010-0799-9549-A2, pp. 9-10]
Organization: Smith, Frank Houston
EPA versus NEDC Test Cycles
Regarding the relationship between NEDC and EPA test cycles please consider ...
NEDC and fuel frugal diesels: Compare
http://www.autocar.co.uk/SpecsPrices/SpecsAndPricesEdition/Volkswagen-Jetta-2.0-TDI-140-
SE-/62466/ at 58.9 mpg(Imperial) combined ==> converts
to -49 mpg(US) to US Individual (user) MPG Estimates
http://www.fueleconomy.gov/mpg/MPG. do? action=mpgData&vehicleID=31577&browser=true
&details=on at 45.5 mpg(US) with roughly 75% highway ... with an EPA sticker of 34/42
mpg(US) combined/highway. [NHTSA-2010-0131-0240-A1, p.3]
Which better reflects US user estimated average experience, US sticker or the convert NEDC
value? I believe you will find that the converted NEDC value (for diesels) more closely reflect
USER Average experience. This appears to be relatively typical for Audi and VW's This
tracking relationship between US user AVERAGE mpg experience and the converted NEDC
combined mpg(Imperial) values seems to be relatively consistent for fuel frugal small
displacement (Further, these VW/Audi vehicles are certainly NOT the best available diesel fuel
economies in the world compared to 2.0-1.5 US gallons/100 miles that is more or less standard
practice for significant portions of the > 49 mpg(US) combined EU offerings as demonstrated by
Table 5 above... with diesel machines that look and function much like ones already in the US
... EXCEPT for superior fuel economy. [NHTSA-2010-0131-0240-A1, p.3]
Organization: Tarazevich, Yegor
CAFE should be measured in EPA real world test numbers otherwise manufactures would
continue to learn tricks to show even higher CAFE numbers which do not translate to real world
numbers. 30 years ago CAFE MPG were very close to real world MPG but right now, CAFE
54.5 MPG in real world means only 40 MPG. Otherwise in 2025 CAFE 54.5 MPG could become
EPA 35 MPG only. [NHTSA-2010-0131-0199, p. 1]
Organization: U.S. Coalition for Advanced Diesel Cars
Emissions testing and calculations that: [NHTSA-2010-0131-0246-A1, p.2]
2-183
-------
EPA Response to Comments
Use market fuel rather than higher energy content laboratory fuel; [NHTSA-2010-0131-0246-
Al,p.2]
Employ real-world driving conditions; [NHTSA-2010-0131-0246-A1, p.2]
Accurately reflect the full environmental impact of each technology (not just at the vehicle's
tailpipe); and [NHTSA-2010-0131-0246-A1, p.2]
The Coalition continues to advocate for fuel economy calculations that provide the clarity
consumers require to make informed decisions and select a vehicle that best meets individual
driving needs. This includes up to date calculations for real world driving and steps to limit the
disparity between fuel economy measurements achieved in the laboratory and the real world.
[NHTSA-2010-0131-0246-A1, p. 10]
Real World Driving [NHTSA-2010-0131-0246-A1, p. 10]
During the comment period for the MY 2012-2016 joint rulemaking on CAFE, the Coalition
called attention to EPA and NHTSA's failure to utilize real world driving calculations. EPA's
own data from a 2006 study confirms that the average American accumulates the majority of
their miles at highway conditions. In spite of this, calculations that indicate drivers accumulate
the majority of their miles in urban conditions were utilized for the MY 2012-2016 rule, and are
again used in the MY 2017-2025 proposed rule. [NHTSA-2010-0131-0246-A1, p. 10]
Interestingly, EPA is not using its own data and public information to calculate the most accurate
fuel economy for CAFE despite the fact that it already utilizes the 2006 data to calculate the
societal benefits resulting from the implementation of advanced vehicle technology. Because the
calculations inaccurately reflect the driving patterns of the average American, EPA and NHTSA
are causing automakers to disproportionately employ technologies that perform well in urban
duty cycles in new vehicles, causing automakers to lean toward technologies that are not
optimized for the needs of the average American driver. [NHTSA-2010-0131-0246-A1, p.10]
The NPRM states that EPA and NHTSA are considering significant changes to test procedures in
response to the wide array of vehicle technologies available. The agencies have also stated that
they lack the statutory authority to change some of these calculations. If EPA and NHTSA have
determined that they lack the statutory authority to update the calculations to reflect the real
world driving habits of the current American driver, the agencies should educate Congress on the
impacts of this flawed statute and formally ask for the statutory authority from Congress to
update the calculations. Instead, the current proposals risk yet another rulemaking process that
will propagate the outdated and inaccurate 1975 calculations for the next decade and beyond.
[NHTSA-2010-0131-0246-A1, p. 11]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 248-249.]
By continuing to use outdated calculations, it may very well appear that manufacturers have
reached the new fuel economy and emissions goals, but it is likely that the real-world impact will
2-184
-------
CO? Emissions Standards
fall short of our nation's targets. Additionally, a significant disparity will continue between
actual fuel economy and what consumers were expecting when they purchased their vehicles.
This is evident from the recent class-action and small claims litigation by thousands of hybrid
owners. In the Detroit Free Press on January 6, 2012, Neil Schmidt, a technical specialist for
American Honda, explained the disparity between fuel economy on the sticker versus what the
drivers were actually achieving. 'We have no choice. We have to put these numbers on the label.'
He noted the small type on the label, which gave a listing of 41 to 57 miles on average, saying,
This is more toward the real world.' The important point for this discussion is that government
standards need to be consistently based on real-world driving patterns for the American
consumer, and therefore optimized for highway driving, to achieve the greatest real world
results. [NHTSA-2010-0131-0246-A1, p. 11]
Organization: Volvo Car Corporation (VCC)
CC has put considerable time and effort into maintaining a high degree of accuracy by having
well-developed arrangements to monitor calibrations, checks, and all critical processes in our
emission laboratory. We work continuously to monitor and improve the correlation and
repeatability of our test rooms. Thus, VCC realizes that test procedures, calibrations, and
instrumentation must be regularly reviewed and renewed to meet new challenges. [EPA-HQ-
OAR-2010-0799-9551-A2, p. 13]
In the fall of 2011 EPA proposed, under TIER 3, to consolidate all test procedure requirements
of Parts 86 into Part 1066 in order to improve their organization, including references to Part
600. In doing this, some test procedures will remain as they are, some will evolve, and new ones
will be introduced. This will also come to affect procedures that involve CO2 /FE. This has to be
considered. [EPA-HQ-OAR-2010-0799-9551-A2, pp. 13-14]
Along with the industry, VCC pointed out that close industry-EPA collaboration is critical to
ensuring that test procedures are relevant, adequate, and meet the objective standards so that the
tests can be reproduced and replicated. The initial EPA proposal would have required major
investment from VCC, but based on current discussions there appears to be an understanding that
there are other possible ways to address measurement. [EPA-HQ-OAR-2010-0799-9551-
A2,p.l4]
VCC has therefore been actively involved in addressing issues directly with the EPA and through
the Alliance on the proposal that was presented by EPA in November 2011. Based on VCC's
ongoing analysis of Part 1066, VCC believes that these proposed processes would benefit from
thorough revision, in cooperation with the industry, to minimize the risk of creating processes
that will add very little value to good repeatability and accuracy. EPA has recognized industry's
challenges and therefore continues to work with industry on this issue. VCC would welcome
CARB's participation in that dialogue. [EPA-HQ-OAR-2010-0799-9551-A2, p. 14]
Currently there are crucial differences between CARB and EPA advanced technology vehicle
test procedures that would benefit from harmonization. [EPA-HQ-OAR-2010-0799-9551-A2,
p.14]
2-185
-------
EPA Response to Comments
Hybrid Test Procedures
The hybrid test procedures need to be updated to reflect a common approach between EPA and
CARB. EPA extensively refers to SAE J1711 test procedures updated during 2010. The J1711
test procedures are the result of many years of cooperative work between industry and
government, which includes EPA and CARB. CARB's corresponding test procedures are based
on J1711 of 2008/2009. There are several changes between these two versions which are going
to generate extensive updating. If the harmonization does not occur, there will be unnecessary
additional test burdens on the industry as a result of duplication of testing and uncertainty
concerning the certification requirements. [EPA-HQ-OAR-2010-0799-9551-A2, [p. 14]
Organization: Weiner, L.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 107-108.]
It's important that agencies develop new, precise test procedures that actively calculate the true
mileage and not an overestimation, as has happened before.
Response:
EPA received a limited number of comments on test procedure changes being finalized
by this rule, which are intended to account for impacts on fuel economy not currently included in
the CAFE test procedures, as described in section III.B.10 of the preamble.
Several commenters noted that the test procedures used for this rule are different from
those used for determining fuel economy label values, and requested that the methods be
harmonized (AAA, U.S. Coalition for Advanced Diesel Cars). While EPA has broad discretion
in our authority to calculate average fuel economy across manufacturers' fleets, we are required
under EPCA 32904(c) to measure fuel economy for each car using "the same procedures for
passenger automobiles the Administrator used for model year 1975 ..., or procedures that give
comparable results". In response to comments urging Congressional action, Congress was
certainly aware of this issue in promulgating the EISA amendments to EPCA in 2007 and left
this provision unamended. A more detailed discussion of the statutory authority is provided in
section III.B.10 of the preamble. Although there is no outright legal bar to adopting a different
test procedure for the other light duty vehicles (including MDPVs and light trucks), there are
significant practical constraints. Virtually all data on control technology efficiency is based on
performance over the CAFE two-cycle test procedure. See 75 FR at 25332, 25408 ("EPA simply
lacks the technical basis to project the effectiveness of the available technologies over these three
test cycles and therefore, could not adequately support a rule which set CO2 standards based on
the five-cycle formulae.") In addition, having car standards based (for legal reasons) on two-
cycle testing and truck standards based on five-cycle testing would raise obvious issues
regarding implementation and harmonization (for example, crafting an ABT program, assessing
costs, developing a proper relation between car and truck curves). As a result of these legal and
practical restrictions, we are not adjusting the test procedures used in this rule to better reflect
real-world driving. This is in contrast to the approach that EPA has taken for the fuel economy
2-186
-------
CO? Emissions Standards
label, which is not subject to the same statutory restrictions. For the fuel economy label, EPA
uses the five-cycle test procedure to better account for real-world driving conditions, and address
issues similar to those expressed by commenter L. Necheles. EPA does not agree with the
conclusion drawn in comments from SAFE that difference between test procedures for labeling
and compliance will confuse consumers, noting that test results for individual models used to
determine manufacturer fleet compliance are not widely publicized, and are likely to be unknown
to the average consumer.
Furthermore, EPA does not believe the restrictions imposed by EPCA on test procedures
will have any impact on the level of emissions reductions and fuel savings that will be achieved
as a result of this rule. EPA notes that the car and truck standards in this rule were determined
with consideration of cost, feasibility of technology adoption, lead time, and consumer
acceptance. A change in test procedures for which the primary effect is a proportional decrease
(or increase) in test values would alter the standard curves, but would not affect the level of
adoption of efficiency technologies required to comply with the standards.
2-187
-------
-------
Air Conditioning System Credits
3. Air Conditioning System Credits
Organizations Included in this Section
Alliance of Automobile Manufacturers
Association of Global Automakers, Inc. (Global Automakers)
BMW of North America, LLC
Center for Biological Diversity
Ferrari
Ford Motor Company
Honeywell International, Inc.
United Automobile Workers (UAW)
Volvo Car Corporation (VCC)
Organization: Alliance of Automobile Manufacturers
The proposed rules properly include various provisions offering manufacturers some flexibility
in developing their plans to comply with the CAFE and GHG standards. Some of these
provisions enable manufacturers to earn credits that can be used to satisfy part of their
compliance obligations. While some may think the term 'credits,' as used here, connotes reduced
stringency or even 'loopholes,' that is not the case. The objective of the CAFE and GHG
standards is to reduce actual fuel consumption and actual GHG emissions from vehicles driven
on American roads. In some cases, however, the laboratory testing used by the agencies to
measure fuel economy and GHG emissions may not fully reflect the improvements built into a
vehicle by the manufacturer, due to limitations of laboratory-based tests. And improvements to
reduce MAC system refrigerant loss can reduce GHG emissions from vehicles while having little
or no impact on fuel economy. It is important for the rules to properly account for such factors.
Otherwise, manufacturers would be encouraged to focus solely on the test procedures, and
opportunities for real-world GHG reduction and fuel economy improvement would be lost. The
Alliance believes that the various credit provisions proposed by EPA and NHTSA are essential
elements of the rulemaking package. Below we offer our specific comments on the details of
these provisions. [EPA-HQ-OAR-2010-0799-9487-A1, p. 10] [[This comment can also be found
in Outline Heading 7.]]
Introduction [EPA-HQ-OAR-2010-0799-9487-A1, p.46]
The MAC credit provisions have become an essential piece of EPA's GHG program. Rapid
progress is underway as a result of the
MY 2012-2016 provisions to improve MAC efficiency, reduce refrigerant leakage, and switch to
a new low global warming refrigerant. In order to maintain the progress made in improving
MAC, as well as the overall integrity of the broader GHG program, the MAC provisions must be
continued in MY 2017-2025 at unreduced credit levels. This was one of the foundations of the
consensus to move forward toward the dramatic GHG reduction targets set through MY 2025, as
the program stringency is designed on the basis of these alternative compliance mechanisms.
Any obstacles that would prevent maximum attainment of MAC credits are therefore a
3-1
-------
EPA Response to Comments
fundamental threat to the achievement of the overarching program goals. [EPA-HQ-OAR-2010-
0799-9487-A1, p.46]
The Alliance comments are directed toward making a success of the MAC provisions through
efficient crediting processes that achieve real-world GHG reductions, commensurate with the
credit levels granted. The Alliance stands ready to work with the agencies to address the
concerns outlined below. [EPA-HQ-OAR-2010-0799-9487-A1, p.46]
Organization: Association of Global Automakers, Inc. (Global Automakers)
The air conditioning system credits provide manufacturers flexibility in pursuing a variety of
enhancements to system efficiencies and the use of advanced low global warming refrigerants.
We see the flexibility mechanisms as an essential part of this program. [EPA-HQ-OAR-2010-
0799-9466-A1, pp. 1-2]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 67.]
Organization: BMW of North America, LLC
Credit generation regarding direct (leakage) and indirect (fuel efficiency) emissions is generally
supported. Details to be modified from our point of view are listed below. The aim is to ensure
best objective methods as well as practicability and fairness. [EPA-HQ-OAR-2010-0799-9579-
Al, enclosure p. 1]
Organization: Center for Biological Diversity
4. A/C credits should be eliminated
We support the use of all technologies that improve the efficiency of air conditioning systems
and the employment of refrigerants with lower carbon footprints. However, these efficiency
improvements and greenhouse gas reductions should not be approached by way of credits. The
technology to accomplish them is or will be readily available and is economically feasible. 105
Their use should be built into the standard rather than merely incentivized. [EPA-HQ-OAR-
2010-0799-9479-A1, pp. 22-23]
105 As ICCT notes, vehicles with low greenhouse gas warming potential refrigerants are already
being sold in Europe; it is preposterous to assume that the U.S. fleet cannot utilize them in all
A/C systems by 2017. ICCT Comments at 42. [EPA-HQ-OAR-2010-0799-9479-Al, p. 23]
Organization: Ferrari
3-2
-------
Air Conditioning System Credits
We agree with EPA's proposal that allows manufacturers to generate credits by reducing CO2
equivalent emissions due to improved air conditioning systems, for reduced leakage (direct) and
enhanced A/C system management with consequent reduced tailpipe CO2 (indirect) emissions.
This is consistent with the goal to reduce the greenhouse gases associated with vehicles
regardless of the source. [EPA-HQ-OAR-2010-0799-953 5-A2, p. 13]
Organization: Ford Motor Company
Ford fully supports all aspects of the Alliance comments on Mobile Air Conditioning (A/C)
credits. We believe these credits are an integral part of both the EPA and NHTSA programs. The
stringency of the standards has been set using specific assumptions on a manufacturer's ability to
make widespread use of this incentive program. It is therefore imperative that the agencies
finalize requirements that allow companies who implement these technologies, which result in
real world CC>2 reductions, to receive the appropriate benefit. In support of this overarching goal,
Ford has the following comments: [EPA-HQ-OAR-2010-0799-9463-Al, p. 10]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 46-47.]
Manufacturers are developing more innovative in-vehicle systems such as more efficient air
conditioning, use of refrigerants with lower global warming potential, and improvements in
energy management and aerodynamics. These technologies provide a real-world benefit for
drivers but are not fully reflected on the fuel economy label. We commend the agencies for
acknowledging these technologies in the rulemaking.
Organization: Honeywell International, Inc.
Honeywell supports EPA and NHTSA's decision to continue and expand upon the A/C Credit
Program to provide strong incentive to eliminate the emissions of greenhouse gases ('GHGs')
from NC systems and improve energy efficiency in A/C operations to reduce fuel consumption.
Consistency and technology neutrality are critical factors in designing regulations that enable
businesses to invest in innovative technologies, systems, and controls. [EPA-HQ-OAR-2010-
0799-9497-A1, p.3]
We believe that good regulatory approaches are performance driven, technology neutral, and
provide some flexibility. They must accommodate for new developments and reflect the best
available science and data. Honeywell believes that EPA should provide flexibility to
accommodate for new developments in controls and test methods for measuring emissions and
improvements in energy efficiency in A/C system programs. Incorporating the most up-to-date
research and technical information will add further credibility to the A/C Credit Program by
accounting accurately for emission reductions and energy efficiency attributable to alternative
refrigerants. [EPA-HQ-OAR-2010-0799-9497-Al, p.4]
EPA and NHTSA must continue to maintain a clear regulatory approach that provides businesses
across the life of a light vehicle's A/C system with the regulatory certainty to commercialize
3-3
-------
EPA Response to Comments
effectively and transition rapidly to low GWP refrigerants. This confidence in the regulatory
system enables manufacturers such as Honeywell to take the risks necessary to innovate and
solve our most pressing environmental and energy security challenges. Currently, markets for
low GWP refrigerants are highly sensitive to standards, specifications, and incentives such as
those established in the Proposed Rule. Continuation of the A/C Credit Program beyond 2016
based upon best available science clearly advances the goals and objectives of fuel economy and
GHG emissions programs. [EPA-HQ-OAR-2010-0799-9497-A1, p.4]
In sum, Honeywell supports EPA and NHTSA's approach to continue and expand upon the A/C
Credit Program beyond 2016, and the recognition of the important contribution that alternative
refrigerants will make toward meeting both fuel economy and GHG emissions objectives. [EPA-
HQ-OAR-2010-0799-9497-A1, p. 12]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 206-
210.]
Organization: United Automobile Workers (UAW)
The UAW also supports EPA's proposal for air conditioning improvement credits and so-called
"off-cycle" credits. Air conditioning credits recognize real-world reductions in climate change
pollution that occur through reduced leakage of chemicals with high global warming potential
from air conditioning systems, the substitution of less harmful chemicals in air conditioning
systems, and more efficient systems that draw less power from the engine and result in lower
CO2 emissions to run the compressor. [EPA-HQ-OAR-2010-0799-9563-A2, p.3]
Organization: Volvo Car Corporation (VCC)
In the GHG regulation for MY 2012-2016 EPA introduced the AC credits as an opportunity to
achieve some flexibility in compliance with standards equivalent to the opportunity that exists
within CAFE by paying fines for deviation. Hence rewarding the manufacturer who has a good
engineering solution, the AC credit has become a very important part of the national GHG
program. It is therefore important that this momentum is maintained. Also for this part of the
program, it is critical that EPA and NHTSA interact with CARB in order to enable consistent
design requirements and reporting requirements for maximum efficiency of both manufacturers
and government. [EPA-HQ-OAR-2010-0799-9551-A2, p. 8]
Response:
EPA acknowledges comments of general support for the proposed program in the preamble to
this rule, Section II.F. 1. With regard to the comment from CBD that the standards should reflect
the anticipated widespread use of A/C, we note that the GHG standards do exactly that (as a
number of commenters, e.g. Ford, noted explicitly and correctly). See joint TSD section 2.5.3.2
(explaining how the target curves reflect use of A/C technology); preamble section III.C.3.
3-4
-------
Air Conditioning System Credits
3.1. Credits Related to Reduced Leakage and the Use of Alternative
Refrigerants
Organizations Included in this Section
Alliance of Automobile Manufacturers
Arkema Inc.
Association of Global Automakers, Inc. (Global Automakers)
BMW of North America, LLC
California Air Resources Board (CARB)
Chrysler Group LLC
Ford Motor Company
Honeywell International, Inc.
Hyundai America Technical Center
International Council on Clean Transportation (ICCT)
Northeast States for Coordinated Air Use Management (NESCAUM)
Toyota Motor North America
Volkswagen Group of America
Volvo Car Corporation (VCC)
Organization: Alliance of Automobile Manufacturers
The Alliance does not support additional requirements on Low Global Warming Potential
(GWP) refrigerant systems (i.e., the "high leak disincentive"). Some manufacturers have
invested millions of dollars to redesign their vehicles and assembly plants for transitioning to
new low-GWP refrigerants. These companies have counted on a specific level of credits in
exchange for making this transition earlier than they might otherwise have done. This new
proposal would potentially reduce the amount of credit, unfairly penalizing early adopters. [EPA-
HQ-OAR-2010-0799-9487-A1, p.5]
Use of Updated SAE J2727 [EPA-HQ-OAR-2010-0799-9487-A1, p.59]
The Alliance supports the proposed adoption of the updated SAE J2727 procedure to calculate
leak rates. However, at the time the NPRM was written, the updated SAE J2727 was still in draft
form. Therefore, not all of the changes have been included in the NPRM. Now that the update is
nearly approved, we recommend that it be fully incorporated into the final rule. Using a lower
multiplier of 10 (instead of 125) for helium tested connectors makes sense to provide lower leak
rates for tighter connectors. The Alliance also proposes that this methodology, along with all
other SAE J2727 updates, be allowed for MY 2012-16 so that manufacturers will be encouraged
to perform helium testing as soon as possible and develop testing methods in advance. This
allowance will benefit the environment and support automakers ability to earn credits to meet the
challenging standards of the future. [EPA-HQ-OAR-2010-0799-9487-A1, p.59]
Use of SAE J2064 [EPA-HQ-OAR-2010-0799-9487-A1, p.59]
3-5
-------
EPA Response to Comments
The Alliance supports the adoption of the SAE J2064 procedure for MY 2017 and beyond for
calculating hose leak rates. The Alliance also proposes to allow this calculation method for MYs
2012-16. [EPA-HQ-OAR-2010-0799-9487-A1, p.59]
High Leak Disincentive [EPA-HQ-OAR-2010-0799-9487-A1, p.59]
The Alliance does not support the proposal to reduce the MAC direct credits (up to 1.8 g/mile for
cars and 2.1 g/mi for trucks) via the "high leak disincentive" if the refrigerant leakage rate is not
reduced by half from industry average leak rates (in other words, generating debits if the MAC
fails to achieve the low leak standards). Compared to the MY 2012-2016 regulation, an
unreduced program for MAC credits was the basis for the consensus GHG targets set for MY
2017-2025. The major reasons why the high leak disincentive should not be implemented for
MYs 2017-25 and beyond for the R1234yf refrigerant are: [EPA-HQ-OAR-2010-0799-9487-A1,
p.59]
1) Manufacturers have invested millions of dollars to change the designs of their vehicles and
their assembly plants to bear the added cost of the new refrigerant in order to earn these credits.
This new proposal to potentially reduce the amount of credit from a switch in refrigerant changes
the cost-benefit equation from making this switch. This unfairly penalizes early adopters by
undercutting the value derived from the credits from their decisions to switch rapidly to a new
refrigerant, when a slower changeover might have been preferred under the new proposed rules.
[EPA-HQ-OAR-2010-0799-9487-Al,pp.59-60]
2) EPA is proposing the high leak disincentive should be implemented for a refrigerant that has a
GWP below 150. R1234yf, the new refrigerant that many auto manufacturers plan to use in this
timeframe, has a GWP of 4. The global warming impact of R1234yf is 0.0028 times that of
R134a. [EPA-HQ-OAR-2010-0799-9487-A1, p.60]
The actual global warming impact of an average leak air conditioner vs. a low leak air
conditioner is shown in the table below, where grams/mile of CO2e are calculated based on the
delta between average leak and low leak. The data suggests that the actual difference in global
warming impact between a vehicle with an average leak and the same vehicle with a low leak air
conditioner is 0.002 g/mile for cars and 0.003 g/mile for trucks on a CO2e basis using the
R1234yf GWP of 4. The high leak disincentives proposed by EPA are 1.8 g/mile for cars and 2.1
g/mile for trucks, which are not in line with the actual global warming impacts. The data below
suggests that, assuming manufacturers report CC>2 emissions to the nearest tenth of a g/mile so in
these terms, excess CO2e emissions from these average leak vehicles will be 0.0 g/mile for cars
and 0.0 g/mile for trucks. This analysis shows that the "high leak disincentive " proposed by
EPA has no environmental basis, due to the de minimis environmental impacts of R1234yf
leakage. [EPA-HQ-OAR-2010-0799-9487-A1, p.60] [For the table please refer to EPA-HQ-
OAR-2010-0799-9487-A1, p.60]
3) Refrigerant leak rates are historically low for modern MAC systems because automobile
manufacturers have improved quality in order to meet rising customer expectations and reduce
warranty expenses. There is no evidence that manufacturers will be backsliding on these leak
rates to save costs. In fact, given the higher cost of R1234yf - up to ten times the price of R134a -
3-6
-------
Air Conditioning System Credits
manufacturers have an increased incentive to further reduce leaks and thereby retain the
expensive new refrigerant. [EPA-HQ-OAR-2010-0799-9487-A1, p.60]
4) EPA has expressed concern about refilling R134a refrigerant in place of the R1234yf
refrigerant. However, this is not easily achieved, since the service port fittings installed on new
vehicles with R1234yf refrigerant are totally different from those using R134a. [EPA-HQ-OAR-
2010-0799-9487-Al,p.61]
5) It is also worth noting that the size of the proposed penalty greatly exceeds the actual scale of
the GHG impact of potential leakage. Please also note that the closing bracket is placed at the
wrong place in the formulas that calculate direct MAC credits in section § 86.1866-12.(b)(2)(i) &
(ii), both for cars and trucks. We recommend that EPA make the correction of these closing
brackets (as noted below) along with removing the HiLeakDis factor in both formulas. [EPA-
HQ-OAR-2010-0799-9487-A1, p.61] [For the figure '(noted below)' please refer to EPA-HQ-
OAR-2010-0799-9487-A1, p.61]
Refrigerant Level Monitoring [EPA-HQ-OAR-2010-0799-9487-A1, p.61]
Emission warranty requirements are not appropriate for mobile air conditioners under the
proposed rule. This is because in-use performance of MAC systems at levels comparable to a
new vehicle is not needed to achieve the emission levels targeted by EPA. [EPA-HQ-OAR-2010-
0799-9487-A1, p.61]
Warranty requirements were established for tailpipe pollutants, such as CO and NOx, because
emissions of those pollutants would rise significantly if the pollution control devices such as
catalytic converters fail. This would typically not be the case for MAC components. First,
consider the case of indirect emissions from fuel consumed to power the MAC. In the vast
majority of MAC failure modes, the system stops cooling and ceases operation - either because
the critical moving parts stop moving or because the system is switched off- thereby actually
reducing the indirect CO2 emissions. [EPA-HQ-OAR-2010-0799-9487-A1, p.61]
Emission warranties should not be required in relation to the indirect MAC emissions. The most
significant item in EPA's proposed warranty coverage, the compressor, can cost over $1,000 to
replace. It seems paradoxical and disproportionate to impose such high costs in an emissions
recall scenario to replace this component, and thereby actually increase indirect emissions.
Although manufacturer warranties may typically already be longer than the two-year period
proposed by EPA in this NPRM, in principle there is no sound basis for emission warranty
coverage to safeguard indirect emission levels, since indirect emissions go down when the
system fails. Finally, it is worth noting that proper functioning of these parts is not actually
required to achieve the emissions levels set by EPA. [EPA-HQ-OAR-2010-0799-9487-A1,
pp.61-62]
Regarding direct emissions of refrigerant, there is only a negligible environmental impact if
refrigerants below a GWP of 150 are released from the system, even if the entire charge
(typically between 1-2 pounds) is released. Therefore, emission warranty coverage of joints,
3-7
-------
EPA Response to Comments
hoses, seals, etc. is certainly not needed to protect the environmental gains from application of
low-GWP refrigerants. While the ultimate cost of the new low-GWP refrigerant R1234yf (also
known as HFO-1234yf)) is higher than the R134a, it is expected to be at a level that would
severely discourage motorists from repeatedly recharging a system with significant unrepaired
leaks (e.g., any cost of over $30 per pound). Therefore, there is no emission-based reason to
mandate warranty coverage to prevent leaks on low-GWP systems, and the potential costs of an
emission recall would be disproportionate to any environmental impact of leakage of these
refrigerants. Any emission warranty requirements should specifically exclude emission warranty
coverage for systems using a refrigerant with a GWP below 150. This is consistent with EPA's
position that no emissions warranty is required for zero emissions vehicles. The sole remaining
MAC environmental impact would be from refrigerant leakage in the current R134a systems.
Given the prospect for fairly rapid adoption of the low-GWP refrigerants in new vehicles during
the time frame of this regulation, this would appear to be a very small basis on which to create an
entirely new area of emissions warranty coverage and all the associated elements of an in-use
program for air conditioners. EPA should not create a program of warranty coverage for MAC
components in pursuit of such a small and temporary emissions impact. [EPA-HQ-OAR-2010-
0799-9487-A1, p.62]
In conclusion, a properly structured MAC credit program can provide substantial low cost, near
term GHG reductions. Our recommendations are provided to make the MAC program work as
effectively as possible. [EPA-HQ-OAR-2010-0799-9487-A1, p.62]
Implementation of New Alternative Refrigerants [EPA-HQ-OAR-2010-0799-9487-A1, p.62]
As part of the Single National Program, the current regulations provide incentives to
manufacturers to implement low-GWP refrigerants and reduce system leakage. Our members
plan to make use of these incentives, with the degree of use depending on each manufacturer's
model changeover plans, MAC technology implementation plans and capital investment
schedules. In fact, we expect some automobile manufacturers to begin use of R1234yf on some
models as early as 2013. Despite this promising news, there remain prohibitive barriers to
achieving 100% use of low-GWP refrigerants. [EPA-HQ-OAR-2010-0799-9487-A1, p.62]
At this juncture, it would be premature for EPA to remove R134a from the list of acceptable
substitutes for CFC-12 in MAC systems. We believe that the key to this transition is to instead
continue the credits available under the MY 2012-2016 National Program for regulation of light-
duty vehicle GHG and fuel economy. This approach would help ease the transition and
encourage earlier action, to the extent that such action is achievable and cost-effective. It would
encourage low-leak R134a systems, so long as R134a systems are allowed on new vehicles. It
would also encourage accelerated introduction of new refrigerants if manufacturers were
awarded credit for any usage of the new refrigerants in excess of mandated requirements. Should
R134a become prohibited and R1234yf become mandatory for all vehicle MAC systems, it is
critical that the MAC credits continue to apply throughout MY 2017-25, since these credits are
an essential part of manufacturers' compliance plans. [EPA-HQ-OAR-2010-0799-9487-A1,
pp.62-63]
Refrigerant Availability [EPA-HQ-OAR-2010-0799-9487-A1, p.63]
-------
Air Conditioning System Credits
Based on current knowledge, the best product that could meet a low-GWP requirement (at or
below 150 GWP) would be R1234yf. This refrigerant is not yet available in commercial
quantities, and it is unclear when a sufficient supply will be available in for the U.S. market or
what the cost of this product will be. [EPA-HQ-OAR-2010-0799-9487-A1, p.63]
The single manufacturer of R1234yf - a joint venture of Honeywell and DuPont - recently
announced that it would begin supplying the refrigerant in commercial quantities in the fourth
quarter of 2012. According to current information, once production is permitted at pilot facilities
at both Honeywell and DuPont, as well as an intermediate-scale facility in China at DuPont
affiliate Changshu 3F Zhonghao New Chemical Materials, supplies likely will meet near-term
EU requirements. A single world-scale plant is expected to follow at an undefined later date as
demand grows. [EPA-HQ-OAR-2010-0799-9487-A1, p.63]
Current EU regulations mandate that automakers switch to low-GWP refrigerants by 2017. This
EU mandate was phased in over a seven year period beginning in 2011. EU sales of nine million
MAC-equipped vehicles filled with 600 grams of refrigerant equate to 5400 metric tons of
refrigerant required for new production. Service and repair will require additional refrigerant.
Since these regulations are already in place, the ramp-up of R1234yf production and system
design is expected to fill the EU market first. The supply challenge is exacerbated by the fact that
Honeywell and DuPont retain exclusive rights to the manufacture of R1234yf, thereby limiting
the opportunity for other chemical manufacturers to supply the future demand for added
manufacturing capacity. [EPA-HQ-OAR-2010-0799-9487-A1, p.63]
Engineering Resources Needed to Transition to R1234yf [EPA-HQ-OAR-2010-0799-9487-A1,
p.63]
In evaluating this issue, the agencies should consider both the availability of the new refrigerant
and the significant automaker resources needed to provide the engineering, logistics, training and
roll-out. The deployment of these changes over 100% of vehicle models will present
considerable challenge. In particular, all new systems will require complete revalidation using
the new lubricants required for R1234yf This will take time and strain the engineering resources
throughout the MAC industry. [EPA-HQ-OAR-2010-0799-9487-A1, p.63]
In most cases, manufacturers will implement R1234yf with a revised component layout,
including additional components that create packaging problems. Therefore, R1234yf is ideally
implemented during vehicle major redesigns. Finally, there are significant changes to the
assembly plants that are required to handle R1234yf (especially OSHA rules). These typically
include relocation of the refrigerant charging area and relocation of refrigerant storage tanks.
Extensive plant rearrangements such as this are very disruptive to plant operations, and are
therefore typically performed as part of the changeover that occurs when new models are
introduced, when extensive replacement of tooling and revised layout of production lines is
typically required throughout the plant. [EPA-HQ-OAR-2010-0799-9487-A1, p.64]
Substituting R1234yf for R134a is fundamentally more complex than the change from R12 to
R134a that was made during the 1990's, and the SNAP usage requirements are more significant.
3-9
-------
EPA Response to Comments
The changes in the assembly plants will also be much more significant than were the case for
R134a. [EPA-HQ-OAR-2010-0799-9487-A1, p.64]
For these reasons, EPA should not delist R134a from the approved SNAP list of automobile air
conditioner refrigerants, nor should EPA establish other policies based on the assumption that a
comprehensive changeover to new refrigerants can occur within the foreseeable future. [EPA-
HQ-OAR-2010-0799-9487-A1, p.64]
Organization: Arkema Inc.
Arkema supports the EPA's focus on the use of more advanced components and technology to
reduce the potential for refrigerant leakage and/or the use of alternative refrigerants. In fact,
Arkema was and is an important contributor to the efforts to develop methods for leak-tight
components and has an interest in the production of HFO-1234yf and/or other alternative
refrigerants. The option of using air conditioning credits and the flexibility to choose leak-tight
components or an alternative refrigerant should remain in the final rule. This choice gives
flexibility to auto manufacturers, allows prioritization of improvements in vehicles, and
acknowledges technological advancements that some auto manufacturers may have already
implemented. For the consumer, the end result is the choice of the newest technology which
could foster higher acceptance. Finally, for example, Arkema supports proper cooling load
management to optimize the sizing of an air conditioning unit in motor vehicles. [EPA-HQ-
OAR-2010-0799-9468-A1, p.2]
Arkema supplies a number of products into the automotive industry, which will help auto
manufacturers achieve the proposed requirements. From coatings, refrigerants, plastics,
polymers, and resins, Arkema serves a number of automobile parts suppliers and manufacturers
to foster technological advancements for motor vehicles. [EPA-HQ-OAR-2010-0799-9468-A1,
p.2]
However, as EPA considers which alternative refrigerants are eligible for use in mobile air
conditioning systems, we believe that each potential, new refrigerant should be evaluated in
terms of its full costs and benefits and effects on health, safety and the environment. Additional
evaluation and information based on the above factors should be included in the final rule
regarding alternative refrigerants. In addition, as alternative refrigerants play a key role in EPA's
proposal, it is necessary to also more fully consider the availability, supply and competitiveness
of such alternative refrigerants. Although potential supply issues are acknowledged in the
NPRM, in light of other international regulatory efforts such as those previously undertaken by
the European Union, for example, we believe additional analysis is needed by EPA to understand
the potential costs and implications that could be posed by an adequate global supply of
alternative refrigerants. Thus, a discussion on the acceptance of alternative refrigerants on a
global scale should be included to benchmark other efforts in this area. EPA may also wish to
consider delaying the use of alternative refrigerant incentives until relevant health, safety,
environmental and supply issues can be fully and properly analyzed and/or until the mid-term
evaluation process envisioned by the proposed rule. [EPA-HQ-OAR-2010-0799-9468-A1, pp.2-
3]
5-10
-------
Air Conditioning System Credits
c. Market Penetration of Alternative Refrigerants is the Best Way to Manage Existing Products
[EPA-HQ-OAR-2010-0799-9468-Al,p.3]
Arkema supports EPA's proposed method of managing the transition to a new refrigerant as long
as the use of particular refrigerants is not mandated by EPA and the market players have freedom
of choice. This will ensure that there is adequate supply of the products and that the products will
operate in a competitive marketplace. If the North American Proposal for HFCs (HFC
Amendment to the Montreal Protocol) is successful, HFCs would be managed on a global cap
and trade allocation basis and could still allow room for the market to govern the selection of
materials. [EPA-HQ-OAR-2010-0799-9468-A1, pp.3-4]
EPA's potential Significant New Alternatives Policy (SNAP) rulemaking on HFC-134a is not
consistent with the proposed method above or the HFC Amendment. The potential SNAP
rulemaking to potentially de-list HFC-134a manages the process on a chemical by chemical basis
and makes EPA the market regulator while the HFC Amendment allows competitive forces to
make choices. [EPA-HQ-OAR-2010-0799-9468-A1, p.4]
Organization: Association of Global Automakers, Inc. (Global Automakers)
B. Availability of HFO-1234yf
As EPA is aware, manufacturers have been evaluating alternative refrigerants with low global
warming potential (GWP) for many years. HFO-1234yf has emerged as a potential alternative
that has the potential to be used in new vehicles in the near term. [EPA-HQ-OAR-2010-0799-
9466-A1, p. 4]
However, while the outlook for the use of HFO-1234yf is promising, the availability of HFO-
1234yf is still highly uncertain. With only two manufacturers and only one plant to produce this
refrigerant at this time, there is not yet a guarantee that there will be adequate supplies for the
U.S. vehicle market, especially since the European Union is moving ahead to adopt alternative
refrigerants prior to the U.S. As part of the determination of the GHG standards, EPA accounts
for the expected use of HFO-1234yf, and therefore the likely credits that would be obtained from
this use, expecting 100% usage prior to 2025. The GHG standards were developed with these
potential credits in mind. If for some reason HFO-1234yf does not reach commercialization, or
adequate supplies are not available for all vehicle manufacturers, then it will be necessary for
EPA to reassess the GHG standards, taking into account that a 100% usage rate will not be met.
Global Automakers recommends that EPA continue to track the progress for HFO-1234yf and
reevaluate the potential for 100% usage as part of the mid-term review. Again, if 100% usage is
not feasible, then EPA should account for this shortfall through a revision of the standards
following the mid-term review. [EPA-HQ-OAR-2010-0799-9466-A1, p. 5]
Organization: BMW of North America, LLC
From our point of view, the adequate availability of HFO-1234yf is highly questionable.
Therefore, we greatly appreciate EPA's decision regarding the future ;: Adoption of this
3-11
-------
EPA Response to Comments
refrigerant. Currently, no one knows when the supply will be adequately established in the
market. To assure that automakers will be able to continue to offer air conditioning to consumers
in the future, the delisting of HFC-134a as an approved substitute would not be prudent at the
present time. [EPA-HQ-OAR-2010-0799-9579-A1, enclosure p. 1]
Regarding leakage-related credits, we would like EPA to reconsider the so called 'Hi Leak
Disincentive.' SAE J639 specifically requires unique service fittings for each refrigerant to
prevent both accidental cross-contamination and intentional tampering by service technicians,
and EPA's regulations currently do not allow the use of any unintended fluid or refrigerant in any
A/C system. If someone does so, then it would violate the law. So the effects of illegal
refrigerant charge cannot be influenced by the manufacturer. Furthermore, this disincentive
provokes discussions to use unintended refrigerants. We do not expect that vehicle
manufacturers will shift to higher potential leakage rates when using HFO-1234yf instead of
HFC-134a; BMW would definitely not do so and our focus will remain on best quality
refrigerant circuit tightness for any given refrigerant. [EPA-HQ-OAR-2010-0799-9579-A1,
enclosure p. 2]
Organization: California Air Resources Board (CARB)
The California Air Resources Board (CARB) is supportive of the general structure of the motor
vehicle air conditioning (AC) leakage credit program in the proposed United States
Environmental Protection Agency (U.S. EPA) 2017-2025 MY light-duty vehicle greenhouse gas
(GHG) rule. We believe the program will continue leading the automotive industry toward a
more sustainable future by incentivizing the use of new refrigerants with low climate impact and
superior refrigerant containment technologies. In the meanwhile, we have three specific
comments on the U.S. EPA AC leakage credit provisions. The purpose of these comments is to
accomplish three things:
• Correcting what appears to be an unintentional error in U.S. EPA's proposed AC leakage
credit formulas,
• Aligning U.S. EPA's AC leakage credit formulas with the broad intent of the rule, and
• Fully aligning the U.S. EPA regulation and the CARB regulation with respect to AC
leakage credit provisions.
The three specific comments are described in the attachment. [EP A-HQ-OAR-2010-0799-9491-
Al,p. 1]
Attachment. Specific Comments on AC Leakage Credit Provisions in U.S. EPA's 2017-2025
MY Light-duty Vehicle GHG Rule
Comment 1 refers to portions of subsections (i) and (ii) in §86.1866-12(b)(2). [EPA-HQ-OAR-
2010-0799-9491-A1, p. 3]
Comment 2 refers to portions of subsections (i) and (ii) in §86.1866-12(b)(2). [EPA-HQ-OAR-
2010-0799-9491-A1, p. 4]
5-12
-------
Air Conditioning System Credits
Comment 3 refers to portions of subsections (i) and (ii) in §86.1866-12(b)(2). [EPA-HQ-OAR-
2010-0799-9491-A1, p. 5]
[See pp. 3-7 of Docket number EPA-HQ-OAR-2010-0799-9491-A1 for specific comments on
AC Leakage Credit Provisions.]
Organization: Chrysler Group LLC
The updated SAE J2727 and J2064 procedures and their bearing on EPA air conditioning system
leakage calculations;
Opposition to EPA's proposed "high leak disincentive";
Refrigerant level monitoring;
And low-global warming potential ("GWP") refrigerant availability and the resources necessary
to transition from R-134a systems to Low-GWP refrigerants. [EPA-HQ-OAR-2010-0799-9495-
Al,p. 10]
Organization: Ford Motor Company
Ford also supports the continuation of the existing A/C leakage credit opportunities and offers
the following comments about the proposed program for 2017-2025 MYs. [EPA-HQ-OAR-
2010-0799-9463-A1, p. 14]
We believe that the current design-based "menu" approach to quantifying leakage credits is
effective and should be retained. We also agree with EPA's proposal to adopt the latest version
of SAE J2727 for calculating leak rates, including the lower multiplier for helium tested
connections as well as all other updates incorporated into the SAE standard at the time the final
rule is published. In addition, Ford supports the adoption of the hose permeation rates calculated
from SAE J2064 as part of SAE J2727. For consistency and to encourage helium leak testing, we
propose that EPA also allow these updated methodologies to be used for 2012-2016 MY
vehicles. [EPA-HQ-OAR-2010-0799-9463-Al, p. 14]
Ford supports the mechanisms in place to incentivize the introduction of new low global
warming potential (GWP) refrigerants, such as R-1234yf. Use of such refrigerants directly
reduces the climate effects of A/C system leakage. As detailed in the Alliance comments and the
NPRM preamble, there are still a number of obstacles that must be overcome before new low-
GWP refrigerants can be used widely throughout the industry. These include, but are not limited
to, refrigerant availability and cost, required A/C system hardware updates and testing, and
assembly plant facility upgrades. Nonetheless, manufacturers are working to pursue this as a
viable option to directly reduce GHG emissions in the future. Ford believes appropriate credit
levels must continue through 2025 MY in order to incentivize the introduction of these new
refrigerants. [EPA-HQ-OAR-2010-0799-9463-Al, p. 14]
3-13
-------
EPA Response to Comments
Related to credit amounts, Ford does not support the introduction of the "high leak disincentive"
proposed in the 2017-2025 MY program for low-GWP refrigerants. This revision makes it
impossible for manufacturers to obtain the maximum leakage credit amounts for these
refrigerants, unless they implement a system that achieves the minimum leakage score. Credits
may be reduced by as much as 1.8 g/mile for cars and 2.1 g/mile for trucks. As detailed in the
Alliance comments, Ford does not believe that the introduction of R-1234yf will encourage
backsliding on leakage rates. Retention of the new, more costly refrigerant should serve as an
incentive to improve or maintain leakage levels. We also have no indication that customers will
commonly choose to recharge with R-134a or higher-GWP refrigerants. As required by the
SNAP rule and SAE J639, we will engineer our systems and port fittings to avoid the possibility
of this occurring. Finally, we do not believe it is appropriate to introduce a disincentive that
would impact all systems that do not achieve the minimum leak score. This goes above and
beyond the goal of discouraging backsliding and significantly infringes on manufacturers' ability
to obtain the full benefit of introducing low-GWP refrigerants. To encourage implementation of
the new refrigerants, Ford recommends that the "high leak disincentive" be removed from the
leakage credit equations. If such a "disincentive" value is retained, Ford believes the score levels
used in the equation to calculate the value should be re-evaluated to ensure that it accomplishes
the stated goal of minimizing backsliding. [EPA-HQ-OAR-2010-0799-9463-A1, pp. 14-15]
Outside the scope of this NPRM, we understand that a petition has been filed and separate
regulatory workstreams are in process to potentially remove the current predominant refrigerant,
R- 134a, from the list of acceptable substitutes for CFC-12 in mobile A/C systems. Due to the
impediments to R-1234yf introduction described above, Ford does not support efforts to delist R-
134a. Should R-134a be delisted for new vehicles, or R-1234yf become required in the future,
the credit opportunities for low-GWP refrigerants should remain in place through 2025 MY. In
determining the stringency of the GHG standards, EPA assumed manufacturers would make
widespread use of the alternative refrigerant credits (especially during the later years of the
program). Therefore, this incentive opportunity must continue through the duration of the entire
2017-2025 MY rule. Ford believes that removal of this flexibility would necessitate a
modification to the overall stringency of the GHG targets. [EPA-HQ-OAR-2010-0799-9463-Al,
p. 15]
Organization: Honeywell International, Inc.
Continuation of the A/C Credit Program beyond 2016 will accelerate the transition to low global
warming potential ('GWP') refrigerant technologies and provide clear market signals to
manufacturers as they incorporate cleaner technologies into their vehicles. [EPA-HQ-OAR-
2010-0799-9497-A1, p.3]
The A/C Credit Program offers a valuable tool to comply with the fleet-wide CO2 emission
requirements and corporate average fuel economy standards by providing vehicle manufacturers
with the flexibility necessary to continue to move ahead on a specific compliance pathway.
[EPA-HQ-OAR-2010-0799-9497-Al,p.3]
Innovation means investment. In response to the European Union's call for a more
environmentally friendly refrigerant for cars, Honeywell's team of world-class scientists
5-14
-------
Air Conditioning System Credits
launched an accelerated effort to develop a next generation air conditioning refrigerant. The
result: Solstice™ 1234yf, a product that not only exceeded the goals set politically, but one that
represents a long-term, global, and energy-efficient solution. [EPA-HQ-OAR-2010-0799-9497-
All,p.3]
EPA and NHTSA properly acknowledge that the large number of light duty vehicles with A/C in
use today has a substantial impact on the amount of energy vehicles consume and on the amount
of refrigerant leakage that occurs due to their 'significant use.' With forecasts predicting more
than 90 million light vehicles to be built per year by 2019, Solstice™ 1234yf mobile refrigerant
can serve as an important component in global climate protection. [EP A-HQ-OAR-2010-0799-
9497-A1, p.4]
With the development of Solstice™ 1234yf refrigerant, Honeywell is investing in making
modern life more comfortable, cost- and energy efficient, and safer. [EP A-HQ-OAR-2010-0799-
9497-A1, p.4]
Honeywell supports EPA's proposal to continue to allow auto manufacturers to generate credits
for employing technologies that reduce A/C leakage emissions ('Leakage Credits') that may be
used for compliance with vehicle emissions standards. The Leakage Credit program can be
improved upon and Honeywell offers recommendations for EPA to incorporate the best available
science in its analysis of average leak rates across the life of a vehicle. [EPA-HQ-OAR-2010-
0799-9497-A1, p.4]
EPA explains that its proposed Leakage Credit is based on the SAE 12727 method. This standard
does not adequately reflect leakage over the lifecycle of the vehicle. In the Draft Joint Technical
Support Document ('TSD'), EPA states that it considers SAE J2727 to be an appropriate method
for quantifying the expected yearly leakage rates from A/C systems, despite EPA's recognition
that SAE 12727 is a 'surrogate for in-use emissions' and is 'not necessarily an accurate
representation of real-world emissions Honeywell agrees that the test is appropriate for
calculating leakage from new, properly constructed vehicles, but this test fails to account
adequately for the increased leakage as vehicles age. [EPA-HQ-OAR-2010-0799-9497-A1, p.5]
Several recent studies indicate that emissions rates in older vehicles are much greater than the
J2727 scores represent. For example, one study found that the average leakage rate of mobile
A/C systems that are 1 to 6 years old is 52.4 g/year ± 4.6 g/yr. Another indicates that new
compressors leak at a rate between 5 and 40 g/year and that aged compressors leak at rates from
97 to 1800 g/year when pressurized with refrigerant.[EPA-HQ-OAR-2010-0799-9497-A1, p.5]
Given that SAE 12727 does not account fully for leakage of refrigerants over the life of a
vehicle, Honeywell proposes that companies seeking to obtain leakage credits be allowed the
opportunity to design a component test based on SAE Standard 12763, Test Procedure for
Determining Refrigerant Emissions from Mobile Air Conditioning Systems. Honeywell suggests
that the use of SAE Standard 12763 test protocols provides a true indication of the correct
selection of leakage reduction components and also allows for the development of additional
3-15
-------
EPA Response to Comments
credit goals for manufacturers to reduce the overall leakage rate. [EPA-HQ-OAR-2010-0799-
9497-A1, p.5]
Honeywell is committed to put in place capacity in the United States to produce Solstice™
1234yf consistent with the requirements of the US automobile manufacturers to meet GHG
emission and fuel economy standards in the current regulations and the Proposed Rule. [EPA-
HQ-OAR-2010-0799-9497-A1, p.5]
Compared to other alternative refrigerants referenced in the Proposed Rule, Solstice™ 1234yf
has the most favorable climate footprint over its entire life cycle, and transition to Solstice™
1234yf will require relatively few changes to existing air conditioning systems. [EPA-HQ-OAR-
2010-0799-9497-A1, p.5]
Solstice™ 1234yf refrigerant has a 99.7 percent lower global warming potential than R134a (4
versus 1430) and breaks down and disappears from the atmosphere within 11 days compared to
the 13 years that R134a stays in the environment. [EPA-HQ-OAR-2010-0799-9497-A1, p.5]
A major part of a refrigerant's global warming potential is due to indirect emissions: CC>2
emissions, caused by increased fuel consumption needed to power the air conditioning system.
NC systems using Solstice™ 1234yf refrigerant generally burn less fuel than other low GWP
technologies. For example, air conditioners equipped with Solstice™ 1234yf refrigerant use
markedly less fuel and produce 20 to 30 percent fewer emissions than CO2 used as a refrigerant
in hot climate zones. These efficiencies offer OEMs additional benefit in meeting the underlying
fuel economy standards in the Proposed Rule. [EPA-HQ-OAR-2010-0799-9497-A1, p.6]
Adoption of Solstice™ 1234yf will require few changes to existing NC systems. The operating
system pressures of Solstice™ 1234yf are similar to the most popular current refrigerant, R134a.
This allows for re-use of the recent manufacturing technology advancements that will continue to
make NC systems affordable into the next generation of Solstice™ . 1234yf refrigerant systems.
Conversely, CO2 A/C systems require completely new equipment designs that would require
significant investment in resources to implement. [EPA-HQ-OAR-2010-0799-9497-A1, p.6]
In the Proposed Rule, EPA and NHTSA generally provide a clear and appropriate process for
alternative refrigerants with low GWPs to qualify for credits that may be used by OEMs for
compliance with GHG emission requirements. The agencies also present some plausible
scenarios for the transition toward commercialization and broad market acceptance of
alternatives to the status quo refrigerant, R134a. Honeywell appreciates and supports the
Proposed Rule's recognition of the dual benefits of alternative refrigerants in meeting our climate
change and energy independence objectives and the incentives to enable the transition to low
GWP refrigerants. [EPA-HQ-OAR-2010-0799-9497-Al,p.6]
Honeywell Agrees with EPA's Leakage Credit Equation to Determine the Net Fleet Effect of
Direct Emission Due to Refrigerant Leakage.
Honeywell supports the continuation of credit opportunities for low leakage technologies and
suggests that to the maximum extent possible the credit program should reflect accurately
5-16
-------
Air Conditioning System Credits
leakage rates in vehicles over time. As vehicles age, the following conditions cause leakage rates
to increase: seasonal, daily, and in operation thermal cycles; vibrations; hardening of hoses and
o-rings; drying out of the shaft seal due to non-operation (or continuous operation for clutchless
models); collisions; service (engine or mobile A/C system); and corrosion leaks. [EPA-HQ-
OAR-2010-0799-9497-A1, p.6]
Honeywell agrees that the assumed emissions leakage rates of 16.6 and 20.7 g/year are
representative of refrigerant emission rates for new motor vehicle A/C systems. Honeywell also
concurs that the MaxCredit term reflects a correct order of magnitude to account for fleet aging
through the vehicle lifetime. Last, Honeywell agrees that the GWP Refrigerant term accounts for
the GWP impact of alternative refrigerants compared to the current R134a refrigerant, which has
a GWP of 1430. In sum, Honeywell concurs with EPA's emission equation to determine the net
fleet effect of direct emissions due to refrigerant leakage. [EPA-HQ-OAR-2010-0799-9497-Al,
pp.6-7]
EPA HiLeakDisincentive Term Is Not the Best Approach to Prevent Against Backsliding to
Higher GWP Refrigerants and Increase GHG Emissions During Ale System Retrofit and
Recharge.
EPA proposes to add to the existing credit calculation a HiLeakDisincentive term with the
intention of preventing GHG emissions from systems designed to operate on low GWP
refrigerants but which potentially could be recharged with a higher GWP refrigerant. This
method is neither effective nor appropriate for two reasons: it provides an advantage to high
GWP refrigerants and it raises the cost of credits far vehicle manufacturers without delivering
demonstrated GHG emissions or fuel economy improvement. [EPA-HQ-OAR-2010-0799-9497-
Al,p.7]
First, if the HiLeakDisincentive term is to account for the loss of efficiency as systems leak, then
it should apply to all refrigerants and not just refrigerants with a GWP less than 150. EPA
proposes that the HiLeakDisincentive term for refrigerants with a GWP higher than 150 will
automatically be zero, regardless of the A/C system's efficiency. Conversely, for lower GWP
refrigerants, EPA proposes that the term account for A/C system efficiency loss due to leakage.
Honeywell argues that the disparate treatment of low GWP refrigerants compared to high GWP
refrigerants for purposes of the HiLeakDisincentive term is inequitable because both high and
low GWP refrigerant systems sustain some amount of leakage before system performance is
affected. [EPA-HQ-OAR-2010-0799-9497-A1, p.7]
SAE Standard 12765:2008 provides a chart, shown below, that demonstrates this point.
Conventional systems such as R134a and future systems that utilize low GWP fluids in
subcritical system design both have optimum charge plateaus, representing a range of refrigerant
charges where system efficiency is largely independent from system refrigerant amount.
Typically, auto manufacturers will charge to the right side of the plateau to allow for some
system leakage before system efficiency is affected. Although the chart below represents a
theoretical bench top system, it demonstrates that a charge amount of nearly 400 grams may be
lost before the leakage affects system efficiency. [EPA-HQ-OAR-2010-0799-9497-A1, p.7]
3-17
-------
EPA Response to Comments
The HiLeakDisincentive term should account for this standard leakage, regardless of the
refrigerant's GWP. Honeywell recommends that EPA either remove the default value of zero for
refrigerants with GWP higher than 150 or raise the MaxCredit term by an equal amount for
refrigerants with a GWP lower than 150. Unfortunately, subcritical systems for CC>2 do not have
a charge plateau, and system efficiency correlates directly with refrigerant leakage.
Consequently, the performance loss disincentive for these systems should be based on the
science of the system design, rather than a set term.
Second, EPA's proposed HiLeakDisincentive term will raise production costs for vehicle
manufacturers without reciprocal GHG benefits, penalizing them for the potential actions of
others without creating any additional efficiency. In order to avoid the HiLeakDisincentive
penalty in the credit calculation, OEMs must not only purchase more costly low GWP
refrigerants, but also the more expensive high-efficiency components. One of the strengths of
the current A/C Leakage Credit system is that it provides OEMs with flexibility to meet
fleetwide GHG emission requirements. [EPA-HQ-OAR-2010-0799-9497-A1, p.8]
The high efficiency components will only render a meaningful fuel savings if the vehicle owner
and repair shop chooses to recharge the vehicle with a low GWP refrigerant. Honeywell believes
that the regulations should not penalize OEMs for decisions that they are unable to control, such
as recharging and retrofitting A/C systems. Instead, Honeywell proposes to collaborate with EPA
and NHTSA to develop an alternative mechanism to prevent backsliding, including providing
certain incentive for recharging with low GWP refrigerants, discussed further in Part IV. [EPA-
HQ-OAR-2010-0799-9497-A1, p.8]
Anti-Backsliding
As discussed in Part II.B., above, the use of low GWP refrigerants brings new challenges in
developing regulations to prevent backsliding to a higher GWP refrigerant during recharging of a
low GWP refrigerant system. EPA and NHTSA acknowledge in the Proposed Rule that repeated
recharging of A/C systems could lead some consumers and/or repair facilities to recharge a
si stem designed for use with a low GWP refrigerant with a cheaper high GWP refrigerant.
Unfortunately, EPA and NHTSA have not set out a strong enough legal case to assure against
such backsliding. [EPA-HQ-OAR-2010-0799-9497-A1, p.ll]
The agencies' statement that 'recharging with a refrigerant different from that already in the A/C
system is not authorized under current regulations' is not correct. Per the authority granted to
EPA under Section 612(c) of the Clean Air Act, the Significant New Alternatives Policy (SNAP)
Program, it may identify acceptable and unacceptable substitutes for ozone-depleting substances,
including R-12 (Freon). The SNAP program has identified alternatives to R-12 and has granted
them New system (with or without restriction) or Retrofit (with or without restrictions) status.
The common refrigerant R -134a is now the focus of the instant rulemaking. SNAP granted R-
134a both New and Retrofit status for R-12 for its automotive application, including the use
restriction that the vehicle charging ports should be modified to allow technicians to service that
vehicle once a retrofit has been carried out. [EPA-HQ-OAR-2010-0799-9497-A1, p.ll]
5-18
-------
Air Conditioning System Credits
SNAP has only granted HFO-1234yf new system status, with certain restrictions regarding
proper vehicle design for the use of a mildly flammable refrigerant, as a replacement to R-12
systems. The SNAP program has not granted Retrofit status to HFO-1234yf because of the
design practices of current R-134a systems and do-it-yourselfer ('DIYer') use of the product is
the subject of current and active judicial matters. One may argue that SNAP approved HFO-
1234yf as a replacement for R-134a and not R-12 and thus that new vehicles using HFO-1234yf
cannot be recharged with R-134a. As such, SNAP'S approval of HFO-1234yf would not have
been necessary because R-134a is not an ozone depleting substance and SNAP would not have
had to exercise its authority under the Clean Air Act to name its acceptable substitutes.
Thus, because they are both acceptable substitutes for R-12, the reverse retrofit of a system
designed and filled by a vehicle manufacturer with HFO-1234yf and recharged by a service
garage or DIYer with R-134a may be considered a legal conversion. [EPA-HQ-OAR-2010-0799-
9497-A1, pp.11-12]
Given that lack of existing legal mechanisms to prevent against backsliding to higher GWP
refrigerants during retrofit and recharge, we support regulatory measures that protect against
reverting to higher GHG emissions over the life of a vehicle. We recommend that EPA and
NHTS A provide incentives for the aftermarket industry to assure use of compliant, low GWP
refrigerants. [EPA-HQ-OAR-2010-0799-9497-Al, p. 12]
In sum, Honeywell supports, and is willing to assist, EPA and NHTSA in developing a clear and
appropriate approach to assure the use and maintenance of low GWP refrigerants in the
aftermarket. [EPA-HQ-OAR-2010-0799-9497-Al, p. 12]
Honeywell appreciates EPA's and NHTSA's recognition of the meaningful contribution that
refrigerants like Solstice™ 1234yf offer to carmakers to comply with the Proposed Rule's GHG
emission and fuel economy requirements throughout the life of the program. Assuring a rapid
and smooth transition to low GWP refrigerants such as Solstice™ 1234yf will deliver
comparable cooling in all climates while saving time, costs, and environmental impact for years
to come. Solstice™ 1234yf will serve as a valuable tool for automakers to achieve the GHG
emissions and fuel economy requirements while advancing our nation's clean energy and
environmental objectives. [EPA-HQ-OAR-2010-0799-9497-A1, p. 12]
Solstice™ 1234yf will contribute significantly to the US economy throughout the life of the
Proposed Rule. Honeywell is committed to put in place capacity in the United States to produce
Solstice™ 1234yf consistent with the requirements of the US automobile manufacturers to meet
GHG emission and fuel economy standards in the current regulations and the Proposed Rule.
Building this new capacity will create large numbers of construction, engineering, and
manufacturing jobs. In addition, plants like a Solstice™ 1234yf facility typically require
significant local contractor support for maintenance and other ancillary services and create
substantial indirect employment in the local community. [EPA-HQ-OAR-2010-0799-9497-Al]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 207-
210.]
3-19
-------
EPA Response to Comments
Organization: Hyundai America Technical Center
HFO-1234yf: EPA has specifically requested comment on the implications for a market
transition to the new HFO-1234yf refrigerant and the factors that may affect the industry demand
for refrigerant in the U.S. and internationally. Hyundai agrees with EPA that while the
technology is very promising, there is uncertainty as to the widespread availability of HFO-
1234yf Hyundai believes the A/C credits for HFO-1234yf create an incentive to move toward
this refrigerant and a phase-out of HFC-134a will ultimately be unnecessary. The uncertainty of
the availability of HFO-1234yf coupled with a phase-out of HFC-134a could create a market
distortion. However, Hyundai is not opposed to phasing-out HFC-134a once there is full-scale
availability of HFO-1234yf and recommends that the agencies wait until this time to take any
action. [EPA-HQ-OAR-2010-0799-9547-A1, p.6]
There is a minor typographical error in the calculation of leakage credit on pages 76 FR 75373 &
75374. The closing bracket is missing in the calculation. We believe the calculation should read
as follows with the red bracket in the correct position: [EPA-HQ-OAR-2010-0799-9547-A1, p.8]
Leakage Credit =MaxCredit x [ l-(leakScore/16.6)x(GWPref/GWPHFC134a)]-HileakDis [EPA-
HQ-OAR-2010-0799-9547-A1, p.8]
Organization: International Council on Clean Transportation (ICCT)
A/C alternative refrigerant credits
The ICCT supports the agencies' proposal to issue credits for alternative refrigerants, which can
dramatically reduce the potential for greenhouse gas emissions from servicing, leaks, and end-of-
life disposal. We commend EPA for tying the leakage credit to the refrigerant being used in the
vehicle. A flat leakage credit would have potentially overstated or underestimated the climate
benefit of the intervention, depending on the refrigerant contained in the vehicle. We also
commend EPA for including a disincentive for systems that utilize a low GWP refrigerant but do
not also adopt low leakage equipment. [EPA-HQ-OAR-2010-0799-9512-A1, p. 39]
We also agree with US EPA and NHTSA that the credits should account for the possibility of
dropping in higher GWP refrigerant such as HFC-134a (GWP 1430) as a replacement for 1234f
in use.69 This potential for backsliding is not fully addressed in the proposed rule. High prices for
alternative refrigerants will very likely encourage vehicle owners to use lower cost but higher
GWP replacements. EPA estimates that 49 percent of direct refrigerant leakage occurs during
servicing and maintenance and nine percent occurs during end of life. This suggests the
possibility for continued release of these higher GWP refrigerants, particularly among poorly
maintained vehicles. Meanwhile, EPA assumes in its credit calculation that low GWP refrigerant
will be used throughout the full life of the vehicle. [EPA-HQ-OAR-2010-0799-9512-A1, pp. 39-
40]
5-20
-------
Air Conditioning System Credits
To address this concern in part, EPA has proposed to reduce the eligible credit available to the
manufacturer when low-leak hoses and valves are not incorporated into the system (p 75002).
While we strongly support this proposed anti-leak credit and agree that it may reduce the rate of
servicing and maintenance, we remain concerned that poorly maintained vehicles or 'super
emitters' will be re-charged with high GWP refrigerant and contribute substantial emissions over
the course of the vehicle life. [EPA-HQ-OAR-2010-0799-9512-A1, p. 40]
The ICCT recommends that the credit be further modified to reflect the likelihood of the use of
higher GWP refrigerant. Currently, the credit assumes that low GWP refrigerants will be used
throughout the life of the vehicle, such that accidental releases during service events and disposal
will be releases of only low GWP refrigerant. EPA should instead assume this only for systems
where manufacturers demonstrate designs that cause the system to fail to operate when recharged
with higher GWP refrigerants. [EPA-HQ-OAR-2010-0799-9512-A1, p. 40]
EPA should require manufacturers to demonstrate applicability to this criterion. When the
criterion isn't met, EPA should reduce the amount of the credit to a level that represents only the
share of total refrigerant consumption represented by the first initial charge of a new vehicle.
This approach may only apply to HFO 1234yf at the moment, since HCF-134a is essentially a
drop-in replacement. Other systems like HFC-152a and CC>2 may not suffer this weakness. For
FIFO 1234yf, automakers would receive credit only for the refrigerant they put in the
vehicle. [EPA-HQ-OAR-2010-0799-9512-A1, p. 40]
In our view, it is not enough to say that SAE design standards are being met. Additional
measures are needed to encourage chemical manufacturers and auto manufacturers to find
solutions that will more reliably deliver climate benefits. Such measures could be patterned after
the requirements for approval of low viscosity and low friction oils for vehicle testing.71 In this
way, EPA would further ensure that design and operational limitations adopted by manufacturers
fully realize the A/C emission reduction credits. [EPA-HQ-OAR-2010-0799-9512-A1, p. 40]
Credit Continuity with 2012-2016 Final Rule
EPA describes in the draft TSD that: [EPA-HQ-OAR-2010-0799-9512-A1, p. 40]
EPA made the policy decision to maintain continuity with the 2012-2016 FRM analysis, and is
proposing to incorporate this level of the credit in the standard setting process. [EPA-HQ-OAR-
2010-0799-9512-A1, pp. 40-41]
This was done despite new information that suggests a need to revise the emissions inventory
and the leakage credits derived from this. The reason for continuing the previous leakage credits
is:
'A reduction in A/C credits would artificially increase the stringency of the standard for those
manufacturers who generated leakage credits in 2016 ... alternatively, the stringency of the 2017
3-21
-------
EPA Response to Comments
standards would have to be relaxed.' '...need for stability for the standards...'. [EPA-HQ-OAR-
2010-0799-9512-Al,p. 41]
We understand the need for stability of the standards for those manufacturers who generate
leakage credits in 2016. However, the proposed rule acknowledges that the credits do not
represent the emission reductions they are designed to represent. We strongly urge that this
approach be re-evaluated in order to provide manufacturers who generate leakage credits in 2016
a means to generate alternative emission reductions equivalent to those represented by the credits
based on the latest understanding of the emissions inventory. [EPA-HQ-OAR-2010-0799-9512-
Al,p.41]
We are concerned that the proposed policy may stimulate manufacturers to pursue these credits
more aggressively as a means to avoid on-cycle reductions. We recommend that staff quantify
the differences between a revised leakage credit based on a revised TAR inventory, and the
credits being proposed, so as to justify the continuation of the existing leakage credits. If the
differences are considerably larger, we recommend reconsideration of the proposed credits. But
if they are small, then it is justifiable to maintain the credits as is. [EP A-HQ-OAR-2010-0799-
9512-Al,p. 41]
Lead Time for Low-GWP Refrigerant Penetration
EPA assumes a long lead time for penetration of low GWP refrigerants, claiming that
automakers expect a full re-design to be necessary. However, automakers in Europe are already
selling vehicles with low GWP refrigerant. For example, EPA assumes 20 percent penetration in
2017, while Europe will be requiring 100 percent penetration that year. In addition, some
refrigerant options like 1234yf require only minor changes to the refrigerant system. EPA cites
confidential discussions with vehicle manufacturers who say 'it may be possible to modify the
hardware for some alternative refrigerant systems between redesign periods.' Thus, the ICCT
strongly recommends harmonization with the European rule. At a minimum, EPA should explain
its expectation of 20 percent penetration in 2017 and 20 percent additional penetration in each
subsequent year through 2021. We feel the long lead time is unjustified and recommend that
EPA expect full adoption of low GWP refrigerant along a more accelerated time frame. [EPA-
HQ-OAR-2010-0799-9512-A1, p. 41]
Refrigerant OBD Monitoring
In its 2012-2016 rulemaking, EPA considered additional leak credits for systems that monitor
refrigerant charge on-board the vehicle, but these ultimately were not adopted. EPA is again
opening the door to this type of monitoring, considering that most A/C systems contain sensors
that detect low refrigerant pressures. The ICCT would be supportive of a refrigerant OBD
monitoring credit in principle, although it would be challenging to accurately model and estimate
the emissions benefits of OBD monitoring. Despite this, we think providing such information to
the vehicle owner would cause many owners to seek repair and maintenance of the A/C system.
In light of the potential benefits and the difficulty in estimating a credit, the ICCT recommends
that EPA require such on-board monitoring. Another approach might be to estimate the
proportion of time that owners would have the A/C system repaired in response to a Malfunction
5-22
-------
Air Conditioning System Credits
Indicator Light (MIL) illumination and multiply this percent by the calculated amount of leakage
used for other A/C refrigerant credits. [EPA-HQ-OAR-2010-0799-9512-A1, p. 42]
Vehicles without air conditioning
The proposed crediting system is designed to mitigate the rather significant climate impacts of
the air-conditioning unit, based upon both its efficiency and its refrigerant emissions. Based on
this perspective, a vehicle without an air-conditioning system would have fundamentally lower
climate impacts, as no refrigerant would be consumed and emitted and no energy would be
required to operate the A/C system. [EPA-HQ-OAR-2010-0799-9512-A1, p. 42]
A potential concern is aftermarket installation of air conditioning systems, especially kits
provided by OEMs and installed by dealers at the time of purchase. The ICCT recommends that
vehicles without air conditioning systems be given an appropriate amount of credits, provided
that the manufacturer commits to monitoring and reporting on dealer-installed AC
systems. [EPA-HQ-OAR-2010-0799-9512-A1, p. 42]
69 ICCT recognizes that HFC-132 phase-out would diminish the potential for 1234f replacement
with HFC 132a.
71 EPA guidance letter CISO-08-1 l;Use of OW Multi-grade Engine Oils in Gasoline Fueled
EPA Test Vehicles, Sept. 18, 2008. EPA guidance letter CCO-04-7; Use of GF-4 Engine Oil in
EPA Test Vehicles, March 2, 2004
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
The inclusion of credits for air conditioning system improvements provides an opportunity for
the program to effectively address emissions of hydrofluorocarbons that have a very high global
warming potential. [EPA-HQ-OAR-2010-0799-9476-A1, p. 3]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 72.]
In addition, the inclusion of credits for air-conditioning system improvements provides an
opportunity for the program to address emissions of a class of high global warming potential
refrigerants, the hydrofluorocarbons.
Organization: Toyota Motor North America
Air Conditioning (A/C) Leakage Credits [EPA-HQ-OAR-2010-0799-9586-A1, p. 14]
High Leak Disincentive: Toyota does not agree with EPA's proposal to impose a high leak
disincentive for refrigerants with a GWP below 150. EPA's proposal will compromise a
3-23
-------
EPA Response to Comments
manufacturer's ability to maximize credits- when the manufacturer elects to utilize a global A/C
system design. To obtain maximum credit, the system would unnecessarily need to be modified
for the US market, incurring additional expense and resource requirements for no additional
environmental benefit. Toyota thinks that EPA~s tampering concern, where R134a would be
refilled in place of R1234yf, is unfounded because the service port fittings for the two
refrigerants are incompatible which makes tampering highly improbable. Additionally, Toyota
believes that appropriate measures are already in place that should be used to address any
attempted tampering that were to occur in the field. [EPA-HQ-OAR-2010-0799-9586-A1, p. 14]
Organization: Volkswagen Group of America
Volkswagen contributed to and supports the comments submitted by the Alliance of Automobile
Manufacturers (Alliance) regarding Mobile Air Conditioning (MAC) system credits. [EPA-HQ-
OAR-2010-0799-9569-A1, p. 30]
Volkswagen continues to make significant investments in deploying advanced MAC systems
incorporating low-leak components and advanced low-GWP refrigerants. The successful market
introduction of these advanced MAC systems relies to a great degree on the treatment of these
systems within the GHG and CAFE program. [EPA-HQ-OAR-2010-0799-9569-A1, p. 30]
HIGH-LEAK DISINCENTIVE
Volkswagen is concerned by the EPA proposal to add a so called 'High Leak Disincentive'.
There are two main reasons: Firstly our company as a major EU manufacturer is obliged by
European law to change to refrigerants <150 GWP. Thus if we make significant investment and
adapt our systems early to integrate low-GWP refrigerants, we would be penalized as fast mover.
Secondly, Volkswagen maintains that refilling an updated system with older refrigerant is
unlikely or even impossible due to differences in the filling systems. Therefore, Volkswagen
recommends EPA to remove the 'High Leak Disincentive' factor. [EPA-HQ-OAR-2010-0799-
9569-Al,p. 30]
LEVEL MONITORING
Volkswagen believes that additional refrigerant level monitoring obligations are not appropriate
for mobile air conditioning systems. As discussed within the Alliance comments, in the case of
MAC failure modes, the system simply stops operating thereby eliminating indirect CO2
emissions. Figure App-0-1 shows that in case of refrigerant losses the power consumption of the
A/C system would decrease as well. [See Figure App-0-1 on p. 32 of Docket number EPA-HQ-
OAR-2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1, p. 31]
Organization: Volvo Car Corporation (VCC)
VCC continuously develops the climate system in order to reduce AC natural losses and improve
durability. The strategy is to keep the rate of natural losses low and also to design the AC-system
to prevent uncontrolled refrigerant losses during the full vehicle service life. [EPA-HQ-OAR-
2010-0799-9551-A2, p. 9]
5-24
-------
Air Conditioning System Credits
According to VCC the revised SAE J2727, which is a major improvement compared to the
version of 2008, does get closer to a real world refrigerant loss rate than the previous version. At
the assembly of the systems, VCC is testing all components and connections of the AC system
with Helium to find any leakage before filling of refrigerants. However, VCC believes that the
actual measured natural losses (according to SAE J2763) could be lower than the calculated
natural losses, according to SAE J2727: [EPA-HQ-OAR-2010-0799-9551-A2, p. 9]
• SAE J2727 does not reflect all existing designs and technologies. VCC assumes that the reason
for this is that such an expansion of the standards would make it very complex to use from a
practical point of view. [EPA-HQ-OAR-2010-0799-95 51-A2, p. 9]
• VCC uses a 'soft nose' concept of AC-connectors. The VCC technical solution has a low loss
rate due to: [EPA-HQ-OAR-2010-0799-9551-A2, p. 9]
o Special rubber material used for the o-rings, a special variant of HNBR, specifically formulated
for this application, where low permeation is one of the more prominent characteristics.
o The geometry of the outer, axially sealing o-ring where the two halves of the blocks are
clamped together with zero clearance between these two surfaces, minimize the possible
losses. [EPA-HQ-OAR-2010-0799-9551-A2, p. 10]
• The service valves cap in the VCC AC technology solution are equipped with a special seal that
functions independent of the torque applied. The sealing properties are not a function of torque
as it is with the standard cap more commonly used. SAE J2727 only includes the standard cap.
The Standard industry cap seals properly if tightened by 0, 8 - 1, 2 Nm - too loose causes leak,
and too tight causes seal damage. The service valve cap used by VCC has strong sealing
capability at20x of that torque. [EPA-HQ-OAR-2010-0799-9551-A2, p. 10]
• The part of the total natural losses coming from the compressor is too large according to
independent measurements made by Ecoles des Mines in Paris (ordered by ACEA in Brussels).
According to SAE J2727 natural losses of the compressor is 67%. Independent measurements
indicate that the natural losses from the compressors, depending on brand and actual design} are
in the range of 40-60%. VCC, therefore, believes that the calculated natural losses from the
compressor are too large. [EPA-HQ-OAR-2010-0799-9551-A2, p. 10]
VCC performs physical tests in a mini-SHED according to the test method prescribed as F-gas
directive 706/2007/EC. VCC strongly believes that physical measurements reflect real vehicle
emissions more accurately than calculations and estimations. The proposed natural losses
measurement standard SAE J2763 (Test procedure for determining R134a natural losses rates of
Mobile Air Conditioning systems in a mini-SHED) is equal to the 706/2007/EC directive. VCC
considers that natural losses rates < 10 gram/year are possible to measure in a mini-
SHED. [EPA-HQ-OAR-2010-0799-9551-A2, p. 10]
CARB and the state of Minnesota allow physical measurements as an alternative to SAE J2727
calculations. [EPA-HQ-OAR-2010-0799-9551-A2, p. 10]
3-25
-------
EPA Response to Comments
VCC would also like to point out that CARB has identified the possibility of physical
measurements as a possibility. VCC supports CARB's intent to allow, as expressed in the draft's
Appendix D, paragraph 2.5.6.3,1 physical measurements of refrigerant leakage as an alternative
to the latest version of SAE J2727. High Leak Disincentive [EPA-HQ-OAR-2010-0799-9551-
A2, p. 10]
VCC does not support the EPA's proposal to reduce the AC direct credits via the 'high leak
disincentive, if the refrigerant leakage rate is not reduced by half from industry average leak
rates. This is a major change compared to the 2012-2016 program and reduces the value because
it alters the rules of the game by adding low GWP for manufacturers considering early
adoption. [EPA-HQ-OAR-2010-0799-9551-A2, p. 10]
Response:
Most commenters from the auto industry generally supported the proposed process for
generating direct A/C credits by using SAE J2727 refrigerant leakage values. Most industry
commenters, as well as Honeywell, opposed the "High Leak Disincentive" relating to A/C
leakage credits; ICCT commented in favor of this provision. EPA's responses to these
comments are presented in Section III.C. 1 .a.i of the preamble. EPA is retaining the provision,
with some revisions. In regard to Honeywell's comment that the disincentive is not applied to
HFC-134a and HFO-1234yf refrigerants in an equitable manner, as we discuss in TSD
5.1.2.3.2.5, the disincentive for low-GWP refrigerants only is intended to reduce the probability
that the A/C system will be recharged with a high-GWP refrigerant.
EPA responds to comments related to EPA use of the updated SAE J2727 procedure in
quantifying A/C leakage credits in the Joint TSD, Section 5.1.2.3. EPA is maintaining the use of
this procedure as the basis for it leakage credits.
EPA responds to comments related to the expected transition to one or more alternative A/C
refrigerants, including the potential pace of that transition and refrigerant availability, costs,
vehicle technical issues, and manufacturing issues, in Section III.C. l.a.ii of the preamble. EPA
continues to believe that the major transition to alternative refrigerants will primarily occur
beginning around MY2017 and continue at a pace that we approximate by a 20% per year
conversion through MY2021, based on the typical 5-year vehicle redesign cycle.
EPA responds to comments on the concept of monitoring refrigerant levels in Section 5.1.1.2.7 of
the Joint TSD.
Regarding the comments from the California Air Resources Board, we have corrected the error
in the High Leak Disincentive formula that CARB identified. In response to CARB comment 2),
we have adjusted the threshold for incurring a High Leak Disincentive to lower values.
(Specifically, we will reduce the threshold from 16.6 g/yr to 11.0 g/yr for systems with
refrigerant charges equal to or less than 733g, and reduce the threshold by 1.5%/yr for systems
with charges greater than 733g). In response to CARB comment 3), electric compressor systems
should have a very low leak score, so we believe that incurring a High Leak Disincentive should
not be an issue for systems incorporating this technology, and we have not further adjusted the
proposed values.
5-26
-------
Air Conditioning System Credits
Regarding concerns about the SAE J2727 procedure failing "to account adequately for the
increased leakage as vehicles age," J2727 was correlated to JAMA and ACEA vehicle field test
results (vehicle/shed test results are ~5 g/yr lower than what J2727 predicts, but the trends are
identical). In addition, the SAE-IMAC study that formed the basis of J2727, "seasoned" the
systems (10-day static soak at 36 deg C, and 30 minutes of system operation at 23 deg C ambient
temp), so the components were broken-in, but not new. We continue to believe that deterioration
of leakage emissions is adequately accounted for in J2727, and that basing leakage credits on
those values is appropriate. We are also continuing to use a Global Warming Potential of 150 to
determine whether an alternative refrigerant requires a manufacturer to consider the High Leak
Disincentive term in the equation, consistent with other programs (CARB and Europe) that
distinguish higher and lower GWP refrigerants.
Regarding the comment from ICCT about how to treat vehicles without A/C systems installed at
the factory, we believe that if someone orders a vehicle without A/C, they aren't doing it to
reduce GHGs - they're doing it because it's a feature they don't need (and consequently, don't
want to pay for). Further, the use of aftermarket A/C systems in modern vehicles, which have
tightly-packaged underhood and underdash environments, is highly unlikely. Therefore, as
proposed, the program will not provide credits for vehicles without factory-installed A/C
systems. In addition, in response to ICCT's comment regarding a requirement that the HFC-
1234yf A/C systems "fail to operate" when recharged with another refrigerant, we know of no
cost-effective, feasible technology that would allow us to incorporate such a requirement, and we
are not pursuing this concept in this rule. Regarding the comment from Volvo about the option to
use a "mini-SHED" procedure to establish leakage credits, the new February 2012 version of
J2727 allows the use of a mini-SHED approach. We are incorporating the new J2727 by
reference.
We acknowledge Honeywell's request for new regulatory measures to protect against parties
reverting to higher GWP refrigerants over the life of a vehicle. It is true that EPA has found
HFO-1234yf acceptable for use in new systems and not for retrofit in motor vehicle air
conditioning systems under the Significant New Alternatives Policy (SNAP) program. It is also
true that EPA has found HFC-134a acceptable for use both in new systems and for retrofit in
motor vehicle air conditioning systems. However, we disagree that this means that users may
retrofit a system designed for HFO-1234yf with HFC-134a. First, the SNAP listings, both for
HFO-1234yf and for HFC-134a, are for use as a substitute for CFC-12. The SNAP listings do
not say that different substitutes are interchangeable, as the commenter implies. Second, the
regulations for the SNAP program at appendix D to subpart G of 40 CFR part 82 state, "No
substitute refrigerant may be used to 'top-off a system that uses another refrigerant. The original
refrigerant must be recovered in accordance with regulations issued under section 609 of the
CAA prior to charging with a substitute." Thus, it is not permissible to add HFC-134a to an
MVAC system that contains HFO-1234yf, as may well occur if a consumer were to service his
or her own car's AC system without refrigerant recovery equipment. Third, the regulations at
appendix D to subpart G of 40 CFR part 82 and the listings for HFO-1234yf and HFC-134a
require use of a unique set of fittings for a specific alternative refrigerant. The SNAP regulations
in appendix D also state, "Using an adapter or deliberately modifying a fitting to use a different
refrigerant is a violation of this use condition." The SNAP requirements for unique fittings do
3-27
-------
EPA Response to Comments
not prohibit retrofitting of vehicles using CFC-12, and appendix D to subpart G of 40 CFR part
82 sets out the conditions for such retrofits.
3.2. Credits Related to Improved A/C system Efficiency
Organizations Included in this Section
Alliance of Automobile Manufacturers
Delphi Corporation
Ford Motor Company
General Motors Company
Honeywell International, Inc.
Hyundai America Technical Center
International Council on Clean Transportation (ICCT)
Johnson Controls, Inc.
Kia Motors
Motor & Equipment Manufacturers Association (MEMA)
Toyota Motor North America
Organization: Alliance of Automobile Manufacturers
The performance-based Mobile Air Conditioning (MAC) efficiency test needs additional
technical analysis and testing, and the Alliance stands ready to work with the agencies to address
these concerns. The proposed MAC efficiency test is likely to interfere with the achievement of
maximum credit levels for improved system efficiency that were fully included in the agencies'
feasibility analysis. The Alliance comments describe these concerns in depth and suggest that the
test not be established as a strict requirement. Instead, we propose that the agencies continue to
allow use of the credit menu, and that manufacturers work with EPA and NHTSA to provide
"reasonable verification" of this progress through selected vehicle testing and other methods.
Such verification will show that the menu amounts are appropriate, and that commensurate real-
world progress is achieved. [EPA-HQ-OAR-2010-0799-9487-A1, p.5]
Organization: Delphi Corporation
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 110.]
Fourth, the air conditioning system is the highest ancillary load on the system. We highly support
the EPA's proposed credit system to incentivize energy-efficient HVAC technology that can
reduce the fuel needed for the air conditioning system by 40 percent.
Organization: Ford Motor Company
Ford supports the continuation of the A/C efficiency credit program into the 2017-2025 MY rule.
[EPA-HQ-OAR-2010-0799-9463-A1, p. 10]
5-28
-------
Air Conditioning System Credits
In addition, Ford supports the differentiation in credit levels for cars and trucks that are being
proposed for 2017-2025 MY, based on the simulation work conducted by the EPA (TSD 5-32).
[EPA-HQ-OAR-2010-0799-9463-A1, p. 14]
We support the proposed addition of the A/C efficiency benefits into the CAFE program which
brings the NHTSA program one important step closer to harmonization with the EPA GHG
program. [EPA-HQ-OAR-2010-0799-9463-Al, p. 14]
Organization: General Motors Company
GM supports the Mobile Air Conditioning (MAC) provisions included in the proposal. However,
we, like the Alliance, have concerns regarding the performance-based MAC efficiency test and
request that cooperative technical work continue - potentially as part of one of the mid-term
review "check-ins" - to address the concerns with testing burden and reasonable verification of
efficiency improvements. [EPA-HQ-OAR-2010-0799-9465-A1, p. 3]
Organization: Honeywell International, Inc.
Honeywell commends EPA and NHTSA for recognizing the measurable contribution that
energy-efficient A/C systems and components can have in reducing CC>2 emissions and fuel
consumption attributable to A/C operation. We support the agencies' proposal to allow auto
manufacturers to generate fuel consumption improvement values for purposes of CAFE
compliance by using technologies that enable A/C systems to run more efficiently. Honeywell
offers that incorporating the most up-to-date research and technical information will add further
credibility to the A/C Efficiency Credit by accounting accurately for the reduced emissions and
energy efficiency attributable A/C system components. [EPA-HQ-OAR-2010-0799-9497-Al,
p.9]
EPA and NHTSA Should Provide Flexibility in the A/C Efficiency Credit Program to Include
New Performance-Based Test Methods That May Become Available Prior to 2026
EPA and NHTSA propose to allow auto manufacturers to generate credits for employing more
energy efficient A/C component technologies ('A/C Efficiency Credits'). Honeywell encourages
EPA and NHTSA to provide flexibility in the A/C Efficiency Credit program to accommodate
new performance-based tests that may be developed during the life of program. EPA and
NHTSA state in the Preamble that although they would ideally award A/C Efficiency Credits
using a performance test, there currently is no reliable performance-based procedure capable of
accurately quantifying efficiency credits. [EPA-HQ-OAR-2010-0799-9497-A1, p.9]
Organization: Hyundai America Technical Center
A/C Credits: [EPA-HQ-OAR-2010-0799-9547-A1, p.6]
1) Hyundai supports the use of the A/C menu for determining air conditioning system credits
and supports an increase in the maximum amount of credits that will be permitted if we are able
3-29
-------
EPA Response to Comments
to demonstrate an emission reduction greater than what is available in the menu. [EPA-HQ-
OAR-2010-0799-9547-A1, p.6]
Organization: International Council on Clean Transportation (ICCT)
16. The ICCT strongly supports off-cycle credits in principle, as they can reduce compliance
costs and increase benefits. However, the credits must avoid double counting and must be valid
and verifiable. ICCT has provided detailed suggestions on how to improve the off-cycle credits
so they are verifiable and do not inadvertently weaken overall standard stringency. [EPA-HQ-
OAR-2010-0799-9512-A1, p. 4]
A/C off-cycle efficiency credits
ICCT appreciates US EPA and NHTSA's efforts to thoroughly document the potential benefits of
A/C off-cycle credits based on both testing and engineering studies for each of the potential A/C
technologies. While we have not fully reviewed the test data and studies for each type of credit,
overall the agencies' basis for inclusion of credits for A/C system efficiency, leak reduction and
alternative refrigerants is well documented. [EPA-HQ-OAR-2010-0799-9512-A1, p. 37]
Our primary concern with the air conditioning credits calculation is that methodology changes
are needed to avoid double-counting the benefits from A/C load reductions and A/C system
efficiency improvements. Currently, the efficiency credits and the load reduction credits are
calculated independently. This is not appropriate. The efficiency reductions and the load
reductions must be treated as a system to avoid double-counting.
To avoid double-counting, the ICCT recommends a multiplicative approach to A/C credit
generation. Following is how the credit calculations should be done in concept:
A/C efficiency credits (CO2 g/mi) = baseline A/C indirect emissions (CO2 g/mi) improved A/C
indirect emissions (CO2 g/mi), where A/C indirect emissions are calculated as: A/C indirect
emissions (CO2 g/mi) = cooling load (degrees) x efficiency (kwhr/degree cooling) x engine
CO2/kWh [EPA-HQ-OAR-2010-0799-9512-A1, p. 38]
The baseline calculation is done using the baseline cooling load and A/C efficiency and the
improved calculation is done using the improved values for cooling load and A/C efficiency.
Note that the improved cooling load should include the impacts of solar reflective paint, window
glazing, and active and passive ventilation, if these technologies are being counted towards off-
cycle credits. [EPA-HQ-OAR-2010-0799-9512-A1, p. 38]
This approach should apply across the A/C system efficiency credits and the load reduction
credits contained on the menu of non-A/C default credits. For instance, if an OEM claimed a
30% improvement in A/C system energy efficiency and a 40% reduction in solar load, the new
energy consumption rate would be 42% of baseline (70% times 60%) for a total benefit of 58%
times the engine CO2/kw-hr, rather than a benefit of 70% times the engine CO2/kw-hr. This
multiplicative assessment should also hold true for determining the cumulative effects of
individual A/C system efficiency improvement technologies. In addition, future engine
> O A
5-30
-------
Air Conditioning System Credits
efficiency should be verified as proposed including advanced engine technologies such as
hybrids that may operate the A/C system with the internal combustion engine entirely turned off
during idle. [EPA-HQ-OAR-2010-0799-9512-A1, p. 38]
US EPA and NHTSA should also account for the system efficiency impact of alternative
refrigerants. In particular, any system efficiency disbenefit with a new refrigerant should offset
either any alternative refrigerant credit or A/C system efficiency credit in this case. [EPA-HQ-
OAR-2010-0799-9512-A1, p. 38]
Organization: Johnson Controls, Inc.
Specifically, we support the inclusion of fuel consumption reductions resulting from air
conditioning improvements [NHTSA-2010-0131-0253-A1, p. 2]
Organization: Kia Motors
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 102.]
Additionally, Kia requests the industry — for industry consistency that EPA set more detailed
guidelines for the framework to prove out the A/C system durability. It's unclear how A/C
system durability is defined.
Organization: Motor & Equipment Manufacturers Association (MEMA)
1. Oil Separators [EPA-HQ-OAR-2010-0799-9478-A1, p.5]
In the NPRM, there is a credit of 0.5 to 0.7 g CO2/mi proposed for an oil separator in the A/C
system. This credit is for either an internal or external oil separator and "the baseline component
for comparison is the version which a manufacturer most recently had in production on the same
vehicle design or in a similar or related vehicle model." MEMA asks the agencies to clarify by
changing this to read: "the baseline component for comparison is the version which a
manufacturer most recently had in production without an oil separation feature on the same
vehicle design or in a similar or related vehicle model." [EPA-HQ-OAR-2010-0799-9478-A1,
pp.5-6]
2. Improved Condensers / Evaporators [EPA-HQ-OAR-2010-0799-9478-A1, p.6]
In the NPRM, the credit listed for improved condensers and/or evaporators ranges from 1.0 to
1.4 gCO2/mi. The conditional requirement for this credit is "system analysis on the component(s)
indicating a coefficient of performance improvement for the system of greater than 10 percent
when compared to previous industry standard designs." Based on this prerequisite, MEMA
believes that early adopters of high performance heat exchangers will not receive the incentive
for their proactive behavior. Therefore, MEMA recommends that standards for heat transfer and
pressure drop - at fixed air inlet conditions (temperature, humidity, flow rate) and refrigerant
3-31
-------
EPA Response to Comments
inlet conditions (temperature, pressure, flow rate) - be the prerequisite for the credit. This will
help prevent content regression and provide equitable treatment to both early and later adopters.
[EPA-HQ-OAR-2010-0799-9478-Al,p.6]
3. Internal Heat Exchanger [EPA-HQ-OAR-2010-0799-9478-A1, p.6]
There are no conditional requirements listed in the NPRM for the Internal Heat Exchanger credit.
Similar to the improved condensers and evaporators, MEMA recommends that the agencies
include a performance threshold for the credit. We note that both the heat transfer and the vapor
side pressure drop are critical attributes of the internal heat exchanger to improve the energy
efficiency of the A/C system. A standard for heat transfer performance and vapor side pressure
drop at fixed inlet refrigerant conditions (temperature, pressure, flow rate) should be set to ensure
actual improvement in system coefficient of performance. The graph below highlights the
importance of vapor side pressure drop. [EPA-HQ-OAR-2010-0799-9478-A1, p.6] [For the
associated graph please refer to EPA-HQ-OAR-2010-0799-9478-A1, p.6]
Organization: Toyota Motor North America
EPA is proposing to allow manufacturers to generate credits for improvements to air
conditioning systems that reduce GHG emissions. In the CAFE portion of the joint proposal,
NHTSA is proposing to allow fuel consumption reductions equivalent to the GHG credits
allowed by EPA that would be applicable for the credit menus provided for MAC efficiency and
the use of off-cycle technologies. Toyota believes that the proposals are appropriate and fully
supports the Alliance comments that address the details of the provisions. However, Toyota
offers additional comments and concerns on several issues below. [EPA-HQ-OAR-2010-0799-
9586-Al,p.l3]
Response:
EPA acknowledges the general support for credits related to improved A/C system efficiency
and the use of a new test cycle to provide "reasonable verification" (Alliance of Automobile
Manufacturers) that the efficiency-improving technologies and methods employed produce
quantifiable reductions in GHG emissions. EPA responses to comments related to the A/C
efficiency credit program are found in Section II.F.l and Section III.C.l of the preamble to the
rule, as well as in Section 5.1 of the joint TSD.
Regarding the comment from ICCT that a "multiplicative approach" should be used to avoid
double-counting the credits (i.e. where A/C load reductions show up as 'credits' as well as on the
5-cycle emissions result), we disagree that our approach will lead to double-counting. Since
tailpipe CO2 emissions standards are based on a 2-cycle test (FTP and HWY cycles) where the
A/C system is turned off, the reduction in engine load due to A/C efficiency improvements
(whether direct A/C compressor load reduction, or system load reduction due to improved solar
and cabin ventilation technologies) is not measured, and therefore cannot be double-counted. We
believe that technologies that reduce the cooling load on the vehicle's A/C system (e.g. glazing,
cabin ventilation, solar reflective paint, etc.) are best addressed using the off-cycle credit
provisions of this rule (see preamble Section III.C.5 and TSD Section 5.2).
> O O
5-32
-------
Air Conditioning System Credits
Regarding the comment from MEMA that we incorporate specific language to define the
components and common test conditions to quantify their benefits, in order to generate credits
for oil separators, improved condensers/evaporators, and internal heat exchangers, we cannot
incorporate prescriptive language regarding these technologies, as the implementation of these
technologies is manufacturer-specific. In addition, we do not believe that setting a common set of
test conditions for demonstrating their performance characteristics or introducing common
descriptive language regarding their design are is feasible at this time. Should industry
organizations adopt common methods and procedures regarding the performance of A/C
technologies, we could consider them in future rules. But until such methods are available, we
will require manufacturers to demonstrate the effectiveness of these components on a case-by-
case basis during the certification process, as proposed.
3.2.1. A/C Test Procedures
Alliance of Automobile Manufacturers
American Honda Motor Co., Inc.
Association of Global Automakers, Inc. (Global Automakers)
BMW of North America, LLC
Chrysler Group LLC
Enhanced Protective Glass Automotive Association (EPGAA)
Ferrari
Ford Motor Company
Guardian Automotive Products, Inc.
Honeywell International, Inc.
Hyundai America Technical Center
International Council on Clean Transportation (ICCT)
Kia Motors
Mercedes-Benz USA, LLC
Mitsubishi Motors R&D of America, Inc. (MRDA)
Pittsburgh Glass Works (PGW)
Toyota Motor North America
Volkswagen Group of America
Volvo Car Corporation (VCC)
Organization: Alliance of Automobile Manufacturers
Idle Test [EPA-HQ-OAR-2010-0799-9487-A1, p.46]
The MY 2012-2016 EPA GHG program uses a menu of credits for application of various MAC
efficiency technologies. However, beginning in MY 2014, an "idle test" requirement is
superimposed on the credit menu, such that certain emissions thresholds must be achieved on the
idle test before credits can be granted for application of the technologies on the menu. The
Alliance, as well as individual manufacturers, supported the credit menu, but commented during
3-33
-------
EPA Response to Comments
that rulemaking process on the inadvisability of superimposing the idle test. [EPA-HQ-OAR-
2010-0799-9487-A1, p.46]
One key concern was that the most promising real-world MAC efficiency technologies - those
that reduce compressor workloads at moderate ambient temperatures - would not have sufficient
time to show their benefits during the idle test procedure. Although the idle test is not performed
at a high ambient temperature, the idle test procedure calls for the systems to be operated as if
they were responding to high ambient temperatures. Automatic systems are set to 9oF below the
75oF ambient temperature. Thus, in order to get to the unrealistically low 66oF interior setting
required by the test procedure, the automatic systems work at maximum cooldown through much
of the 10-minute MAC-on portion of the test. Manual MAC systems are tested at maximum
cooldown for ten minutes (as if responding to a high ambient temperature) and at a low fan
setting for ten minutes. [EPA-HQ-OAR-2010-0799-9487-A1, p.46]
The SAEIMAC study, which was a major basis for EPA's idle test thresholds, demonstrated a
30% lifecycle energy efficiency improvement for a nationally representative mix of high,
moderate and light MAC loads. But the energy efficiency improvements came primarily from
better moderate temperature technologies. At moderate and light loads, efficiency improvements
of 40% or more were recorded. An energy efficiency improvement of only 5% to 10% was
measured at high ambient temperatures. [EPA-HQ-OAR-2010-0799-9487-A1, pp.46-47]
Since the development of the MY 2012-2016 regulation, many idle tests have been run in
automobile manufacturer laboratories, and the anticipated concerns, as well as other problems,
have been confirmed. [EPA-HQ-OAR-2010-0799-9487-A1, p.47]
One of the most prominent issues identified for the idle test is that smaller displacement engines
will receive significantly less EPA CO2 credit for the same HVAC technology content, compared
to larger displacement engines. [EPA-HQ-OAR-2010-0799-9487-A1, p.47]
Manufacturer testing also shows that on small engines, even the most sophisticated MAC
systems will probably receive little EPA CO2 credit because of their idle test results, thereby
sharply reducing the incentive to apply MAC efficiency technologies to these vehicles. [EPA-
HQ-OAR-2010-0799-9487-A1, p.47]
Test-to-test variability is large relative to the scale for getting credit, creating an additional
element of regulatory compliance planning uncertainty, resulting in an additional barrier to MAC
efficiency technology implementation. High variation is inherent in this test, in part due to the
higher CVS dilution (low CO2 concentrations) of tailpipe exhaust gases for a vehicle at idle,
which makes CO2 measurement highly variable being close to the limit of detection of the
analyzer. [EPA-HQ-OAR-2010-0799-9487-A1, p.47]
Many of these preliminary idle test results and their implications have been communicated to
EPA over the past two years, and these issues are discussed by EPA in the NPRM. Although the
idle test has some relationship to MAC efficiency, it does not sufficiently get at the most
important area for improvement, the moderate load technologies, since much of the idle test is
conducted as if the vehicle were in a high ambient temperature, with corresponding high
> O A
5-34
-------
Air Conditioning System Credits
demands placed on the MAC system. The thresholds for obtaining full credit were established by
EPA based on the premise of a 30% efficiency improvement over baseline MAC technologies.
This is a challenging hurdle that can only be met if moderate and light load technologies are
allowed to demonstrate their benefits to a substantially greater extent than the idle test allows.
Based on the tests reported to EPA, no vehicle with an engine below approximately 2.5 liters in
displacement would receive full credit for its MAC technologies, due to the idle test results (e.g.,
TSD p. 5-40). Unmodified, the idle test poses a potentially insurmountable obstacle to MAC
improvements for credits on many vehicles, especially those with small engines which are
anticipated to be predominant in the future. [EPA-HQ-OAR-2010-0799-9487-A1, p.47]
The test-to-test variability is an additional obstacle, since it introduces inherent uncertainty as to
whether technology additions will ultimately result in credits. MAC operation is a fraction of
overall vehicle fuel consumption, and the fuel consumption difference between a good, advanced
technology MAC system and a bad MAC system is a matter of only a few grams of CC>2 per mile
(or per minute). On the idle test scale, the total range from maximum credit to no credit is only
6.4 g CCVminute. Thus, significant test-to-test variation (even as low as a gram or two) carries
the potential to negate a large portion of the planned credits for any program to improve MAC
efficiency technology or to move the vehicle to the next level of credits. In testing reported at the
United States Council for Automotive Research (US CAR), standard deviations of over 1.0
gCCVminute were consistently found from repeated idle testing on the same vehicle.
Statistically, this shows that inherent test-to-test variation could negate a substantial portion of
the MAC indirect credits for any vehicle. [EPA-HQ-OAR-2010-0799-9487-A1, pp.47-48]
Idle Test Temperature and Humidity Tolerances [EPA-HQ-OAR-2010-0799-9487-A1, p.48]
The Alliance supports EPA's effort to broaden the ambient air temperature and humidity
specifications for the idle test and the optional idle test, from the current requirements for
humidity levels of 50 ± 5 grains/pound, average temperature 75 ± 2 °F and instantaneous
temperature: 75 ± 5 °F. We also support the EPA proposal to relax temperature and humidity
requirements in order to use test cells designed for FTP testing. The data that manufacturers
shared with EPA on June 30, 2011 (EPA Ann Arbor Meeting) showed that some tests run at a
manufacturer's lab failed/exceeded these stringent specifications defined for the idle test on
temperature and humidity. Automaker emission test facilities are not all designed for tight
temperature and humidity controls such as are required for SC03 test chambers. Since the
idle/optional idle test will not require solar loads, these tests will probably not be performed in
SC03 solar test cells. The non-solar test cells are designed to run standard emission tests such as
the FTP (EPA75), Highway Fuel Economy (HWFET) and US06 tests, where temperature and
humidity specifications are less stringent as compared to the current A/C SC03 test
specifications. If the temperature and humidity range is not widened, it will cause a large
percentage of void tests that the manufacturers will be forced to repeat simply because of
seasonal temperature and humidity variation or because the original specifications of test cell
HVAC system were not designed around the idle test limits. This will add to the manufacturer
testing burden and costs without any significant benefit to the accuracy of the test results.
Therefore, the Alliance encourages EPA to widen these temperature and humidity specifications
limits on the idle/optional idle tests, as proposed, so that they can be performed in the non SC03
3-35
-------
EPA Response to Comments
chambers without added testing and cost burdens on manufacturers. [EPA-HQ-OAR-2010-0799-
9487-A1, p.48]
The Alliance recommends the following humidity and temperature tolerances: [EPA-HQ-OAR-
2010-0799-9487-A1, p.48]
(1) Ambient humidity within the test cell during all phases of the test sequence shall be
controlled to an average of 50 ± 10 grains of water/pound of dry air. [EPA-HQ-OAR-2010-0799-
9487-A1, p.48]
(2) Ambient air temperature within the test cell during all phases of the test sequence shall be
controlled to 75 ±5 °F on average and 75 ±10 °F as an instantaneous measurement. Air
temperature shall be recorded continuously at a minimum of 30 second intervals. [EPA-HQ-
OAR-2010-0799-9487-A1, p.48]
Idle Test Engine Size Adjustment [EPA-HQ-OAR-2010-0799-9487-A1, p.49]
To partially address these concerns, EPA proposes an optional revised set of thresholds for
performance on the idle test beginning in 2014. The revised thresholds are adjusted for engine
size, so that smaller engines receive better scores and more ability to earn credits from
application of MAC technologies on the credit menu. Although we believe all the idle test
requirements should be discarded from the MAC program, if the idle test is kept, then it is useful
to add this optional engine-size adjusted set of thresholds. [EPA-HQ-OAR-2010-0799-9487-A1,
p.49]
Adding the engine size adjustment option to the MAC program is an improvement, but it does
not solve the most fundamental problems with the idle test. The most important technologies for
real-world energy savings, the moderate load technologies, would continue to show little benefit
on the idle test, and the test-to-test variability would remain inherently high. We therefore
believe that both the idle test and the engine size-adjusted idle test contribute little toward the
goal of ensuring real-world greenhouse gas reduction, and that they will do little to encourage
improved MAC technology implementation. [EPA-HQ-OAR-2010-0799-9487-A1, p.49]
Reasonable Verification [EPA-HQ-OAR-2010-0799-9487-A1, p.49]
The Alliance supports the EPA goal stated in the NPRM of "reasonable verification" that the
technologies receiving credit from the credit menu are actually producing commensurate levels
of GHG reduction. Chrysler, Ford and GM have worked with EPA and CARB over the past
several months at USCAR to evaluate procedures for MAC efficiency testing. This work has
identified several key criteria and issues for MAC testing that directly relate to the goal of
reasonable verification. This research has resulted in the draft "AC 17" test procedure discussed
in the NPRM. [EPA-HQ-OAR-2010-0799-9487-A1, p.49]
Since the creation of the EPA MAC program, automobile manufacturers have believed that the
MAC technology improvements on the EPA credit menu will result in actual GHG emission
reductions that significantly surpass the amounts of the credits on the menu. This stems from the
5-36
-------
Air Conditioning System Credits
methodology used to quantify credits on the menu. EPA began with an overall inventory of
estimated fuel consumption from MAC operation, then apportioned improvements from that
inventory to the percentage improvements identified for various prominent MAC efficiency
technologies, especially those used by the SAE EVIAC cooperative research program. EPA
estimated that MAC operation accounted for 14.3 g CO2/mile on average for each vehicle,
representing 3.9% of national light duty vehicle GHG emissions. The cap of 5.7 g CCVmile was
derived as 40% of the 14.3 g CCVmile total, and the credit for each technology was roughly
calculated as a percent improvement of the 14.3 g CO2/mile total. [EPA-HQ-OAR-2010-0799-
9487-A1, pp.49-50]
Automobile manufacturers commented at that time that the EPA inventory of fuel consumed for
MAC operation was at the low end of the range of estimates by various researchers, such as
studies by the National Renewable Energy Laboratory (NREL) and
Northeast States Center for a Clean Air Future (NESCCAF)/CARB. For example, NREL
estimates were that MAC usage consumed 5.5% of national light duty fuel usage. NESCCAF
and CARB together estimated that MAC operation accounted for 5.3% of a vehicles fuel usage.
These alternative estimates are at least 70% higher than the 14.3 g CCVmile figure ultimately
used by EPA. In the MY 2012-2016 Regulatory Impact Analysis, there is a complicated
comparison of these studies, and EPA made numerous adjustments and assumptions in arriving
at its ultimate figures, noting numerous uncertainties along the way. Without fully replaying that
debate, suffice it to say that automobile manufacturers believed MAC compressors were engaged
much more often and used more total fuel than EPA estimated, and that the higher estimates
from relatively sophisticated analyses by NREL and NESCCAF/CARB were closer to the real-
world MAC energy consumption. [EPA-HQ-OAR-2010-0799-9487-A1, p.50]
If the higher amounts of baseline MAC fuel consumption were used, the reductions from each
MAC efficiency technology would be expected to be much greater than the figures used in the
EPA credit menu. EPA finalized the regulation using its own (low) estimate of total MAC fuel
consumption, resulting in credits on the menu that should be very conservative compared to
actual vehicle usage, as measured by other researchers and industry data, and as used in the SAE
EVIAC program. This should be kept in mind when considering the need for thorough and precise
verification procedures, since EPA's very conservative methodology in creating the credits
results in a huge margin before real-world emissions reductions might fall short of the credited
amounts. [EPA-HQ-OAR-2010-0799-9487-A1, p.50]
AC17 Test [EPA-HQ-OAR-2010-0799-9487-A1, p.50]
The auto industry has shared EPA and CARB's interest in furthering understanding of these
issues, and the draft AC 17 vehicle test procedure that we jointly developed through USCAR is a
significant step to aid future research. We therefore strongly support adding an option to use the
AC 17 procedure as a reporting-only alternative to the idle test to demonstrate that a vehicle's
MAC system is delivering the efficiency benefits of the new technologies from the credit menu
in MY 2014-2016. [EPA-HQ-OAR-2010-0799-9487-A1, p.50]
3-37
-------
EPA Response to Comments
During the development of the AC 17 procedure, it was shown that a very complicated and
elaborate procedure would unavoidably be needed to accurately measure MAC energy
consumption. A high level of vehicle instrumentation is needed, in part to understand what is
happening throughout the test and identify voided tests where the procedure may have gone
wrong. A high number of voided tests are to be expected. Also, the procedure cannot be
conducted in a standard FTP test cell, but needs a climate controlled chamber with solar lamps
that meets SC03 test specifications. At least four hours is needed for the test, due to the desire to
include solar soak periods that attempt to comprehend the benefits of reduced thermal load
technologies. In addition, even with the improved repeatability and added instrumentation of the
AC 17 test, testing has shown that a single AC 17 test may not demonstrate the benefit of a single
or a bundled set of technologies. In order to statistically verify the benefit, multiple tests may
need to be run and statistically analyzed. [EPA-HQ-OAR-2010-0799-9487-A1, pp.50-51]
In total, although this test is unlike any other used for emission certification (or any other
regulatory certification program), the high level of complexity was arrived at and determined to
be necessary in pursuit of the goals of an accurate, reproducible test that could distinguish a good
MAC system from a bad one under representative ambient climate conditions, and which could
validate the benefits of the technologies on the EPA credit menu. [EP A-HQ-OAR-2010-0799-
9487-Al,p.51]
EPA proposes testing with the relevant technologies turned "on" then turned "off in order to
validate the improvements that are awarded from the credit menu. We agree with the principle of
validating the menu credit amounts through actual vehicle testing, but note the difficulty of doing
this on a comprehensive basis for every model of vehicle. In actuality, there is typically no
baseline vehicle and baseline MAC system that is engineered and built without the improved
MAC technologies for true apples-to-apples comparison of tests with the MAC technologies
turned "on," and then turned "off." For example, if a variable compressor with the associated
computer controls is engineered for a vehicle platform, it is typically applied across-the-board on
that platform, and no systems are built with a fixed compressor or with the computer controls
that would be necessary to get optimized performance from this fixed compressor. [EPA-HQ-
OAR-2010-0799-9487-A1, p.51]
The exercise suggested by EPA is more appropriately viewed as a research exercise, rather than a
traditional vehicle emissions certification program. For example, the EVIAC program tested a
baseline Cadillac vehicle, and then added various new MAC technologies, including new,
smarter computer controls that improved vehicle integration. The improvements from each added
new technology were measured as the EVIAC program progressed. However, EVIAC was a
research program that cost hundreds of thousands of dollars, involved experts from
approximately 40 corporations, government labs and agencies, and spanned approximately two
years. To expect such a complicated procedure to validate the menu credit amounts for a large
number of vehicles is simply not feasible and would violate the boundaries of "reasonable
verification." [EPA-HQ-OAR-2010-0799-9487-A1, p.51]
In some circumstances, it may be possible to obtain (or build) baseline vehicles which
approximate the apples-to-apples technology "on" versus technology "off comparisons that
EPA seeks. A research program would seek to identify the best of these vehicle opportunities
J-J
-------
Air Conditioning System Credits
and, on a selected basis, use them to answer the research questions that are to be studied. Such a
program would allow for multiple repetitions of the test to be run on the selected vehicles to
statistically verify results. There are only approximately eight efficiency technologies on the
MAC credit menu (including the two levels of reduced reheat). This is a manageable number of
technologies to assess using the AC 17 test (or other methods) in a detailed way in order to
validate the amount of credits provided by the menu. On a survey basis, it can also be used to
show that the credit amounts from the menu are being consistently achieved, but it is not
reasonable to require that this be tested on every model or platform. [EPA-HQ-OAR-2010-0799-
9487-Al,pp.51-52]
Due to the complexity of the required tests, the rarity of good baseline comparison opportunities,
and the overall high test burden of this program in comparison to the amount of credits involved,
the Alliance recommends that EPA to utilize the AC 17 test solely to validate menu credit
amounts and monitor progress on a sample basis, rather than as a mandatory certification test that
must be run on every vehicle model or platform in order to achieve MAC efficiency credits.
[EPA-HQ-OAR-2010-0799-9487-Al,p.52]
AC17 Thresholds [EPA-HQ-OAR-2010-0799-9487-A1, p.52]
EPA raises the possibility of setting an absolute required threshold for the AC 17 test, as was
done in 2014 with the idle test, rather than comparing improvements to case-by-case baselines.
This raises a host of complex issues. Establishing these standards would be a very complex
exercise, and two key issues emerge that show this to be a bad idea, even before entering into the
particular issues related to the standard setting process. [EPA-HQ-OAR-2010-0799-9487-A1,
p.52]
First, the test burden would be overwhelming. The AC 17 test is much longer and more
complicated than other emissions tests, and it cannot be used in the same way. [EPA-HQ-OAR-
2010-0799-9487-A1, p.52]
Second, the planning uncertainties and implementation difficulties from such a complex program
would become an insurmountable obstacle to getting better MAC technologies implemented.
Rather than speeding progress in this area, the tests would slow or stop the progress that is being
made. [EPA-HQ-OAR-2010-0799-9487-A1, p.52]
AC17 Corrections and Clarifications [EPA-HQ-OAR-2010-0799-9487-A1, p.52]
We note the need for the following minor technical corrections and clarifications in the AC 17
procedure written in the NPRM: [EPA-HQ-OAR-2010-0799-9487-A1, p.52]
During the soak that occurs between the preconditioning and test cycle (for both the solar-on and
solar-off portions of the test) we believe that instead of turning the cooling fan off, it should be
set to 4 mph. The low wind level is a more representative real-world condition. Maintaining that
fan speed impacts solar glazing technology. This change would impact 40 C.F.R. §86.167(f)(8).
[EPA-HQ-OAR-2010-0799-9487-A1, p.52]
3-39
-------
EPA Response to Comments
A solar load tolerance of 850 W/m2 +/- 45W/m2 should be allowed, and the procedure should
specify 'solar off for the MAC off test. [EPA-HQ-OAR-2010-0799-9487-A1, p.52]
If windows are partially cracked during the test in order to accommodate wiring or other test
instrumentation, a piece of foam or other flexible insulation should be used to keep a tight seal
when the window should be closed or when wires are inserted through the gap. (Without this, the
gap is too large where the various cords run through the window and the vehicle will not heat up
consistently during the solar soak.) [EPA-HQ-OAR-2010-0799-9487-A1, pp.52-53]
In the test procedure flow chart on p. 75359 of the NPRM the word "Nominal" should be added
to "Time (Minutes)" [EPA-HQ-OAR-2010-0799-9487-A1, p.53]
AC17 Test Vehicle Selection [EPA-HQ-OAR-2010-0799-9487-A1, p.53]
Because the AC 17 test is so long, expensive and complicated, the number of tests should be
minimized to a manageable level, no matter what the ultimate purpose of the test. These tests
must be done in climate-controlled SC03 chambers, not in regular FTP test cells, and test
capacity is very limited in SC03 chambers. MAC systems generally have consistent designs and
specifications on each vehicle platform (except that some platforms now have hybrid powertrain
models, which would usually have a very efficient MAC electric compressor), so performing one
test per vehicle platform would give a good overview of MAC efficiency performance. However,
vehicle platforms usually have multiple engine and transmission combinations available, so the
number of tests would escalate rapidly if various engine and transmission combinations require
testing. [EPA-HQ-OAR-2010-0799-9487-A1, p.53]
For example, for 2012 model certification, one manufacturer, GM, tested and certified
approximately 20 vehicle platforms. There were approximately 85 GM platform/engine
combinations, and this number then approximately doubles if transmission combinations are
included. Clearly, if various engine/transmission combinations required testing, the MAC testing
program would surpass the number of tests performed for tailpipe certification, which violates
the standard of "reasonable "verification," considering the relatively small environmental
impacts of MAC indirect GHG emissions. [EPA-HQ-OAR-2010-0799-9487-A1, p.53]
We therefore object to the criteria for test vehicle selection proposed in the NPRM, which
defines a platform as "a group of vehicles with common body floorplan, chassis, engine and
transmission." We propose the following "platform" definition, which is adapted from the
current EPA definition for a "carline": [EPA-HQ-OAR-2010-0799-9487-A1, p.53]
Platform means a group of vehicles within an OEM which has a degree of commonality in
construction (e.g., body, chassis). Platform does not consider the model name, brand or
marketing division, does not consider any level of decor or opulence and also does not consider
characteristics such as roof line, number of doors, seats, or windows. A platform may include
vehicles from various fuel economy classes, including both cars and trucks. [EPA-HQ-OAR-
2010-0799-9487-A1, p.53]
5-40
-------
Air Conditioning System Credits
This definition provides the flexibility to combine the large variations which occur within
platform families that use the same MAC architecture. Intra-platform variation is based on
"floorplan" such as two-door, four-door and wagon/crossover variants or SUV/pickup variants,
as well as powertrains. However, the benefit of the menu technologies should not be significantly
affected by body style or powertrain. We recommend that wherever the term "platform" is used
in MAC regulations, it be based on the flexible and inclusive definition proposed above by the
Alliance. [EPA-HQ-OAR-2010-0799-9487-A1, pp.53-54]
In addition, in 40 C.F.R. 86.1866-12(c)(6)(iii), EPA proposes that the highest selling sub-
configuration within each platform be tested in the first model year for which a MAC system is
expected to generate credits and then one additional sub-configuration must be tested in each
subsequent model year until all sub-configurations within the platform have been tested. Given
the fact that a platform will contain tens, if not hundreds, of sub-configurations, this proposal
essentially eliminates the possibility for a manufacturer to "carryover" representative data from a
prior model year and unnecessarily increases a manufacturers overall testing burden. Therefore,
we urge EPA to allow the use of good engineering judgment when selecting a representative test
vehicle for each platform and when determining whether carryover of data is appropriate. Also,
if EPA were to persist on having sales figures be a part of the basis for test vehicle selection,
sales projections should be clearly allowed as the basis for these test vehicle selections rather
than waiting for actual sales figures to be finalized at the end of the year. [EPA-HQ-OAR-2010-
0799-9487-A1, p.54]
Finally, we believe that 40 C.F.R. §86.1866-12(c)(6)(iv) is redundant to 40 C.F.R. §86.1866-
12(c)(6)(iii) and should be removed. [EPA-HQ-OAR-2010-0799-9487-A1, p.54]
AC17 Test Burden [EPA-HQ-OAR-2010-0799-9487-A1, p.54]
The AC 17 test takes approximately four hours, which is eight times as long as the idle test.
Further, AC 17 requires more technician time to set up the elaborate instrumentation, and it
requires SC03 climate-controlled test cells. More voided tests are also expected with AC 17, due
to all the complications. The following are specific recommendations to reduce test burden:
[EPA-HQ-OAR-2010-0799-9487-Al,p.54]
86.167-17 (a) Overview. [EPA-HQ-OAR-2010-0799-9487-A1, p.54]
The reference for humidity should be changed from "... 50 percent relative humidity..." to "... 69
grains of water / pound of dry air..." to be consistent with our recommendation for test cell
ambient conditions (please see our next recommendation). [EPA-HQ-OAR-2010-0799-9487-A1,
p.54]
86.167-17 (c) Test cell ambient conditions. [EPA-HQ-OAR-2010-0799-9487-A1, p.55]
The proposed A17 test procedure limits are extremely stringent. SC03 test facilities were not
designed to operate at 77 °F at 69 grains of water/pound of dry air humidity at 850 W/m2 solar
3-41
-------
EPA Response to Comments
load. We recommend that the tolerances be widened to minimize test voids without significantly
impacting testing accuracy as described below: [EPA-HQ-OAR-2010-0799-9487-A1, p.55]
§ 86.167-17 (c) Test cell ambient conditions. [EPA-HQ-OAR-2010-0799-9487-A1, p.55]
The test cell ambient temperature and humidity recorded values should lie within the
specifications at least 95% of the time [EPA-HQ-OAR-2010-0799-9487-A1, p.55]
(1) Ambient Air Temperature (i) Temperature = 77 ± 3 °F air temperature on average and 77 ± 5
°F air temperature instantaneous [EPA-HQ-OAR-2010-0799-9487-A1, p.55]
(2) Ambient Humidity (i) Humidity = 69 ± 5 grains of water/pound of dry air on average and 69
± 10 grains of water/pound of dry air instantaneous [EPA-HQ-OAR-2010-0799-9487-A1, p.55]
§ 86.167-17(d) Interior temperature measurement. [EPA-HQ-OAR-2010-0799-9487-A1, p.55]
A thermocouple location tolerance should be added to (d) Interior temperature measurement. The
current requirement is too restrictive for high volume production testing (language implies a
location of exactly 30mm and 330 mm). The word "nominally" should be added before each
measurement tolerance and OEM's should not be required to validate exact physical location by
documenting dimensions. Also there may be some vehicles (like 2 seat sports cars or pickup
trucks) where the distance below the roof or behind the headrest is not achievable due to physical
constraints of vehicle (example; rear deck lids or window). In these cases language should be
added to allow OEM's to use "good engineering judgment" to get a close as possible to these
prescribed physical locations. [EPA-HQ-OAR-2010-0799-9487-A1, p.55]
§ 86.167-17(e) Air conditioning system settings. [EPA-HQ-OAR-2010-0799-9487-A1, p.55]
The requirement for "6 volts at the motor" is too unwieldy a specification to be reliably executed
in high volume testing and may not even be achievable, given varying motor voltage
configurations such as vehicles with systems other than 12-volt. We recommend that it be
reduced to the setting closest to "6 volts at the motor" or the blower switch position at 50% of
maximum blower speed, or immediately below 50% if there are an odd number of positions. For
example, position 2 if the maximum is position 4, or position 3 if the maximum is position 7.
Also, the word "nominal" should be added to the requirement".. .to provide 55 degF..." since
(1) this temperature may change with different segments of the test (idles, accelerations, cruses,
decelerations) or (2) with some vehicles may not achievable or stable at this idle period, and (3)
implies a tolerance of ±0.49 degF which may be difficult to set in such a short period of time.
Finally, on vehicles that 'default to recirculated air above 75 °F,' the OEM should have the option
to let this feature function as intended and not be required to start in recirculated air and change
to outside air at the first idle of the SC03. [EPA-HQ-OAR-2010-0799-9487-A1, pp.55-56]
§ 86.167-17(f)(8) Procedures following the preconditioning cycle. [EPA-HQ-OAR-2010-0799-
9487-A1, p.56]
5-42
-------
Air Conditioning System Credits
Following the preconditioning cycle, the test vehicle and cooling fan(s) are turned off, all
windows are rolled up, and the vehicle is allowed to soak in the ambient conditions of paragraph
(c)(l) of this section for 30 ±1 minutes. The solar heat system must be turned on and generating
850 W/m2 within 1 minute of turning the engine off. [EPA-HQ-OAR-2010-0799-9487-A1, p. 56]
This requirement implies that the solar heat system must be turned on and achieves 850 W/m2
within 1 minute of turning the engine off. This takes four events to accomplish: (1) turn engine
off, (2) turn solar lamps (heat) load on, (3) set pyrometers up near the vehicle, (4) solar load
lamps warm up to produce 850 W/m2. One minute (total) is insufficient time to accomplish these
tasks as just item #4 can take more than five minutes to achieve (produce 850 W/m2). Since this
short time requirement of one minute is really not a critical element to the test, we recommend
changing it to: [EPA-HQ-OAR-2010-0799-9487-A1, p.56]
The solar heat system must be turned on within one minute of turning the engine off. The 30
minute soak starts immediately after the solar load has achieved 850 ± 45 W/m2. Facility
calibration data on solar lamp warm-up can be used to establish the start of solar soak time. Total
soak time would be time to turn on the lights (e.g., one minute) plus lamp warm-up time (from
calibration data) plus 30 minute solar soak. For example if the facility calibration demonstrates
the lamps reach 850 W/m2 within two minutes, the soak time can be standardized at 33 minutes
after engine off for that facility. [EPA-HQ-OAR-2010-0799-9487-A1, p.56]
§ 86.167-17(f)(10) "Air conditioning off test. [EPA-HQ-OAR-2010-0799-9487-A1, p.56]
The air conditioning off test is identical to the steps identified in paragraphs (d)(l) through (9) of
this section, except that the air conditioning system and fan speeds are set to complete off or the
lowest. It is preferred that the air conditioning off test be conducted sequentially after the air
conditioning on test, following a 10-15 minute soak." We believe this to be a typo, "... set to
complete off or the lowest (setting)." Also during this SC03 and HFET portion of the air
conditioning off test, (f)(8) requires ".. .all windows are rolled up...". Provisions need to be
made to allow the driver to get sufficient cooling, such as allowing the windows to be partially or
fully opened during the "air conditioning off portion of the test. [EPA-HQ-OAR-2010-0799-
9487-A1, p.56]
The MY 2014-2016 regulation currently allows substantial flexibility based on good engineering
judgment to limit idle testing to one worst-case vehicle per platform, and carryover data could be
used from one year to the next if no changes are made to a platform. Under the current
regulation, although initially all platforms would need testing, over time, the regular cadence of
vehicle changes over (typical) five-year program lives would mean that only 20% or so of each
manufacturer's platforms would need testing in any year. [EPA-HQ-OAR-2010-0799-9487-A1,
pp.56-57]
In contrast, the new proposal requires AC 17 testing in each year on each platform that receives
credit. Beginning in 2017, carryover data is effectively disallowed, since a different sub-
configuration within the platform must be tested each year. Also, the technology "on" and
technology "off testing effectively doubles the number of tests. Thus, the high test burden from
3-43
-------
EPA Response to Comments
attempting to test every platform every year with the AC 17 test exceeds the objective of
reasonable verification, since the test burden has grown exponentially from the original idle test.
Disallowing carryover data effectively raises the number of tests approximately five-fold, the
technology "on" versus "off requirement then doubles the number of tests, and the AC 17 test is
at least eight times longer than the idle test. Although this is very rough math, it shows that the
proposed approach would require approximately 80 times more test hours. [EPA-HQ-OAR-
2010-0799-9487-A1, p.57]
The objectives of menu validation and monitoring real-world progress can be achieved with a
much lower test burden than this. In view of the complexity of the AC 17 test in comparison with
the idle test as well as other emission certification tests, no manufacturer should be required to
conduct AC 17 testing on more than four platforms in any year. [EPA-HQ-OAR-2010-0799-
9487-A1, p.57]
Bench Testing [EPA-HQ-OAR-2010-0799-9487-A1, p.57]
SAE procedures have been developed for bench testing of MAC systems at a range of steady-
state speeds and for the calculation of the Lifecycle Climate Change Performance of the system
using the steady-state results as input data. These methodologies were used for some analyses
within the EVIAC program. [EPA-HQ-OAR-2010-0799-9487-A1, p.57]
These procedures have strengths as well as weaknesses. The bench test data is accurate and
reproducible, although the full battery of SAE tests is very expensive to run (e.g., $80,000 per
model), and automobile manufacturers are not currently set up to run these tests. Importantly, the
integration of the MAC system with the vehicle is not comprehended in a sophisticated manner
by these procedures. Thermal load technologies could not be directly evaluated. As computer
controls grow more sophisticated, they have become a major factor in reducing energy
consumption of MAC systems, while also meeting acceptable levels of performance in other
vehicle parameters. The bench test procedure does not include sophisticated consideration of
these computer control algorithms, and it would not be a simple task to include this important
variable. [EPA-HQ-OAR-2010-0799-9487-A1, p.57]
The bench test methodology would be no better than the AC 17 methodology in achieving the
EPA goal of reasonable verification, and it would probably have deficiencies compared to AC 17.
The bench test methodology was considered within USCAR, but a vehicle test approach was
selected instead because it was more comprehensive and the OEMs had facilities and
experienced staffs in place for vehicle testing. Since the AC 17 test has shown positive early
results, it is preferred over bench testing as the basis for future work on these issues. [EPA-HQ-
OAR-2010-0799-9487-A1, pp.57-58]
Once again, even using a bench test approach, the questions to be examined more closely
resemble a research program than a traditional vehicle emissions certification program. If
necessary, reasonable verification of the menu credit amounts could probably be achieved by a
research program using bench test data, and sample-based verification could be used to validate
that real improvements were occurring on new vehicles. However, comprehensive testing of
every platform or model using this approach would be enormously burdensome, and the bench
5-44
-------
Air Conditioning System Credits
test approach does not solve the problem of defining baseline performance or standards. Since
bench testing offers no clear advantages, we recommend AC 17 as the basis for future progress
on MAC performance. [EPA-HQ-OAR-2010-0799-9487-A1, p.58]
Conclusion [EPA-HQ-OAR-2010-0799-9487-A1, p.58]
EPA set the stringency of the overall GHG standards based on maximum achievement by the
industry of 5.0 g CO2/mile MAC efficiency credits for cars in 2017, followed by maximum
achievement of the 7.2 g CCVmile MAC efficiency credits by trucks in 2019. Clearly, this is an
ambitious forecast, since it requires that no manufacturer encounter obstacles that preclude
achievement of the maximum credit on any of its vehicles. However, the proposed efficiency
tests have a high potential to interfere with the achievement of these maximum credit levels. In
testing thus far, vehicles with engines below 2.5 liters in displacement have consistently shown
only partial achievement of the idle test thresholds. It is not yet clear what achievement levels
can be attained on the AC 17 test, or how that test may be used. The potential testing burden
and/or the planning uncertainties created by these tests may by themselves be sufficient to
prevent maximum achievement of these credits. [EPA-HQ-OAR-2010-0799-9487-A1, p.58]
In view of these considerations, we ask that achievement of certain levels on the MAC efficiency
tests not be established as a strict requirement in order to gain credits from the MAC technology
menu. The credit menu is working, and we expect it to continue to generate significant progress,
provided that these test requirements are not allowed to interfere. We will work with EPA and
NHTSA to provide "reasonable verification" of this progress through selected vehicle testing and
other methods to show that the menu amounts are not overstated, and that commensurate real-
world progress is achieved. The mid-term review and the 'check-ins' prior to the mid-term review
will provide an opportunity for EPA to review whether a "reporting-only" AC 17 test (instead of
an AC 17 test with thresholds) continues to be adequate. However, the number of tests to achieve
this should be far less than proposed in the NPRM. [EPA-HQ-OAR-2010-0799-9487-A1, p.58]
NHTSA should adopt regulatory language that provides equivalent levels of MAC efficiency
credits in the CAFE program. We note, however, both the difficulty and the importance of
keeping the EPA and NHTSA programs aligned. NHTSA CAFE standards will also be based on
maximum achievement of these credits, while the ability to earn other compliance credits to
offset MAC efficiency shortfalls will not be the same. [EPA-HQ-OAR-2010-0799-9487-A1,
p.59]
Finally, we support including MAC credits in fleet averages in a manner consistent with the
proposal for off-cycle credits. [EPA-HQ-OAR-2010-0799-9487-A1, p.59]
Organization: American Honda Motor Co., Inc.
5. A/C 17 Test Concerns
"Baseline vehicle" - In section III. C. 1. b) of the preamble, the AC17 test procedure is described
as requiring an OEM "To determine whether the efficiency improvements of these technologies
3-45
-------
EPA Response to Comments
are being realized on the vehicle, the results of an AC 17 test performed on a new vehicle model
would be compared to a "baseline" vehicle which does not incorporate the efficiency-improving
technologies." Honda believes this is problematic for the following reasons: [EPA-HQ-OAR-
2010-0799-9489-A1, p. 4]
• Comparator - It may be impossible to re-create a vehicle without the new technology, and
secondly, all-new and completely re-designed vehicles may not have a proper comparison
vehicle.
• Fairness - early efficiency is not rewarded, because the prior model (where one exists) is
the basis for establishing improvements. If prior models are extremely efficient, only
relative improvements are rewarded.
• Test integrity - Test repeatability is yet to be assured. EPA says that OEM only needs to
pick one model from vehicles that share common platform. Test result, however, is easily
affected by vehicle design, such as window size and design, test cell condition (blower
setting, humidity level control), resulting in test result variability. Thus test method that
use baseline vehicle cannot be accepted. [EPA-HQ-OAR-2010-0799-9489-A1, p. 4]
AC 17 Test Repeatability - In the preamble, the agencies claim that the AC 17 test shows good
repeatability, however, there were limited laboratories used and limited models. Honda proposes
a solution to this issue. Recognizing that the idle test does not have good repeatability, and that
the AC 17 test data points are not as substantial as they need to be, the agencies could allow
OEMs to provide AC17 test data during the MY12 - MY16 period, in lieu of the idle test (with
its questionable repeatability) and the threshold concern. AC 17 test data would allow OEMs to
take advantage of the menu-based credits. This will enable EPA to quickly develop a large
dataset of AC 17 test results, which will accelerate the adoption of performance-based criteria for
AC credits. [EPA-HQ-OAR-2010-0799-9489-A1, p. 4]
The agencies seek comment on the threshold criteria for the AC 17 test. Unfortunately, Honda
doesn't have any test data or experience at this point. The previous proposal (allowing AC 17 test
in lieu of idle test during the MY12- MY16 period) would provide EPA with enough data to
make a good determination. Additionally Honda proposes that EPA work with SAE Interior
Climate Control Committee to establish appropriate thresholds values. [EPA-HQ-OAR-2010-
0799-9489-A1, p. 4]
Organization: Association of Global Automakers, Inc. (Global Automakers)
EPA proposes to use a new air conditioning test procedure (AC 17) to evaluate potential credits
for system efficiency improvements by manufacturers. However, it is clear that there could be
problems resulting from the use of the new test. EPA states that "the appropriateness of the test is
still being evaluated" and "EPA believes that more testing and development will be necessary
before the new test could be used directly ..." See 76 FR 74938, 74940. Global Automakers has
several concerns with AC 17 test procedure, which we recommend that EPA address before the
test procedure is required by the regulations. For instance, it is not clear if the precision of the
AC 17 test procedure is high enough to differentiate between the baseline vehicle and the vehicle
enhanced with A/C energy saving technologies. If the total precision of the vehicle test is 2 g
CO2/mi and the enhanced vehicle has A/C-related technologies with menu credits worth that
5-46
-------
Air Conditioning System Credits
amount or less, the benefit may not be identifiable at all on the vehicle test. Moreover, it is not
clear that it would be practicable to use the AC 17 test to compare the performance of certain
vehicles with and without the individual efficiency improvements from the EPA menu installed,
as proposed by EPA. This would be a problem in particular for vehicles that incorporate
efficiency improvements as part of a major redesign or full model change. In those situations, it
may not be possible to provide a comparable vehicle having an air conditioning system without
the efficiency improvements installed. Another issue may result from the comparison of A/C
systems when the "baseline" system is already efficient. It may be difficult to demonstrate
improvements between two efficient systems, and it is not clear how to obtain credits for changes
that resulted in the improved efficiency for the "baseline" system. [EPA-HQ-OAR-2010-0799-
9466-A1, p. 4]
We understand the goal of ensuring that credits given on the menu system for A/C technologies
actually translate into real-world emissions reduction and fuel savings on the vehicle. There are
different methodologies to evaluate the improvement from A/C technologies including menu
systems, bench testing, simulation, and vehicle testing. Each of these has its own merits and
challenges. One possible improvement that can be made in the current menu system is to put
technical specifications relating to efficiency for the individual component technologies. Other
options may also be appropriate. Nevertheless, the test procedure concerns should be addressed
before implementation. [EPA-HQ-OAR-2010-0799-9466-A1, p. 4]
Due to these potential problems, we urge the EPA to collaborate with the SAE Interior Climate
Control Committee to evaluate options to improve the test procedure and to reassess the test
procedure as part of the mid-term review. In the interim, we recommend that EPA include in the
final rule an "off-ramp" procedure to allow the determination of air conditioning credits without
using the AC 17 test procedure. [EPA-HQ-OAR-2010-0799-9466-Al, p. 4]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 51.]
Second, the agencies should carefully consider the relationship between the creation of
incentives under the new standards and the development of alternative test procedures to assess
the incentivized technologies. Global Automakers strongly supports incentivizing technologies
whose potential benefits are not fully measured under the 1975 CAFE test procedure. Air
conditioning efficiency, off-cycle, and advanced technology incentives are justified based on
their potential long term, real world benefits. Such incentives will typically take the form of
compliance credits that are assessed using alternative test procedures. In developing incentives
for the final rule, the agencies need to carefully consider how to reconcile these incentives with
the testing procedures required by law. [EPA-HQ-OAR-2010-0799-9466-Al, p.2]
[[This comment can also be found in Outline Heading 7.4.]]
Organization: BMW of North America, LLC
3-47
-------
EPA Response to Comments
Regarding fuel efficiency credits, we provide the following comments and recommend some
specific changes.
• AC-idle:
- We support the review of AC-idle judgment limits as a function of engine displacement.
- This also supports implementing fuel efficient technologies in smaller vehicles even when fuel
consumption improvements which definitely have positive effects during overall typical driving
conditions - are not fully visible during small engine idling. [EPA-HQ-OAR-2010-0799-9579-
Al, enclosure p. 2]
• AC 17 Test and Evaluation:
- We carried out our own AC 17 tests after the publication of the NPRM. [EPA-HQ-OAR-2010-
0799-9579-A1, enclosure p. 2]
- In our opinion, the AC 17 test conditions do not reflect typical average or moderately increased
air conditioning loads. In particular, the solar load is too high. According to a FAT study, the
average North American sun load is around 310 Wfm2 already taking into account that driving
time periods are variable during a day (e.g. less driving at night). We therefore would expect a
maximum value of around 350 Wfm2 to 400 Wfm2 (instead of 850 Wfm2 ) for the AC 17 test.
Some of the powerful measures to lower all-the-year fuel consumption also can't be evaluated at
the currently suggested AC 17 test load - e.g. significant reduction of reheat. [EPA-HQ-OAR-
2010-0799-9579-A1, enclosure p. 2]
- Reliability of test data is expected to be not better but similar to the AC-idle-test.
- Definition of platforms or carlines could be adopted according to the Alliance proposal. [EPA-
HQ-OAR-2010-0799-9579-A1, enclosure p. 2]
- We are also concerned about determining fuel consumption improvements and credit
calculations depending on baseline test results. The generation of baseline car results needs to be
properly defined. BMW does not have baseline cars - especially focused on 2017 - they have to
be designed and built up for this single test. Therefore, we propose to test a baseline car once for
each platform - according to the Alliance carline definition - and the use of these baseline results
should be allowed during the entire model year 2017 to 2025 timeframe. [EPA-HQ-OAR-2010-
0799-9579-A1, enclosure pp. 2-3]
• AC 17 Test Procedure:
- During the 30 minute soak, it is quite difficult to control temperature and humidity properly. A
wider tolerance range in this phase of the cycle would help. Even more critical for some modern
full automatic test benches is the combination of engine off and 4 mph wind speed because this
has significant impact on exhaust gas analysis measurement devices. We would prefer a soak
definition with a wider tolerance range of temperature and especially humidity and a speed
5-48
-------
Air Conditioning System Credits
definition of maximum 4 mph (instead of exactly 4 mph). [EPA-HQ-OAR-2010-0799-9579-A1,
enclosure p. 3]
- Solar load during MAC off phases causes extreme temperature exposure to test drivers. These
working conditions are unacceptable and will lead to poor accuracy when trying to meet the
given drive cycle requirements. We suggest running MAC off phases without solar load. As
MAC is turned off, this has no impact on MAC off fuel consumption. [EPA-HQ-OAR-2010-
0799-9579-A1, enclosure p. 3]
- Drive cycle definitions should be fully equal to currently used cycles (e.g. some seconds time
shift @ HWFET). This would help to keep accuracy and test quality high and to avoid mistakes.
[EPA-HQ-OAR-2010-0799-9579-A1, enclosure p. 3]
Organization: Chrysler Group LLC
Air conditioning system efficiency improvements differ between passenger cars and light-duty
trucks. It is appropriate to establish separate credit levels for the passenger car and light-duty
truck fleets. The Agencies have developed this split in an environmental and fuel consumption
neutral manner. [EPA-HQ-OAR-2010-0799-9495-A1, p. 6]
The air conditioning efficiency idle and AC 17 test procedures; [EPA-HQ-OAR-2010-0799-
9495-A1, p. 10]
Chrysler supports the Agencies' development of separate passenger car- and light-duty truck-
specific credits for air conditioning system efficiency improvements.
In the DJTSD, the Agencies derive passenger car and light-duty truck specific greenhouse gas
and fuel consumption benefits associated with air conditioning load demand. Chrysler believes
that it is a reasonable approximation that opportunities for improvement on passenger cars will
differ from those on light-duty trucks. Therefore, the Agency's proposal to establish separate air
conditioning system efficiency improvement credits for passenger cars and light-duty trucks is
appropriate. [EPA-HQ-OAR-2010-0799-9495-A1, p. 11]
Organization: Enhanced Protective Glass Automotive Association (EPGAA)
4. EPGAA supports the proposal to add the AC 17 test procedure with certain modifications.
EPGAA advocates migration toward incorporation of AC load into drive cycles or test
procedures which can be determined to produce reasonable correlation with real world
performance. While credits are a good first step to recognizing the untapped benefits of heat load
reduction, the reality is that the imposed caps and generality of credits will not allow full
recognition of the potential benefit. To this end EPGAA acknowledges the proposed AC 17 test
cycle as a potential good advancement. There is always some question as to the validity of sun
lamps to simulate true solar load due to incident angle and emitted spectra variances. However, it
is also recognized that a repeatable outdoor test, which would be the ideal solution, is difficult to
3-49
-------
EPA Response to Comments
achieve. Regarding the specifics of the AC 17 proposed test protocol, EPGAA would like to offer
the following comments: [EPA-HQ-OAR-2010-0799-9301-A1, p. 2]
a. EPGAA suggests that the solar soak period time be increased from 30 minutes to 40-45
minutes. Studies have shown that consumer do indeed leave their vehicles parked for longer than
30 minutes, and thermal modeling of some typical passenger vehicles with RadTherm software
shows that at 30 minutes there is still a fairly steep slope of cabin temperature increase occurring
in many cases. This slope does tend to taper after about 45 minutes. [EPA-HQ-OAR-2010-0799-
9301-A1, pp. 2-3]
b. EPGAA supports the test condition of a 72 degree set point for automatic climate control
systems but has concerns regarding the control logic for manual systems. Any protocol selected
for the manual systems should be validated by testing a similar or same vehicle configuration
equipped with an automatic system and subsequently with a manual system and confirming that
both procedures provide the same or similar results. Regarding the proposed manual system
procedure, EPGAA agrees that the test should begin at full output with recirculation and also
agrees that at some reasonable time period the fan speed should be moderated. It is also agreed
that the recirculation mode should be defeated after the vehicle attains a comfort level. It is
EPGAA's recommendation that this adjustment point should be triggered by internal cabin
temperature rather than simply based on time. Using the temperature control to moderate air
supply temperature seems flawed as most manual temperature controls when in fresh air mode
moderate supply temperature by adjusting a mixing damper to introduce partial reheat through
the heating coil. This will not necessarily result in a true reduction of AC load or hence
measurement of the attainable efficiency. The AC compressor in most systems will cycle based
on evaporator coil temperature. Introducing mixed air will ultimately increase evaporator
sensible load to remove the reheat energy resulting in a poor measure of any heat load reduction
improvement as the compressor will not shut off as often as was possible without reheat. In this
scenario, any technology which reduces heat load in the cabin will trigger a response to increase
the temperature setting which will simply increase the amount of reheat energy. EPGAA
suggests that for the above reasons, the temperature control must remain in the full cold position
during the test cycle and cooling air supply should only be regulated via fan speed. The fan speed
should be adjusted as required at intervals to hold an interior temperature. Furthermore, EPGAA
suggests that the adjustment should be based on a breath level cabin temperature reading, rather
than the supply air temperature at a duct outlet, since this will be more representative of the
usage by an actual driver. [EPA-HQ-OAR-2010-0799-9301-A1, p. 3]
Organization: Ferrari
To reduce the certification test burdens for small-volume manufacturers, we request that the A/C
Idle Test could be used (instead of the new AC 17 test) beyond MY 2016. At least, the transition
from the A/C idle test to the AC 17 should be smooth. [EPA-HQ-OAR-2010-0799-9535-A2,
p.13]
Organization: Ford Motor Company
5-50
-------
Air Conditioning System Credits
We also support proposed changes to the program for 2014-2016 MYs that will allow
manufacturers to earn credits by reporting results from the new AC 17 test, which Ford helped to
develop jointly with industry (USCAR), EPA and CARB. This option has two primary benefits.
First, it provides a rich source of data for evaluating the new AC 17 test, prior to its proposed
2017 MY implementation. Second, it provides an alternative to the Idle Test, which has several
shortcomings, as detailed in the Alliance comments as well as in the NPRM preamble and
Technical Support Document. [EPA-HQ-OAR-2010-0799-9463-Al, pp. 10-11]
Ford also supports the introduction of the AC 17 test procedure as a means of validating credit
values for the 2017-2025 MYs. As mentioned, Ford has worked with industry and the agencies
to develop this procedure and will continue to work with these groups in the future to conduct
additional prove-out on this test. We do however, have some concerns with the 2017-2025 MY
test requirements, as proposed: [EPA-HQ-OAR-2010-0799-9463-Al, p. 11]
While the AC 17 test is much improved over the Idle Test, we believe that the addition of this test
is more suited for a research program to validate menu levels, rather than a certification-type test
requirement. Variability with this test has been reduced, but remains a concern. The charts below
show that using a single baseline and demonstration test may not always successfully show the
technology benefit. On the left side of the first chart, test data from a base test, without
recirculation, and two tests with recirculation technology are shown. On the right side of that
chart, the difference in CO2 emissions between the base test and the two recirculation tests are
provided. Based on this data, one of the recirculation tests does not show an improvement over
the baseline. If this single test were run for certification, no credit would have been earned for a
technology that clearly should provide a benefit. This shows the importance of running multiple
repeats when demonstrating the benefits of these technologies. The second chart below shows
that when multiple baseline and "with technology" tests are averaged and compared, the benefit
of the recirculation technology is seen and can be quantified. This shows that reliance upon one
test point may not adequately demonstrate an accurate credit level, nor does it allow for
acceptable credit planning assessments. Without the ability to reliably estimate credit levels
during the planning process, decisions to introduce these beneficial technologies will be
jeopardized. [EPA-HQ-OAR-2010-0799-9463-A1, p. 11]
For certification, the concept of comparison testing a vehicle containing the A/C new technology
with a similar "baseline vehicle" without the technology will be difficult to accomplish in
practice. When manufacturers introduce new A/C technology, these changes typically take place
when other updates are being made to the vehicle. As a result, a comparison of the older baseline
vehicle to the new vehicle may be influenced by factors other than simply the A/C system
changes. In general, it is also not rational to test a vehicle with the A/C technologies deactivated
as a baseline. In many circumstances this is impossible, or would require a great deal of effort to
accomplish, and would not be optimized for performance. Therefore, it may be difficult to
identify reasonable baseline vehicles, especially given the large number of tests that are proposed
to be required for each model year. In the interest of validating menu levels, a more limited
number of comparison tests should be conducted to evaluate the different A/C technologies, with
multiple test runs to statistically verify results. This could be done as a research program using
industry and agency data collected prior to 2017 MY. Once that work is complete, we
3-51
-------
EPA Response to Comments
recommend that credit levels be awarded on the basis of that validated menu (similar to the
current process, as well as the proposed off-cycle pre-approved technology list). Additional
testing should then be limited to survey or confirmatory purposes or for the evaluation of new
technologies. [EPA-HQ-OAR-2010-0799-9463-Al, p. 13]
Ford believes the testing burden associated with the new requirements is excessive, as proposed.
EPA acknowledges that the AC 17 test requires a significant amount of time, using expensive
SC03-capable facilities, and therefore suggests this testing should be conducted on a limited
subset of vehicles. The proposal indicates that one vehicle (plus the baseline) per platform must
be tested. Based on the proposed platform definition, this is problematic because each platform is
required to have a common body floor plan, chassis, engine and transmission. Ford's product
line-up would result in an extremely large number of required tests. For example, using the
proposed definition on Ford's 2012 MY line-up would result in up to 63 platforms. For 2013
MY, the number of platforms increases to 66. We do not expect elements like powertrain and
transmission to have any significant impact on the benefits of the A/C technologies and therefore
believe the scope of the platform definition should be narrowed. If testing requirements are
determined on a platform-basis, we agree with the definition proposed in the Alliance comments,
included below for reference: [EPA-HQ-OAR-2010-0799-9463-A1, p. 13]
Platform means a group of vehicles within an OEM which has a degree of commonality in
construction (e.g., body, chassis). Platform does not consider the model name, brand or
marketing division, does not consider any level of decor or opulence and also does not consider
characteristics such as roof line, number of doors, seats, or windows. A platform may include
vehicles from various fuel economy classes, including both cars and trucks. [EPA-HQ-OAR-
2010-0799-9463-A1, p. 13]
Using this updated definition would reduce Ford's platform counts to 10 and 9 for the 2012 and
2013 MYs, respectively, which is much more reasonable than the number that would be required
using the definition proposed in the NPRM. [EPA-HQ-OAR-2010-0799-9463-Al, p. 13]
Ford also requests the option of allowing manufacturers to use additional instrumentation for
collecting PCM and other A/C control data during the AC 17 testing to study parameters and
better understand what occurs during the test. This should be an allowable option, but not a
requirement for recording or reporting. [EPA-HQ-OAR-2010-0799-9463-Al, p. 13]
Ford also supports all of the suggested technical corrections and recommended test procedure
and tolerance updates to the Idle Test and AC17 Procedures in sections 40 CFR § 86.165-12 and
§ 86.167-17, as detailed in the Alliance comments. [EPA-HQ-OAR-2010-0799-9463-A1, p. 14]
To summarize, Ford believes the inclusion of the new AC 17 test is a major step in the right
direction for helping to quantify A/C technology benefits. As indicated by the above comments,
additional work remains to resolve various technical and logistical issues for using this test to
validate credit levels. Ford is committed to continuing our cooperative work with industry and
the agencies to make the use of this test a success and allow for proper credit achievement with
planning certainty. As that development work continues, we urge the agencies not to finalize a
rule that will establish overly burdensome test requirements or thresholds for achieving
5-52
-------
Air Conditioning System Credits
maximum credit levels that have not yet been fully proven out. [EPA-HQ-OAR-2010-0799-
9463-A1, p. 14]
Organization: Guardian Automotive Products, Inc.
Guardian advocates migration toward incorporation of AC load into drive cycles or test
procedures which can be determined to produce reasonable correlation with real world
performance. While credits are a good first step to recognizing the untapped benefits of heat load
reduction, the reality is that the imposed caps and generality of credits may not allow full
recognition of the potential benefit. Nonetheless, the proposed AC 17 test cycle appears to be a
step in the right direction. Sun lamps in test chambers do not represent an ideal duplication of
real world solar load; however, they are perhaps the best available compromise given the
difficulty of establishing a repeatable outdoor test. Guardian offers the following specific
comments regarding the proposed AC 17 cycle: [EPA-HQ-OAR-2010-0799-9299-A1, p. 2]
• The solar soak period time should be increased from 30 minutes to 40-45 minutes. Thermal
modeling of various passenger vehicles with RadTherm software demonstrates that at 30 minutes
there is still in many cases a fairly steep slope of cabin temperature increase. This slope tends to
taper only after about 45 minutes. [EPA-HQ-OAR-2010-0799-9299-Al, p. 2]
• We understand the rationale behind the proposed test condition of a 72 degree set point for
automatic climate control systems left to operate during testing in fully automatic mode.
However, we have concerns regarding the proposed control logic for manual systems. Any
protocol selected for manual systems should be verified by testing a similar or same vehicle
configuration equipped with an automatic system to ensure that the manual system results are
similar to those of the automatic system. Regarding the proposed manual system procedure,
Guardian agrees that the test should begin at full output with recirculation and that at some
reasonable time period the fan speed should be moderated. We also agree that the recirculation
mode should be defeated after the vehicle attains a comfort level, but this adjustment point
should be triggered by internal cabin temperature and not a set time period. Using the
temperature control to moderate air supply temperature seems flawed as most manual
temperature controls when in fresh air mode moderate supply temperature by adjusting a mixing
damper to introduce partial reheat through the heating coil. This will not necessarily result in a
true reduction of AC load or, therefore, measurement of the attainable efficiency. The AC
compressor in most systems will cycle based on evaporator coil temperature or humidity level.
Introducing mixed air will ultimately increase evaporator sensible load to remove the reheat
energy resulting in a poor measure of any heat load reduction improvement as the compressor
will not shut off as often as was possible without reheat. In this scenario, any technology which
reduces heat load in the cabin will trigger an operator response to increase the temperature
setting which will simply increase the amount of reheat energy. Guardian suggests that for the
above reasons the temperature control must remain in the full cold position during the test cycle
and cooling air supply should only be regulated via fan speed. The fan speed should be adjusted
as required at intervals to hold an interior temperature. Furthermore, Guardian suggests that the
adjustment should be based on a cabin temperature reading near one of the headrests rather than
3-53
-------
EPA Response to Comments
the supply air temperature at a duct outlet since this will be the control input temperature for an
actual driver. [EPA-HQ-OAR-2010-0799-9299-A1, pp. 2-3]
Organization: Honeywell International, Inc.
Consequently, the agencies propose to require manufacturers to use the new Air Conditioning,
2017 ('AC 17') tests to demonstrate that new or improved A/C technologies actually result in
efficiency improvements, while continuing to use the menu-style approach to determine credits
and fuel consumption improvement values. [EPA-HQ-OAR-2010-0799-9497-A1, p.9]
Honeywell agrees that a performance-based test is preferable to the proposed menu-style
approach because it could quantify more accurately the degree of improved efficiency resulting
from an A/C system, thus providing a more precise measurement of GHG emissions reduction
and CAFE fuel consumption value. Honeywell believes that by locking in the vehicle menu
approach for the next 13 years, EPA and NHTSA could prevent the use of new and improved
performance tests developed during the life of the Proposed Rule. Although EPA and NHTSA
are obligated to conduct a separate rulemaking for MY 2022-2025 standards, Honeywell
maintains that the proposed midterm review is still too far into the future to exclude new
performance tests and recommends providing opportunity for more frequent updating in the final
rule. [EPA-HQ-OAR-2010-0799-9497-A1, p.9]
Honeywell offers that EPA and NHTSA should not require manufacturers to use the AC 17 test
to demonstrate the effectiveness of their A/C efficiency technologies until that test has been
thoroughly evaluated. It is our understanding that EPA and NHTSA propose the use of the four-
part AC 17 performance-based test to quantify efficiency improvements as a prerequisite for
access to the credit menu. However, EPA and NHTSA note that they are not proposing to replace
the credit menu with the AC 17 test because the test 'is still being evaluated.' Although
Honeywell generally prefers the use of a performance-based test when practicable, Honeywell
discourages the required use of a new test until the agencies can verify the test's accuracy and
reliability. Honeywell suggests that EPA and NHTSA either conduct more frequent reviews or
develop a method to evaluate industry suggestions for potential performance tests and to
incorporate them as they deem appropriate. [EPA-HQ-OAR-2010-0799-9497-A1, pp.9-10]
Honeywell Agrees with the Use Of SAE Standard J 2765 to Establish the Credit for Improved
Evaporators and Condensers, which EPA Required Specifically for MY 2012-2016 Vehicles, and
Suggests that EPA Expressly Require Its Use for MY 2017-2025 Vehicles as well [EPA-HQ-
OAR-2010-0799-9497-A1, p. 10]
EPA and NHTSA propose an A/C Efficiency Credit for the use of improved evaporators and
condensers. EPA and NHTSA state in the TSD that the credit will be based upon SAE Standard
12765 - Procedure of Measuring System Coefficient of Performance of a Mobile Air
Conditioning System on Test Bench Honeywell agrees that Standard J 2765 is the appropriate
method for showing improvements in the energy efficiency and cooling capacity of systems.
EPA and NHTSA do not specify, however, in the Proposed Rule, as EPA did in final rule
establishing vehicle emissions and fuel economy standards for MY 2012-2016 vehicles, that the
credit for improved condensers and evaporators must be determined using the bench test
5-54
-------
Air Conditioning System Credits
procedures described in SAE 12765. To ensure compliance with this requirement, Honeywell
suggests that EPA and NHTSA specify expressly in the rule, in addition to the TSD, that the
credit shall be determined using the SAE 12765 bench test procedures. [EPA-HQ-OAR-2010-
0799-9497-Al,p.lO]
Honeywell proposes that EPA employ SAE Standard J 2765 for calculation of the oil separators
credit [EPA-HQ-OAR-2010-0799-9497-Al, p. 10]
EPA and NHTSA propose a credit for manufacturers if they prevent oil from circulating
throughout the A/C system due to inefficiencies resulting from heat transfer effectiveness.
Honeywell agrees that large amounts of oil circulating throughout the system can negatively
impact the efficiency of a system, but we disagree that adding an oil separator will necessarily
improve efficiency. For example, an improperly designed oil separator could negatively impact
the system's efficiency by restricting the flow of refrigerant through the device, resulting in
increased pressure losses. [EPA-HQ-OAR-2010-0799-9497-A1, p.10]
Relying on the SAE EVIAC team, EPA and NHTSA estimate a standard credit of 0.6 gram/mi
CC>2. Instead, Honeywell suggests that the efficiency improvements of oil separators can be
measured identically to evaporators and condensers by using SAE Standard 12765 - Procedure of
Measuring System CC>2 of a Mobile Air Conditioning System on a Bench Test. Using SAE
Standard 12765 will enable manufacturers to more accurately determine the overall efficacy and
resulting credit of their component technology. [EPA-HQ-OAR-2010-0799-9497-A1, p. 11]
Organization: Hyundai America Technical Center
However, Hyundai has concerns with the new AC 17 A/C test procedure that allows
manufacturers to evaluate potential credits for A/C efficiency improvements. Since the new
AC 17 test procedure has not yet been fully developed, Hyundai recommends that EPA retain the
idle test as an option until the AC 17 procedure has been proven to be reliable rather than
requiring the use of AC 17 procedure beginning in 2017. [EPA-HQ-OAR-2010-0799-9547-A1,
p.6]
2) Hyundai questions the requirement that automakers conduct back-to-back tests with and
without the credit-generating technologies to determine potential credits. There may be a number
of scenarios which make it impossible to test without the credit-generating technologies,
particularly on a full model changeover. For this reason and for consistency, the baseline vehicle
should be clearly defined. Unless the baseline is defined, some manufacturers could be
comparing their new A/C technologies against a highly efficient system and generate minimal
credits while another could be comparing against a less efficient system and show greater
improvement. Hyundai supports the recommendation made in the Global Automaker's comments
which would be to rely on the Society of Automotive Engineers (SAE) Interior Climate Control
Committee to determine the appropriate baseline A/C systems and address any test procedure
concerns prior to implementation of requirements. [EPA-HQ-OAR-2010-0799-9547-A1, p.7]
Organization: International Council on Clean Transportation (ICCT)
3-55
-------
EPA Response to Comments
ICCT also supports combining the menu of credits for specific A/C technologies with
manufacturer performance testing to justify application of these credits. Creating a menu of
credit values will help quantify emission reductions for components/technologies that may be
hard to quantify through testing individually, while performance testing will verify that an
effective overall package meets the minimum threshold for improvement and achieves the
claimed emissions reductions. We encourage US EPA's continued work to improve the A/C test
procedures in parallel with the rulemaking effort. [EPA-HQ-OAR-2010-0799-9512-A1, p. 37]
We note that the USEPA/NHTSDA November 2011 draft TSD (page 5-51) suggests that only
one or two vehicles per year may be tested per manufacturer on average. Given the wide range of
changes in new product offerings, engine technology, A/C system operations, and alternative
refrigerants, we believe that each significantly changed model should be tested. We recommend
deleting this statement in the final TSD. [EPA-HQ-OAR-2010-0799-9512-A1, pp. 37-38]
Organization: Kia Motors
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 101-102.]
Kia supports the use of A/C menu for determining air conditioning system credits but supports
an increase in the maximum amounts of credits permitted if we were able to demonstrate an
emission reduction greater than the items provided in the menu. However, since the new AC 17
test procedure has not yet fully been developed, Kia recommends that EPA retain the idle test as
an option until the AC 17 has been proven to be more reliable rather than requiring the use of the
AC 17 procedure at the beginning of 2017.
Organization: Mercedes-Benz USA, LLC
In particular, we endorse the concept of reviewing the A/C idle values with regard to small
displacement engines, where fuel consumption improvements may be less visible during idling.
With regard to the proposed A/C 17 test, DAG is concerned that the test conditions do not reflect
typical, or even moderately elevated, A/C loads. For example, a 2008 German study of vehicles
in over 3200 counties in the United States found that the average solar load in the U.S. is below
350 W/m2 rather than the 850 W/m2 . DAG is concerned that, given these more typical loads,
the most effective ways to reduce annual MAC fuel consumption may not be recognized or
evaluated through the proposed A/C 17 test procedure.6 [EPA-HQ-OAR-2010-0799-9483-A1, p.
A-3]
DAG has a number of additional suggestions with regard to the proposed test procedures. These
include wider tolerances for the climate parameters during the soak period, as it is difficult to
maintain temperature and humidity within the proposed tolerances. A wider tolerance range can
be provided without impacting results. A wind speed lower than 4 mph should also be
established since such a wind speed would improve the accuracy of the exhaust gas
measurement. Drive cycle definitions should also be consistent with currently used cycles to
retain accuracy and reduce failures. Correction factors should be applied to retain accuracy. First,
a correction factor is necessary to overcome the fact that fuel consumption from the MAC
5-56
-------
Air Conditioning System Credits
system is calculated as the difference between two measured values that are approximately an
order of magnitude larger than the MAC fuel consumption value. Second, the expected
efficiency differences related to technical measures, component enhancements and refrigerant
circuit optimization would fully be hidden by the effect of ambient and operating conditions
deviations. Therefore, correction factors are needed to recognize ambient enthalpy, system
settings and driving variations. We also propose that the HVAC system be adjusted at the
beginning of the preconditioning stage of the MAC test cycle, that target temperatures be defined
to meet the target temperature and mass air flow values, that A/C recirculation be allowed if
recirculation is the default, and that the settings of all vent flaps be specified. [EPA-HQ-OAR-
2010-0799-9483-A1, p. A-3]
Rather than attempting to correlate the cabin volume and the cabin temperature level during the
test, DAG suggests that a correction factor be deduced based on vehicle size and later applied to
the measured MAC fuel consumption. This would allow consideration of vehicle cabin sizes and
allow all vehicles to be tested with the same MAC settings. Finally, we suggest that the Tts value
for each glazing plane be calculated in accordance with ISO 13837. This allows glazing quality
and angle to be accounted for in the Tts value. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-4]
We look forward to working with the agencies as the A/C 17 test procedure is further refined and
fully support the effort to promote more efficient MAC systems. [EPA-HQ-OAR-2010-0799-
9483-A1, p. A-4]
6 We are also concerned about unacceptable work place conditions for the test bench personnel
due to solar radiation during that portion of the MAC test conducted with the A/C off. We
therefore recommend that the MAC test be conducted without solar radiation during both the
A/C off and the A/C on portions of the test.
Organization: Mitsubishi Motors R&D of America, Inc. (MRDA)
Recommends the AC 17 test on a reporting only basis to verify air conditioning (A/C) efficiency
improvements as an option in MYs 2014 through 2016, and after MY 2016, as a replacement for
the A/C Idle test. [EPA-HQ-OAR-2010-0799-9507-A1, p.2]
Organization: Pittsburgh Glass Works (PGW)
3. PGW supports the proposal to add the AC 17 test procedure to enable an actual measurement
of the impact rather than a model-based calculation. PGW recommends certain minor
modifications to the proposed AC17 test procedure. The AC17 test procedure calls for a 30
minute soak. PGW recommends a 45 minute soak to better account for "real world" conditions.
Cabin temperature after 30 minutes is still deviating between cars with heat load technologies
compared to those without. In addition, solar lamps located overhead do not necessarily provide
adequate simulation of real world conditions where the sun moves across the horizon over the
day. The heat load in the mornings and evenings can be very different from the mid-day sun.
3-57
-------
EPA Response to Comments
Therefore, PGW recommends that test chambers be modified to include solar lamps on the sides
as well as above the vehicle. Finally, the test procedure for cars with manual air conditioning
should be modified to require changing the air flow with the cabin temperature rather than
temperature of the vent air. A simple procedure could be to measure air temperature at a few
locations (three at a minimum - driver breath, passenger breath, and rear seat breath) and use that
air temperature to control the air conditioning system. This would be a better simulation of the
actual air conditioning use by a consumer. [EPA-HQ-OAR-2010-0799-9300-A1, pp. 2-3]
Organization: Toyota Motor North America
Air Conditioning (A/C) Efficiency Credits [EPA-HQ-OAR-2010-0799-9586-A1, p. 13]
Idle Test Thresholds - EPA has proposed to modify the Idle test thresholds from a flat threshold
to a function of engine displacement. Toyota recommends that an additional threshold be
considered for dual A/C systems. Under the proposed threshold, it will be difficult for a dual A/C
system employing state of the art high efficiency technology to comply. Toyota recommends that
the threshold for vehicles equipped with dual A/C systems be increased to a value of 19
g/minute. [EPA-HQ-OAR-2010-0799-9586-A1, p. 13]
AC 17 Test General- Toyota appreciates EPA's flexibility in allowing manufacturer's to run the
AC 17 test for 2014-2016 model years as a reporting option, in lieu of the Idle test requirements-
while still allowing credits to be generated from the menu. However, EPA has proposed AC 17
testing be required to generate credits starting with the 2017 model year. Toyota remains
concerned with the proposed AC 17 test because its complexity will require 8 hours from set-up
to completion. In addition, the proposed AC 17 testing for 2017 model year requires testing in
each year and on each platform that would receive credit, which would quickly create an
inordinate test burden. In order to reduce this burden, Toyota requests that EPA consider
flexibility when addressing carry over allowances, test group configurations, and testing
requirements. [EPA-HQ-OAR-2010-0799-9586-A1, p. 14]
Technical Recommendation -Toyota supports the corrections and clarifications provided in the
Alliance comments. In addition- per AC17 test procedure §86-167-17 (e)(2) regarding manual
A/C systems, a manufacturer must manually adjust the airflow setting to 'outside-air' at the first
idle period of the SC03 drive cycle, even if the airflow setting is automatically set to
"recirculated-air" by systems having automatic recirculation control technology. Toyota requests
to add the option that if the system is equipped with automatic recirculation control- then it is
not necessary to change the airflow setting to 'outside-air' at the first idle period of SC03 drive
cycle in AC 17 test. Toyota thinks this recommended option would be consistent with EPA's
current consideration for A/C systems. As an example, EPA currently allows 'default to
recirculated air with closed-loop control of the air supply whenever the outside ambient
temperature is 75F or higher' as an efficiency improvement to current A/C systems. [EPA-HQ-
OAR-2010-0799-9586-A1, p. 14]
Organization: Volkswagen Group of America
CREDITS FOR EFFICIENCY IMPROVEMENTS
5-58
-------
Air Conditioning System Credits
Volkswagen disagrees with the agencies modifications to the credit levels available for
efficiency improvements within the 2017-2025 proposal. Previously in 2012-2016, both cars and
trucks were eligible for up to 5.7 g/mi CC>2 credit. Within this proposal, the agencies have
decreased the maximum level of car credit to 5.0 g/mi and increased the maximum truck credit to
7.2 g/mi. Volkswagen understood that it was the intention of the agencies to continue the base
flexibilities from 2012-2016 into the 2017-2025 timeframe. The decrease in passenger car and
increase in truck credits contrasts with this understanding. [EPA-HQ-OAR-2010-0799-9569-A1,
p. 30]
It is Volkswagen's position that A/C loading is a function of vehicle attributes rather than
compliance category. Vehicle mass, interior volume, glazing, etc will determine loading
requirements and the effects of efficiency improvements rather than whether the vehicle is a car
or truck. In some cases the exact same A/C system between related or similarly sized cars and
trucks. Improvements made to particular A/C system would then be integrated into both the car
and truck at the same point in production. [EPA-HQ-OAR-2010-0799-9569-A1, p. 30]
Efficiency is a reduction in energy use which is independent of the type of vehicle. Trucks will
feature greater total lifetime CO2 reductions due to the expected higher VMT, however in terms
of rate (g/mi) there may not be any difference between cars or trucks. [EPA-HQ-OAR-2010-
0799-9569-A1, p. 30]
We simply fail to see enough technical evidence to broadly apply a 2.2 g/mi difference,
especially for two vehicles in different categories which have the same A/C system. Volkswagen
proposes that the maximum credit levels for cars and trucks are equalized at 7.2 g/mi. As an
alternative, an average g/mi reduction could be calculated for the fleet as a whole and applied
equally for cars and trucks. [EPA-HQ-OAR-2010-0799-9569-A1, p. 30]
IDLE TEST CONDITIONS
As stated within the Alliance comments, the idle test procedure requires the air conditioning
system to be operated as if they were working at a high ambient temperature. Thus the air
conditioning system will work at maximum 'cool down' for a majority of the testing time. These
temperature conditions are unrealistic and prevent the test from reflecting efficiency gains
possible at moderate and light load. As demonstrated by the SAE/EVIAC study, the efficiency
improvements at moderate and light loads are 40% or more. The idle test conditions should be
adapted to include efficiency gains at moderate and light loads within the overall result. [EPA-
HQ-OAR-2010-0799-9569-A1, pp. 30-31]
Volkswagen maintains that there are significant test-to-test repeatability issues with the idle test
due to test cell influences (air movement, etc). Volkswagen requests that EPA provide more
clearly defined testing parameters to improve the repeatability of the test. Volkswagen has
conducted internal evaluations of the idle test and would welcome the opportunity to provide
input on how to improve the definition of these test parameters. [EP A-HQ-OAR-2010-0799-
9569-Al,p. 31]
3-59
-------
EPA Response to Comments
IDLE TEST ENGINE DISPLACEMENT FACTOR
EPA has included within the proposal an idle test threshold adjustment based on engine
displacement. Volkswagen supports the overall comments from the Alliance on the minimal
contribution of this change to the higher level goals of real world GHG reductions. Volkswagen
considers this option as a transitional provision until the AC 17 test will be used to quantify
MAC system efficiency. Volkswagen seeks to clarify that the optional use of this provision is at
the discretion of the manufacturer, e.g. by model type. [EPA-HQ-OAR-2010-0799-9569-A1, p.
31]
AC 17 TESTING AND VEHICLE SELECTION
Volkswagen fully supports the concerns over the complexity, length and therefore time and costs
to run the AC 17 test. Furthermore, there may be difficulties in establishing baseline results from
which to compare a vehicle equipped with a new A/C system. It is often the case that a new A/C
system will be integrated into a vehicle which has also undergone a significant refresh, or even a
complete redesign. In this case, it will be difficult to implement an 'old' baseline A/C system in a
'new' redesigned car in order to properly establish before/after results. Therefore Volkswagen
agrees with the alliance proposal to utilize the AC 17 test solely to validate menu credit amounts
and monitor progress. Another option would be to consider the possibility of establishing an
industry baseline value. [EPA-HQ-OAR-2010-0799-9569-A1, p. 31]
Volkswagen proposes the following definition of a 'vehicle platform' and to restrict the required
testing to a platform. [EPA-HQ-OAR-2010-0799-9569-A1, p. 31]
Platform means a group of vehicles within an OEM which has a degree of commonality in
construction (e.g., body, chassis). Platform does not consider the model name, brand or
marketing division, does not consider any level of decor or opulence and also does not consider
characteristics such as roof line, number of doors, seats, or windows. A platform may include
vehicles from various fuel economy classes, including both cars and trucks. [EPA-HQ-OAR-
2010-0799-9569-A1, p. 31]
Volkswagen supports the concept of eventually allowing the use of detailed simulation as an
accepted analysis tool in helping to determining credit levels. Simulation tools are broadly
applied within the vehicle development process and have proven valuable in both enabling faster
analysis and lower costs. We request EPA to consult with SAE in order to fully explore this
route. [EPA-HQ-OAR-2010-0799-9569-A1, p. 31]
Organization: Volvo Car Corporation (VCC)
VCC supports the use of the complete vehicle test cycle AC 17 instead of the A/C Idle ON/OFF
test, but would like to see a harmonization of the complete vehicle test cycle AC 17 (within the
US) and the European MAC efficiency test cycle. VCC proposes this to keep the number of tests
at a minimum because these tests are very resource demanding. [EPA-HQ-OAR-2010-0799-
9551-A2, p. 8]
5-60
-------
Air Conditioning System Credits
The new GHG regulations have led to substantial enhancements of several test procedures, all to
achieve more real and credible results. However, it is important that EPA and NHTSA, in
cooperation with CARB, also realize that these complex test procedures may result in excessive
costs for manufacturers. VCC therefore asks that EPA and NHTSA, in cooperation with CARB,
recognize that the SC03 test is a much more complex test format and requires a unique test
facility, and that manufacturers today have limited capacity. Consideration also should be given
to how critical these tests are, with a view to limiting the number of tests that are required, while
achieving quality results in order to identify the efficiency of AC systems. [EPA-HQ-OAR-
2010-0799-9551-A2, p. 8]
The AC 17 test is a long, expensive and complicated test, so it is essential that the number of tests
should be kept to a reasonable and manageable level. The AC 17 test takes approximately four
hours, which is eight times as long as the AC Idle test. The AC 17 test requires more technician
time to set up the elaborate instrumentation, and it requires SC03 climate-controlled test cells.
[EPA-HQ-OAR-2010-0799-9551-A2, p. 9]
For future technologies, VCC supports the utilization of a system bench test to measure energy
efficiency of an AC system. In future advanced technology vehicles, active AC cooling of the
battery pack could be necessary. Therefore, for this type of vehicle a complete vehicle test such
as the AC 17, could prove to be difficult to achieve the necessary repeatability, because it would
require keeping track of the environment of the battery pack during the test. [EPA-HQ-OAR-
2010-0799-9551-A2, p. 9]
VCC supports the new method for attaining efficiency credits. VCC thinks that the so-called
credit menu for energy efficient AC system components is somewhat misleading. VCC considers
that a combination of different technologies in the credit menu could give advantages or
disadvantages in AC system efficiency depending on how the combination is made. [EPA-HQ-
OAR-2010-0799-9551-A2, p. 9]
VCC's opinion is that the amount of credits should be a result of a suitable full vehicle test or
bench test. [EPA-HQ-OAR-2010-0799-9551-A2, p. 9]
Response:
EPA acknowledges the general support for a more comprehensive vehicle-based test for
generating A/C efficiency credits, AC 17, instead of the Idle Test. We also recognize the
manufacturer and industry concerns regarding the burden and accuracy of such a test. As such,
we have incorporated changes regarding ambient temperature and humidity tolerances the
environmental test chamber (see TSD Section 5.1.3.6). Modifications regarding the tolerances
for test cell ambient conditions on the Idle Test have been incorporated as well (see TSD Section
5.1.3.5). Regarding the burden of the AC17 test, we have implemented a program where a
maximum of one AC 17 test per vehicle platform will be required in a given model year, with the
ability to carry forward the AC 17 test result and A/C credits to future model years. We believe
that this revision addresses concerns about the number of tests that will need to be performed in
order to generate credits, while appropriately ensuring sufficient testing to confirm that new
3-61
-------
EPA Response to Comments
technologies are reducing CO2 emissions as expected. The details regarding the determination of
how many AC 17 tests a manufacturer will need to submit upon certification (see preamble
Section II.F.l.b.ii and HID and TSD 5.1.3.8).
In response to comments concerning the accuracy (and test-to-test repeatability) of the AC 17
test, EPA believes that our testing of production vehicles has shown that with proper control of
the test cell conditions, the AC 17 test cycle is capable of producing results that can demonstrate
differences in A/C load, which are then reflected in tailpipe CO2 emissions. Our analysis of these
test results is found in TSD 5.1.3.7. In addition, our memo to the docket (see Docket Number
EPA-HQ-OAR-2010-0799) describing the results of USCAR testing - in which the effect of
specific A/C technologies are evaluated relative to a baseline technology — also supports our
position that the AC 17 test is capable of quantifying the effect of efficiency-improving
technologies. While the USCAR test results may lack the number of repeat tests necessary to
establish a reduction in CO2 emissions, these preliminary and developmental results serve to
demonstrate that the effect of the efficiency-improving technologies is always in the direction of
lower A/C-related CO2 tailpipe emissions relative to a baseline technology.
In regard to comments which suggested different A/C system control settings or adjustment of
control settings based on actual interior temperature readings, we believe that such changes
would add complexity to the test and could result in greater test-to-test variability, as interior
temperatures can be airflow- and vehicle-dependent, and language to define precise, repeatable
positioning of vents (which would affect the interior temperature reading) is not feasible at this
time. As such, we are finalizing the A/C system control settings that were specified in the NPRM
(see TSD Section 5.1.3.6).
5-62
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
4. Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and
Fuel Cell Vehicles
Organizations Included in this Section
Alliance of Automobile Manufacturers
American Clean Skies Foundation (ACSF)
American Council for an Energy-Efficient Economy (ACEEE)
American Fuel and Petrochemical Manufacturers (AFPM)
American Honda Motor Co., Inc.
American Petroleum Institute (API)
Association of Global Automakers, Inc. (Global Automakers)
BMW of North America, LLC
Borg Warner, Inc.
Center for Biological Diversity
Center for Sustainable Systems, University of Michigan
Ecology Center
EcoMotors International, Inc.
Edison Electric Institute (EEI)
Electric Drive Transportation Association
Ferrari
Fisker Automotive, Inc.
Ford Motor Company
General Motors Company
Growth Energy
Honeywell Transportation Systems
Hyundai America Technical Center
Institute for Policy Integrity, New York University School of Law
International Council on Clean Transportation (ICCT)
Jackson, F.W.
Johnson Controls, Inc.
Magna E-Car Systems
Marz, Loren C.
Mercedes-Benz USA, LLC
Minnesota Department of Commerce
Mitsubishi Motors R&D of America, Inc. (MRDA)
Motor & Equipment Manufacturers Association (MEMA)
National Association of Clean Air Agencies (NACAA)
National Corn Growers Association et al.
National Propane Gas Association (NPGA)
National Wildlife Federation (NWF)
Natural Resources Defense Council (NRDC)
Nissan North America, Inc.
Northeast States for Coordinated Air Use Management (NESCAUM)
Pennsylvania Department of Environmental Protection
Pew Charitable Trusts
4-1
-------
EPA Response to Comments
Plant Oil Powered Diesel Fuel Systems, Inc.
Porsche Cars North America, Inc. (PCNA)
Renewable Fuels Association (RFA)
Securing America's Future Energy (SAFE)
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
South Coast AQMD
Tesla Motors, Inc.
Toyota Motor North America
U.S. Coalition for Advanced Diesel Cars
Union of Concerned Scientists (UCS)
United Automobile Workers (UAW)
Volkswagen Group of America
Volvo Car Corporation (VCC)
Weiner, L.
Organization: Alliance of Automobile Manufacturers
Automakers should not be required to account for utility GHG emissions. The proposed rule
indicates that the agencies expect electric vehicles to become an increasingly large part of the car
park. Yet the rule leaves open the possibility of requiring manufacturers to account for upstream
emissions from electricity generation in the event that the Administration is unable to control
these emissions through other channels. In other words, automakers may now be called on to not
only make an unprecedented investment into vehicles with lower GHG emissions, but to also fill
the void between this rulemaking and a comprehensive national energy policy. If Americans
agree that programs to address upstream GHG emissions are appropriate, then such programs
should be put in place through appropriate regulation of electricity generators, not by imposing
additional burdens on vehicle manufacturers. [EPA-HQ-OAR-2010-0799-9487-A1, pp.4-5]
Dual Fuel Plug-In Hybrid Electric Vehicles (PHEVs) [EPA-HQ-OAR-2010-0799-9487-A1,
p.68]
The Alliance supports the continued use of the Society of Automotive Engineers (SAE) cycle-
specific utility factor approach for PHEV compliance and label emissions calculations. This
utility factor approach provides a method for predicting the fractions of total distance driven in
each mode of operation. In this case the modes of operation would be wall electricity from the
grid or conventional liquid fuel such as gasoline. [EPA-HQ-OAR-2010-0799-9487-A1, p.68]
Automakers Should Not be Required to Account for Utility GHGs. [EPA-HQ-OAR-2010-0799-
9487-A1, p.76]
EPA requests comments on several aspects of its proposal regarding accounting for the carbon
emissions from the use of electricity. These include the conversion process, tons accounting, a
phase out, costs, the timing, etc. The Alliance strongly recommends that all upstream carbon
emissions from the use of electricity be quantified as zero for the purposes of automotive GHG
emissions regulations. This should be the case for all model years and for all vehicle volumes.
[EPA-HQ-OAR-2010-0799-9487-Al,p.76]
4-2
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
In the NPRM, EPA notes, [EPA-HQ-OAR-2010-0799-9487-A1, p.76]
The tailpipe GHG emissions from EVs, PHEVs operated on grid electricity, and hydrogen-fueled
FCVs are zero, and traditionally the emissions of the vehicle itself are all that EPA takes into
account for purposes of compliance with standards set under Clean Air Act section 202(a).
[EPA-HQ-OAR-2010-0799-9487-Al,p.76]
The Alliance agrees with this statement and further notes that EPA should, in fact, maintain this
same logic when dealing with current and future GHG emissions. [EPA-HQ-OAR-2010-0799-
9487-A1, p.76]
EPA further states, [EPA-HQ-OAR-2010-0799-9487-A1, p.76]
Focusing on vehicle tailpipe emissions has not raised any issues for criteria pollutants, as
upstream emissions associated with production and distribution of the fuel are addressed by
comprehensive regulatory programs focused on the upstream sources of those emissions. At this
time, however, there is no such comprehensive program addressing upstream emissions of
GHGs, and the upstream GHG emissions associated with production and distribution of
electricity are higher, on a national average basis, than the corresponding upstream GHG
emissions of gasoline or other petroleum based fuels. [EPA-HQ-OAR-2010-0799-9487-A1,
p.76]
Again, the Alliance maintains that simply because EPA does not currently regulate upstream
emissions at the source, this is not reason enough to inappropriately attempt to control them via
automakers. Clearly automakers have no control over the feedstock's that power plants use to
create electricity, nor do we have control over the conversion or transportation processes, or
where and when a vehicle owner recharges a vehicle. [EPA-HQ-OAR-2010-0799-9487-A1,
pp.76-77]
Further, EPA states, [EPA-HQ-OAR-2010-0799-9487-A1, p.77]
Manufacturers are unlikely [to invest in PHEVs and EVs] if vehicles with these technologies are
treated for compliance purposes to be no more advantageous than the best conventional hybrid.
[EPA-HQ-OAR-2010-0799-9487-Al,p.77]
EPA Data Supports the Alliance Position [EPA-HQ-OAR-2010-0799-9487-A1, p.77]
The agencies' own analysis and data prove that if upstream carbon emissions from electricity are
accounted for in automakers compliance calculations, a PHEV or EV costs three to four times
more than a strong hybrid for the same reduction benefit. While the Alliance is not indicating
agreement with the agency's analysis and data, we do believe it is helpful to use that analysis and
data to show how it supports the Alliance position. [EPA-HQ-OAR-2010-0799-9487-A1, p.77]
Table 3.12-1 of EPA's Draft Regulatory Impact Analysis (EPA RIA) shows several 2011 model
year vehicles with associated data. The table includes manufacturer, vehicle name, footprint,
unadjusted fuel economy, tailpipe CO2 and powertrain type. In addition to the data in this table,
4-3
-------
EPA Response to Comments
for select models, below we have also included the associated unadjusted electrical consumption
and the cost from other sources within the joint TSD and the EPA RIA. Finally, for the analysis,
we included data from a baseline small car (4-cycle, 6-speed at 41 mpg (216.8 g/mile)) from the
TSD for comparison purposes. [EPA-HQ-OAR-2010-0799-9487-A1, p.77] [For the table please
refer to EPA-HQ-OAR-2010-0799-9487-A1, p.77]
# Leaf mpg value is mpge [EPA-HQ-OAR-2010-0799-9487-A1, p.78]
** Costs from EPA documents below: [EPA-HQ-OAR-2010-0799-9487-A1, p.78]
P2 from Table 1.2-7 Costs for P2-Hybird Technology (pg 24 of 377 of the EPA RIA), large car
at 10% mass reduction [EPA-HQ-OAR-2010-0799-9487-A1, p.78]
PHEV40 from Table 1.2-9 Costs for Plug-in Hybrid Technology with 40 Mile EV Range, (pg 25
of 377 of the EPA RIA), small car at 15% mass reduction [EPA-HQ-OAR-2010-0799-9487-A1,
p.78]
EV75 from Table 1.2-10 Costs for Full Electric Vehicle Technology with 75 Mile Range, or
EV75, (pg 25 of 377 of the EPA RIA), small car at 10% mass reduction [EPA-HQ-OAR-2010-
0799-9487-A1, p.78]
PSHEV from Table 3-46 Costs for Power-Split Hybrids, small car [EPA-HQ-OAR-2010-0799-
9487-A1, p.78]
* 260 w-hr/mi is back-calculated from pg 294 of 893, 'example, as shown in the Regulatory
Impact Analysis, today's Nissan Leaf EV would have an upstream GHG emissions value of 161
grams per mile based on national average electricity' [EPA-HQ-OAR-2010-0799-9487-A1, p.78]
* 251.9 Whr/mi is the unadjusted combined electric consumption rate for the Volt as report in
certification documentation for the 2011MY Chevrolet Volt [EPA-HQ-OAR-2010-0799-9487-
Al,p.78]
From this EPA data, a "grams per unit" benefit (with the 0.0 g/mile incentive in place) can be
calculated, compared to the baseline, for each technology. For example, to improve the
performance of his fleet, if a manufacturer chose to replace a baseline small car in its fleet with
an EV75, it would replace a 216.8 g/mile unit with a 0.0 g/mile and have a 216.8 g/unit benefit.
Similarly, if the manufacturer chose to replace the baseline car with a P2HEV, the benefit would
only be 46.5 g/unit (216.8-170.3). [EPA-HQ-OAR-2010-0799-9487-A1, p.78]
Further, by dividing EPA's cost by the calculated gram per unit benefit, we can determine the
cost per gram of improvement for the manufacturer's potential choices. For example, while
replacing a baseline small car with an EV75 gains the manufacturer 216.8 g/unit of benefit, it
comes at a cost of $57.7/gram ($12,508/216.8). It is interesting to note, before moving on to
these same calculations without the 0.0 g/mile upstream incentive in place, that a PSHEV (i.e., a
strong hybrid that does not use grid electricity) is more effective on a $/gram basis than either
PHEV40 or anEV75. [EPA-HQ-OAR-2010-0799-9487-A1, p.78]
4-4
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
The next step in the analysis is to determine both the gram/unit and $/gram values for both the
PHEV40 and EV75 if the 0.0 g/mile upstream emissions incentive is removed and automakers
are required to account for power plant emissions. EPA outlines how this calculation is to occur,
proposing a 4-step methodology for calculating the GHG emissions compliance value for vehicle
production in excess of the cumulative production cap for an individual automaker.6 For
example, for an EV in MY 2025, this methodology would include the following steps and
calculations: [EPA-HQ-OAR-2010-0799-9487-A1, p.78]
Measuring the vehicle electricity consumption in watt-hours/mile over the EPA city and highway
tests (for example, a midsize EV in 2025 might have a 2-cycle test electricity consumption of
230 watt-hours/mile). [EPA-HQ-OAR-2010-0799-9487-A1, p.78]
Adjusting this watt-hours/mile value upward to account for electricity losses during electricity
transmission (dividing 230 watt-hours/mile by 0.93 to account for grid/transmission losses yields
a value of 247 watt-hours/mile). [EPA-HQ-OAR-2010-0799-9487-A1, p.79]
Multiplying the adjusted watt-hours/mile value by a 2025 nationwide average electricity
upstream GHG emissions rate of 0.574 grams/watt-hour at the power plant (247 watt-hours/mile
multiplied by 0.574 grams GHG/watt-hour yields 142 grams/mile). [EPA-HQ-OAR-2010-0799-
9487-A1, p.79]
Subtracting the upstream GHG emissions of a comparable midsize gasoline vehicle of 39
grams/mile to reflect a full net increase in upstream GHG emissions (142 grams/mile for the EV
minus 39 grams/mile for the gasoline vehicle yields a net increase and EV compliance value of
103 grams/mile). Using this methodology and the data in table 3.12-1, a g/mile value without the
0.0 g/mile upstream emissions incentive for both the Volt and Leaf can be determined. The
Leafs compliance value without the 0.0 g/mile upstream emissions incentive is 121.5 g/mile
while the Volt's is 141.3 g/mile. [EPA-HQ-OAR-2010-0799-9487-A1, p.79] [For the table
referenced please refer to EPA-HQ-OAR-2010-0799-9487-A1, p.79]
Applying the same gram/unit and $/gram values for both these values for Leaf and the Volt
results in: [EPA-HQ-OAR-2010-0799-9487-A1, p.80]
Model Year Vehicle Grams/unit benefit NO 0.0 $/gram NO 0.0
2011 Small Car
2011 Leaf 95.3 131.3
2011 Volt 75.4 155.0 [EPA-HQ-OAR-2010-0799-9487-A1, p.80]
On a dollars per gram of benefit basis, using EPA's own data, an EV75 or PHEV40 costs three to
four times as much as a strong hybrid (i.e., $43. I/gram for a strong hybrid versus $131.3/gram
for an EV75). Automakers are businesses, and with the 0.0 g/mile upstream electricity emissions
incentive, an EV75 or PHEV40 make only marginal business sense. Without the zero upstream
emissions factor, both an EV75 and a PHEV40 - all PHEV/EV variants for that matter - make no
business sense. The Alliance strongly recommends that EPA finalize the 0.0 g/mile
4-5
-------
EPA Response to Comments
quantification incentive for the purposes of automotive GHG emissions regulations, for all model
years, and for all vehicle volumes. [EPA-HQ-OAR-2010-0799-9487-A1, p.80]
Additional Comments Related to Upstream Emissions [EPA-HQ-OAR-2010-0799-9487-A1,
p.80]
The Agencies request comment on whether or not the 0.0 g/mile value should phase out
completely in MY 2022 or instead decay at half value or some other rate. They also ask for
comment regarding the 200,000 unit cap (or 300,000 if certain conditions are met) for MYs
2012-2016. Consistent with our above comments, upstream electricity emissions should be
counted at 0.0 g/mile for auto manufacturers for all years - MYs 2012-2025 - with no sales
volume limits. [EPA-HQ-OAR-2010-0799-9487-A1, p.80]
The entities with control over those emissions are the federal and state agencies that regulate
power plant operation and performance, the power companies that buy and sell power from
different energy sources, and the vehicle operators who decide when to recharge their vehicles —
not the manufacturers who produce the vehicles. Assigning upstream emissions factors to grid-
powered vehicles would be economically inefficient. The entity to regulate is the utility, not the
downstream user. [EPA-HQ-OAR-2010-0799-9487-A1, p.80]
Finally, making vehicle manufacturers responsible for emissions over which they have no
control is contrary to the Clean Air Act. Section 202(a) of the Act gives EPA authority to set
'standards applicable to the emission of any air pollutant from any class or classes of new motor
vehicles or new motor vehicle engines.' Upstream emissions are not emissions 'from' vehicles or
engines; they are emissions from power plants and other facilities involved in generating energy
used for many purposes, such as powering vehicles. And even if such legal authority existed,
with no sound method for assessing comparative upstream emissions effects from grid-powered
electric vehicles, and significant regional variations in upstream GHG emissions, the attribution
of upstream emissions impacts to grid-powered vehicles alone would be arbitrary, capricious and
an abuse of discretion. [EPA-HQ-OAR-2010-0799-9487-A1, p.80]
The Alliance supports the advanced technology volume multipliers as proposed in the NPRM.
[EPA-HQ-OAR-2010-0799-9487-Al,p.82]
In addition, the Alliance would support NHTSA's further evaluation of such multipliers, as their
inclusion in the NHTSA requirements would help to further harmonize the two programs. [EPA-
HQ-OAR-2010-0799-9487-A1, p.82]
Also, the agencies proposed minimum electric or equivalent all-electric range for the definition
of a PHEV for use of this advanced technology volume multiplier. The agencies specify that to
qualify, a PHEV must".. .be required to be able to complete a full EPA highway test (10.2
miles), without using any conventional fuel, or alternatively, have a minimum equivalent all-
electric range of 10.2 miles as measured on the EPA highway cycle." [EPA-HQ-OAR-2010-
0799-9487-A1, p.82]
The Alliance supports this metric and definition. [EPA-HQ-OAR-2010-0799-9487-A1, p.82]
4-6
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
Additional Attribute(s) for PHEV Incentive Multipliers [EPA-HQ-OAR-2010-0799-9487-A1,
p.82]
EPA requests comment on whether PHEV incentive multipliers should vary based on range or on
another PHEV metric such as battery capacity, or ratio of electric motor power to engine or total
vehicle power. [EPA-HQ-OAR-2010-0799-9487-A1, p.82]
Basing PHEV incentive multipliers on factors such as battery capacity or power has potential
unintended consequences. These types of metrics encourage manufacturers to install battery
capacity or power not demanded by customers thereby increasing vehicle costs. [EPA-HQ-OAR-
2010-0799-9487-A1, p.82]
Given the potential unintended consequences of adding additional attributes to determine PHEV
incentive multiplier credits, the Alliance recommends that a single multiplier be used for all
PHEVs. [EPA-HQ-OAR-2010-0799-9487-A1, p.82]
Dual Fuel Vehicle CAFE Calculations for MY 2020-2025 [EPA-HQ-OAR-2010-0799-9487-A1,
p.82]
EPA requests comment on several aspects of dual fuel vehicle CAFE calculations for MY 2020
and later, including how to weight alternative and conventional fuel use and whether to continue
use of the petroleum equivalency factor for PHEV equivalent fuel economy and the 0.15 divisor
for dual fuel vehicles. [EPA-HQ-OAR-2010-0799-9487-A1, p.82]
EPA proposes to weight dual fuel (but not flexible fuel vehicle) conventional and alternative fuel
use by applying the SAE-based utility factor approach. This approach equitably weights the
expected fuel use on conventional and alternative fuels based on national driving pattern surveys,
and is supported by the Alliance. [EPA-HQ-OAR-2010-0799-9487-A1, p.83]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 98.]
Second, the rule needs to fit into comprehensive energy policy. For instance, the proposed rule
indicates that the agencies expect electric vehicles to become an increasingly large part of the car
market; yet, the rule leaves open the possibility of requiring manufacturers to account for
upstream emissions — this is what Mike Robinson spoke about — from electricity generation in
the event that the Administration is unable to control these emissions through other channels. If
programs to address upstream emissions are needed, then let's put them in place with appropriate
upstream regulations, not by imposing additional burdens on automakers.
6 - Id. at 75014. The Alliance is using EPA's methodology only for the sake of analysis. The
Alliance is not stating it is in agreement with EPA's methodology. [EPA-HQ-OAR-2010-0799-
9487-A1, p.78]
4-7
-------
EPA Response to Comments
Organization: American Clean Skies Foundation (ACSF)
In the Proposed Rule, EPA plans to allow a '0 grams per mile' incentive to EVS. This incentive is
subject to certain per-manufacturer and industry-wide production caps. The decision to calculate
the upstream emissions of EVs at 0 grams per mile (g/mi) is combined with the above multiplier
incentive to create undue and discriminatory benefits for EVS. For the reasons stated above,
ACSF believes that the 0 g/mi incentive is inappropriate and it should be eliminated. The 0 g/mi
is anticompetitive and unnecessarily favors one class of lower carbon vehicle platforms at the
expense of others. [EPA-HQ-OAR-2010-0799-9464-A1, p. 11]
Organization: American Council for an Energy-Efficient Economy (ACEEE)
Treatment of EVs and PHEVs
ACEEE has previously expressed to the EPA its view that the treatment of EVs and PHEVs in
the GHG emissions program should be based on emissions performance, both to maximize
benefits of the rule and to help put plug-in vehicles on a sound environmental footing. Treating
EVs as zero-emissions vehicles allows unearned increases in emissions from gasoline vehicles,
thereby undercutting the GHG reductions achieved by the rule. We have also previously
recommended that, if some EVs are to be treated as zero-emissions vehicles in the 2017-2025
period, the number of such EVs should be capped at 2 million, based on considerations of annual
sales volumes and battery cost reductions. The caps on zero-emissions EV proposed in the
NPRM far exceed our recommendations. In fact, no cap is proposed for the period 2017-2020.
[EPA-HQ-OAR-2010-0799-9528-A2, p.8]
Most important, however, is that a zero-upstream treatment of plug-in vehicles not be continued
indefinitely, and that full upstream accounting be applied to these vehicles by a date certain.
EPA's proposed treatment of EVs largely accomplishes this, so we strongly support that aspect
of the proposal. [EPA-HQ-OAR-2010-0799-9528-A2, p.9]
Recommendations
• In calculating UFs for PHEVs, apply the appropriate shortfall to fuel economy test values
in charge-depleting mode. Use Fleet UFs, rather than the MDIUFs, for labeling purposes.
• Make UF values for PHEVs publically available, along with other fuel economy and
emissions performance data for individual vehicle models.
• Begin using UFs to calculate the fuel economy of PHEVs in 2017. EPA-HQ-OAR-2010-
0799-9528-A2, p.9]
Organization: American Fuel and Petrochemical Manufacturers (AFPM)
Compliance calculations should be transparent and should not include inappropriate incentives or
credits. [EPA-HQ-OAR-2010-0799-9485-A1, p.8]
EPA proposed temporary incentives for EVs, PHEVs, and FCVs for MYs 2017-2025 (76 FR
75012). The first is to allow EVs, plug-in hybrid electric vehicles (PHEVs, electric operation),
4-8
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
and fuel cell vehicles (FCVs) to use a GHG compliance value of 0 grams per mile, even though
upstream GHG emissions for electricity generated by a coal-fired powerplant without carbon
capture and sequestration or for hydrogen generation can be very high. The second proposed
alternative is a multiplier for all EVs, PHEVs and FCVs which would allow each of these
vehicles to "count" as more than one vehicle in the manufacturer's compliance calculation.
AFPM objects to these proposed temporary incentives as they distort real world impacts and
paint a false picture of the proposed fuel economy standards. [EP A-HQ-OAR-2010-0799-9485-
Al,p.8]
These proposed incentives are inappropriate and very misleading considering the current extent
of electricity generation by coal-fired powerplants without carbon capture and sequestration and
unknown processes for generating hydrogen. These proposed temporary incentives will not result
in a substantial reduction in lifecycle GHG emissions if recharging uses coal-fired powerplants
without carbon capture and sequestration. It is certainly not evident that hydrogen will be
produced on a low-carbon lifecycle basis. Conversion of fossil fuels like natural gas to produce
hydrogen results in carbon emissions until carbon capture and sequestration is commercialized
and deployed. [EPA-HQ-OAR-2010-0799-9485-A1, p.8]
Organization: American Honda Motor Co., Inc.
EPA requests comment the multiplier incentives, as proposed in Table III-15, for EVs, PHEVs
and FCEVs. Honda supports these multipliers. EVs, PHEVs and FCVs are expensive
technologies that hold promising environmental benefits. Honda generally supports incentives
that are proportionate to the benefits. Alternative fuel vehicles and advanced technologies face
unique challenges in coming to market; developing appropriate infrastructure and overcoming
initial consumer resistance to new, unfamiliar technologies. Incentives that are limited in time
and appropriately phased-out can help accelerate the introduction of these vehicles. [EP A-HQ-
OAR-2010-0799-9489-A1, p. 2]
EPA proposes to set the upstream portion of EVs, PHEVs and FCEVs to zero grams/mile. EPA
requests comments on this approach. Honda believes that EPA should separate incentives and
credits from the measurement of emissions. Honda believes that without accounting for the
upstream emissions of all fuels, inaccurate comparisons between technologies will take place.
Relying upon EPA's regulation, policy makers - in the U.S. and around the world - may make
unfavorable technology comparisons and set mis-directed policies as a result. [EPA-HQ-OAR-
2010-0799-9489-A1, p. 3]
A compelling example exists. According to DOE's GREET model, the upstream emissions of a
Toyota Prius are 46 grams/mile, and the tailpipe emissions are 198 grams/mile, for a total of 244
grams/mile. By contrast, the GREET model estimates the average upstream emissions of a
comparably sized Battery Electric Vehicle (BEV) are 256 grams/mile. Without commenting on
the merits of creating incentives for electric vehicles, it is clear that zero grams/mile for the BEV
would lead one to believe that BEVs have a clearly superior greenhouse gas profile compared to
similarly sized hybrid gasoline vehicles. [EPA-HQ-OAR-2010-0799-9489-A1, p. 3]
4-9
-------
EPA Response to Comments
EPA's regulations need to be comprehensive and transparent. By zeroing out the upstream
emissions, EPA is conflating incentives and credits with proper emissions accounting. In
discussions with EPA staff, the question of "double counting" arose. This argument points out
that electric power generation is under its own regulations, and including the upstream emissions
in this regulation would result in "double counting." Honda observes that upstream emissions are
necessarily correlated with the intensity-based emissions regulation of light duty automobiles. In
the case of petroleum refineries, significant increases in fuel economy on the part of automobile
manufacturers could result in a "windfall" for the refineries' if their tonnage caps were not
adjusted accordingly. These two arguments suggest that not only the upstream emissions of
electricity but the upstream emissions of all fuels ought to be included in EPA's
regulation. [EPA-HQ-OAR-2010-0799-9489-A1, pp. 3-4]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17,2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 116-118.]
Honda has long advocated for technology-neutral performance-based standards. These are
important principles for several reasons. First, technology-neutral is important because these
standards would be in place for more than a dozen years into the future. It is impossible to
predict the potential advances that would be made over this time in each and every technology.
Technology-neutral standards help to assure that favoritism in 2012 does not lead to failure in
2020. And just as importantly, each OEM will have different capabilities with respect to each
technology, and favoritism for a technology necessarily results in, intentionally or not, favoritism
for an OEM.
Secondly, performance-based standards are the best way to assure that regulations result in the
greatest advance possible for our social goals.
In the 2012 to '16 regulation EPA set the CO2 value for the electric portion of the plug-in electric
vehicles and battery electric vehicles to zero as an incentive for OEMs to bring these relatively
expensive vehicles to market. This incentive was capped both in terms of volume and timing.
These constraints have been weakened by their extension through 2025. Honda believes that this
policy is misguided and creates significant incorrect perceptions about the relative merits of
these technologies. We agree with most of the environmental community that the social benefits
must be understood and measured on a well-to-wheel basis. It is clear that there are no special
virtues to be associated with tailpipe greenhouse gas emissions if the well-to-tank emissions are
high.
Additionally, without a comprehensive well-to-wheel assessment of greenhouse gases, EPA and
others who rely on EPA's assessments will improperly favor or signal preferred technologies
rather than providing technology-neutral standards.
We think the solution to quantify well-to-wheel greenhouse gas emissions is already within the
government's grasp. The Department of Energy uses a respected, widely accepted model called
GREET, and the NGOs, academics and the federal government itself use GREET to model
policy choices when considering light-duty vehicles and their impact on the greenhouse gas
4-10
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
emissions. We believe it makes sense for EPA to adopt DOE's GREET model in order to
evaluate the well-to-wheel impact on various technologies.
EPA has solicited comments on its proposal for advanced technology multipliers as a means to
facilitate market penetration of the most advanced vehicle technologies as rapidly as possible.
Honda supports the proposed multipliers for EV, PHEV, and fuel cell technologies. EPA
requested comment on the idea of including natural gas vehicles in the technology multipliers.
Natural gas vehicles can reduce CC>2 as much as 25 percent simply through changing the fuel
from gasoline to natural gas. In addition, there is a new-found abundance of this clean domestic
fuel. Together these attributes mean it makes sense to include natural gas vehicles in the
advanced technology multiplier.
Organization: American Petroleum Institute (API)
While API has no comment on the stringency of the proposed fuel economy and CC>2 standards,
we are concerned that the proposal provides a number of incentives that appear to reflect an
attempt to pick winning and losing technologies in the marketplace, an action which could
potentially limit consumer choice and increase societal costs. [This comment can also be found
in sections 5.1 and 6 of this comment summary.] [EPA-HQ-OAR-2010-0799-9469-A1, p. 1]
Incentives for Electric Vehicles, Plug-in Hybrid Electric Vehicles, and Fuel Cell Vehicles—
EPA is proposing an extra credit incentive multiplier for CC>2 compliance purposes to promote
early market penetration for all electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs),
and fuel cell vehicles (FCV) sold in MY 2017 through 2021. EVs and FCVs would start with a
multiplier value of 2.0 in MY 2017, phasing down to a value of 1.5 in MY 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. The
multiplier is 1.0 for MY 2022-2025 vehicles. [EPA-HQ-OAR-2010-0799-9469-A1, p. 1]
For EVs, PHEVs (electricity usage) and FCVs, EPA is proposing to set a tailpipe-only CC>2
compliance value of 0 g/mi. Beginning from MY 2022, the 0 g/mi limit would only be allowed
up to a per-company cumulative sales cap, above which manufacturers would be required to
account for the net upstream GHG emissions for the electric portion of operation, using
accounting methodologies set out in the rule. [EPA-HQ-OAR-2010-0799-9469-Al, p. 1]
As EPA and NHTSA staff should be aware, the history of government agency efforts to dictate
the pace of technology development and utilization in the market place is usually unsuccessful,
to the detriment of US taxpayers and, ultimately, consumers. The recent bankruptcy filing of the
solar panel firm, Solyndra Corp after having received over a half billion dollars in US
government loan guarantees is one example.3 Continuation of a mandate to force the use of
millions of gallons of cellulosic biofuels (when the current production is zero) is another.4
EPA's faith that NOX adsorbers will be the predominant technology to meet the heavy-duty
diesel engine emissions standards is a third.5 The incentive to use an artificial 0 g/mi lifecycle
GHG value for EVs, PHEVs and FCVs and to count this value as much as twice for compliance
purposes for a period of time is potentially a fourth example. [EP A-HQ-OAR-2010-0799-9469-
Al,p.2]
4-11
-------
EPA Response to Comments
API opposed the use of multipliers and 0 g/mi lifecycle GHG scores for advanced technology
vehicles in comments filed on the corporate average fuel economy/GHG rulemaking for MY
2012 - MY 2016 passenger cars and light trucks, and our opposition remains unchanged.?
Ignoring the significant contribution of (and extensive compilation of published literature on)
upstream CO2 emissions from electricity generation, defies principles of transparency and sound
science and distorts the market for developing transportation fuel alternatives. It incentivizes the
electrification of the vehicle fleet with a pre-defined specific and costlyS set of technologies
whose future potential is not measured with the same well-to-wheels methodology against that of
advanced biofuels or other carbon mitigation strategies. Furthermore, when used in conjunction
with the car/light truck trading flexibilities proposed for the automakers, this incentive could
potentially yield unintended consequences that run counter to the intent of the rule to reduce
GHG emissions attributable to light-duty vehicles. [EPA-HQ-OAR-2010-0799-9469-A1, pp. 2-
3]
Although battery electric vehicles (BEVs) and hydrogen fuel cell vehicles (HFCVs) have zero
tailpipe emissions, they will have significant upstream emissions. Despite the proposed per-
company cumulative production cap on the numbers of BEVs and HFCVs that will qualify for
the zero emissions compliance incentive, the effect of ignoring upstream GHG emissions yields a
substantial incentive for these qualifying vehicles as we demonstrate below. [EPA-HQ-OAR-
2010-0799-9469-A1, p. 3]
Upstream emissions, coupled with the incentive multipliers described above, will allow well-to-
wheels (WTW) carbon dioxide equivalent (CC^e) emission rates for BEVs and HFCVs that are
clearly greater than the gasoline vehicles they would replace for model years 2017 to 2021, even
though they are counted as zero for compliance purposes. Even for model years 2022 to 2025,
neither BEVs nor HFCVs have a WTW emission rate markedly lower than the gasoline target.
These results, which are based on the published fuel economy performance and specifications
(i.e., footprint) of the Nissan Leaf (BEV) and Honda FCX Clarity (HFCV), are shown in Figures
1 and 2, respectively. Appendix A summarizes the details regarding the calculation of the
estimated WTW CC^e gram-per-mile emission rates shown in these figures, which reflect U.S.
average electricity emission rates and hydrogen produced from natural gas via steam methane
reforming. [Figures 1 and 2 can be found on p. 4 of Docket number EPA-HQ-OAR-2010-0799-
9469-AL] [Appendix A can be found on pp. 14-18 of Docket number EPA-HQ-OAR-2010-
0799-9469-A1] [EPA-HQ-OAR-2010-0799-9469-Al, p. 3]
Regulatory agencies should not be in the business of promoting investments and innovations in
government-selected technologies applied to government-selected vehicle categories. Regulators
should instead set broad, performance-based targets that reward innovation directed at achieving
outcomes, not the implementation of specific technologies. The market, via consumer choice,
should then be allowed to select the winners and losers. In short, the proposed 0 g/mi CO2
compliance values and multipliers for EVs, PHEVs and FCVs should be removed. [EPA-HQ-
OAR-2010-0799-9469-A1, p. 3]
Calculation of Upstream GHG Emissions
4-12
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
EPA argues that electricity and hydrogen can be produced from renewable resources with very
low carbon emissions (e.g., wind energy for electricity and use of that electricity for electrolysis
of water to H2). The contribution of these carbon-free electricity feedstocks (to the extent that
they are dedicated to the production of transportation fuels in the timeframe of the proposed rule)
should be calculated as a percent of their overall contribution to the electricity grid. [EPA-HQ-
OAR-2010-0799-9469-A1, p. 5]
EPA is requesting comment on the appropriate electricity upstream GHG emissions factor or rate
to use in future projections of EV/PHEV emissions based on the net upstream approach outlined
in the proposed rule. The Agency is proposing to use a CY 2025 nationwide average electricity
GHG emissions rate (power plant plus feedstock extraction, transportation, and processing) of
0.574 grams GHG/watt-hour, based on simulations with the EPA Office of Atmospheric
Program's Integrated Planning Model (IPM) in the calculation of upstream GHG emissions for
EVs and PHEVs. API concurs with the EPA's observation that there is significant regional as
well as temporal variation in the fuels and equipment used for electric power generation.
Consequently, a more robust analysis and representation of upstream electricity GHG emissions
that incorporates this regional and temporal variability is preferable if the ultimate objective is to
reflect real-world fuel usage patterns. [EPA-HQ-OAR-2010-0799-9469-A1, p. 5]
EPA notes that the emission factor for electricity was adjusted upwards by 6 percent in order to
properly capture GHG emissions associated with the feedstock gathering that occurs upstream of
the power plant. This adjustment apparently was based on the GREET Model Version l.S.c.O
and was carried over from the analysis used to support the MY 2012-MY 2016 Final Rule. 10
Using the most recent version of GREET (version 1_2011) yields an adjustment factor of 9.2%
for the average US electricity mix in calendar year 2020, calculated as shown in Appendix B of
these comments. However, this revised adjustment factor from GREET masks a wide range of
uncertainty in the underlying data used in the model - a fact recently acknowledged in print. 11 If
EPA continues to rely on GREET for upstream emissions calculations, this further heightens the
need for the Agency to conduct a more robust and rigorous analysis (as discussed above) to
increase confidence in the accuracy of the model results. [Appendix B can be found on p. 19 of
Docket number EPA-HQ-OAR-2010-0799-9469-A1.] [EPA-HQ-OAR-2010-0799-9469-Al, pp.
5-6]
• The government should not pick technology winners - Regulatory agencies should not promote
investments and innovations in government-selected technologies applied to government-
selected vehicle categories. Regulators should instead set broad, performance-based targets that
reward innovation directed at achieving outcomes, not the implementation of specific
technologies. The market, via consumer choice, should then be allowed to select the winners and
losers. The proposed production and compliance incentives - particularly those for plug-in hybrid
electric vehicles (PHEVs) full electric vehicles (EVs) fuel cell vehicles (FCVs) and dual-fueled
vehicles should be removed. [EPA-HQ-OAR-2010-0799-9469-A2, pp. 1-2]
• The proposal distorts the market and ignores real environmental impacts - Allowing plug-in
hybrid electric vehicles, full electric vehicles and fuel cell vehicles to certify to a 0 g/mi CC>2
standard does not properly reflect the full well-to-wheels contribution of these technologies to
the GHG inventory. By not counting the real contribution of upstream CC>2 emissions from
4-13
-------
EPA Response to Comments
electricity generation, the proposal distorts the market for developing transportation fuel
alternatives. The 0 g/mi CC>2 compliance values for EVs, PHEVs and FCVs should be dropped
from the proposal. [EPA-HQ-OAR-2010-0799-9469-A2, p. 2]
3 Bloomberg Business Week, Solyndra Files for Bankruptcy, Looks for Buyer, September 6,
2011, http://www.businessweek.com/ap/fmancialnews/D9PJ89JGO.htm [EPA-HQ-OAR-2010-
0799-9469-A1, p. 2]
4 US Environmental Protection Agency, EPA Finalizes 2012 Renewable Fuel Standards,
December 2011, http://www.epa.gov/otaq/fuels/renewablefuels/documents/420fl 1044.pdf [EPA-
HQ-OAR-2010-0799-9469-A1, p. 2]
5 http://www.epa.gov/otaq/highway-diesel/regs/ria-iii.pdf [EPA-HQ-OAR-2010-0799-9469-A1,
p. 2]
7 Isakower, K.B., American Petroleum Institute, November 24, 2009, Comments on the
Proposed Rulemaking to Establish Light Duty Vehicle Green House Gas Emission Standards and
Corporate Average Fuel Economy Standards, submitted to Dockets EPA-HQ-OAR-2009-0472
and NHTSA-2009-0059 [EPA-HQ-OAR-2010-0799-9469-A1, p. 2]
8 For instance, Table V-107 of the NHTSA Preliminary Regulatory Impact Assessment suggests
that the net accumulated cost of a Mid-Size Passenger Car EV (75 mile range) in MY 2025 is
anticipated to be $13,517 - exclusive of the incremental costs associated with expanding the EV
charging infrastructure. [EPA-HQ-OAR-2010-0799-9469-A1, p. 3]
10 EPA, NHTSA, Draft Joint Technical Support Document: Proposed Rulemaking for 2017-
2025 Light-Duty Vehicle Greenhouse Gas Emissions Standards and Corporate Average Fuel
Economy Standards, November 2011, p. 4-43 [EPA-HQ-OAR-2010-0799-9469-A1, p. 5]
11 Burnham, A. et al, Argonne National Laboratory, "Life-Cycle Greenhouse Gas Emissions of
Shale Gas, Natural Gas, Coal and Petroleum," Environmental Science & Technology, 2012,
46,619-627 [EPA-HQ-OAR-2010-0799-9469-A1, p. 5]
Organization: Association of Global Automakers, Inc. (Global Automakers)
EPA has proposed company specific caps on the 0 grams per mile emissions rate for electric and
fuel cell vehicles beginning with MY 2022. Global Automakers recommends that EPA
reconsider the need for these caps as part of the planned mid-term review of the standards. If
EPA decides to adopt company-specific caps, we recommend that it adopt a simple linear
function based on vehicle sales levels to establish the caps, rather than using the proposed two-
step approach. [EPA-HQ-OAR-2010-0799-9466-A1, p. 7]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 66-67.]
4-14
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
Advanced technology credit provides an incentive for manufacturers to continue to develop and
market these technologies which have the potential for substantial long-term improvements in
fuel efficiency and emission performance.
Organization: BMW of North America, LLC
Regarding electric vehicles, automakers can influence tailpipe emissions but not power plant
emissions. [EPA-HQ-OAR-2010-0799-9579-A1, p. 1]
We acknowledge that the upstream impact of electricity generation needs to be addressed in
order to ensure the credibility of a policy supporting the electrification of road transport;
therefore, Og/mi upstream emissions can be the goal. However, as automakers, we accept the
responsibility for vehicle efficiency, but we have no control over the carbon content of electricity
generation and cannot be held responsible for energy mix decisions made decades ago.
Automakers can influence tailpipe emissions but not power plant emissions. [EPA-HQ-OAR-
2010-0799-9579-A1, p. 3]
Multipliers encourage automakers to pull-ahead early generation low CC>2 technologies such as
BEV, PHEV and FCV. Multipliers should be applied on advanced technologies with significant
GHG reduction potential (which are much more expensive than mature gasoline technologies).
Therefore, they are a motivation for automakers to move forward with cost-intensive technology
(low volume, high investments) to reach full market economic viability. Multipliers are a key
issue because significant market penetration of electric vehicles is needed for compliance with
the proposed standards. The mid-term evaluation should also reassess the further need of
multipliers, based on the current market penetration of electric vehicles. BMW is supportive of
the proposed multipliers and recommends the inclusion of BEVx with a pro-rated multiplier in
line with the recent CARB proposal. [EPA-HQ-OAR-2010-0799-9579-A1, enclosure p. 3]
Projections by US authorities for overall standard achievement and projections for each OEM are
all based on the assumption of a Og/mi upstream approach. It is fundamentally unfair to punish
the auto industry for power plant decisions made decades ago. Further, public utility
commissions do not consider electric vehicles when they make decisions. [EPA-HQ-OAR-2010-
0799-9579-A1, enclosure p. 4]
The proposed cap for MYs 2022-25 may serve to slow the U.S. market penetration of electric
vehicles as described below:
• Situation 1: A significant market penetration of E-mobility is needed for compliance with the
proposed standards through MY2025 (i.e., industry must undertake extensive efforts). If E-
mobility does not develop as expected today or as projected in the joint draft Technical Support
Document (TSD), automakers will need to compensate the missing E-mobility contribution
through the introduction/penetration of additional cost-intensive advanced technologies, thereby
creating a disadvantage for automakers. [EPA-HQ-OAR-2010-0799-9579-A1, enclosure p. 4]
• Situation 2: If E-Mobility shows a higher success than assumed, then industry will be punished
for their efforts by inclusion of upstream emissions but without a corresponding correction of the
4-15
-------
EPA Response to Comments
standards. This increases the stringency of the standards, again disadvantaging
automakers. [EPA-HQ-OAR-2010-0799-9579-A1, enclosure p. 4]
• Result: The inclusion of upstream emissions, even with the proposed exemption for MYs 2022-
25, creates a strong disincentive for future E-mobility activities from automakers. Automakers do
not control the electric power grid mix and have absolutely no ability to influence upstream
emissions. Therefore, Og/mi upstream emissions should be set for electric vehicles without caps
or other conditions for the duration of the rule and beyond. [EPA-HQ-OAR-2010-0799-9579-
Al, enclosure p. 4]
However, if the proposed cap for MYs 2022-25 is retained, BMW recommends the adoption of
the following for the treatment of upstream emissions when the cap is exceeded:
• Manufacturers are responsible for vehicle energy consumption only.
• Therefore, the regulation of energy efficiency should be taken into account by converting the
electric energy consumed during the cycle into fuel efficiency- or CCV equivalent by means of a
MJ based conversion from electricity to gasoline CO2 content. [EPA-HQ-OAR-2010-0799-9579-
Al, enclosure p. 5]
Organization: Borg Warner, Inc.
In reviewing the proposal we are concerned that the rules contain a lot of language and
incentives to steer the technologies used to achieve the goals. We feel the rules should focus
solely on setting the standards and let the marketplace decide which technologies are best to
meet the consumer needs. [EPA-HQ-OAR-2010-0799-9320-A1, p. 1]
The inclusion of performance based credits offered for any vehicle that achieves a rating above
the standard is the right approach and we commend the EPA and NHTSA for this. However, we
see no need to also offer credits based on simply using a certain technology regardless of its
credits for incorporating a technology regardless of the contribution that technology has made in
improving CC>2 performance, and plug-in electric, plug-in hybrid electric and fuel cell vehicles
that are rated at 0 g/mi CO2 and also receive an inflationary multiplier to vehicle volumes when
calculating corporate averages. In today's atmosphere of limited capital this approach to drive a
certain technology mix could also impede the development and market introduction of more
conventional, cost-effective solutions that utilize existing infrastructure in large volumes
resulting in better real-world results. All technologies need to be on equal ground and
evaluated/incentivized based on their real-world performance. [EPA-HQ-OAR-2010-0799-9320-
Al, pp. 1-2]
Organization: Center for Biological Diversity
1. The electric vehicle credits must be removed
The Center supports the development of all forms of non-fossil-fuel based vehicles, including
electric vehicles (EVs), battery electric vehicles (BEVs), fuel cell electric vehicles (FCEVs) and
4-16
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
plug-in hybrid electric vehicles (PHEVs). Although these vehicles are likely to have tremendous
advantages in the form of energy conservation and greenhouse gas emissions reductions over
conventional vehicles and play a critical role in weaning the transportation sector off fossil fuel
use, those benefits can be lost if manufacturers are given credits for them that exceed the actual
improvements they bring. In addition, credits lead to lower fuel efficiency standards overall if
used to evade other efficiency technologies that would otherwise be installed. [EPA-HQ-OAR-
2010-0799-9479-A1, p. 21]
For this reason, it is imperative that the Agencies complete full life-cycle analyses of the
greenhouse gas emissions of each of these vehicles, accurately account for them in the overall
vehicle fleet, and limit credits for these vehicles based only on actual emission reductions they
achieve. We also believe the two "bonus credits" the NPRM envisions for EVs are
inappropriate. 100 These credits are (1) a default greenhouse gas compliance value of zero g/mi
for BEVs, FCEVs and PHEVs, and (2) a multiplier system that lets manufactures count each EV
as more than one vehicle in the earlier years of the rulemaking. [EP A-HQ-OAR-2010-0799-
9479-A1, p. 21]
While we believe that credits may have provided a valuable incentive for electric vehicles during
the 2012-2016 rulemaking to encourage this relatively new technology, such concerns are now
misplaced. The 2017-2025 rulemaking years no longer constitute a start-up period for these
vehicles. Allowing their lifecycle greenhouse gases to be ignored may well lead to substantial
unintended consequences, encouraging forms of technologies that actual do not reduce
greenhouse gases to the extent envisioned. Only full, transparent, and accurate accounting can
guard against this clear possibility, including full modeling of regional variations in grid
electricity carbon intensity. As pointed out by ICCT, the use of multipliers and windfall credits
for vehicles required under the California ZEV mandate is particularly problematic and should
be eliminated, and we incorporate ICCT's comment on this subject here by reference. 101 ICCT
calculates that these two forms of credit would eliminate the reduction of 80 to 110 million
metric tons of greenhouse gases from the MY 2017-2025 rulemaking period. 102 This is clearly
contrary to the statutes' intent, and we urge the Agencies to remove these credits from the final
rulemaking. [EPA-HQ-OAR-2010-0799-9479-A1, p. 21]
100 We agree with the Agencies' assessment that the credits for electric vehicles already
included in 49 U.S.C. § 32904(a)(2)(B) precludes additional incentives beyond those already
provided for by Congress. NPRM, 76 Fed. Reg. 74878 n.56. [EP A-HQ-OAR-2010-0799-9479-
Al,p.21]
101 ICCT Comments at 29-34. [EPA-HQ-OAR-2010-0799-9479-Al, p. 21]
102 Id. [EPA-HQ-OAR-2010-0799-9479-A1, p. 21]
Organization: Center for Sustainable Systems, University of Michigan
4-17
-------
EPA Response to Comments
We recognize that electrified vehicles, including battery electrics (EVs), and plug-in hybrids
(PHEVs), have the potential to reduce GHG emissions from the light-duty vehicle fleet. In low
carbon grid scenarios electrified vehicles have been shown to have a lower emissions profile than
conventional gasoline and diesel powered vehicles (CVs).1 However, the GHG emissions
attributable to electrified vehicles charged on the current U.S. electric grid, are significant. The
proposed 2017-2025 GHG emission standards neglect to count these important upstream sources.
This may result in unintended consequence by incentivizing electrified vehicles which may be
charged in regional grids of high carbon intensity. Vehicles charged in these grids may do little
to reduce the total new vehicle fleet GHG emissions, without a significant change in the electric
grid. [EPA-HQ-OAR-2010-0799-9493-A1, p.l]
1 - Elgowainy, A., et al. (2010). "Well-to-wheels analysis of energy use and greenhouse gas
emissions of plug-in hybrid electric vehicles." Chicago, IL, Argonne National Laboratory.
2 - MacPherson, N. D., Keoleian, G. A., Kelly, J. C. (2012). "Fuel Economy and Greenhouse
Gas Emissions Labeling for Plug in Hybrid Vehicles from a Life Cycle Perspective." Journal of
Industrial Ecology. In review.
Organization: Ecology Center
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17,2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 190-191.]
in particular the incentives for electric vehicles, plug-in electrics and fuel cell vehicles.
As I stated earlier, support for these emerging technologies is critical if we are to maintain U.S.
leadership and encourage new manufacturing opportunities here at home. We do agree, however,
that the incentives should be phased out over time so the full emissions of these vehicles can be
accounted for. We, therefore, support the decrease in the incentive multiplier and the proposed
manufacturer caps on the 0-gram per mile value for upstream emissions.
Organization: EcoMotors International, Inc.
II. Proposed Incentives for EVs, PHEVs, and FCVs
In developing the proposed standards, the agencies have considered and accounted for a wide
range of technologies which they believe are, or will be available for manufacturers to reduce
GHG emissions and improve fuel economy. These technologies specifically include advances in
gasoline engines and transmissions - technology already familiar to, and accepted by the vast
majority of consumers. However, in the Proposed Rule the agencies have chosen to limit
valuable industry incentives for meeting these standards to a small, select group of vehicles.
[EPA-HQ-OAR-2010-0799-9594-A2, p. 3]
4-18
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
While we agree that including credit mechanisms in the National Program is necessary and
appropriate, such provisions should not undercut the primary objectives of the program, namely
achieving significant reductions of GHG emissions and improving fuel economy in the light
vehicle fleet. Favoring a handful of vehicle technologies over other competing technologies with
equal or better performance is counter to the intent of the Proposed Rule. EcoMotors urges EPA
and NHTSA to adopt a significantly more technology-neutral and attribute-based program that
provides greater opportunities and incentives for OEMs to take advantage of a broader range of
technologies to meet federal standards. [EPA-HQ-OAR-2010-0799-9594-A2, p. 4]
A. EPA's Proposed Multiplier Incentive for EVs, FCVs and PHEVs
In order to encourage commercialization of EVs, FCVs and PHEVs, EPA is proposing an
incentive multiplier for all EVs, PHEVs, and FCVs sold in MYs 2017-2021. Each
EV/PHEV/FCV would 'count' as more than one vehicle in a manufacturer's compliance
calculation. EPA is also considering providing similar multiplier incentives to dedicated and/or
dual fuel compressed natural gas vehicles. [EPA-HQ-OAR-2010-0799-9594-A2, p. 4]
EcoMotors endorses EPA's institution of temporary regulatory incentives that will promote
commercialization of game-changing advanced vehicle technologies. However, as drafted, the
regulations would result in OEMs and consumers being force-fed a select group of costly
vehicles at the expense of technology neutrality. Other less-costly and equally energy efficient
and environmentally beneficial vehicle technologies - available today - should be afforded
equally beneficial regulatory incentives. [EPA-HQ-OAR-2010-0799-9594-A2, p. 4]
EPA has been very candid about the significant consumer barriers facing EVs, FCVs and PHEVs
in the Proposed Rule. While it 'remains optimistic' about consumer acceptance of these vehicles
in the long run, it acknowledges that it is 'less certain' about their near-term market acceptance.
The unease expressed by the agency is not unfounded. A 2010 study by J.D. Power and
Associates concluded that the significant obstacles faced by hybrid electric vehicles and battery
electric vehicles make it unlikely that global demand for these vehicles will reach the levels
predicted for the industry. The study determined that sales of these advanced vehicles are
expected to account for only slightly more than 2.2% of global passenger-vehicle sales in 2010,
and will only account for 7.3% of global passenger-vehicle sales in 2020.6 [EPA-HQ-OAR-
2010-0799-9594-A2, p. 4]
The Proposed Rule, if implemented, will clearly diminish the incentive for automotive
manufacturers to invest in a range of other technologies that can dramatically reduce GHG
emissions and improve fuel economy. Yet, as the Boston Consulting Group recently noted,
'[a]dvanced ICE technologies [which include gasoline- or diesel-based direct injection, reduction
of engine displacement by turbocharging and reduction of internal engine resistance] will be the
most cost-effective way to reduce CO2 emissions on a broad scale.' 7 Near-term development
and commercialization of advanced ICE technologies, such as the opoc engine and other
advanced vehicle technologies, remains an extremely important path for emissions reduction and
fuel economy improvements and should be encouraged by national policy, particularly
considering the challenges that must still be overcome for widespread market acceptance of EVs,
FCVs and PHEVs. [EPA-HQ-OAR-2010-0799-9594-A2, p. 5]
4-19
-------
EPA Response to Comments
Other hybrids, such as hydraulic hybrids, should also be targeted for regulatory incentives.
Certainly EPA's partnership with the Chrysler Group, LLC to apply EPA's hydraulic hybrid
technology to LDVs is a clear indication that EPA is very optimistic about the GHG and fuel
economy benefits of this cutting-edge technology. The Final Rule should include language broad
enough to encompass, and grant incentives to hydraulic hybrid vehicles, as well as all
mechanical hybrids. [EPA-HQ-OAR-2010-0799-9594-A2, p. 6]
• Specific Recommendation: EcoMotors strongly encourages EPA to extend comparable
EV/PHEV/FCV multiplier incentives to OEMs that manufacture mechanical hybrid
vehicles, hydraulic hybrid vehicles, and similar advanced technology hybrid vehicles
during MYs 20172021. This would place other significant, game-changing vehicle
technologies -like the dual-module opoc engine - on a level playing field with EVs,
PHEVs and FCVs, and continue to encourage innovation in our struggling auto industry.
EcoMotors stands ready to assist the agencies in crafting appropriate language to embrace
a range of advanced technology hybrid vehicles. [EPA-HQ-OAR-2010-0799-9594-A2, p.
7]
EPA is proposing a Og/mile tailpipe compliance value for all EVs, PHEVs (electricity usage) and
FCVs in MYs 2017-2021. In MYs 2022-2025, Og/mi would only be allowed up to a per-
company cumulative sales cap, established on a tiered basis. EPA proposes to phase-in the
change in compliance value, from Og/mile to a net upstream accounting, for any manufacturer
that exceeds its cumulative production cap for EV/PHEV/FCVs. Not until MY 2022 would the
compliance value for EVs, FCVs, and the electric portion of PHEVs in excess of individual
automaker cumulative production caps begin to be calculated according to a methodology that
accounts for the full net increase in upstream GHG emissions relative to that of a comparable
gasoline vehicle. [EPA-HQ-OAR-2010-0799-9594-A2, p. 9]
The EPA proposal to specify Og/mile for these vehicles' tailpipe emissions continues to
completely ignore the fact that electric vehicles draw some or all of their fuel from the grid
which is not GHG free. 13 Yet EPA has repeatedly acknowledged that 'the upstream GHG
emissions associated with production and distribution of electricity are higher than the
corresponding upstream GHG emissions of gasoline or other petroleum based fuels." The
Proposed Rule even notes that 'today's Nissan Leaf EV would have an upstream GHG emissions
value of 161 grams per mile based on national average electricity, and a value of 89 grams per
mile based on the average electricity in California, one of the initial markets for the Leaf Other
significant studies, such as the National Academy of Sciences' report, 'Hidden Costs of Energy-
Unpriced Consequences of Energy Production and Use,' have also recently drawn attention to the
hidden life-cycle costs associated with electric vehicles - including those associated with energy-
and material-intensive battery and electric motor production. [EPA-HQ-OAR-2010-0799-9594-
A2, p. 9]
An accurate assessment of the environmental benefits of fuel/propulsion system options requires
a complete 'well-to-wheels' analysis. The CO2 value for these vehicles should be based on a
sound scientific approach. [EPA-HQ-OAR-2010-0799-9594-A2, p. 10]
4-20
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
The impacts on GHGs and other pollutant emissions from electric vehicles are significant and
should be quantified by EPA to the extent possible for purposes of this rulemaking. The
emissions associated with EVs, PHEVs and FCVs should not be ignored for several more years.
Commencing with MY 2017, EPA should set aside all incentives that falsely suggest that there
are no environmental repercussions associated with the use of these vehicles. Furthermore, when
combined with the incentive multipliers proposed for EVs, PHEVs and FCVs (discussed above),
allocating a Og/mile emissions value to these vehicles is clearly excessive. EPA is promoting
these vehicles well beyond their environmental merits. This is inherently inequitable to other
less-costly and even more environmentally-beneficial vehicle technologies available today -like
EcoMotors' opocMDH engine. [EPA-HQ-OAR-2010-0799-9594-A2, p. 11]
• Specific Recommendation: EcoMotors encourages EPA to drop the Og/mile tailpipe
compliance value for EVs, PHEVs (electricity usage) and FCVs and to calculate and
include the full 'well-to-wheels' upstream emissions from fuel production and distribution
in their CC>2 emissions commencing in MY2017 in order to achieve equity across
different vehicle technologies. [EPA-HQ-OAR-2010-0799-9594-A2, p. 11]
6 J.D. Power and Associates, 'Drive Green 2020: More Hope than Reality?' (November 2010).
The MIT Electric Vehicle Team has identified significant limitations for electric vehicles in each
of the following areas: energy and power density, battery charging, lifetime performance, and
system costs, and recently cautioned: Existing internal combustion powertrains are remarkable in
that they provide excellent performance... We can drive our cars for more than 300 miles, fill lip
anywhere in 5 minutes. When treated well, these vehicles can last a decade and travel hundreds
of thousands of miles before they finally fall apart. This sets quite a high bar for the new EV
market entrants. MIT Electric Vehicle Team, Technology, Challenges, and the Future of Electric
Drive,' (April 2008), p. 1, http://web.mit.edu/evt/summary future, pdf.
7 The Boston Consulting Group, 'The Comeback of the Electric Car? How Real, How Soon, and
What Must Happen Next' (2009), p. 2. See also J.D. Power and Associates, supro, p. 68 ('[I)n
order to safeguard the environment today, it will remain important to pursue continuous
improvements in ICEs and allow time to map out the future.')
13 EcoMotors commends the agency for attempting to fully account for the upstream GHG
emissions associated with all electricity used by EVs and PHEVs (and any hydrogen used by
FCVs) in its regulatory projections of the impacts and benefits of the program, and in all GHG
emissions inventory accounting.
Organization: Edison Electric Institute (EEI)
More than most other technologies or policy options, EVs offer the U.S. the capability to
substantially reduce, if not end, its dependence on petroleum fuels. EEI's comments focus on
EPA's regulatory incentives to foster widespread commercial deployment of EVs. [EPA-HQ-
OAR-2010-0799-9584-A2, pp. 1-2]
4-21
-------
EPA Response to Comments
I. Executive Summary
Electric vehicles "have significant transportation GHG emissions and oil consumption
gamechanging potential in the long-run." Increased deployment of EVs will increase fuel
efficiency and reduce dependence on petroleum. Increased EV deployment also will reduce
emissions of GHGs and criteria air pollutants from the transportation sector. These
environmental benefits will be compounded by the continued reductions in emissions of both
GHGs and criteria air pollutants related to the generation of the electricity that will fuel EVs.
[EPA-HQ-OAR-2010-0799-9584-A2, p. 2]
EEI supports the decision to use 0.0 g/mile for the EV (and PHEV in all-electric mode)
compliance value for MY 2017-2021 and to provide a multiplier for manufacturers who produce
these zero-emitting vehicles. EPA should not "discount" EV incentives for MY 2022-2025 to
reflect specific upstream GHG emissions related to electricity production. If EPA decides to
discount EV incentives in the later years of the proposal, the Agency should not calculate an
upstream electricity GHG emissions factor today for standards that will not take effect for nearly
10 years. Given the limits of EPA's modeling and uncertainties about the fuel and emissions
profile of electric generation in 10 years, there is no way that any emissions factor for MY 2022
calculated today would bear a reasonable relationship to actual future emissions. [EPA-HQ-
OAR-2010-0799-9584-A2, p. 2]
Moreover, EPA's proposed approach to assessing upstream GHG emissions in the power sector
is inappropriate, unfair and based on incorrect data and assumptions. By focusing only on
upstream electricity GHG emissions and not upstream emissions related to other fuels, EPA is
not fairly comparing the overall well-to-wheels emissions of EVs with those of conventional
vehicles. When compared on a well-to-wheels basis, EVs have lower emissions than
conventional vehicles. If EPA continues to focus on upstream electricity GHG emissions, the
Agency's analysis must be based on the most accurate and timely information about the makeup
of the electric generating fleet and must consider regional variation in generation portfolios,
particularly in those areas that are likely to be earlier adopters of this important technology. If
EPA does not revise this approach, the Agency will continue to overestimate EV emissions as
compared to emissions from conventional fuels, underestimating the environmental, economic
and energy security benefits of EVs are realized. [EPA-HQ-OAR-2010-0799-9584-A2, pp. 2-3]
II. EPA and NHTSA Should Incentivize the Production of All Types of Electric Vehicles for All
Model Years Covered by the Proposed Rule.
EEI applauds EPA's determination that incentives are needed to ensure the commercial success
of electric vehicles because they "have significant transportation GHG emissions and oil
consumption game-changing potential in the long-run." 75 Fed. Reg. at 75011. Increased
deployment of EVs will increase fuel efficiency and reduce dependence on petroleum, consistent
with the goals of the Energy Independence and Security Act of 2007. Increased EV deployment
also will reduce emissions of GHGs and criteria air pollutants from the transportation sector.
These environmental benefits will be compounded by the continued reductions in upstream
emissions of both GHGs and criteria air pollutants related to the generation of the electricity that
4-22
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
will fuel EVs. See upstream emissions discussion in section III, infra. [EPA-HQ-OAR-2010-
0799-9584-A2, p. 3]
At present, as EPA notes in the proposed rule, the missing link between the potential
environmental and energy independence benefits of EVs and achieving these benefits is the
widespread deployment of this new technology. See 76 Fed. Reg. at 75011. EPA's proposed
incentives for EVs will help forge this link. EEI supports providing EV incentives in the context
of CAFE and GHG vehicle standards, as discussed below. [EPA-HQ-OAR-2010-0799-9584-A2,
pp. 3-4]
A. EPA Should Finalize the EV Incentives for MY 2017-2021 as Proposed.
EPA proposes different incentives for the different types of electric vehicles and for different
time periods covered by the MY 2017-2025 standards. For MY 2017-2021, EPA proposes two
incentives: 1) allowing EVs, including PHEVs in all-electric mode, to use emissions of 0.0
g/mile for compliance purposes; and 2) providing a multiplier that allows EVs to "count" as
more than one vehicle in a manufacturer's compliance calculation. The proposed multiplier for
PHEVs is discounted, presumably to reflect operations not in all-electric mode. 76 Fed. Reg. at
75012. [EPA-HQ-OAR-2010-0799-9584-A2, p. 4]
EPA considers counting EV emissions (and PHEV emissions when operating all-electric mode)
as 0.0 g/mile an "incentive" because of concerns related to the upstream GHG emissions
associated with electricity production. See upstream emissions discussion, section III, infra.
While EEI appreciates EPA's efforts to foster increased EV manufacturing and deployment, it
must be emphasized that this is not an "incentive" but a recognition of actual EV emissions,
which are 0.0 g/mile when measured at the tailpipe, the proper point at which to measure
compliance with vehicle emissions standards. [EPA-HQ-OAR-2010-0799-9584-A2, p. 4]
Nonetheless, these MY 2017-2021 incentives represent a welcome improvement and departure
from EPA's more limited approach to EV incentives for MY 2012-2016, which placed a
production cap on the number of vehicles for which manufacturers could use 0.0 g/mile for
compliance purposes and provided no multipliers. See 75 Fed. Reg. 25324 (May 7, 2010). EEI
supports the broader "incentives" for MY 2017-2021 proposed by EPA as tools necessary to
encourage the increased manufacture and ultimate deployment of EVs and PHEVs. EPA should
finalize these incentives as proposed. [EPA-HQ-OAR-2010-0799-9584-A2, p. 5]
B. EPA's Approach to Incentives for MYs 2022-2025 Is Fundamentally and Technically Flawed
and EPA Should Wait to Finalize These Incentives.
For MY 2022-2025, EPA proposes only one "incentive" for EVs: Manufacturers can use 0.0
g/mile for EVs (and PHEVs in all-electric mode) when calculating compliance averages, but this
is limited by a manufacturer-specific production cap. The production cap is tiered to provide
greater incentives to those manufacturers that invest in EV technologies earlier. See 76 Fed. Reg.
at 75013. EPA states that the production cap also is necessary as a way to limit "the overall
decrease in program GHG emissions reductions associated with the incentives." Id. [EPA-HQ-
OAR-2010-0799-9584-A2, p. 5]
4-23
-------
EPA Response to Comments
In the alternative, EPA is considering an industry-wide production cap to provide greater
certainty as to the number of EVs deployed and the overall impact on GHG emissions. See id.
EPA suggests that a 2-million vehicle cap would limit the "maximum decrease in GHG
emissions reduction to about 5 percent of total program GHG savings." Id. EPA would allocate
the cap to individual automakers in calendar 2022 based on cumulative EV/PHEV/FCV sales in
MYs 2019-2021. Id. [EPA-HQ-OAR-2010-0799-9584-A2, p. 5]
For vehicle production that exceeds the cap, EPA proposes that compliance values for EVs and
PHEVs be "calculated according to a methodology that accounts for the full net increase in
upstream emissions relative to that of a comparable gasoline vehicle." Id. EPA proposes a
methodology for making this calculation, based on estimated future projections of upstream
GHG emissions associated with the grid electricity used to charge EVs and PHEVs. See id. at
75014. [EPA-HQ-OAR-2010-0799-9584-A2, p. 6]
In order to discount the incentive for any sales above the manufacturer-specific (or industrywide)
cap for MY 2022-2025, EPA proposes a four-step methodology, which would require, among
other things, measuring EV electricity consumption in Watt-hours/mile and then multiplying this
figure by an already pre-determined 2025 nationwide estimated average electricity upstream
GHG emissions rate of 0.574 grams/Wart-hour. See 76 Fed. Reg. 75014. EPA would use a
similar approach for PHEVs. See id. [EPA-HQ-OAR-2010-0799-9584-A2, p. 6]
EEI opposes the use of any upstream GHG emissions factor. EV tailpipe emissions are 0.0
g/mile, and this is the value that should be used for compliance purposes for all time periods
covered by the proposed vehicle standards. EPA should not "discount" this compliance value to
reflect upstream GHG emissions related to electricity production. After all, EPA does not
calculate any value for upstream emissions rates for conventionally-fueled vehicles.3 [EPA-HQ-
OAR-2010-0799-9584-A2, p. 6]
In addition to EEI's general objection to estimating any discount factor based on upstream
electricity GHG emissions, there are several issues with EPA's proposed approach to estimating
an appropriate discount factor. If EPA persists in using a discount factor, the Agency must
address these issues. [EPA-HQ-OAR-2010-0799-9584-A2, pp. 6-7]
First, it is inappropriate for EPA, now in 2012, to calculate any upstream electricity GHG
emissions rate for 2025, as there is no way that this value could reasonably approximate actual
electric generating unit (EGU) emissions 13 years in the future. The current version of EPA's
Integrated Planning Model (TPM), which is used to generate electricity generation emissions
data, relies on certain assumptions about the current national electric generating unit (EGU) fleet
and incorporates some, but not all, regulations affecting EGUs in the near term. The version of
IPM used for the proposed vehicle standards does not, for example, include EPA's recently
promulgated hazardous air pollutant regulations, nor does it include any regulations that are not
currently on the books, but expected to be final and effective well before MY 2025. These
include GHG new source performance standards (NSPS) for both new and existing EGUs, new
effluent guidelines for EGUs, new regulations for EGU cooling water intake structures and new
regulations affecting the disposal of coal combustion residuals. These regulations will
dramatically change the makeup of the current EGU fleet, as many coal-based units will retire
4-24
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
rather than incur the substantial costs associated with air, water and solid waste pollution control
retrofits. If these units are replaced by those using renewable fuels, or even natural gas, their
GHG emissions will be much lower than those of existing units. Because no one knows how
many units will be retired and replaced by cleaner fuels, it is impossible for the 2012 version of
IPM to predict with any accuracy an upstream electricity GHG emissions rate for 2025. [EPA-
HQ-OAR-2010-0799-9584-A2, p. 7]
EPA notes that it is considering running IPM with "more robust" vehicle and vehicle charging
specific assumptions to generate a "better" electricity upstream emissions factor for the final
rule. Id. Unless EPA dramatically changes its assumptions about the makeup of the generating
fleet in 2025 to better reflect current and expected regulations, any additional IPM runs - even
those using updated vehicle and charging assumptions - will be equally unable to provide an
upstream electricity GHG emissions rate that has any relationship to actual emissions in 2025. If
EPA does decide to conduct additional IPM runs for the final rule, the Agency must do more
than update vehicle and charging assumptions, and any and all changes in the assumptions must
be subject to notice and comment. A discussion of appropriate assumptions related to EV
upstream emissions is included in section III, infra. [EPA-HQ-OAR-2010-0799-9584-A2, p. 8]
If EPA persists in using an upstream electricity GHG emissions rate, there is no regulatory
purpose served by calculating a 2025 rate that is, on its face, inaccurate now. The Agency would
be better served by waiting until MY 2021 to estimate upstream GHG electricity emissions,
using actual emissions data and the most up-to-date information about the EGU generating fleet.
EPA easily could conduct this analysis concurrently with the planned midterm evaluation of the
vehicle standards necessary to support NHTSA's required, separate rulemaking to establish
CAFE standards for MY 2022-2025. See 76 Fed. Reg. at 74879. [EPA-HQ-OAR-2010-0799-
9584-A2, p. 8]
III. EPA's Approach To Upstream EV Emissions Related To Electricity Generation Is Flawed
And Must Be Revised.
The tailpipe emissions of EVs (and PHEVs operating in an all-electric mode) are 0.0 g/mile, for
both GHG emissions and criteria air pollutant emissions. Despite this, EPA asserts that it must
consider the upstream GHG emissions related to the grid electricity and that these upstream
emissions are higher than those associated with the production and distribution of gasoline. See
76 Fed. Reg. at 75010. [EPA-HQ-OAR-2010-0799-9584-A2, p. 9]
Upstream GHG emissions related to electricity production are only part of the analysis, however,
and by focusing on upstream emissions only for EVs, EPA underestimates the overall
environmental benefits of EVs. Upstream electricity GHG emissions are only relevant to the
extent that EPA considers all upstream emissions from all fuels, which EPA does not do. When
compared on a well (EGU)-to-tailpipe basis, EV GHG emissions are less than those of
conventional vehicles. [EPA-HQ-OAR-2010-0799-9584-A2, p. 10]
Contrary to EPA's assertions, expanded introduction of EVs into all classes and categories of
vehicles will serve to reduce GHG emissions significantly from the transportation sector, not
dilute vehicle emissions standards, as EPA asserts. See Electric Power Research Institute (EPRI)-
4-25
-------
EPA Response to Comments
National Resourced Defense Council, Joint Technical Report, Environmental Assessment of
Plug-in Hybrid Electric Vehicles, Vol. 1: Nationwide Greenhouse Gas Emissions.6 In the Draft
Environmental Impact Statement (EIS) (at 6-22), NHTSA concludes that the literature review
reveals an overarching conclusion about the GHG emissions from EVs compared to conventional
vehicle: "[EJven in modeled scenarios in which EVs charge from a carbonintensive grid mix
(i.e., electricity generated mostly from coal power plants), the vehicle lifecycle emissions from
EVs are less than conventional gasoline vehicles." [EPA-HQ-OAR-2010-0799-9584-A2, p. 10]
Even if EPA were to compare the overall emissions of conventional vehicles and EVs fairly,
EPA first would have to revise its assessment of EV emissions. EPA's current approach to EV
emissions is unfair, inappropriate, and based on flawed data and assumptions. If EPA believes
that upstream emissions must be discussed in the context of vehicle standards and decides to
consider all emissions from all fuels, EPA must revise the final rule to provide a full and accurate
discussion that leads to a fair comparison of the upstream emissions for all vehicle fuels and
recognizes the environmental benefits of EV deployment. [EPA-HQ-OAR-2010-0799-95 84-A2,
pp. 10-11]
A. EPA Has Failed To Consider the Transition of the Generating Fleet in Response to
Environmental Regulations.
For many reasons, the U.S. electric generating fleet in MY 2025 will be significantly cleaner
than the fleet of 2012: [EPA-HQ-OAR-2010-0799-9584-A2, p. 11]
Increased regulation of criteria air pollutant emissions, via more stringent standards under the
CAA to address national ambient air quality standards for sulfur dioxide, nitrogen oxides,
particulate matter; new hazardous air pollutant regulations addressing mercury, acid gases, non-
mercury metals and other pollutants; new standards to address the interstate transport of air
pollution; and more stringent standards to address ozone and opacity.
Regulation of GHG emissions from new sources and the existing fleet under two separate
CAA programs, NSPS and the new source review/prevention of significant deterioration pre-
construction permitting programs.
Regulation of coal combustion residuals.
More stringent effluent guidelines and cooling water intake structure regulations.
Increased deployment of high-efficiency natural gas combined cycle units to provide additional
generating capacity and replace retired coal units.
Increased deployment of renewable generation to comply with state renewable portfolio standard
(RPS) or renewable electricity standard (RES) requirements. [EPA-HQ-OAR-2010-0799-95 84-
A2,p. 11]
4-26
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
These trends towards increasingly clean generation are evident in the recent projections from the
Energy Information Administration (EIA) in its Annual Energy Outlook 2011. In EIA's
Reference Case, average emissions intensity, per unit of electricity generated, for the U.S.
electric power sector is projected to fall between 2010 and 2020 by 40.4 percent for sulfur
dioxide, 26.5 percent for nitrous oxide, 36.9 percent for mercury and 7.9 percent for carbon
dioxide.7 And because EIA's Reference Case generally assumes that current laws and
regulations remain unchanged throughout the projections, these calculated improvements would
likely be greater if EIA took into consideration all of the air quality rules that have been finalized
in recent years and are expected to be finalized in the next several years, as well as clean energy
technology improvements and cost reduction. [EPA-HQ-OAR-2010-0799-9584-A2, pp. 11-12]
EPA also states that it is appropriate to consider upstream EV emissions because currently there
is no national, comprehensive program addressing GHG emissions from the electric sector. See
75 Fed. Reg. at 75010, 75011. EPA's focus on the existence of a "current" national regulatory
program addressing GHGs related to electricity production and distribution is not appropriate in
the context of vehicle rules covering MY 2017-2025. But, there are no comprehensive GHG
emissions control programs for any fuel sector today. [EPA-HQ-OAR-2010-0799-9584-A2, p.
12]
Moreover, it appears that the electric sector will become subject to GHG regulations sooner than
other fuel sectors. Under the terms of a settlement agreement signed in late 2010, EPA is in the
process of designing proposed GHGNSPS for all fossil fuel-based EGUs. These standards will
apply to new units and major modifications, as well as the existing fleet. While EPA has missed
the original deadline for proposing the GHG NSPS, at least the new and modified source parts of
the rule are expected to be released imminently. The entire GHG NSPS program is expected to
be in place within the next few years, well before the MY 2017 standards take effect. In the
proposed rule, EPA fails to acknowledge these standards and their effect on electricity generation
during the time period covered by the proposed MY 2017-2025 standards. [EPA-HQ-OAR-
2010-0799-9584-A2, pp. 12-13]
B. Unless EPA Considers the Upstream Emissions Related to Other Fuels, EPA Cannot Purport
to Compare EV and Conventional Vehicles.
Moreover, EPA asserts that the "overall GHG emissions" associated with the generation and
distribution of electricity are higher than the upstream emissions associated with the production
and distribution of gasoline. See 75 Fed. Reg. at 75010, 75011. Not only is this statement
unsupported by any facts or analysis, but it difficult to see how EPA can make such a
comparison when the Agency has failed to include, by its own admission, an examination of the
overall GHG emissions related to the production and distribution of other transportation fuels. In
the proposed rule, the Agency acknowledges that 20 percent of the GHG emissions from
traditional fuel vehicles are related to upstream fuel production and distribution, see id., but
provides no evidence that these emissions were considered when making comparative statements
about the upstream emissions for EVs. This undermines EPA's determination that considering
upstream GHG emissions related to electric vehicles is appropriate because of the "higher"
upstream GHG emissions associated with electricity production and distribution. See id. EPA
cannot compare upstream emissions of the various vehicle fuels unless that comparison is a fair
4-27
-------
EPA Response to Comments
comparison - and EPA has acknowledged that it is not. At minimum, if EPA is going to consider
upstream emissions, the Agency should not make broad statements purporting to compare the
"overall GHG emissions" related to electricity with the "overall GHG emissions" of other fuels
unless and until the Agency's analysis includes upstream emissions related to conventional
fuels. [EPA-HQ-OAR-2010-0799-9584-A2, p. 13]
C. EPA Does Not Use Recent Electricity Emissions Data and Has Failed to Consider Regional
Variation in Electricity Generation and Likely EV Charging Timing Patterns.
Even if EPA were to conduct a fair comparison of the upstream GHG emissions between EVs
and conventional vehicles, EPA first would have to revise significantly how the Agency
estimates upstream emissions related to electricity generation. EPA's assumptions about the
upstream emissions related to the grid electricity that will be used to charge MY 2017-2025 are
based on outdated and incomplete electricity generation data; do not address regional variability
in the generating fleet or likely EV charging patterns; and do not take into consideration the
expected composition of the electric generating fleet during the periods covered by the proposed
standards. Unless and until EPA revises these assumptions, any comparison between the
upstream emissions of EVs and conventional vehicles is fundamentally flawed and cannot serve
as the basis for reasonable regulatory action. [EPA-HQ-OAR-2010-0799-9584-A2, p. 14]
First, EPA has used outdated data to support its assessment of the upstream GHG emissions
related to EVs. EPA used eGRID2007 emissions factors, which contains electric generation
emissions data from calendar year 2005. See 76 Fed. Reg. at 75012. Using 2005 data quite
clearly skewed the national average electricity upstream GHG emissions rate that EPA calculated
for comparative purposes. For example, according to EIA, total carbon dioxide emissions from
electric generation were 8.6 percent lower in 2009 compared to 2008 (and declined by nearly
10.8 percent between 2005 and 2009).8 [EPA-HQ-OAR-2010-0799-9584-A2, p. 14]
But even if EPA used 2011 emissions data, the more current data have no bearing on the GHG
emissions from electricity production in MY 2017 and beyond. As noted, the electric generation
in the U.S. has and will continue to become cleaner over time. This results from many factors,
including renewable energy policies enacted by many states, more stringent EPA regulation, and
even the low cost of natural gas, which has been displacing coal in many markets. EPA's
analysis fails to recognize these changes in the electric generation fleet. At a minimum, EPA
should wait until the Agency can more reasonably obtain data for the period covered by the
vehicle standards, considering all environmental requirements that will be in effect, as well as
fuel generation patterns, as discussed above. [EPA-HQ-OAR-2010-0799-9584-A2, p. 15]
Second, EPA's creation and use of a national average electricity upstream GHG emissions rate
fails to account for significant regional differences in electricity generation. Emissions associated
with the generation of electricity vary significantly from utility to utility—with nuclear, wind,
solar, geothermal and hydroelectric power sources emitting extremely low or no GHGs or
criteria air pollutants. Any meaningful estimates of upstream emissions associated with
electricity as a transportation fuel would need to be tailored not only to reflect regional variations
in current electricity baseload (and peak load) generation and expectations for marginal
electricity generation mix, but also developments in usage and recharging of the vehicle (as more
4-28
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
"smart meters" and "smart chargers" are installed), as well as state and federal electric
generation policies (such as state RPS and RES requirements)9 and state and regional/federal
GHG emissions limits and reductions programs (e.g., California's A.B. 32, the New England
Regional Greenhouse Gas Initiative and the federal CAA). [EPA-HQ-OAR-2010-0799-9584-A2,
pp.15-16]
In the proposed rule, EPA acknowledges that there is "significant regional variation with
upstream GHG emissions associated with electricity production and distribution." See 76 Fed.
Reg. at 75010 n.280. Accordingly, given this recognition, it is unreasonable for EPA to continue
to use a nationwide average emissions rate. Any analysis of upstream electricity GHG emissions
methodology for estimating upstream emissions rates must take the significant orders of
magnitude of regional variability into account. [EPA-HQ-OAR-2010-0799-9584-A2, p. 16]
Regional variations in generating resources must be considered, especially with respect to the
areas of the country with the highest expected near-term EV deployment rates. For example,
California's average upstream GHG electricity emissions rate is significantly lower than that of
other parts of the country, as EPA recognizes in the proposed rule. See 76 Fed. Reg. at 75011.
California also is expected to have one of the highest rates of EV adoption. 10 In 2011, California
residents purchased more than 60 percent of the Nissan Leafs and about 30 percent of the
Chevrolet Volts sold in the U.S.I 1 California also recently adopted aggressive regulations that
are intended to put 1.4 million EVs, PHEVs and hydrogen vehicles on the state's roads by
2025.12 As a result, any analysis that uses national average upstream electricity GHG emissions
to estimate the environmental impacts of early EV deployment is, by definition, overestimating
these emissions. [EPA-HQ-OAR-2010-0799-9584-A2, pp. 16-17]
A recent graphic from the California Air Resources Board (CARB) report demonstrates the
superior emissions benefits of EVs and PHEVs in California. 13 [See figure on p. 17 of Docket
number EPA-HQ-OAR-2010-0799-9584-A2.] [EPA-HQ-OAR-2010-0799-9584-A2, p. 17]
In addition, using nationwide average upstream GHG emissions would be inconsistent with
previous Agency action to address fuel economy labels for LDVs. In that rulemaking, EPA
concluded that "[d]ue to different electric generation fuels and technologies, this level of
[regional generation] variation is significant; from one region to another, the highest-to-lowest
upstream average GHG emission ratios are roughly 3-to-l. If examined from a utility-by-utility
perspective, the ratio is even greater, at 75-to-l. For a national label to present a single national
average would be misleading and inaccurate given such a wide range." Revisions and Additions
to Motor Vehicle Fuel Economy Labels, 76 Fed. Reg. 39478, 39493 (July 6, 2011). [EPA-HQ-
OAR-2010-0799-9584-A2, p. 18]
Finally, EPA must also take into consideration the effects on upstream emissions rates of
expected EV charging patterns. EV charging is likely to take place at night, 14 when overall
national GHG emissions related to electricity generation are lower because most wind power is
generated at nightlS and because baseload nuclear generating units do not cycle and are always
operating. 16 Electric utilities also are incenting night EV charging through time-of-day
electricity rates and separate EV rates, which are significantly lower at night when overall
electricity demand is lower. In addition, increased installation and use of smart meters in the
4-29
-------
EPA Response to Comments
coming years, funded in large measure with stimulus funds administered by DOE, also will help
to facilitate charging EVs at home at night. [EPA-HQ-OAR-2010-0799-9584-A2, pp. 18-19]
IV. Conclusion
EEI appreciates EPA's efforts to incentivize the manufacture and deployment of EVs and EPA's
recognition of the potential for EVs to revolutionize the transportation sector by reducing GHG
and other criteria pollutant emissions and reducing U.S. dependence on imported oil. EPA's
overall assessment of the environmental impacts of EVs is flawed, however, and should be
revised. If EPA's assumptions about the upstream GHG emissions related to the generation of
the electricity that will be used to power EVs were consistent with scientific literature, used
appropriate and accurate information about the current and future generating fleet and recognized
regional variability in electricity generation and expected charging timing patters, EPA would
conclude that increased EV deployment will enhance GHG reductions in the transportation
sector. [EPA-HQ-OAR-2010-0799-9584-A2, p. 19]
3 Upstream emissions related to oil production have been a central part of the debate over the
Keystone pipeline.
4 See Department of Energy, Alternative Fuels & Advanced Vehicles Data Center, Natural Gas
Emissions, available at: http://www.afdc.energy.gov/afdc/vehicles/natural_gas_emissions.html.
5 For an assessment of the upstream emissions related to natural production and transportation
from the Center for Transportation Research, Argonne National Laboratory, see A. Burnham et
al., Life-cycle Greenhouse Gas Emissions of Shale Gas, Natural Gas, Coal and Petroleum, 46
Envtl. Sci. & Tech. 619 (2012), available at:
http://www.transportation.anl.gov/pdfs/EE/797.PDF.
6 Available at: http://my.epri.com/portal/server.pt?Abstract_id=000000000001015325. It is
important to note that the EPRI-NRDC study focused on PHEVs and did not include EVs. If it
had included EVs, its conclusions about reduced GHG emissions would have been even more
robust.
7 EIA, Annual Energy Outlook 2011 (Apr. 2011), Reference Case Scenario ref2011, Datekey
d0202011a, compiled from Tables 8, 18, available at:
http://eia.gov/forecasts/aeo/excel/yearbyyear.xls.
8 EIA, Electric Power Annual 2009 8 (Apr. 2011), available at
http://www.eia.gov/cneaf/electricity/epa/epa.pdf
9 As of 2011, 29 states and D.C. have RPS or RES requirements and seven additional states have
non-binding renewable generation goals. Existing RPs or RES requirements applied to 47
percent of U.S. load in 2010; when these requirements are fully implemented, these obligations
will apply to 56 percent of load. See R. Wiser, "State of the States: Update on RPS Policies and
4-30
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
Progress" (Oct. 20, 2010), available at:
http://www.renewableenergymarkets.com/docs/presentations/2010AVed_State%20of%20the%20
Markets_Ryan%20Wiser.pdf.
10 See EPRI, Transportation Electrification: A Technology Overview 4-10 (2011), available at:
http://my.epri.com/portal/server.pt?Abstract_id=000000000001021334. EPRI also states that
Oregon and Washington, D.C. are expected to have higher early EV adoption rates.
11 See Jerry Hirsch, Chevrolet Plans Special Volt to Qualify for Carpool Sticker, Rebate, Los
Angeles Times, Jan. 19, 2012, available at: http://www.latimes.com/business/money/la-fi-
mochevrolet- volt-20120119,0,6323739.story.
12 For more information, see
http://www.arb.ca.gov/msprog/consumer_info/advanced_clean_cars/consumer_acc.htm.
13 CARB, Advanced Clean Cars: the Zero Emission Vehicle (ZEV) Regulation, Fact Sheet,
available at: http://www.arb.ca.gov/msprog/zevprog/factsheets/general_zev_2_2012.pdf
14 Researchers at the Department of Energy's (DOE) Argonne National Laboratory used data
from the 2001 National Household Transportation Study to determine likely charging scenarios.
They found that more than 60 percent of vehicles end their last trip after 5 p.m. and 70 percent
after 4 p.m. More than half of these vehicles begin their first trip between 6 and 9 a.m. See A.
Elgowainy, et al., Well-to-Wheels Analysis of Energy Use and Greenhouse Gas Emissions of
Pug-In Hybrid Electric Vehicles, Energy Systems Division, Argonne National Laboratory,
ANL/ESD/10-1 (June 2010), available at: http://www.transportation.anl.gov/pdfs/TA/629.PDF.
15 See K. Coughlin & J. Eto, Analysis of Wind Power and Load Data at Multiple Time Scales,
Environmental Energy Technologies Division, Lawrence Berkeley National Laboratory, LBNL-
4147E, 4 (Dec. 2010) (noting the "common features of wind power: regular diurnal pattern with
stronger winds at night..."), available at: http://www.ferc.gov/industries/electric/indusact/
reliability/analysiswindpowerload.pdf Indeed, NHTSA's analysis also fails to consider how
EVs, especially PHEVs, can help better integrate more variable resources, like wind, into the
grid, further de-carbonizing electricity generation. See, e.g., F. Tuffner & M. Kintner-Meyer,
Using Electric Vehicles to Meet Balancing Requirements Associated with Wind Power, DOE,
PNNL-20501 (July 2011), available at: http://energyenvironment.pnnl.gov/pdf/PNNL-
20501_Renewables_Integration_Report_Final_7_8_2011 .pdf
16 Nuclear power plants essentially run continuously. This is because their power output cannot
be ramped up and down readily on a daily and weekly basis. As a result, at night, when electric
demand is lower, nuclear units continue to run and other forms of generation are backed off. See
the World Nuclear Association's website for more information: http://world-nuclear.org/.
Organization: Electric Drive Transportation Association
While EDTA supports the overall direction of the proposed regulations, EDTA has three
significant concerns with the proposal:
4-31
-------
EPA Response to Comments
First, EDTA opposes the proposal to include upstream emissions when determining the
"compliance value" for light-duty vehicles pursuant to these regulations. The proposal to include
upstream emissions exceeds EPA's authority under Title II of the Clean Air Act. This proposal
also lacks a rational basis because of the inherent uncertainties involved in calculating upstream
emissions, and is arbitrary because it does not adequately account for the upstream emissions of
conventionally fueled vehicles. [EPA-HQ-OAR-2010-0799-9449-Al, pp. 1-2]
Second, EDTA opposes the automatic phase-out of the multiplier for electric drive vehicles. The
phase-out schedule in the proposed regulations is predicated on the assumption that the
multiplier will become unnecessary by the year 2022. While it is possible that electric drive
vehicles will gain widespread adoption by that year, the pace of adoption is uncertain and will be
impacted by economic factors outside of the control of vehicle manufacturers, such as the price
of conventional motor fuels. Given the inherent uncertainty in predicting the underlying
economic trends that affect this industry, EDTA recommends that the multiplier be established
for the full period covered by this rule (through 2025), subject to modification in a separate
rulemaking following a mid-term review. [EPA-HQ-OAR-2010-0799-9449-A1, p. 2]
Third, EDTA opposes NHTSA's determination that it lacks authority to include a multiplier as
part of its CAFE standards under EPCA and EISA. While these statutes do provide for certain
incentives, they do not preclude NHTSA from establishing additional incentives, such as a
multiplier. Adoption of a multiplier in NHTSA's rule would promote the fundamental policy of
developing a harmonized national system in which EPA and NHTSA establish consistent
regulatory requirements. [EPA-HQ-OAR-2010-0799-9449-A1, p. 2]
In addition, while we support the use of the utility factor methodology developed by the Society
for Automotive Engineers (SAE), we encourage EPA to ensure the manufacturers are given an
adequate opportunity to participate in determining the utility factor for each vehicle model. We
also encourage EPA to ensure that its approach to determining the utility factor is harmonized
with the ongoing efforts of the California Air Resources Board. [EPA-HQ-OAR-2010-0799-
9449-A1, p. 2]
1. Upstream Emissions.
EPA's proposed rule would provide a temporary incentive for (EVs), plug-in hybrid electric
vehicles (PHEVs), and fuel cell vehicles (FCVs) - that is, electric drive vehicles - by allowing
manufacturers to use a compliance value of 0 grams per mile (g/mile) when calculating GHG
emissions for those vehicles. This provision will allow the 0 g/mile compliance value to be used
for an unlimited number of vehicles in MY 2017-2021. But from 2022 onward, there would be a
cap on the number of vehicles that could qualify for the 0 g/mile assumption. If sales exceed the
cap in MY 2022 and afterward, the GHG emissions calculation for those vehicles would be
required to include an amount equivalent to "net upstream emissions." [EPA-HQ-OAR-2010-
0799-9449-A1, p. 2]
EDTA supports the proposal to establish a zero-emission compliance value for MYs 2017-2021,
but opposes the proposal to include upstream emissions in the compliance values for vehicles
above the cap in MY 2022 and beyond. Upstream emissions should not be included in
4-32
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
determining the compliance value because (1) EPA has authority under Title II of the Clean Air
Act only to set emissions standards based on emissions from the vehicle itself, not upstream
emissions; (2) EPA has not established an accepted methodology for calculating upstream
emissions for individual makes and models of light-duty-vehicles; (3) it is arbitrary to include
upstream emissions for electric drive vehicles, when such emissions are not regulated for other
types of vehicles; and (4) any method for allocating the proposed cap could create uncertainty
and adversely affect competition among vehicle manufacturers. [EPA-HQ-OAR-2010-0799-
9449-A1, p. 2]
a. EPA Lacks Authority to Include Upstream Emissions.
The proposed GHG emission standards are based on EPA's authority to regulate motor vehicle
emissions under Section 202(a) of the Clean Air Act, 42 U.S.C. § 7521(a). Section 202(a) gives
EPA authority to set "standards applicable to the emission of any air pollutant from any class or
classes of new motor vehicles or new motor vehicle engines ...." Id. (emphasis added). The
plain language of Section 202(a) authorizes EPA to set emission standards applicable to
emissions "from" a vehicle - i.e., tailpipe emissions. There is nothing in Section 202(a) that
states or implies that EPA can set emission standards for a vehicle based on emissions that come
from power plants or other upstream sources and are not "from" the vehicle. [EPA-HQ-OAR-
2010-0799-9449-A1, p. 3]
This reading of Section 202(a) is supported by other provisions in Title II of the Clean Air Act.
For example, Section 206 provides for the testing of vehicles to determine whether they conform
to the emission standards established by EPA. Section 206 states that EPA "shall" test or require
to be tested any new motor vehicle or engine upon request of a manufacturer, and "shall" issue a
certificate of conformity to the manufacturer if the vehicle or engine conforms to the regulations
issued under Section 202(a). This provision makes clear that EPA is required to issue a
certificate of conformity for a vehicle if the emissions from the vehicle comply with the EPA-
prescribed emissions test. Section 206 does not give EPA discretion to establish an emissions
test that imputes to a vehicle emissions that do not come from the vehicle itself, nor does it give
EPA discretion to deny a certificate of conformity for a vehicle that passes the emissions test.
Similarly, Section 207 authorizes EPA to establish the emissions test that is used for determining
"whether, when in actual use throughout its warranty period, each vehicle and engine ...
complies with the emissions standards" set in the regulations issued under Section 202. This
language in Section 207 requires the emissions test to be based on emissions from the vehicle
itself, and leaves no discretion for EPA to establish an emissions test that imputes to a vehicle
emissions released by power plants or other sources. [EPA-HQ-OAR-2010-0799-9449-Al, p. 3]
The overall structure of the Clean Air Act also confirms that Title II only gives EPA authority to
set standards for emissions that come directly from motor vehicles. Congress created a
comprehensive scheme to regulate emissions from a wide range of sources. Title I authorizes
EPA to set emissions standards for stationary sources; Title II authorizes EPA to set emissions
standards for mobile sources. 1 There are many end-users of electricity whose activities could be
associated with "upstream" emissions from power plants, but to date EPA has not sought to
impute the power plants' emissions to the end-users of the power generated by those plants.
Rather, EPA has interpreted the statutory scheme to require regulation of power plant emissions
4-33
-------
EPA Response to Comments
at the source, not at the end-user. This approach is not only consistent with the structure of the
Act; it also makes practical sense, because end users have no ability to control upstream
emissions. [EPA-HQ-OAR-2010-0799-9449-Al, p. 3]
Notwithstanding the plain language of Section 202(a) and the structure of the Clean Air Act,
EPA asserts in this rulemaking that it has authority to include upstream emissions when
establishing the compliance value for light-duty vehicles. The proposed rule itself does not
articulate the legal basis for this assertion of authority. In its previous rulemaking for MYs
2012-2016, EPA asserted in response to a comment that it has "broad discretion" to set GHG
emission standards for light-duty vehicles under Section 202, including the authority to base
compliance values on an assumed level of upstream emissions. (See 75 Fed. Reg. 75437). We
respectfully disagree with that conclusion because it is contrary to the language and intent of the
Clean Air Act. For the reasons stated above, Title II of the Act only gives EPA authority to set
standards governing emissions "from" the vehicle itself. [EPA-HQ-OAR-2010-0799-9449-Al,
pp. 3-4]
b. EPA's Proposed Methodology for Estimating Upstream Emissions is Arbitrary.
Even if EPA were authorized to include upstream emissions when setting standards for vehicle
emissions under Title II, such a requirement would be permissible only if EPA could articulate a
non-arbitrary basis for estimating the upstream emissions for each vehicle model covered by the
regulations. The "four-step methodology" proposed in this rule falls far short of this
requirement. Rather than describing a methodology for estimating the upstream emissions
associated with each vehicle, the proposed rule requires a single national average to be used as
the basis for estimating upstream emissions for all vehicles. (76 Fed. Reg. 75014) (requiring use
of "2025 nationwide average electricity upstream GHG emissions rate of 0.574 grams/watt-hour
at the powerplant"). [EPA-HQ-OAR-2010-0799-9449-Al, p. 4]
This national average - or any national average for that matter - fails to take into account the
wide variation in actual "upstream emissions" among different regions, demographic groups, and
vehicle types. The fundamental point is that average GHG emissions from electricity generation
are not necessarily representative of the incremental emissions resulting from the charging of a
particular vehicle or vehicle model. The additional emissions associated with charging a
particular vehicle or vehicle model will depend on many factors. First, any estimate of upstream
emissions would need to take into account the geographic distribution of the users of the
vehicles, since the electricity generation mix varies considerably by region. In addition, it would
need to take into account the expected driving habits and charging habits of those users, which
could vary significantly for different vehicle models. It also would need to take into account a
host of capital investment and operational decisions made by electric utilities and grid operators,
including decisions about the electricity generation mix for both base load and peak load that are
made on a daily basis in managing the grid, and over time, in planning the energy inventory of a
service territory. [EPA-HQ-OAR-2010-0799-9449-A1, p. 4]
To avoid arbitrariness, any calculation of upstream emissions would need to be customized to
reflect these factors with regard to each vehicle model in a manufacturer's fleet. To date, no
such methodology has been developed, and indeed it may not be possible to credibly do so. In
4-34
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
the absence of a statistically reliable methodology for calculating upstream emissions for each
vehicle model, it would be arbitrary for EPA to require upstream emissions to be included as part
of the compliance value for electric drive vehicles. [EPA-HQ-OAR-2010-0799-9449-A1, p. 4]
c. EPA's Proposal is Also Flawed Because it Would Not Apply Equally to All Vehicle Types.
An additional flaw in the proposed rule is the fact that it requires upstream emissions to be
included for electric drive vehicles in spite of the fact that this has never been done for
conventionally fueled vehicles. Even if EPA were authorized to regulate upstream emissions
under Title II, any such system would need to apply evenhandedly to all categories of vehicles,
including those that use petroleum fuel. [EPA-HQ-OAR-2010-0799-9449-Al, p. 4]
The proposed regulations seek to address this concern by requiring the upstream emissions for a
"comparable midsize gasoline vehicle" to be deducted from the upstream emissions for an
electric drive vehicle. (See 76 Fed. Reg. 75014.) This methodology would mitigate, but not
eliminate, the arbitrariness inherent in requiring upstream emissions to be included for some
vehicles but not others. By EPA's own logic, this methodology would understate the GHG
emissions of both gasoline vehicles and electric drive vehicles.
In short, we see no justification for imposing this upstream emission requirement on electric vehi
cles alone. [EPA-HQ-OAR-2010-0799-9449-A1, pp. 4-5]
d. Allocating a Cap Could Create Uncertainty and Adversely Affect Competition.
Finally, the proposed methods for allocating a cap would create uncertainty among
manufacturers and could distort competition. An industry-wide cap is especially problematic,
because each manufacturer's cap would depend on that manufacturer's relative share of the
market, not its absolute sales volume; a cap based on relative share is very difficult for a
manufacturer to predict, because it is tied to decisions made by other manufacturers. The
proposed company-specific cap would provide greater certainty, but it has drawbacks as well.
Any company-specific cap is potentially market-distorting, because it could enable a
manufacturer to lock in a multi-year competitive advantage (in the form of a much higher cap)
based on that manufacturer's sales of electric drive vehicles in the years immediately following
adoption of these regulations. While advantageous to that manufacturer, such a system would
conflict with the goal of free and open competition. These practical difficulties with allocating a
cap provide a further basis for eliminating the cap and instead allowing all vehicles to qualify for
the zero-emissions compliance value.
For all of these reasons, EDTA recommends that the rule provide a zero-emissions compliance
value for electric drive vehicles for the full period covered by this rule, MYs 2017-2025. [EPA-
HQ-OAR-2010-0799-9449-A1, p. 5]
2. Phase-Out of Multiplier for EVs, PHEVs, and FCVs.
For MY 2017-2021, EPA is proposing an incentive multiplier for all electric drive vehicles to
facilitate market penetration of the most advanced vehicles as rapidly as possible. This
multiplier approach means that each EV, PHEV, and FCV would count as more than one vehicle
4-35
-------
EPA Response to Comments
in the manufacturer's compliance calculation. For EVs and FCVs, the multiplier would be 2.0
from MY 2017 to MY 2019, at which point it will be phased down to 1.75 in 2020 and 1.50 in
2021; in 2022 and later, it would be 1.0 (i.e., no multiplier). For qualifying PHEVs, the
multiplier would be 1.6 from 2017-2019, 1.45 in 2020, 1.3 in 2021, and 1.0 from 2022 onward.
To qualify for the multiplier, a PHEV would need to complete a full EPA highway test (10.2
miles), without using any conventional fuel, or alternatively, have a minimum equivalent all-
electric range of 10.2 miles as measured on the EPA highway cycle. [EPA-HQ-OAR-2010-0799-
9449-A1, p. 5]
The rationale for the multiplier, as described in the proposed rule, is that a multiplier is needed as
an incentive to accelerate the commercialization and widespread adoption of EVs, PHEVs, and
FCVs. EDTA concurs that this incentive is needed, but opposes automatic termination of this
incentive in 2021. There is significant uncertainty in making multi-year market predictions; in
this case, the uncertainty is compounded by the fact that electric drive technology and markets
are just emerging. Moreover, expanding electric drive vehicle capacity will require substantial
investments and long-term planning by manufacturers and other industry participants. The
incentive to encourage those investments should be similarly long-term and not subject to an
arbitrary time limit. [EPA-HQ-OAR-2010-0799-9449-A1, p. 5]
For these reasons, EDTA recommends that the multiplier be extended at its initial level
throughout the full time period covered by these regulations (through MY 2025), subject to mid-
term review. If EPA determines through its mid-term review of actual market conditions that the
incentive is no longer needed or should be reduced, it could make that change through a separate
rulemaking. [EPA-HQ-OAR-2010-0799-9449-A1, pp. 5-6]
In short, rather than arbitrarily building in a phase-out schedule, the rule should include a trigger
for a new rulemaking to reduce the multiplier //EPA determines - based on sales volumes of
electric drive vehicles - that the multiplier is no longer needed. This approach will ensure that
the multiplier remains in effect as long as it is needed, while also providing a mechanism to
reduce or eliminate the multiplier when it is warranted. [EPA-HQ-OAR-2010-0799-9449-A1, p.
6]
3. NHTSA Authority to Establish a Multiplier.
EDTA also objects to NHTSA's determination that it lacks authority to establish a multiplier in
the fuel economy regulations under EPCA and EISA. The preamble to the proposed rule states
that: "NHTSA currently interprets EPCA and EISA as precluding the agency from offering
additional incentives for EVs, FCVs and PHEVs, except as specified by statute, and thus is not
proposing incentive multipliers comparable to the EPA incentive multipliers described above."
(76 Fed. Reg. 74878). This statement is accompanied by a footnote, which states that: [EPA-
HQ-OAR-2010-0799-9449-A1, p. 6]
Because 49 U.S.C. 32904(a)(2)(B) expressly requires EPA to calculate the fuel economy of
electric vehicles using the Petroleum Equivalency Factor developed by DOE, which contains an
incentive for electric operation already, and because 49 U.S.C. 32905(a) expressly requires EPA
to calculate the fuel economy of FCVs using a specified incentive, NHTSA believes that
4-36
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
Congress' having provided clear incentives for these technologies in the CAFE program suggests
that additional incentives beyond those would not be consistent with Congress' intent. Similarly,
because the fuel economy of PHEVs' electric operation must also be calculated using DOE's
PEF, the incentive for electric operation appears to already be inherent in the statutory
structure.(76 Fed. Reg. 74878, at footnote 56). [EPA-HQ-OAR-2010-0799-9449-A1, p. 6]
EDTA disagrees that these statutory provisions preclude NHTSA from including an incentive
multiplier for EVs, PHEVs, and FCVs in its CAFE regulations. As NHTSA acknowledges in the
proposal, "the President's National Fuel Efficiency Policy announcement of May 19,
2009...called for harmonized rules for all automakers...." (76 Fed. Reg. 75164). Consistent
with this directive, NHTSA should, wherever possible, interpret its authority in a manner that is
consistent with the establishment of a single, consistent national program, with requirements that
parallel those established by EPA. [EPA-HQ-OAR-2010-0799-9449-Al, p. 6]
The interpretation of EPCA and EISA offered in footnote 56 falls short in this regard. 42 U.S.C
§ 32904(a)(2)(B) merely directs NHTSA to "include" equivalent petroleum-based fuel economy
values in its calculation of average fuel economy for electric vehicles. This section contains no
"exclusivity" language, nor does it even imply an intent to preclude other incentives. From a
practical standpoint, there is nothing that prevents NHTSA from complying with this statutory
directive and also promulgating a regulatory incentive multiplier to harmonize with EPA's
program. The same holds true for 42 U.S.C. § 32905(a), which directs NHTSA to use a specific
equivalency factor for liquid alternative fuel. This language does not otherwise constrain
NHTSA's authority; NHTSA can comply with this statutory directive and comply with the
President's directive to harmonize the CAFE and GHG programs. EDTA strongly encourages
NHTSA to reconsider its interpretation of its governing statutes in light of the President's
harmonization policy. EDTA does not believe that EPCA or EISA presents a barrier to the
adoption by NHTSA of an incentive multiplier for advanced technology vehicles, consistent with
EPA's proposal. [EPA-HQ-OAR-2010-0799-9449-A1, p. 6]
1. In the proposed rule, EPA implies that it needs to address upstream GHG emissions from
motor vehicles as part of the emission standards under Title II of the Clean Air Act because that
"[a]t this time ... there is no such comprehensive program addressing upstream emissions of
GHGs." (See 76 Fed. Reg. at 75010). In fact, EPA has taken several steps to regulate the GHG
emissions of stationary sources, including rulemakings under the Prevention of Significant
Deterioration and Title V Operating Permit programs and the upcoming New Source
Performance Standard for electric generating units. These programs directly regulate the GHG
emissions of power plants. The fact that EPA is already regulating upstream GHG emissions
contradicts the rationale offered in this rulemaking for addressing those emissions through the
emission standards for motor vehicles.
Organization: Ferrari
We concur with EPA that believes it would be appropriate to provide an incentive to encourage
the introduction of advanced technology vehicles (Electric Vehicles, Plug-in Hybrids, and Fuel
4-37
-------
EPA Response to Comments
Cells), FFV and AFV vehicles and off-cycle technologies and that a credit mechanism is an
effective way to do this. [EPA-HQ-OAR-2010-0799-9535-A2, p. 14]
Organization: Fisker Automotive, Inc.
Fisker's solution to this conundrum is the electric vehicle with extended range (EVer), a
powertrain that enables all-electric driving while eliminating the range anxiety that presents a
hurdle to some buyers. We are proud to offer the Karma as the first electric vehicle with
extended range in the premium luxury sedan segment. Not only does the Karma offer a world-
class combination of style and luxury, but the Karma would allow Fisker to comply with the
greenhouse gas standards proposed in this rulemaking for 2025 - today. [EPA-HQ-OAR-2010-
0799-9266-A1, pp. 1-2]
As stated in the preamble to this rule, plug-in vehicles are one of the technologies that "have
significant transportation GHG emissions and oil consumption game-changing potential in the
longer run, and that also face major market barriers in entering a market that has been dominated
by gasoline vehicle technology and infrastructure for over 100 years." Fisker Automotive is
bringing to market today the type of vehicle that this rule is designed to support. [EPA-HQ-
OAR-2010-0799-9266-A1, p. 2]
Encourage re-consideration of upstream emissions in the future
One of the rationales for accounting for upstream emissions (for those vehicles not subject to the
incentive) is that "there is currently no program in place to reduce GHG emissions from electric
powerplants." However, in the recently adopted amendments to California's GHG program for
light-duty vehicles, the Air Resources Board (ARB) continued to hold automakers responsible
for upstream emissions even in the context of a cap-and-trade program in that state to control
GHG emissions from powerplants. As automakers have no control over the GHG intensity of
electricity generation, we encourage EPA to consider a pathway in which tailpipe emissions and
upstream emissions are controlled separately. For instance, if a national cap-and-trade program
or other GHG control regulation is in place at the time of the proposed mid-term review, we
would encourage both EPA and NHTSA to reconsider its treatment of upstream emissions.
[EPA-HQ-OAR-2010-0799-9266-A1, p. 4]
Support incentive program for electric vehicles, plug-in hybrid electric vehicles, and fuel cell
vehicles as proposed
In the absence of a means of controlling GHG emissions upstream, Fisker supports the 0 g/mi
upstream emissions incentive and the multipliers for years 2017-2021 as proposed. We believe
the requirement that a PHEV be required to complete a full EPA highway test without using any
conventional fuel - essentially a 10.2 mile All Electric Range (AER) - is an appropriate
threshold to place for participation in the incentive program. [EPA-HQ-OAR-2010-0799-9266-
Al,p.5]
Organization: Ford Motor Company
4-38
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
Production Volume Multipliers: To promote the research, development and manufacture of
advanced technology vehicles, Ford supports the proposal to provide production volume
multipliers for electrified vehicles (full battery electric and plug-in hybrid electric vehicles) and
fuel cell vehicles, at the levels proposed. As noted in the preamble, it is likely that these
technologies will become increasingly important toward meeting the aggressive standards, and
we further recommend that the continuation of the multipliers beyond 2021 model year be
considered during the mid-term evaluation. [EPA-HQ-OAR-2010-0799-9463-A1, p. 18]
Upstream Emissions: Ford also supports the continuation of the accounting of the electric drive
portion for battery electric and plug-in hybrid electric vehicles in the GHG equation as 0
grams/mile. However, just as traditional vehicles are certified based on their measured tailpipe
emissions over the federal test procedures, without regard to the source of the gasoline on which
they are operated, we do not believe it is appropriate to include upstream (e.g., utility) emissions
in the vehicle greenhouse gas compliance calculation for electrified products. Therefore, the
production volume caps, adopted for 2012-16 model years as well as those proposed for the
2022-2025 model years should be eliminated. [EPA-HQ-OAR-2010-0799-9463-Al, p. 19]
Auto manufacturers have no control over the emissions of the utility industry, but unique
solutions for electric vehicles are being investigated which allow the customer to further reduce
the "carbon footprint" of these vehicles independent of the local energy supply. For example,
Ford has announced a partnership with SunPower to provide a high-efficiency rooftop solar
system that could provide Focus Electric owners enough renewable energy production to offset
the energy used for charging. Ford also has an established a partnership with Microsoft to
develop technology that will allow the customer to easily charge vehicles when electricity rates
are lowest, which typically corresponds to when the utilities have excess capacity in their system.
Balancing utility load in such a manor improves the overall utility industry carbon footprint.
Requiring manufacturers to bear the burden of another industry's greenhouse gas emissions is
not only inappropriate, it could potentially disincentivize innovations like these which provide a
real world benefit. [EPA-HQ-OAR-2010-0799-9463-A1, p. 19]
Ford supports the comments provided by the EDTA, which raises the additional issues regarding
EPA's authority to include upstream emissions in a vehicle requirement and the proposed
methodology for estimating the upstream emissions. [EPA-HQ-OAR-2010-0799-9463-Al, p.
19]
Definition of PHEV: EPA has proposed that a plug-in hybrid vehicle must meet a minimum "all
electric range" limit of 10.2 miles in order to be eligible to utilize the production volume
multiplier, and requested comments on this threshold and whether a different PHEV metric (such
as battery capacity, ratio of electric motor power to engine, or total vehicle power) would be
appropriate. Ford supports the minimum range requirement both as the appropriate metric for
defining a PHEV for the purpose of the use of a volume multiplier, and at the level proposed
(10.2 miles). Further, we support the proposal, as stated by EPA, that the minimum electric range
may be optionally measured as equivalent all-electric range as measured on the EPA highway
cycle. [EPA-HQ-OAR-2010-0799-9463-A1, p. 19]
NHTSA Incentives for Electric Vehicles, Plug-in Hybrids, and Fuel Cell Vehicles
4-39
-------
EPA Response to Comments
NHTSA has also expressed the view that it lacks authority to establish an incentive multiplier for
EVs, PHEVs, and FCVs, comparable to the one proposed by EPA, in the fuel economy
regulations under EPCA and EISA. In this case, we disagree with NHTSA's interpretation of
EPCA and EISA. In our view, the law does not address this issue, either directly or indirectly.
Moreover, the President has directed EPA and NHTSA to coordinate and harmonize their
regulations as much as possible. Consistent with that directive, the agencies should interpret
statutes so as to optimize the degree of harmonization between the GHG program and the CAFE
program. Thus, if one agency incorporates a program flexibility into its rules, the other agency
should adopted a corresponding program flexibility unless expressly prohibited by law. We refer
the agencies to the comments of EDTA on this point, which we support and incorporate by
reference. [EPA-HQ-OAR-2010-0799-9463-Al, p. 21]
Organization: General Motors Company
GM supports the advanced technology volume multipliers as proposed, as well as the proposed
definitions and metrics for electric, fuel cell and plug-in vehicles. GM recommends that all
aspects of the advanced technology program should be fully examined in the mid-term review,
and updated as appropriate. [EPA-HQ-OAR-2010-0799-9465-A1, p. 3]
GM does not believe that requiring automakers to account for upstream electricity carbon
emissions should ever become a part of the agencies' vehicle regulatory programs. Vehicle
compliance has been, and should continue to be, regulated at the vehicle emissions and
consumption level. For the purposes of calculating a manufacturer's fleet average performance,
GM strongly recommends that all upstream carbon emissions from the use of electricity be
quantified as zero, for all model years, and for all vehicle volumes. [EPA-HQ-OAR-2010-0799-
9465-A1, p. 3]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 36-37.]
Finally, a specific concern that we have with the proposal is related to the treatment of so-called
upstream electricity emissions. EPA has couched the quantification of upstream emissions at 0.0
grams per mile as a 'flexibility' for automakers. This characterization is really inappropriate and
could lead EPA at some point to reduce or eliminate this so-called flexibility. At its core, the
problem is that the word flexibility suggests some measure of choice or control. However,
automakers control neither the feedstocks nor the conversion processes for generating and
creating electricity. Suggesting that at some point we could or should be responsible for these
emissions is worrisome to us. To the degree that these emissions are going to be addressed by
government, legislators and regulators need to create a program to do so directly, not indirectly
through further restrictions on vehicles. With due respect, we have a tough job ahead of us as it
is.
Organization: Growth Energy
Although not required by Congress in EISA or in the other statutes governing this rulemaking,
the proposed standards in the Joint NPRM place great reliance on the production, sale and use of
4-40
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
vehicles powered from the electrical grid, far exceeding any prior federal regulatory program. As
noted above, the success or failure of the regulations that the Agencies are proposing will
ultimately be determined by the consumer market for new motor vehicles. Insofar as the
Agencies' program is based on regulatory templates from California, which has attempted for
more than 20 years to implement requirements for widespread sale and use of pure electric
vehicles, there is reason for great skepticism about the Joint NPRM's view that grid-powered
electric vehicles (pure electric vehicles and plug-in hybrid vehicles) can provide a "game-
changing" strategy to reduce GHG emissions and dependence on foreign oil. [EPA-HQ-OAR-
2010-0799-9505-A1, p. 2]
This Attachment to the Comments of Growth Energy explains why EPA needs to reconsider its
analysis of the electric vehicle component of the Joint Notice of Proposed Rulemaking (Joint
NPRM). [EPA-HQ-OAR-2010-0799-9505-A1, p. 7]
As part of the Joint NPRM, EPA includes incentives for electric vehicles (EVs), plug-in hybrid
electric vehicles (PHEVs), and fuel cell vehicles (FCVs) intended "To facilitate market
penetration of the most advanced vehicle technologies as rapidly as possible..." EPA goes on to
provide the following rationale for providing these incentives:
EPA has identified two vehicle powertrain-fuel combinations that have the future potential to
transform the light-duty vehicle sector by achieving near-zero greenhouse gas (GHG) emissions
and oil consumption in the longer term, but which face major near-term market barriers such as
vehicle cost, fuel cost (in the case of fuel cell vehicles), the development of low-GHG fuel
production and distribution infrastructure, and/or consumer acceptance.
• Electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) which would
operate exclusively or frequently on grid electricity that could be produced from very low
GHG emission feedstocks or processes.
• Fuel cell vehicles (FCVs) which would operate on hydrogen that could be produced from
very low GHG emissions feedstocks or processes. [EPA-HQ-OAR-2010-0799-9505-A1,
p. 7]
EPA believes that these advanced technologies represent potential game-changers with respect to
control of transportation GHG emissions as they can combine an efficient vehicle propulsion
system with the potential to use motor fuels produced from low-GHG emissions feedstocks or
from fossil feedstocks with carbon capture and sequestration. [EPA-HQ-OAR-2010-0799-9505-
Al,p. 8]
However, EPA also notes that during the 2017 to 2025 time frame that the production of the
electricity and hydrogen required to power these vehicles:
... will decrease the overall GHG emissions reductions associated with the program as the
upstream emissions associated with the generation and distribution of electricity are higher than
the upstream emissions associated with production and distribution of gasoline... [EPA-HQ-
OAR-2010-0799-9505-A1, p. 8]
4-41
-------
EPA Response to Comments
and quantifies the magnitude of these lost emission reductions as between 80 million and 120
million metric tons of CC>2 over the period from 2017 to 2025 alone. According to EPA, the loss
in benefits associated with EV, PHEV, and FCV incentives equals 4 to 5% of the total GHG
reductions expected from the proposed rule. [EPA-HQ-OAR-2010-0799-9505-A1, p. 8]
Given that EPA admits that the incentives it is providing for EVs, PHEVs, and FCVs will
undermine the goal of the GHG regulation at least during the period from 2017 to 2025, the
obvious question is why are these incentives being provided? The answer to this question is that
as indicated above, EPA believes these advanced technologies are potential game-changing
technologies. As discussed in detail below, not only does EPA overstate the potential GHG
benefits of EVs, PHEVs, and FCVs, but the Agency fails to accurately address the serious
challenges facing these vehicle technologies. As a result, EPA's decision to incentivize these
technologies seems completely at odds with the goal of the proposed rule, which is to lower
GHG emissions. [EPA-HQ-OAR-2010-0799-9505-A1, p. 8]
In contrast, the proposed rule ignores the fact that vehicles designed to operate on ethanol-
blended fuels are truly ".. .potential game-changers with respect to control of transportation GHG
emissions..." Given this, EPA must modify the proposed rule to provide incentives that will
ensure that vehicles capable of operation on ethanol blends continue to enter the vehicle fleet in
substantial numbers so that the tremendous "game-changing" GHG benefits of ethanol-blended
fuels can be realized in the real world. [EPA-HQ-OAR-2010-0799-9505-A1, p. 8]
Another major factor with respect to vehicle costs for EVs, PHEVs, and FCVs are the durability
of batteries and fuel-cells. Most analyses of EVs, PHEVs, and FCVS, including that associated
with CARB's recent rulemaking (which used the same data that supports the NPRM) are based
on two highly uncertain assumptions which are: [EPA-HQ-OAR-2010-0799-9505-A1, pp. 11-
12]
1. The useful lives of EVs, PHEVs, and FCVs will be the same as conventional vehicles in terms
of miles travelled; and
2. Vehicle owners will not have to replace batteries or major fuel cell system components over
the course of a vehicle's useful life. [EPA-HQ-OAR-2010-0799-9505-A1, p. 12]
Obviously if either shorter vehicle life or the need to incur replacement costs for batteries or fuel
cell systems occurs, the costs associated with EV, PHEV and FCV will be even higher than
described above making these vehicles even less likely to provide "game-changing" reductions
in GHG emissions. [EPA-HQ-OAR-2010-0799-9505-A1, p. 12]
In supporting the proposed credits for EVs and PHEVs, EPA notes that ".. .electricity is
considerably cheaper, on a per mile basis, than gasoline." While that may be true at present for
electricity from the existing electrical grid and generation mix, it is not at all clear that will be the
case for the electricity produced ".. .from low- GHG emissions feedstocks or from fossil
feedstocks with carbon capture and sequestration" that EPA makes clear will need to be used to
power EVs and PHEVs in order for them to provide "game-changing" reductions in GHG
emissions. Generation costs for electricity from low-GHG sources or fossil-fired sources with
4-42
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
carbon sequestration may be far higher than current generation costs and need to be carefully
considered by EPA to the extent that decisions to provide incentives to EVs and PHEVs are
based on the premise that electricity costs less than gasoline. Evidence that generation costs for
low-GHG sources are likely to be higher than for existing plants can be seen, for example, in
substantially higher capital cost estimates for those sources. Again, construction and operation of
these low-GHG electricity sources are a necessary condition that must be met in order for EVs
and PHEVs to provide "game-changing" reductions in GHG emissions. [EPA-HQ-OAR-2010-
0799-9505-A1, pp. 12-13]
The situation with respect to fuel costs for hydrogen is far less clear than for electricity.
Hydrogen dispensed as a transportation fuel for use in FCVs is currently more expensive than
gasoline and even in large scale wide spread production, the cost of low-GHG hydrogen is going
to be considerably higher than that of central steam reforming of natural gas. Therefore, there
will likely be substantial cost premiums associated with low GHG hydrogen that will have to be
paid in order for FCVs to provide "game-changing" reductions in GHG emissions. [EPA-HQ-
OAR-2010-0799-9505-A1, p. 13]
In order to put the fuel cost issues for EVs, PHEVs, and FCVs into perspective, the "Payback
Calculator" developed by CARB for its recent rulemaking was used to estimate the prices at
which fuel costs for EVs and FCVs would equal those for gasoline vehicles based on low and
average gasoline price forecasts which range from about $3.10 to $4.10 from 2017 to 2025.
Using this CARB spreadsheet and its optimistic assumptions regarding EV and FCV energy
efficiency, the electricity price at which electric vehicle fuel costs equal those for gasoline ranges
from about $0.36 to $0.45 per kilowatt-hour while the hydrogen price ranges from about $7.50 to
$9.00 per kilogram. [EPA-HQ-OAR-2010-0799-9505-A1, p. 13]
Although these prices for electricity and hydrogen may seem high relative to current electricity
prices and prices for hydrogen produced using steam methane reforming at centralized plants, it
should be recalled that they have to be compared to the prices that will be associated with
electricity from marginal new ultra-low GHG generation capacity that would not otherwise be
built and hydrogen production using ultra-low GHG processes. Given this, it is not at all clear
that when proper cost accounting is made for ultra-low GHG electricity and hydrogen production
that EVs, PHEVs, and FCVs will provide any meaningful fuel costs savings relative to
conventional vehicles which in turn will create yet another hurdle to their ever providing "game-
changing" reductions in GHG emissions. [EPA-HQ-OAR-2010-0799-9505-A1, p. 13]
Although it might seem that the situation would be similar with respect to the distribution of
electricity for use by EVs and PHEVs, that is in fact not the case. First, there are direct costs
associated with residential charging equipment (referred to as electric vehicle service equipment
or EVSE) which EPA has estimated range from about $1,300 to $1,500 for equipment and
installation labor over the 2017 to 2025 period with the lower end of the range applying in the
later years. These costs must be added on top of the already large incremental purchase prices of
EVs and PHEVs. [EPA-HQ-OAR-2010-0799-9505-A1, p. 14]
Next there is the possibility that additional costs will be incurred to develop public EV and
PHEV recharging infrastructure. While it is not clear that this infrastructure will be necessary,
4-43
-------
EPA Response to Comments
CARB will be studying the need for it and may at some point mandate its construction, and EPA
may have to follow suit in the remainder of the nation. Again, to the extent that public EV and
PHEV recharging infrastructure does have to be constructed to improve the viability of these
vehicles those costs will obviously also have to added to the ledger. [EPA-HQ-OAR-2010-0799-
9505-A1, p. 14]
Another potentially substantial cost associated with the deployment of EVs and FCVs is the need
to upgrade the existing electrical transmission and distribution system. This is a problem that is
already facing California that will almost certainly have to be dealt with across the country
before EVs and PHEVs could even be hoped to provide "game-changing" reductions in GHG
emissions. [EPA-HQ-OAR-2010-0799-9505-A1, p. 14]
FCVs face even more serious issues with respect to the development of refueling infrastructure.
First, refueling stations will either have to be located in reasonably proximity to existing
hydrogen production facilities and receive hydrogen by truck or pipeline or utilize expensive
onsite hydrogen generation capability. In addition, there may be significant facility siting and
permitting issues and concerns regarding the high pressures and special equipment required for
FCV refueling. [EPA-HQ-OAR-2010-0799-9505-A1, p. 14]
Although EPA has not attempted to analyze the costs associated with the development of the
hydrogen refueling infrastructure that will be required to support FCVs regardless of how the
hydrogen they use is produced, CARB has performed an analysis that likely represents a "best
case" scenario. This analysis includes numerous optimistic assumptions regarding hydrogen
station costs as well and assumes both that stations can be carefully located using knowledge of
where FCVs will be sold and in general 100% utilization rates for hydrogen refueling stations.
Even with these very optimistic assumptions, the direct capital costs for refueling stations
amount to about $1,700 per FCV over roughly the same period as the 2017 to 2025 period
considered by EPA. Again, these costs have to be added on top of the already large incremental
purchase costs for FCVs and must be incurred before it can even be hoped that FCVs will
provide "game-changing" GHG reductions. [EPA-HQ-OAR-2010-0799-9505-A1, pp. 14-15]
To summarize, EPA has proposed to provide incentives under the GHG regulation for EVs,
PHEVs, and FCVs because according to EPA these vehicles have the potential to yield "game
changing" reductions in GHG emissions. However, in order for those reductions to be realized
the following things all have to occur:
1. The public (directly or indirectly) must be willing to pay substantially higher prices for these
vehicles;
2. The public (directly or indirectly) must be willing to pay substantial costs in order to develop
the infrastructure required to provide fuel to these vehicles;
3. The public must be willing (directly or indirectly) to pay the costs associated with low-GHG
electricity and/or hydrogen, which are not likely to be substantially lower than the costs for
petroleum based fuels. [EPA-HQ-OAR-2010-0799-9505-A1, p. 15]
4-44
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
Organization: Honeywell Transportation Systems
EPA and NHTSA have historically refrained from adopting prescriptive policies favoring
technologies, instead aiming to implement regulations favoring innovation and preserving the
ability of industry to develop new technologies while also encouraging enhancements to current
technologies. The Council of Economic Advisors has strongly endorsed technology neutrality,
making clear that "the difficulty in promoting technology adoption through subsidies and other
tools lies in designing policies that are neutral across all alternative technologies. Weighting the
size of a subsidy by the degree to which each technology reduces environmental and security
concerns would help to ensure that the Government is not in the position of picking winners.
[EPA-HQ-OAR-2010-0799-9474-Al,p.3]
The agencies have proposed various incentive programs. Incentives for electric drivetrains take
the form of both credit multipliers and a focus on tank-to-wheel emissions rather than accounting
for the full well-to-wheel emissions of those vehicles. [EPA-HQ-OAR-2010-0799-9474-Al, p.4]
Organization: Hyundai America Technical Center
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 173.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 23.]
For example, some OEMs are focusing resources on electric vehicles, and they are receiving
credit multipliers for expanding that technology.
Organization: Institute for Policy Integrity, New York University School of Law
EPA Should Move Quickly Toward Fully Counting Upstream Emissions from Electric
Vehicles [EPA-HQ-OAR-2010-0799-9480-A1, p. 11]
In the proposed rule, EPA continues its practice of incentivizing electric vehicle technology by
treating such vehicles as producing zero emissions and by letting manufacturers apply a
multiplier when counting electric vehicles in their fleet averages. Yet, as EPA knows, electric
vehicles are not responsible for zero greenhouse gas emissions: electric vehicles run on energy
from the electric grid, produced largely by carbon-emitting combustion. EPA's program in
essence allows for a triple undercounting of greenhouse gas emissions—once by not accounting
for emissions from electric cars, twice by counting electric cars more than once when averaging,
and finally by allowing the credits to be traded to other manufacturers—and allowing for
increases in greenhouse gas emissions at every step. Any form of subsidization of new
technology should be neutral with respect to greenhouse gas emissions; it should definitely not
contribute to their increase. Although it may be a valid policy goal to incentivize new
technology, EPA should achieve this goal by providing grants and subsidies to manufacturers
and scientists exploring all promising emission-reducing technologies. By giving inflated
regulatory incentives to a certain type of technology rather than allowing manufacturers to find
4-45
-------
EPA Response to Comments
the most efficient and effective solution, EPA will disincentivize other forms of technology that
may be more cost-effective at reducing greenhouse gas emissions. [EPA-HQ-OAR-2010-0799-
9480-Al,pp. 11-12]
Fortunately, EPA at least plans to limit these distorting credits starting with model year 2022,
dropping the multiplier and capping the number of cars that can be counted as having zero
emissions; any remaining electric vehicles will be assigned their net upstream emissions. The
agency asks for comments on whether there should be an interim period where only half of
upstream emissions are counted, whether any changes should be made to the current electric
vehicle incentive program, and whether similar incentives should be extended to other specific
technologies. For the reasons given above, EPA should either eliminate these incentives, or at
least move as quickly as possible toward fully accounting for the upstream emissions of
alternative fuel vehicles. [EPA-HQ-OAR-2010-0799-9480-A1, p. 12]
Organization: International Council on Clean Transportation (ICCT)
13. While the ICCT strongly supports development of electric and fuel cell vehicles, one of our
core principles is that efficiency and greenhouse gas emission standards should be technology
neutral. Default zero upstream electric and fuel cell vehicle credits and multipliers violate this
principle and reduce the benefits from the rule. [EPA-HQ-OAR-2010-0799-9512-A1, p. 3]
The provision will also give windfall credits to vehicles required by the CA ZEV mandate,
reducing benefits from the rule without any additional advanced vehicle sales. Electric and fuel
cell vehicle credits should at least be limited to vehicles that are additional to those required by
the ZEV mandate. A proposed system that strikes a balance between providing appropriate
incentives for advanced vehicles and maintaining the effectiveness of the standards is detailed in
our comments. [EPA-HQ-OAR-2010-0799-9512-A1, pp. 3-4]
13) Upstream Plug-in and Fuel Cell Vehicle Credits
The ICCT was founded around the Bellagio Principles37, set forth in 2001 by regulators from
the largest car markets around the world to help guide the future of worldwide motor vehicle
technology and transportation fuels. A key principle states: 'Policymakers must...base policies
solely on performance compared to societal objectives, and not give special consideration to
specific fuels, technologies, or vehicle types.' [EPA-HQ-OAR-2010-0799-9512-A1, p. 25]
Technology-neutral standards have a number of advantages over policies that specifically target
distinct technologies. Picking the right 'winners' is challenging, and the wrong choices may
hinder technologies that could have had the greatest potential benefit over the long run.
Technology-specific bonuses reduce transparency and at the same time introduce opportunities
for windfall credits at the expense of alternative technology development, consumer cost savings,
and GHG reductions. [EPA-HQ-OAR-2010-0799-9512-A1, p. 25]
EPA has proposed two electric vehicle (EV) technology-specific bonus credits:
4-46
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
1. A default GHG compliance value of zero g/mi for battery electric vehicles (BEVs), fuel cell
electric vehicles (FCEVs), and the electric operation fraction of plug-in hybrid electric vehicles
(PHEVs). [EPA-HQ-OAR-2010-0799-9512-A1, p. 25]
2. A system of multipliers that allows manufacturers to count EVs as more than one vehicle in
manufacturers' compliance calculations during the 2017 to 2021 model years. [EPA-HQ-OAR-
2010-0799-9512-Al,p. 25]
The ICCT strongly agrees with the need to commercialize BEVs, FCEVs and PHEVs. These
technologies are key components needed to meet the ambitious 2050 GHG reduction targets
necessary to avert the worst impacts of climate change.39 To promote these vehicles without
violating the principle of technology neutrality, ICCT is proposing an alternative accounting
method for EV upstream fuel cycle GHG emissions that strikes a balance between providing
advanced vehicle credits and maintaining technology-neutral standards. We also propose
eliminating or restricting the use of multipliers and eliminating windfall credits for vehicles that
are required under the California ZEV mandate. This would appropriately reward benefits
inherent to EV technology, while also encouraging a number of other technology options to
further improve EV efficiency. [EPA-HQ-OAR-2010-0799-9512-A1, pp. 25-26]
The NPRM estimates that the two credit types proposed in the rule would erode 80 to 110
million metric tons of benefits from the MY 2017-2025 GHG standards. Our detailed comments
below describe the benefits of ICCT's proposed technology-neutral EV emissions accounting
system, contrasting them with the large windfall credits and unfavorable cost/benefit ratios that
would result from the currently proposed EV incentives. [EPA-HQ-OAR-2010-0799-9512-A1,
p. 26]
Electric Vehicle Net Upstream Fuel Cycle GHG Emissions Accounting
There are a number of compelling reasons why the regulatory proposal should properly account
for the EV fleet's upstream GHG emissions from grid electricity and/or hydrogen. First, such a
system would achieve all of the benefits of a technology-neutral standard. As noted earlier,
transparency would increase and windfall credits would be avoided. Windfall credits are
discussed in further detail later. [EPA-HQ-OAR-2010-0799-9512-A1, p. 26]
In addition, full EV upstream net-GHG emissions accounting would incentivize efficiency
improvements and fully legitimize, for EVs, the application of many important and desirable off-
cycle incentives proposed by the US EPA. ICCT expects that EVs can earn low or zero g/mile
compliance values (as shown in Table 4) both because of intrinsic advantages to electric drive
technology and the ability to capitalize on other improvements such as:
• Inherent efficiency advantages over petroleum combustion engines
• Further efficiency improvements through lightweighting, aerodynamics, and low rolling
resistance tires
• Displaced petroleum upstream emissions
4-47
-------
EPA Response to Comments
• Reduced air conditioning GHG emissions through low Global Warming Potential (GWP)
refrigerants, low-leak technologies and/or improved AC system efficiency
• Other off-cycle credits, when justified [EPA-HQ-OAR-2010-0799-9512-A1, p. 26]
We recommend that the net EV emissions be calculated in the same way as the example for
BEVs provided by US EPA, with the explicit addition of off-cycle credits: [EPA-HQ-OAR-
2010-0799-9512-A1, pp. 26-27]
net upstream EV emissions = fuel carbon intensity x vehicle efficiency - off-cycle credits -
displaced petroleum upstream emissions [EPA-HQ-OAR-2010-0799-9512-A1, p. 27]
EVs with specific technologies not reflected on FTP/HWFET test cycles, upon meeting specific
criteria, would receive credit for displacing off-cycle internal combustion engine (ICE) GHG
emissions. As opposed to giving credit for avoided BEV upstream emissions only (based on
displaced upstream), this approach would not understate the overall BEV benefit compared to a
conventional ICE. [EPA-HQ-OAR-2010-0799-9512-A1, p. 27]
In response to US EPA's request for comments on FCEV hydrogen carbon intensity, we
recommend using California's expected carbon intensity values as a default at least until the mid-
term review of the national GHG standards. California cumulative FCEV deployments are
expected to reach more than 50,000 by 201742 and California is currently establishing hydrogen
stations through the use of incentives and regulations.43 We encourage US EPA to establish an
initial California transportation hydrogen carbon intensity placeholder value based on 67% steam
methane reformer (SMR) hydrogen production (a widespread method of production in the United
States today) and 33% hydrogen production from renewable resources. This would be reflective
of California's approach and could be updated overtime as FCEVs spread to other states. [EPA-
HQ-OAR-2010-0799-9512-A1, p. 27]
We encourage US EPA to model regional variations in grid electricity carbon intensity, as
suggested in the NPRM. Potential reductions in grid carbon intensity, changing over time due to
mandatory state renewables or other carbon-reduction standards, should be accounted for as well.
In the meantime, California has conducted extensive analysis estimating electricity carbon
intensity for 2020, including imported electricity, which could be used for a substantial portion
of US BEV and PHEV placements. As this information is currently available, US EPA could
establish an interim California value of270 g/kw-hr44 along with a parallel aggregate value for
the remaining 49 states. We agree with US EPA's proposed inclusion of transmission and
distribution losses, as well as upstream fossil fuel production emissions. [EPA-HQ-OAR-2010-
0799-9512-A1, p. 27]
Table 4 provides an example of the ICCT's recommended emission calculations, using a 2020
BEV fueled by projected California or US average 2020 electricity. We would encourage US
EPA to determine a similar example with a 49-state electricity carbon value.45 This example is
not intended to predict future vehicle emissions, but rather to illustrate the methodology
explained above and show the potential for 'earned zero' net g GHG/mile ZEV compliance
4-48
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
values. [Table 4 can be found on p. 28 of Docket number EPA-HQ-OAR-2010-0799-9512-A1]
[EPA-HQ-OAR-2010-0799-9512-A1, pp. 27-28]
Windfall Credits for Mandatory ZEV Deployments and Lost Benefits
We agree with the importance of EV technology deployment. However, we emphasize that EV
credits should be earned based on performance, rather than awarded, independent of
performance, for the production of a certain vehicle type. [EPA-HQ-OAR-2010-0799-9512-A1,
pp. 28-29]
The ICCT has two significant issues related to (a) the proposed EV multipliers (also referred to
as 'supercredits') and (b) the concept of giving vehicles a default zero gram per mile compliance
score:
1. Large windfall credits for mandatory ZEV deployments.
2. High costs in terms of lost consumer savings and GHG benefits, even for vehicle deployments
beyond mandatory levels. [EPA-HQ-OAR-2010-0799-9512-A1, p. 29]
Incentive programs are normally structured to avoid rewarding activity that is already otherwise
required.47 The NPRM itself cites this principle, noting in the discussion of off-cycle credits that
'EPA would not provide credits for a technology required to be used by Federal law, such as tire
pressure monitoring systems, as EPA would consider such credits to be windfall credits (Le. not
generated as a results of the rule),'48 We agree with this principle, and in these comments we
discuss how it can be applied to EV incentives. [EPA-HQ-OAR-2010-0799-9512-A1, p. 29]
The California Air Resources Board and Section 177 states have adopted the Zero Emission
Vehicle program, requiring that manufacturers deploy large numbers of EVs.49CARB has
forecast vehicle deployments out to 2025, although in terms of vehicle numbers the deployments
are not specific regulatory targets due to flexibilities included in the ZEV rule. US EPA
projections imply that for model years 2017 through 2025, deployments of BEVs and FCEVs
mandated under California's ZEV rule are likely to account for 85 to 90+% of such vehicles
nationally, whereas CARB forecasts show that PHEV deployments would be much higher than
the US EPA's projection, as shown below in Table 5. Thus the vast majority of'supercredits'
generated under the proposed multipliers would likely be awarded to vehicles that manufacturers
will be required to build even in the absence of the incentive. Furthermore, the total allocation of
windfall credits seems likely to exceed the high-end scenario considered by US EPA in
determining potential emission detriments stemming from the multiplier. [Table 5 can be found
on p. 30 of Docket number EPA-HQ-OAR-2010-0799-9512-A1] [EPA-HQ-OAR-2010-0799-
9512-Al,p. 29]
While manufacturers receive benefit from bonus GHG credits, as noted below, ICCT finds that
the societal costs of 'supercredit' multipliers and related default zero g/mi compliance values
would be significantly greater than any potential incentive to manufacturers. Excess GHG credits
allow manufacturers to decrease fuel efficiency across non-EVs in the fleet, and the resulting
4-49
-------
EPA Response to Comments
increase in overall fuel consumption and expenditures is the main factor responsible for this
result,52 [EPA-HQ-OAR-2010-0799-9512-A1, p. 30]
Higher fleetwide fuel consumption along with related costs are shown in Table 6 below.
Increased petroleum fuel costs range from $17,200 in MY2017 to $9,400 in MY2021 (in 2009$)
at a 3 percent discount rate per EV from the proposed excess credits. We also estimate that
fleetwide CO2 would increase significantly per incremental EV due to the excess credits. Results
for PHEVs would be scaled down based on different multipliers and the electric fraction of
mileage. [Table 6 can be found on p. 31 of Docket number EP A-HQ-OAR-2010-0799-9512-
Al] [EPA-HQ-OAR-2010-0799-9512-A1, p. 30]
Table 7 shows two potential scenarios for the magnitude of the potential incentive manufacturers
would see from the multiplier and zero upstream credits. ICCT selected scenarios of $25 and $35
per g CCVmi for illustrative purposes in Table 7 to represent a range of estimates of the potential
marginal cost to move below 2020 emission levels for a midsized vehicle.57 As noted in several
of our earlier comments, we believe that technology development will tend to result in lower
costs than these estimates, reducing the potential value of bonus credits to manufacturers. ICCT
used assumptions from NHTSA to calculate the reduction in a manufacturer's sales price for less
efficient vehicles, which would reduce the net value of a GHG credit to a
manufacturer. 5 8 [Table 7 can be found on p. 33 of Docket number EP A-HQ-OAR-2010-0799-
9512-A1] [EPA-HQ-OAR-2010-0799-9512-A1, pp. 31-32]
In all of these cost scenarios, the societal cost of the proposed EV incentives (as shown in Table
6) is significantly higher than the net benefit incentivizing the manufacturer (as shown in Table
7). We also note that the net manufacturer cost savings in these scenarios is less than the
incremental cost of producing a BEV or FCEV in 2020, which is estimated by ARB to be
$12,400-$12,900.59 The magnitude and uncertainty of this benefit is such that the EV bonus
credits are unlikely to be effective in the absence of other types of consumer benefits, incentive
programs, or manufacturer priorities. [Tables 6 and 7 can be found on pp. 31 and 33 of Docket
number EPA-HQ-OAR-2010-0799-9512-A1] [EPA-HQ-OAR-2010-0799-9512-A1, p. 32]
We also find that the system proposed in the NPRM could create confusion in the minds of
consumers by creating a linkage between EV purchases and increased overall GHG emissions.
Surveys show that drivers in the US, Canada, and 11 other countries overwhelmingly would
want to know the source of electricity for a plug-in vehicle, and in the US 43% of respondents
said that the source of electricity would affect their decision of whether to purchase the vehicle
or not.60 While drivers were not directly asked whether indirect CC>2 increases linked to an EV
purchase would discourage them from buying an EV this could be an unintended side-effect of
these bonus credits. [EPA-HQ-OAR-2010-0799-9512-A1, p. 32]
Alternative Recommendation
If US EPA chooses not to eliminate MY2017-2021 multipliers and does not require EV fuel
cycle net GHG upstream accounting, we would strongly encourage two modifications to the
NPRM. First, EV incentives should be eliminated for all mandated vehicles. Direct coordination
with CARB and Section 177 states would be the preferred approach, or an acceptable alternative
4-50
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
would be to set a corresponding minimum deployment floor below which vehicles would not
qualify for the incentives. Table 8 shows a potential scenario of ZEV and PHEV sales in
California and Section 177 states as a percentage of national passenger vehicle sales, by model
year. [Table 8 can be found on p. 34 of Docket number EPA-HQ-OAR-2010-0799-9512-
Al] [EPA-HQ-OAR-2010-0799-9512-A1, pp. 33-34]
In addition, we would also recommend setting ambitious performance requirements to restrict
eligibility for multipliers to the top performers. Real world range is a key determinant of
environmental impact (due to gasoline vehicle miles displaced) as well as consumer acceptance,
and could be used to establish performance criteria for each of the multiplier ratios that US EPA
is considering. An example of this concept is shown in Table 9.64 [Table 9 can be found on p. 34
of Docket number EPA-HQ-OAR-2010-0799-9512-A1] [EPA-HQ-OAR-2010-0799-9512-A1,
p. 34]
Finally we would also encourage US EPA to add a cap on incentives offered for MY
2017MY2021, and to generally set these caps for those model years as low as possible. In the
proposed rule, the lack of a cap for MY 2017-2021 leaves open the possibility of significant
foregone emission reductions in the event that electric vehicle sales greatly exceed US EPA's
expectations. If such high sales levels occur, then presumably the technology is succeeding
beyond expectations and the incentive is either unnecessary or excessive. We recommend
establishing caps, with eligibility on a 'first come-first served' basis, even if US EPA initially
gives each manufacturer credit eligibility for a minimum number of vehicles in order to
encourage broader adoption of EV technology. [EPA-HQ-OAR-2010-0799-9512-A1, p. 35]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 197.]
One of ICCT's guiding principles is that standards should be technology neutral. The proposed
provisions to assign zero carbon emissions to electric-only operation and for artificial credits for
certain pickup truck technologies distort the compliance system and reduce the overall benefits
of the program.
37 Bellagio Memorandum on Motor Vehicle Policy, Principles for Vehicles and Fuels in
Response to Global Environmental and Health Imperatives, Consensus Document: 19-21 June,
2001, Bellagio, Italy
39 See for example California Air Resources Board. 2011 Staff Report: Initial Statement of
Reasons, Advanced Clean Cars, 2012 Proposed Amendments to the California Zero Emission
Vehicle Program Regulations; Vehicles.' (ZEV ISOR)
42 Source: CARB. 2011. Initial Statement of Reasons, Advanced Clean Cars 2012 Proposed
Amendments to the Clean Fuels Outlet Regulation. (CFO ISOR) November. p!2. Available at
http://www.arb.ca.gov/regact/2012/cf02012/cfoisor.pdf last accessed 2-6-2012. Note that factors
4-51
-------
EPA Response to Comments
such as transportation hydrogen station infrastructure deployment and the Zero Emission Vehicle
regulation will favor FCEV deployments in California initially.
43 CARB. 2011. Initial Statement of Reasons for Proposed Rulemaking, Public Hearing to
Consider the 'LEV III Amendments' (LEV III ISOR) etc. p 136. CARB expects that California's
33% renewable transportation hydrogen requirement (California Senate Bill 1505 of2006) will
be effective in the 2017-2025 timeframe
44 CARB LEV III ISOR. 2011. pi36
45 us EPA us EPA Draft Regulatory Impact Analysis: Proposed Rulemaking for 2017-2025
Light-Duty Vehicle Greenhouse gas Emission Standards and Corporate Average Fuel Economy
Standards (DRIA) RIA p4-31 and 4-32 and Federal Register Volume 76, Number 231, '2017 and
Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel
Economy Standards; Proposed Rule', p75014.
47 See for example the California Carl Moyer Memorial Air Quality Standards Attainment
Program, which 'provides incentive grants for cleaner-than-required engines, equipment and
other sources of pollution providing early or extra emission reductions', (emphasis added)
49 Currently, there are 10 states which have adopted the California ZEV regulation: Connecticut,
Maine, Maryland, Massachusetts. New Jersey. New Mexico, New York, Oregon. Rhode Island,
and Vermont CARB, 2011. ZEV ISOR.BEVs and FCEVs are mandatory, and PHEVs can be
used to partially satisfy the mandate.
52 The zero g/mi compliance value and related multipliers applied to ZEVs allow a de facto
increase in the fleet average GHG standard that must be met by the conventional (non-ZEV)
portion of the fleet. Thus each ZEV deployed results in a small increase in allowable emissions
from the remainder of the fleet, and a related small decrease in mandated fuel economy.
57 As a first-order approximation, ICCT estimated an average cost of $29 per g/mile for midsize
car technology packages, excluding AC reduction, to reduce emissions from the level of the 2020
standard. Technology package costs are from the CARB LEV I1I1SOR p!24. LEV HIISOR
technology costs generally listed in 2009 dollars, see for instance ES-12. Some packages would
cost more while others less.
59 CARB. 2011. ZEV ISOR, p. 62.
60 Accenture. 2011. 'Plug-in electric vehicles: Changing perceptions, hedging bets'.
http:jjwww.accenture.comjus-enjPagesjinsight-plug-in-electric-vehicles-changing-perceptions-
summary.aspx last accessed 10-13-2011. pp. 5, 17. 1,000 of 7,000 surveys were conducted in the
US, 500 in Canada, and 3,502 in Europe.
64 1.45 and 1.5 multiplier categories merged for simplicity. Note that while this suggested table
would not provide an additional timing incentive, early deployments would generally receive
4-52
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
greater credits through a more favorable credit due to the higher level of the standards in earlier
years.
Organization: Jackson, F.W.
Comments:
1. Impressive claims appear based on 'faulty' EPA analyses, see references 2 & 3. Ref 2 page 4 -
32 claim in error. Claims Leaf CO2/mile at 161 g/mile by using average grams CC>2 per Kw-hr
(0.632) but this is a marginal problem and has to use marginal analyses which as documented in
ref 1 table 3-15 & 3-16 calcs to 1.267 gCCVadded (marginal) Kw-hr. So using the correct
marginal rate the Leaf g CCVmile would be 323 g CCVmile. This should be immediately
corrected by EPA in their documentation, to not do so raises the question: where else in EPA's
documentations are they using incorrect analyses & assumptions & methods & credits &
multipliers to promote a more favorable, albeit incorrect, number. And using the official label's
0.34 Kw-hrs per mile yields 431 g CO2/mL [EPA-HQ-OAR-2010-0799-8041-A1, p. 1]
2. Additionally, the claimed (Ref. 2 on page 4 - 32) for the Leaf of 0.34 Kw-hrs/mile, or at 3412
btu/Kw-hr yields 1160 btu/mile electrical energy to plug, or at 115,000 btu per gallon gasoline
makes vehicle mpgge (miles per gallon of gasoline equivalent) at 99 mpgge. However, with
overnight coal generating & distribution & conversion net efficiency at 28% coal fossil fuel to
plug Kw-hrs reality is system fossil fuel mpgge is at 28 mpgge. While vehicle performance is
interesting to make the vehicle go it has to have the fuel, thus information on all it takes to make
the vehicle go a mile has to be counted, Le., moving the Leaf a mile using overnight coal
generated Kw-hrs calcs to 28 mpgge fossil fuel (not 99 mpgge) and produces CC>2 emissions of
431 g/mile (not 161)! And at significantly more cost per vehicle mile, so why is Govt promoting
these expensive to Nation poor system performance vehicles? [EPA-HQ-OAR-2010-0799-8041-
Al,p. 1]
'Faulty' PHEV & BEV & corn ethanol Promotional analyses often used by others corrected for in
my data: [EPA-HQ-OAR-2010-0799-8041-A1, p. 5]
1. Failure to assess all results at National and Consumer/Taxpayer level (all consequences of
action including taxes & inflation & credits & multipliers & passthroughs impact; all important
measures)
2. Use of average vs. reality (gCO2 per overnight added/removed Kwhr)
3. pre-2017; classifying Plug-in miles as zero emissions, when they, at National system level, are
not; and using elec miles to 'allow' vehicles with gas mpgg not meeting CAFE to be sold!
4. benign miles/Kwhr vs real world miles/Kwhr (environment cabin/battery
conditioning/performance)
4-53
-------
EPA Response to Comments
5. Need full & accurate upstream CO2 & oil & E6Btu & $s & lifestyle accounting, use of
current/future HEV upstream vs. CV upstream and some reduced upstream gasoline CC>2 & fuel
could be nonUS
6. PHEV vs. CV instead of PHEV vs. HEV; obscures the Plug-in stand alone consequences
7. failure to show all consequences of CAFE credit (cost,CO2,gasoline,E6Btu).
8. failure to evaluate all possible actions, e.g., Mid/Max eft ICE or HEV or PHEV or less
ethanol, i.e., pick 'poor' competition and not look for most improvement for $:lifestyle, CC>2,
gasoline, E6Btu
9. failure to account for Business/Govt pass throughs, i.e., inflation/taxes (I believe very
significant, albeit not included in most of my above data), e.g., assuming for every consumer
vehicle business+Govt also have some then the delta cost (all factors included) would be an
increase to consumers/taxpayers. [EPA-HQ-OAR-2010-0799-8041-A1, p. 5]
Ref: 1. EPRI 'Environmental Assessment of Plug-In Hybrid Electric Vehicles Volume 2' United
States Air Quality Analysis July 2007 - see Table 3-10 for MWh and Table 3-15 for CO2 ton
2. EPA Draft Regulatory Impact Analysis 'Proposed Rulemaking for 2017-2025 Light-Duty
Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards'
EPA-420-D-11-004 November 2011
3. EPA Draft Joint Technical Support Document 'Proposed Rulemaking for 2017-2025 Light-
Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy
Standards' EPA-420-D-11-901 November 2011
Organization: Johnson Controls, Inc.
Standards must be technology-neutral and performance-based. Johnson Controls believes that, in
some ways, this proposal inadvertently imposes 'preferred technologies' and, in so doing, does
not consider the full range of technologies available to allow for a fully competitive marketplace.
[NHTSA-2010-0131-0253-A1, p. 3]
Organization: Magna E-Car Systems
Magna E-Car Systems is engaged in the supply and manufacture of high quality components and
systems for hybrid and electric vehicles. We at Magna E-Car Systems view our work as central
to the innovation that automakers will require to reach the 54.5 mpg fuel economy standard
proposed by the EPA and NHTSA. But more importantly, we view hybrid and electric vehicle
technology as imperative to the continued growth and reinvention of the automotive industry in
the United States.[EPA-HQ-OAR-2010-0799-9263-Al, p. 1]
4-54
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
Hybrid and electric vehicles will help automotive manufacturers reach their 54.5 mpg target for
their corporate average fuel economy. That's good news for the American economy and workers.
Already, Magna E-Car Systems manufacture these technologies at our new hybrid and electric
vehicle development facility in Holly, Michigan. Magna E-Car Systems alone employs over 300
employees in Michigan. [EPA-HQ-OAR-2010-0799-9263-A1, pp. 1-2]
Organization: Marz, Loren C.
However, I do not support the 'Incentives for Electric Vehicles, Plug-in Hybrid Electric Vehicles,
and Fuel Cell Vehicles' unless diesel technology is also included in some fashion. [NHTSA-
2010-0131-0213-Al,p.l]
Another National Academies report concluded...
'...Electric vehicles and grid-dependent (plug-in) hybrid vehicles showed somewhat higher
nonclimate damages than many other technologies for both 2005 and 2030. Operating these
vehicles produces few or no emissions, but producing the electricity to power them currently
relies heavily on fossil fuels; also, energy used in creating the battery and electric motor adds up
to 20 percent to the manufacturing part of life-cycle damages....' [NHTSA-2010-0131-0213-A1,
p.7]
Source: National Academies, 'Hidden Costs of Energy: Unpriced Consequences of Energy
Production and Use.'
This is supported by GREET1_2011 which shows that WTW emissions of particulate matter
(PM) are higher for EV, PHEV, and FCV technology, all of which are proposed to receive
special incentives under the proposed rule, than 'clean diesel' technology. Based on the default
'mid-sized' car assumed in GREET for the year 2020... [NHTSA-2010-0131-0213-A1, p.7]
WTW PMio (diesel) = 0.009 (Feedstock) + 0.013 (Fuel) + 0.030 (Vehicle Operation) = 0.052
g/mi
WTW PMio (EV) = 0.355 (Feedstock) + 0.017 (Fuel) + 0.021 (Vehicle Operations) = 0.393 g/mi
WTW PMio (FCV) = 0.001 (Feedstock) + 0.059 (Fuel) + 0.021 (Vehicle Operations) = 0.081
g/mi
WTW PM2.5 (diesel) = 0.005 (Feedstock) + 0.007 (Fuel) + 0.016 (Vehicle Operations) = 0.028
g/mi
WTW PM2.5 (EV) = 0.089 (Feedstock) + 0.009 (Fuel) + 0.007 (Vehicle Operations) = 0.119 g/mi
WTW PM2.5 (FCV) = 0.001 (Feedstock) + 0.031 (Fuel) + 0.007 (Vehicle Operations) = 0.039
g/mi
4-55
-------
EPA Response to Comments
All of these values are based on the U.S. electric generation mix assumed in GREET in 2020.
These values are graphically depicted more or less in a presentation of a previous version of
GREET at
http://www.iom.edU/~/media/Files/Activity%20Files/Environment/EnvironmentalHealthRTAVan
gGREETPresentationtoInstituteofMedicinellOTREVISED.ashx - slides 24-25. [NHTSA-2010-
0131-0213-Al,p.8]
Vehicle assumptions in GREET1_2011...
Diesel = 120% mpgge of baseline gasoline car
EV = 375% mpgge of baseline gasoline car
FCV = 237% mpgge of baseline gasoline car
Exhaust PM from the diesel car = 0.009 g/mi (PMio); 0.0084 g/mi (PM2.5).
Based on certified emissions of the 1996 VW Passat TDI (example of an 'old tech' diesel car),
exhaust PM emissions = 0.06 g/mi
(http://www.arb.ca.gov/msprog/onroad/cert/pcldtmdv/1996/volkswagen_pc_a0070189_ld9_l_di
esel.pdf). [NHTSA-2010-0131-0213-A1, p.8]
0.06 - 0.009 = 0.051 g/mi more exhaust PM for the 'old tech' diesel than that assumed for 'clean
diesel' in GREET.
0.052 g/mi + 0.051 g/mi = 0.103 g/mi WTW PMio for the 'old tech' diesel car, still far less than
0.393 g/mi WTW PMio, and significantly less than the WTW PM2.5 from EV even assuming all
PM from 'old tech' diesel exhaust is PM2.5 (0.079 g/mi vs. 0.119 g/mi). [NHTSA-2010-0131-
0213-Al,p.8]
'Old tech' diesel vehicles have been effectively banned for many years under Tier 2/LEV II
regulations, to EPA's and CARB's credit, yet special incentives are being proposed for vehicle
technology (e.g., EV) which may actually increase PM emissions from a WTW perspective
above 'old tech' diesel engine technology. EPA acknowledges in the Draft RIA for this proposed
rule that all PM2.5 is treated as equally potent in causing premature mortality regardless of source
(page 6-35 of the Draft RIA), even specifically mentioning PM2.5 from diesel engine sources. So
there appears to be no valid reason from a public health perspective to displace the reduction in
PM2.5 emissions from diesel engines with increased PM2.5 emissions from power plants to
support EV/PHEV/FCV technology. The regulatory push for these 'advanced technologies'
defies logic from an emissions perspective. [NHTSA-2010-0131-0213-Al, pp.8-9]
It should also be noted that WTW SOX emissions would also be higher for EV/PHEV/FCV, as
would WTW NOX emissions for EV/PHEV, than the default diesel car, according to GREET.
[NHTSA-2010-0131-0213-A1, p.9]
4-56
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
A massive shift to EV/PHEV/FCV technology could risk offsetting gains made by EPA from
diesel PM emission reduction mandates, more than offsetting it in the case of EV, and potentially
reverse downward trends in the National Emission Inventory of PMio and PM2.5 emissions
recently highlighted by EPA. Based on this analysis, a massive shift to these 'advanced
technologies' would not only not be desirable, it may actually be environmentally detrimental,
and incentives for these technologies are dubious. [NHTSA-2010-0131-0213-A1, p.9]
Organization: Mercedes-Benz USA, LLC
DAG endorses many aspects of the proposal, including in particular the agencies incentivizing
advanced technologies such as electric and fuel cell drivetrains and off-cycle technologies.
[EPA-HQ-OAR-2010-0799-9483-A1, p. 2]
DAG's future products will incorporate all aspects of advanced technologies. DAG will offer in
the United States electric vehicles, plug-in hybrid vehicles, hybrid vehicles, fuel cell vehicles and
potentially dedicated CNG vehicles as well. [EPA-HQ-OAR-2010-0799-9483-A1, p. 2]
• DAG strongly endorses the incentives for electric and fuel cell vehicles. Fuel cell vehicles, in
particular, offer considerable long term advantages, and yet enjoy less short term public and
private financial support than electric recharging infrastructure. The agencies should ensure that
fuel cell vehicles remain a feasible option in the future by increasing the multiplier for fuel cell
vehicles to 4. In addition, the agencies should provide a multiplier of 3 to dedicated CNG
vehicles in light of the barriers these vehicles face and the significant role they can play in the
fleet. [EPA-HQ-OAR-2010-0799-9483-A1, p. 2]
DAG strongly endorses the proposed incentives for battery-powered vehicles. The potential for
battery technology in the United States and throughout the world remains strong, with a hesitant
consumer market beginning to consider advanced technology vehicles. The four major market
hurdles for battery-powered vehicles are: (1) public perception of electric vehicles as having
limited range and functionality; (2) attacks based on upstream emissions pending change in the
electricity supply towards renewable energy sources; (3) battery costs; and (4) limited
infrastructure. EPA's conclusion that the market requires support to grow consumer confidence,
build the refueling and servicing infrastructure and reduce battery costs recognizes the
difficulties of building and sustaining support for 'game-changing' technologies with
transformational long-term potential. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-5]
The concept of providing breathing room within a regulation to help nascent technology
overcome short-term barriers is not novel.9 EPA, for example, granted waivers through a
relaxation of the NOX standards in the 1980s in order to encourage diesel vehicles, and diesel
sales soared. DAG's diesel sales during that period were substantial. More recently DAG
introduced diesel BlueTEC technology to the United States. Other manufacturers have also
introduced diesel passenger vehicles to the U.S. market. Public demand for clean diesel vehicles
is growing.10 The electric vehicle segment is particularly well-suited to such support. The credits
associated with each type of battery technology should reflect the technology's potential to
eliminate fossil fuel dependence and the level of the barriers that must be overcome for the
technology to gain a strong foothold in the consumer marketplace. Thus, EPA has proposed that
4-57
-------
EPA Response to Comments
the credit multiplier for plug-in hybrids be somewhat less than the credit multiplier for full
battery electric vehicles. Plug-in hybrids, while certain to playa significant role in building public
confidence in electric vehicles, continue to have some limited ability to emit greenhouse gases.
Full battery electric vehicles require a slightly higher incentive because they emit no greenhouse
gases but will require more infrastructure and further technological advancement and more
public experience to overcome initial skepticism. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-5]
Fuel cell vehicles are at the ultimate end of the spectrum. Fuel cell vehicles are able to support
full functionality and dispense with range anxiety. They supply emissions free urban
transportation as well as the capacity for long distance and interurban driving. Fuel cell vehicles
can support a wide range of renewable fuels to generate hydrogen and electricity. Advances in
battery technology will have a synergistic effect, because they will promote fuel cell batteries, as
well as BEYs and PFLEYs. DAG believes that with supporting government incentives, economies
of scale, and advances in module strategies, fuel cell technology can be made cost competitive
with diesel-hybrid vehicles. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-6]
Support for fuel cell infrastructure in the United States, however, lags behind that for electric
vehicles. To be sure, California has moved towards revamping the Clean Fuels Outlet to promote
fuel cell refueling stations.11 The CFO proposal, however, links infrastructure support to the
volume of fuel cell vehicles in California. Production incentives are therefore especially
important to sustain the California effort and to ensure that a fuel cell market begins to take root
and can ultimately grow in California and then spread throughout the United States. [EPA-HQ-
OAR-2010-0799-9483-A1, p. A-6]
Accordingly, DAG urges EPA to expand the credit multiplier applicable to fuel cell vehicles
from 2.0 to 4.0. While PFLEYs and BEYs are important, fuel cell technology represents the best
opportunity over the long term to transform the personal transportation system entirely, to
eliminate tailpipe greenhouse gas emissions and to service the full range of functionality and
range demanded in the U.S. market. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-6]
9 EPA has long supported advanced diesel technology. While diesel engines expand fuel
economy range over gasoline engines, they suffer from the carbon penalty when applied in the
GHG program. This creates an inherent inconsistency between the CAFE and the GHG
programs. A product with growing public support and the capacity to enhance fuel efficiency,
reduce dependence on foreign oil and promote the economy provides a substantial compliance
benefit in CAFE but goes largely unrecognized in the GHG program. This fundamental
inconsistency creates a public policy disconnect with Europe and penalizes companies, such as
DAG, that invested substantially in developing advanced diesel technology for the world market
as well as the additional technology necessary to meet U.S. requirements.
10 Indeed, DAG has found that consumer prefer advanced diesel engines to hybrid vehicles with
comparable fuel economy performance, at least as applied to DAG's luxury car offerings.
4-58
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
11 A nationwide effort is also underway in Germany to create a refueling network to support fuel
cell vehicles.
Organization: Minnesota Department of Commerce
The proposed rule provides Electric vehicles (EVs) with preferential treatment compared with
conventional or alternative fuel vehicles by means of a "credit" mechanism. The "credit" system
proposed in the rule does not use life cycle assessment (LCA) methods commonly used for
evaluating greenhouse gas emissions. Absent use of LCA, the proposed rule grants EVs zero
greenhouse gas emissions even though U.S. DOE National Energy Technology Laboratory
(NETL) studies show that electricity produced from fossil fuel may result in higher LCA vehicle
emissions per mile than produced from gasoline (E10) hybrid electric vehicles. [EPA-HQ-OAR-
2010-0799-7363-A1, p. 1]
Assure that the rule drives innovation so that diverse vehicle propulsion and fuel technologies
can compete to achieve the goal. [EPA-HQ-OAR-2010-0799-7363-Al, p. 1]
Electric motors have no GHG emissions at point of use. A federal rule that only includes "tail
pipe" -rather than life cycle emissions - effectively requires electric vehicles for the U.S.
market. Rather than mandating a technology, the rule should motivate all propulsion and fuel
technologies to compete to provide diverse, technical and economically optimal solutions for the
Greenhouse Gas Emissions and Corporate Average Fuel Economy Standard. [EPA-HQ-OAR-
2010-0799-7363-A1, p. 1]
Use LCA methodology for evaluating greenhouse gas emissions. [EPA-HQ-OAR-2010-0799-
7363-Al,p. 1]
Organization: Mitsubishi Motors R&D of America, Inc. (MRDA)
Supports the inclusion of an EV multiplier for MYs 2017 through 2021, and recommends that an
EV multiplier be extended for MYs 2022 through 2025. [EPA-HQ-OAR-2010-0799-9507-A1,
p.2]
Supports the 0 gram per mile compliance value for EVs, and the electric portion of PHEVs for
MYs 2017 through 2021, and recommends that this compliance value continues in MYs 2022
through 2025. [EPA-HQ-OAR-2010-0799-9507-A1, p.2]
Mitsubishi Motors fully supports EPA's decision to provide an EV multiplier "to facilitate
market penetration of the most advanced vehicle technologies as rapidly as possible". (76 FR
74878) This decision accurately reflects the current status of the EV industry relative to the U.S.
market. During commercialization, an EV multiplier helps justify necessary capital investments
to enable, deploy, and advance EV technologies before recouping these costs from vehicle sales.
These capital investments are in addition to ongoing investments in traditional internal
combustion engine technologies. As stated earlier, Mitsubishi Motors encourages the agencies to
extend the EV multiplier in the later years of this rulemaking. Extending the multiplier will
4-59
-------
EPA Response to Comments
continue to make costs more reasonable and further promote EV technologies, allowing even
greater GHG emission reductions to be realized. [EPA-HQ-OAR-2010-0799-9507-A1, p.4]
Mitsubishi Motors capital investments have led to global commercialization of the i-MiEV and
to the development of quick charging technology. Specifically, we are a founding member of the
CHAdeMO Association, a private industry association which aims to increase EV infrastructure
worldwide and to internationally standardize the CHAdeMO protocol for DC quick charging of
electric vehicles. As of February 2012, 1011 CHAdeMO quick chargers have been installed
worldwide - 835 in Japan and over 176 in Europe, Australia and North and South America. One
of these quick chargers, certified for U.S. sale and public utility, was installed in our solar-
powered charging station at our corporate headquarters in Cypress, California. [EPA-HQ-OAR-
2010-0799-9507-A1, p.4]
Some of our continued and future capital investments are in the area of innovative charging
techniques and energy storage management. Currently in Japan, Mitsubishi Motors is
collaborating with wireless charger manufacturing and technology companies to develop EV
charging systems enabled through electromagnetic induction. Mitsubishi Motors is also
researching methods for capitalizing on i-MiEV batteries' storage capability for non-vehicle
applications. Later this year, the Smart Grid Demonstration Project (the ,,V2X? concept) will
begin at Mitsubishi Motors R&D headquarters in Okazaki, Japan. In the V2X project, electricity
produced by solar panels will be stored in solar batteries, as well as i-MiEV batteries, and will be
distributed to the factory power grid. All of these examples demonstrate our ongoing
commitment and investment in EV vehicles and associated applications. An EV multiplier helps
companies to sustain this type of research and investment before the establishment of a mass
market for EVs. [EPA-HQ-OAR-2010-0799-9507-A1, pp.4-5]
Zero gram per mile compliance value [EPA-HQ-OAR-2010-0799-9507-A1, p.5]
Mitsubishi Motors fully supports EPA's decision to assign a zero gram per mile compliance
value to EVs and the electric portion of PHEVs without company level caps for MYs 2017
through 2021. EPA's decision is sound public policy and recognizes that geography and regional
economic factors determine the amount of renewable energy used to generate electricity. OEMs
do not control these factors. Moreover, stationary source emissions are directly controlled by
EPA under Title 5. Assigning power generation emissions to vehicles would lead to double
counting - this is unprecedented and introduces an artificial burden on emerging technologies.
Historically, fuel production ("well-to-tank") emissions were never assigned to the vehicle
utilizing the fuel. Vehicle emissions are currently measured and regulated by the amount of
compounds directly emitted by the vehicle. Given EVs and the electric portion of PHEVs do not
emit CO2, the proposed zero gram per mile compliance value is appropriate. [EPA-HQ-OAR-
2010-0799-9507-A1, p.5]
The factors determining the amount of renewable energy used to generate electricity will not
change. Therefore, the zero gram per mile compliance value as discussed above should remain in
place for MYs 2022 through 2025. The regulatory cost of requiring the accounting of upstream
emissions could create a barrier that would prevent manufacturers from producing and
introducing newer, more efficient EVs and PHEVs. Furthermore, a company cap as proposed on
4-60
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
the amount of vehicles that can use the zero gram per mile compliance factor is an unnecessary
regulatory limitation, and we recommend that this requirement be removed. A cap could prevent
a true and effective market penetration rate of these technologies. [EPA-HQ-OAR-2010-0799-
9507-A1, p.5]
The EV multiplier compliance incentive is absolutely necessary to promote EV adoption during
this rulemaking, and should be extended into the later part of this rulemaking. We support the
zero gram per mile compliance value for EVs and the electric portion of PHEVs, which reflect
the real-world GHG emissions at the vehicle level- a factor OEMs can control. Furthermore, this
compliance value should continue into the later years of the rulemaking without limitations on
usage. [EPA-HQ-OAR-2010-0799-9507-A1, p. 6]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 95-99.]
Automotive OEMs have little control over the source of electricity. Therefore, like was said
before, they should not be subject to arbitrary emissions regulations on electric vehicles. These
need to be accounted for in separate regulations of those regulated industries. And in absence of
comprehensive national energy policy, Mitsubishi Motors recognizes the challenges and the
associated risks of developing practical federal and fuel economy and greenhouse gas standards
for light-duty vehicles. Mitsubishi Motors believes continued inclusive process to develop fuel
economy and greenhouse gas standards is a realistic goal.
Organization: Motor & Equipment Manufacturers Association (MEMA)
Standards must be technology-neutral and performance-based. The proposed rule inadvertently
imposes "preferred technologies" and, in so doing, does not consider the full range of
technologies available to allow for a fully competitive marketplace. [EPA-HQ-OAR-2010-0799-
9478-A1, p.2]
Fuel efficiency and GHG emissions standards must be technology-neutral and performance-
based. Undoubtedly, the standards proposed by the agencies are well-intended and will continue
to compel the automotive industry to reach these goals by incorporating a full range of
technological innovations. No specific vehicle technology will meet all of our nation's driving
needs. All options must be made available in order to achieve the overall objectives to reduce
fuel consumption and emissions. Despite the agencies' assurances that they are not influencing
the availability of certain vehicles, the proposal inadvertently influences "preferred vehicle
technologies." Thus, it constrains the full field of advanced technology vehicles that are available
to meet the overarching fuel consumption and emissions reduction goals. A solution of today
may not necessarily be the solution of tomorrow. Unintentionally driving technologies down a
few narrow paths could possibly set us up for long-term failure to realize the nation's goals.
Moreover, such inadvertent preferences stifle technology innovation and constrain the
competitive marketplace. [EPA-HQ-OAR-2010-0799-9478-A1, p.3]
Other potential consequences are non-market based imbalances and preferential treatment to
certain vehicle manufacturers (depending on their use of "preferred technologies" in their fleet
4-61
-------
EPA Response to Comments
mix), ultimately picking "winners and losers." Restricting incentives to specific technologies
could present a market where such vehicles are produced, but not purchased because these
vehicles may not meet consumers' needs or value expectations. Again, this may result in less-
than-needed fleet penetration in order to impact the emissions and fuel consumption and meet the
goals of the Program. [EPA-HQ-OAR-2010-0799-9478-A1, p.3]
Benefits of these technologies should be considered from a well-to-wheel, fuel lifecycle
perspective. Without this type of comprehensive assessment, the agencies consequently
improperly favor preferred technologies rather than providing truly technology-neutral standards.
MEMA would recommend using the existing well-to-wheel assessment of the GREET
(Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation Model) that is used
by the U.S. Department of Energy. GREET has been used to shape policy choices that impact
emissions and evaluates the well-to-wheel impact of various technologies. [EPA-HQ-OAR-
2010-0799-9478-A1, p.3]
In the NPRM, EPA discusses two alternatives for the calculation of CAFE for dual fuel vehicles
for MY2020 and beyond after the expiration of the calculation currently in effect through
MY2019 (as specified in 49 U.S.C. 32905). EPA has invited comment on both approaches.
[EPA-HQ-OAR-2010-0799-9478-Al,p.l2]
Organization: National Association of Clean Air Agencies (NACAA)
Third, we recognize that this program, proposed by EPA under section 202(a) of the Clean Air
Act, is a vehicle tailpipe emissions control program. As such, it is appropriate to assign a tailpipe
emissions level of 0 g/mile CC>2 for all electric vehicles (EVs), plug-in hybrid electric vehicles
(PHEVs) and fuel cell vehicles (FCVs), as EPA does for MYs 2017 through 2021 with a per-
company cumulative sales cap for 0 g/mile for MYs 2022 through 2025. [EPA-HQ-OAR-2010-
0799-8084-A1, p. 4]
We are pleased that, as EPA states, this program's focus on vehicle tailpipe emissions does not
raise issues relative to criteria pollutants because "upstream emissions [of criteria pollutants]
associated with production and distribution of the fuel are addressed by comprehensive
regulatory programs focused on the upstream sources of those emissions." In addition, we
appreciate the agency's statement that because "upstream GHG emissions values are generally
higher than the upstream GHG emissions values associated with gasoline vehicles, and because
there is currently no national program in place to reduce GHG emissions from electric power
plants, EPA believes it is appropriate to consider the incremental upstream GHG emissions
associated with electricity production and distribution." But, we also believe it is an appropriate
position to encourage the initial commercialization of EVs, PHEVs, and FCVs while monitoring
the status of upstream emissions. [EPA-HQ-OAR-2010-0799-8084-A1, p. 4]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 36-37.]
Organization: National Corn Growers Association et al.
4-62
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
Only vehicle tailpipe emissions are counted toward compliance with GHG standards rather than
including complete life cycle emissions, excluding emissions generated in the production and
delivery of the fuel whether electricity, gasoline, natural gas or a renewable fuel such as ethanol.
As a result, all types of electric vehicles would have "zero" emissions during electric operation
when this is clearly not the case when electricity production emissions are included. This method
unfairly advantages electrically fueled vehicles over other technologies, and does not allow for a
comparison of true emission performance among various propulsion technologies and fuels. For
example, a BEV generates no tailpipe emissions, but an FFV fueled with E85 might compare
very favorably to the BEV if GHG emissions were evaluated on a life cycle basis3 as they should
be in evaluating their contribution to the air. By structuring credits to favor one technology over
another, the agencies are picking winners and losers rather than allowing technologies to
compete on a level playing field against a performance standard4 . In addition, the fact that EPA
chose tailpipe instead of life cycle emission standards for the CAFE/GHG rule is inconsistent
with EISA and with RFS2 GHG performance threshold standards5. [EPA-HQ-OAR-2010-0799-
9565-Al,p.3]
3 - "Well-to-Wheels Analysis of Advanced Fuel/Vehicle Systems — A North American Study of
Energy Use, Greenhouse Gas Emissions, and Criteria Pollutant Emissions", May 2005, Figure 4-
5. [EPA-HQ-OAR-2010-0799-9565-A1, p.3]
4 - The favoring of EV technology over renewable fuels is especially evident in the specific
denial of credits for FFVs in the proposed rule, Sec. III.C, p311. [EP A-HQ-OAR-2010-0799-
9565-Al,p.3]
5 - "EISA required EPA to apply lifecycle greenhouse gas performance threshold standards to
ensure that each category of renewable fuel emits fewer greenhouse gases than the petroleum
fuel it replaces." From http://www.epa.gov/otaq/fuels/renewablefuels/ [EPA-HQ-OAR-2010-
0799-9565-A1, p.3]
Organization: National Propane Gas Association (NPGA)
Government Agency Consistency
The Department of Energy is currently seeking to adopt the recommendation of the National
Academy of Sciences (NAS) that "DOE shift over time to use of a FFC measure of energy
consumption for assessment of national and environmental impacts, particularly GHG for
establishing appliance efficiencies." In doing so, the NAS also recommended providing more
comprehensive information to the public through labels and/or other means, such as an enhanced
website. [EPA-HQ-OAR-2010-0799-9482-A1, p. 6]
NPGA believes any final rule reducing CAFE and GHG standards for light-duty vehicles for the
years of 2017 through 2025 absent FFC measurement would easily provide automakers of
advanced technology vehicles an unfair market advantage for their vehicles. Without FFC
analysis, using electricity as the dedicated vehicle fuel gives the impression that its use in light-
4-63
-------
EPA Response to Comments
duty vehicles is 100 percent efficient with zero end-use emissions. This conclusion is erroneous
and analogous to the DOE promulgating energy efficiency standards for building appliances
finding no GHG emissions associated with turning on a light bulb. Further conveyance of this
logic will have a compounding effect for any and every year the EPA/NHTSA carries it forward
through the year 2025. [EPA-HQ-OAR-2010-0799-9482-A1, p. 6]
Rulemaking that focuses on point-of-use energy creates and maintains an unfair market
advantage for technologies that already have lower full-fuel-cycle efficiency and higher GHG
emissions. The overall FFC efficiency for electricity typically results in only about 30 percent of
usable energy at the point-of-use. However, FFC analysis recognizes the efficiency of the
autogas delivery process resulting in approximately 87% of the energy produced being delivered
as usable energy. For these and other reasons, we propose that GHG emissions especially as they
relate to emissions for electric vehicles, fuel cell vehicles, and the electric portion of plug-in
hybrid electric vehicles be accounted for immediately upon the final rule's effective date. [EPA-
HQ-OAR-2010-0799-9482-A1, p. 7]
Organization: National Wildlife Federation (NWF)
In principle, we also support incentives for plug-in hybrid electric and electric vehicle
technology and for real off-cycle CC>2 reductions, and we look forward to continuing to work
with automakers, the agencies and consumers to maximize the effectiveness of these credits and
other measures which enable rapid adoption of new technology, and to optimize short and long
term emissions impacts. [EPA-HQ-OAR-2010-0799-9887-A2, p. 4] [[This comment can also be
found in Outline Headings 5. and 7.]]
Organization: Natural Resources Defense Council (NRDC)
EPA should include emissions associated with upstream electricity or hydrogen production for
plug-in electric or hydrogen fuel cell vehicles in the emission scoring. If incentives remain that
discount upstream emissions, the structure should be strengthened to ensure greater
environmental certainty of the incentives and minimize losses of emission reduction benefits.
[EPA-HQ-OAR-2010-0799-9472-A2, p. 3]
B. Program incentives
1. Treating Plug-in Electric and Hydrogen Fuel Cell Vehicles as "Zero" Emissions Undermines
Pollution and Technology Benefits of Program
In the proposal, EPA acknowledges that awarding plug-in electric vehicles an emissions rate of 0
g/mi inaccurately reflects their real-world impact and reduces the potential GHG reductions of
the program by up to 5.4 percent.34 Automakers can comply by producing advanced technology
vehicles such as plug-in electric or hydrogen fuel cell vehicles which then allows them to apply
less technology to their conventional vehicle fleet which, in turn, results in a higher average fleet
emissions rate. To avoid this loss in emissions and fuel savings benefits, NRDC believes that the
emissions associated with upstream electricity or hydrogen production should be included in the
compliance scoring. [EPA-HQ-OAR-2010-0799-9472-A2, p. 11]
4-64
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
However, if the agencies proceed with their proposed 0 g/mi treatment, other incentives, such as
off-cycle credits, should not be available for the portion of an advanced vehicle's driving range
that is powered by grid electricity or off-board hydrogen. No vehicles should be allowed to have
negative emissions. For plug-in hybrid electric vehicles, the benefit of additional incentives
should be calculated based on the emissions or efficiency benefit achieved for only the gasoline
or diesel operation of the vehicle. [EPA-HQ-OAR-2010-0799-9472-A2, p. 11]
NRDC believes EPA underestimates the potential losses in GHG reductions due to plug-in
electric vehicles. The California Zero Emission Vehicle (ZEV) program, the latest version of
which was recently authorized by the California Air Resources Board (CARB), is expect to
encourage higher sales volumes nationally than those predicted by EPA. EPA estimates up to 2.8
million vehicles (plug-in electric and fuel cell vehicles) will be sold from 2017 to 2025.
According to CARB, the ZEV program could result in 1.4 million sold in California during the
same period.3 5 Additionally, CARB has estimated that the states which have adopted the ZEV
program (under Section 177 of the Clean Air Act) could have electric vehicle sales that are twice
the California level, or 2.8 million vehicles.36 It is also reasonable to assume that another 10
percent of vehicles would be sold in non-ZEV states as many automakers are focusing sales
nationally or at least in some states in addition to 177 states. In total, national electric vehicle
sales could be 4.6 million, or 65 percent greater than EPA's highest estimate. [EPA-HQ-OAR-
2010-0799-9472-A2, p. 11]
To limit the loss of GHG benefits, EPA should modify the cap on the number of vehicles eligible
for 0 g/mi treatment. NRDC recommends that EPA adopt an industry-wide cap following the
structure described in the NPRM as the alternative to the proposed manufacturer-specific cap.
NRDC recommends the industry-wide cap because it ensures the environmental benefits of the
program. If set appropriately by considering the higher potential sales as described above, the
industry-wide cap could ensure that no more than 5 percent of the program GHG reductions are
lost. NRDC recommends that the industry-wide cap be set based on cumulative plug-in electric
vehicles produced beginning in 2012 because even these early volumes will help pave the way
for electric vehicle production cost reductions and greater market acceptance. While 0 g/mi
treatment could be applied for model years 2017 to 2021, as EPA has proposed, the post 2021
cap of no more than 2 million vehicles would be lowered by the cumulative sales that occurred
before 2022 to reflect the technology advancement in the early years of the program. [EPA-HQ-
OAR-2010-0799-9472-A2, pp. 11-12]
If EPA maintains the manufacturer-specific cap, NRDC believes it should be lowered from the
proposed 600,000 for each manufacturer that sells at least 300,000 from 2019-2021 to ensure that
no more than 5 percent of the GHG reductions are lost when considering sales volumes in excess
of 4 million vehicles from 2017-2025. [EPA-HQ-OAR-2010-0799-9472-A2, p. 12]
NRDC opposes any weakening or removal of the cap on 0 g/mi treatment that exists for model
years 2012-2016. [EPA-HQ-OAR-2010-0799-9472-A2, p. 12]
NRDC supports the requirement of a minimum all-electric range of at least 10 miles for a vehicle
to be eligible for 0 g/mi treatment. NRDC also agrees that the 0 g/mi treatment should only apply
to operation on grid-supplied electricity in plug-in hybrid electric vehicles. The use of a utility
4-65
-------
EPA Response to Comments
factor is a reasonable allocation of the 0 g/mi treatment. [EPA-HQ-OAR-2010-0799-9472- A2, p.
12]
We also welcome further discussions with EPA on the details of setting upstream emissions
accounting. EPA notes that there are several factors to consider including marginal versus
average power plant emissions rates, regional variability and how to project emission rates for
vehicles that are charging over many years. NRDC provided comments in the 2012-2016 GHG
proposed rule along these lines and we recognize that on-going analysis could be appropriate to
most accurately quantify electric vehicle emission rates for real-world operation. [EPA-HQ-
OAR-2010-0799-9472-A2, p. 12]
35 CARB, Staff Report: Initial Statement Of Reasons, Advanced Clean Cars, 2012 Proposed
Amendments To The California Zero Emission Vehicle Program Regulations, December 7,
2011. [EPA-HQ-OAR-2010-0799-9472-A2, p. Ill]
36 Ibid [EPA-HQ-OAR-2010-0799-9472-A2, p. 13]
Organization: Nissan North America, Inc.
Support for Electric Vehicles: The proposal represents a significant leap forward in advancing
environmentally friendly vehicles and zero emissions transportation. Battery electric technology
has the ability, over time, to reduce substantially reliance on foreign oil and to provide vehicles
capable of running on renewable energy sources. While automobile manufacturers cannot control
the source of fuel, the industry can develop and market vehicles supporting clean energy use and
can ensure that tailpipe emissions are diminished, or-as in the case of the Nissan LEAF-
eliminated completely. [EPA-HQ-OAR-2010-0799-9471-A1, p.2]
Credit Multiplier: The proposed credit multiplier for battery electric vehicles (EVs), plug-in
hybrid electric vehicles (PHEVs) and fuel cell vehicles (FCVs) is critical to the Widespread
deployment of these advanced powertrain technologies. The adoption of these alternative
powertrains, beyond their initial purchasers, hinges on significant investment by automobile
manufacturers in research and development, the appropriate amount of time to create an effective
deployment strategy, and marketing initiatives that are tailored to new technology deployment.
Past experiences have shown that regulatory programs that support new technologies Increase
the availability and rate of adoption of new technologies, making it more likely that new
technologies reach a critical mass of consumers. [EPA-HQ-OAR-2010-0799-9471-A1, p.2]
Measuring Tailpipe Emissions: Nissan supports EPA's proposal to use a greenhouse gas
emissions compliance value of 0 grams per mile for EVs, FCVs and the electric portions of
PHEVs in MYs 20172021 (and certain vehicles in MYs 2022-2025). The compliance value of
these vehicles should always be measured at zero grams per mile. Including upstream emissions
in the compliance calculation will cause confusion in the marketplace and will detract from the
agencies' support for the deployment of battery powered vehicles. The agency should, as a matter
of public policy, continue to promote the advancement of zero and low-emission vehicles while
4-66
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
separately focusing on the development of renewable and/or low emission power sources. This is
not only the best policy decision to promote EV deployment and increase their rate of adoption,
it is also legally required. [EPA-HQ-OAR-2010-0799-9471-A1, p.3]
While advancements in petroleum powered vehicles are essential to improving fuel efficiency
and necessary to achieve immediate goals, battery electric technology offers the promise of yet
more substantial reductions-and even the elimination-of tailpipe emissions. Nissan anticipates
that battery electric and plug-in hybrid vehicles can achieve a significant market share if
supported by government programs and incentives, and if the industry is provided with the
necessary incentives to invest in the technology. [EPA-HQ-OAR-2010-0799-9471-A1, p. 10]
Other automakers are also entering the market for battery electric vehicles and plug-in hybrids.
Most, however, are doing so more cautiously than Nissan and continued investment will depend
largely on the extent to which consumers adopt the technology and infrastructure is built to
support the vehicles. As set forth in more detail below, government incentives and support are
essential to ensuring manufacturer investment and widespread consumer adoption of these
technologies. [EPA-HQ-OAR-2010-0799-9471-A1, p. 10]
The credits proposed for electric drivetrains and the continued focus on tailpipe emissions when
calculating GHG emissions are critical to promoting the government's long term policy
initiatives. Without the incentives and continued focus on tailpipe emissions when calculating
GHG emissions, as explained more fully below, consumers will be slower to adopt these
advanced technologies and continue to rely on traditional internal combustion vehicles, which
will result in higher overall greenhouse gas emissions long term. It is not until consumers adopt
these technologies that the United States can realize the benefits of these transformational, 'game
changing' vehicle technologies. [EPA-HQ-OAR-2010-0799-9471-A1, p. 10]
As EPA recognizes, the proposed regulatory incentives for electric vehicles are 'justified by
promoting technologies that have significant transportation GHG emissions and oil consumption
game-changing potential in the longer run, and that also face major market barriers in entering a
market that has been dominated by gasoline vehicle technology and infrastructure for over 100
years.' See 76 Fed. Reg. 74,854, 75,011 (Dec. 1, 2011) ('Proposed Rule'). Meaningful market
penetration of these advanced powertrains hinges not only on increased consumer demand and
continued infrastructure development, but also on significant investment by automobile
manufacturers. [EPA-HQ-OAR-2010-0799-9471-A1, pp. 10-11]
Automobile manufacturers face an increasingly competitive market, short-term economic
uncertainties and increasing regulatory costs. Nissan and other automakers must invest in a range
of technologies to provide certainty in their ability to meet the proposed standards. While Nissan
remains committed to the promise of battery electric vehicles, the proposed incentives provide
the requisite support to the industry as a whole to make the early investment required to create a
more robust market for battery electric vehicles and to spur their adoption rate. [EPA-HQ-OAR-
2010-0799-9471-Al,p.ll]
In order for new a technology—especially technologies that disrupt the status quo-to be adopted
on a meaningful scale, it is essential that the new technology be adopted by a critical mass of
4-67
-------
EPA Response to Comments
consumers. While some new technological innovations diffuse from first use to widespread
adoption in a matter of years, others may level out at less than 2 percent. See generally Everett
M. Rogers, Diffusion of Innovations 219 (Free Press 5th ed. 2003) (1962). [EPA-HQ-OAR-
2010-0799-9471-Al,p.ll]
A widely used depiction of the technology adoption curve is the 'Innovation Adoption Lifecycle'
developed by Joe M. Bohlen, George M. Beal, and Everett M. Rogers at Iowa State University:
[EPA-HQ-OAR-2010-0799-9471-A1, p. 11] [For the graphic referenced (technology adoption
curve) please refer to EPA-HQ-OAR-2010-0799-9471-A1, p.l 1]
See Diffusion of Innovations at 281.6 As the bell curve shows, new technologies begin with a
relatively small number of'Innovators,' then move to 'Early Adopters' before possibly finding
acceptance within the pragmatic majority of consumers. Most of the variance in the rate of
adoption of innovations is explained by five attributes: relative advantage, compatibility,
complexity, trialability, and observability. Jd. at 221. [EPA-HQ-OAR-2010-0799-9471-A1,
pp.11-12]
As applied to many consumer markets, a disruptive technology is likely to displace more
traditional technology as it moves along the adoption curve to reach the pragmatic majority of
consumers. However, as applied to the motor vehicle market, the goal is not for electric
drivetrains to displace ICE vehicles, but rather for electric vehicles to gain enough of a foothold
in the marketplace to be able to share the market with more traditional drivetrain technology.
[EPA-HQ-OAR-2010-0799-9471-Al,p.l2]
A disruptive technology has the best chance of broader adoption when 'opinion leaders adopt,
which usually occurs somewhere between 3 and 16 percent adoption in most systems.' Jd. at 223.
The Early Adopters are the opinion leaders in communities, and potential adopters of a new
technology look to them for advice and information. Jd. at 283. Consistent with this well-
developed theory of technology adoption, the agency has recognized that 'consumer interest in
EVs is likely to change over time, as early adopters share their experiences.' Proposed Rule at
75,117 (emphasis added). [EPA-HQ-OAR-2010-0799-9471-A1, p. 12]
The Innovation Adoption Lifecycle represents what is necessary to enable EVs to move from
Innovators to Early Adopters in order to gain enough of a foothold to, over time, find acceptance
amongst early members of the more pragmatic majority. In this context, government production
incentives are imperative to ensure that electric drivetrains are able to make the critical move
from the approximate 2.5% of the market where Innovators are willing to experiment with the
new technology to the next group of consumers where Early Adopters showcase the practical use
of the technology and begin the process of incorporating the technology into the broader market.
[EPA-HQ-OAR-2010-0799-9471-Al,p.l2]
Since the motor vehicle market needs to be supported by substantial infrastructure and involves
substantial investment and up-front costs, movement along the technology adoption curve is
substantially slower and more precarious. Hybrids, for example, while gaining general
acceptance as a viable drivetrain, have only just reached a consumer market share where they
4-68
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
have transgressed beyond innovative consumers to more widespread early adopters. [EPA-HQ-
OAR-2010-0799-9471-A1, p.13]
The chart on the following page depicts the rate of HEV sales from when they were first
introduced in 1999 through 2007, and also depicts where EVs are on that same production
schedule: [EPA-HQ-OAR-2010-0799-9471-A1, p. 13] [To view the chart please refer to EPA-
HQ-OAR-2010-0799-9471-A1, p. 14]
The first hybrid Honda Insight was introduced in the U.S. in 1999 and the first Toyota Prius was
introduced in the United States in 2000. HEVs comprised only about 0.5% of new car sales
during the first generation of these vehicles; and, as of2004, only five HEV models were
available. HEVs reached a key tipping point, increasing their U.S. light-duty vehicle market
share by 250%, between 2004 and 2005 when multiple automobile manufacturers entered the
market offering a variety of HEV models. This tipping point coincided with the second
generation Prius. Yet, today hybrids have just reached a 2.5-3% market share. [EPA-HQ-OAR-
2010-0799-9471-Al,p.l4]
The hybrid experience represents the extreme challenges of introducing transformational
drivetrain technology into the new motor vehicle fleet. EVs must not only travel the same early-
stage adoption path as HEVs (which still rely on petroleum), but also face more substantial
market barriers, such as concerns over range and the need to develop support infrastructure. As
reflected on the graph, the EV market is only in its infancy. It will require substantial support to
overcome the barriers to broad market penetration and to ensure a solid and long-lasting foothold
in the automotive marketplace. [EPA-HQ-OAR-2010-0799-9471-A1, p.14]
The projected market penetration rates for EVs and PHEVs vary significantly, demonstrating the
market uncertainty surrounding these technologies. The Boston Consulting Group projects that
EVs and PHEVs could make up 2% of new light-duty vehicle sales in 2020. A study conducted
by Google.org using McKinsey & Company's Low Carbon Economics Tool, on the other hand,
projects that EVs and PHEVs could make up as much as 70% of new light-duty vehicle sales by
2030. The Google Study projection assumes rapid decreases in battery costs and increases in
energy density by 2030, to enable the production of electric vehicles with 300-mile range and a
total cost of ownership lower than that of conventional gasoline vehicles. See Google Study at
12. Without a breakthrough in battery technology, however, the Google Study concludes that it
will be 'much harder for EVs to reach scale.' Id. [EPA-HQ-OAR-2010-0799-9471-A1, pp.14-15]
The HEV experience and the EV market forecasts reflect the uncertainties surrounding the
successful deployment of transformational drivetrain technologies beyond market innovators.
'Diffuser incentives'-incentives provided to manufacturers to produce a new technology and to
persuade consumers to adopt that technology-will provide a strong foundation upon which to
base that deployment and to redress the market barriers that may otherwise stall or limit a more
expanded market for advanced vehicle technologies. The proposed production incentives are
imperative for that technology adoption to occur. [EPA-HQ-OAR-2010-0799-9471-A1, p. 15]
Indeed, compliance incentives historically have been successful in generating production and
creating a market for new light-duty vehicles. When, for example, EPA provided an incentive for
4-69
-------
EPA Response to Comments
diesel vehicles in the 1980s through a relaxed NOX standard, the production and sale of diesel
vehicles rose considerably.11 As evidenced in the graph below, diesel vehicles saw their best
sales during those years. For the period during which the waivers were in effect, the percentage
of new light-duty vehicle sales was approximately four times higher than it was in the
immediately preceding years: [EPA-HQ-OAR-2010-0799-9471-A1, p.15] [To view the graph
please refer to EPA-HQ-OAR-2010-0799-9471-A1, p. 16]
The experience with light-duty diesel vehicles demonstrates the successful use of compliance
incentives to generate the manufacture and marketing of advanced and innovative technology in
the light-duty vehicle market.13 [EPA-HQ-OAR-2010-0799-9471-A1, p. 16]
The Proposed Incentives Will Encourage State and Local Governments and Private Firms to
Stay the Course, and Continue to Promote Advanced Vehicle Technologies [EPA-HQ-OAR-
2010-0799-9471-Al,p.l6]
The successful development of an EV market depends upon the simultaneous growth of vehicle
production, consumer demand and infrastructure. The proposed incentives offered to
manufacturers will result in increased production and availability of EVs and PHEVs. They will
complement an existing array of federal and state consumer incentives and public funds for
infrastructure and charging14 that have created a viable market in the key and early markets, and
a budding consumer interest in additional markets throughout the nation. Private investment in
EV infrastructure is being made as well15, and utilities are offering time-of-use incentives which
make owning and operating a battery electric vehicle easier.16 [EPA-HQ-OAR-2010-0799-9471-
Al,pp.l6-17]
Public and private investment, however, remains uncertain as budget constraints present
challenges to the federal, state and local governments. Private firms, moreover, must see strong
government support for electric vehicles to justify investment in electric vehicle infrastructure.
The proposed incentives will encourage state and local governments and private firms to stay the
course, and continue to promote advanced vehicle technologies. [EPA-HQ-OAR-2010-0799-
9471-Al,p.l7]
The experience to date shows that the market will respond best with a combined support of
incentives, infrastructure and vehicle availability. The deployment of the Nissan LEAF has been
initiated in 'waves'. The waves reflect the markets that Nissan considered to be more market
ready in terms of both consumer demand and local government support. The initial wave (Wave
1) began in late 2010 and included San Francisco, San Diego, Sacramento, Los Angeles,
Honolulu, Portland, Seattle, Phoenix, Nashville, Dallas, Houston and Austin. The Nissan LEAF
was introduced in other cities in additional waves throughout 2011. Nissan anticipates a
nationwide rollout of the Nissan LEAF in 2012. [EPA-HQ-OAR-2010-0799-9471-A1, p. 17]
Focusing on the Wave 1 markets where data is more readily available, Nissan has analyzed the
factors necessary to convert general consumer interest in electric vehicles to the ultimate
purchase of a Nissan LEAF. Consumer interest in the Nissan LEAF begins with 'Handraisers,'
those who sign up (bye-mail or otherwise) to receive information about the Nissan LEAF.
Handraisers can then take the next step and make a 'Reservation,' a refundable $99 deposit that
4-70
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
will reserve the consumer's place in line when Nissan LEAFs are made available in the
consumer's market. Once they are, the consumer can request a quote (RAQ) from a dealer.
Ultimately, if the consumer decides to purchase the Nissan LEAF, this will lead to an order or
sale (collectively 'Orders'). [EPA-HQ-OAR-2010-0799-9471-A1, p. 17]
The Wave 1 markets demonstrate the importance of consumer incentives. Providing direct
consumer benefits such as access to HOV lanes and financial support for home electric vehicle
supply equipment (EVSE) installation significantly increase EV interest and sales. Data from
Wave 1 of the Nissan LEAF shows that consumers eligible for the EV Project (a public-private
partnership funded in part by the Department of Energy), through which they would receive
residential EVSE installation at no cost, were twice as likely to purchase an EV as those who did
not. Moreover, in states with one monetary consumer incentive, internal data shows that people
were 216% more likely ultimately to order a Nissan LEAF. In states with two or more consumer
incentives, data shows that people were 300% more likely ultimately to order a Nissan LEAF.
[EPA-HQ-OAR-2010-0799-9471-A1, p. 18]
Further, markets with more substantial installed and planned infrastructure exhibit a higher level
of conversion from Reservations to Orders (35-40%) than those with less infrastructure (23-
30%). The amount of infrastructure needed in the remaining markets, however, remains
considerable and Nissan's data suggests that a combination of increased vehicle availability and
growth in infrastructure will combine to increase demand for battery electric vehicles. [EPA-HQ-
OAR-2010-0799-9471-A1, p.18]
In sum, the proposed incentives will complement an existing array of consumer incentives and
infrastructure development to enable EVs to overcome near-term market barriers, resulting in an
accelerated tipping point for EV adoption. [EPA-HQ-OAR-2010-0799-9471-A1, p. 18]
Upstream Emissions Should Not be Considered When Calculating Greenhouse Gas Emission
Compliance Values [EPA-HQ-OAR-2010-0799-9471-A1, p.18]
Nissan has long endorsed measuring the greenhouse gas emissions from EVs, PHEVs and FCVs
from the tailpipe, and not including the upstream emissions associated with the generation of the
electricity that powers these vehicles. EPA endorsed this approach in the previous rulemaking
governing MYs 2012-2016 (up to a specific amount of vehicles), in the labeling rule and has
proposed that approach for certain EVs, PHEVs, and FCVs in this rulemaking as well. The
proposal to focus on tailpipe emissions is consistent with the policy objective of fostering electric
vehicles and with the fact that automobile manufacturers only control tailpipe emissions and
have no control over the fuel source for electric power. [EPA-HQ-OAR-2010-0799-9471-A1,
p.18]
Moreover, any non-regulatory consumer information provided by website, label or otherwise,
must present any upstream emissions information to consumers in a consistent fashion so that
consumers will see not only the upstream emissions associated with electric vehicles but also the
upstream emissions associated with other types of vehicles. The agencies should not provide any
upstream emissions information to consumers based on a net adjustment for electric vehicles
because such an approach unfairly suggests that ICE vehicles involve no upstream emissions and
4-71
-------
EPA Response to Comments
creates unnecessary confusion over the question of upstream emissions. If the agencies were to
provide this information to consumers, the information should reflect the upstream emissions
associated with each vehicle type and should further provide consumers with insight into how
their region or location may differ from the national average. 1? [EPA-HQ-OAR-2010-0799-
9471-Al,pp.l8-19]
Policy Considerations Mandate Against Including Upstream Emissions [EP A-HQ-OAR-2010-
0799-9471-Al,p.l9]
In the prior rulemaking, EPA acknowledged that including consideration of upstream emissions
would detract from the strong public policy support for encouraging the development of an
electric vehicle market to enable the long term emissions reductions opportunities associated
with electric vehicles. See 75 Fed. Reg. 25,323,25,341 (May 7, 2010). EPA stated that the
agency would reassess the issue of how to address upstream emissions associated with EVs and
PHEVs for MYs 2017-2025 based on: (1) 'the status of advanced technology commercialization,'
(2) 'the status of upstream GHG control programs,' and (3) 'other relevant factors.' Id While the
final rule was issued only twenty months ago, in May 2010, the same considerations leading to a
focus on tailpipe emissions in that rule are equally applicable to the current proposal. [EPA-HQ-
OAR-2010-0799-9471-A1, p. 19]
The electric vehicle market remains embryonic and, as the experience with hybrid vehicles
shows, will still be in its infancy when the proposed standards go into effect. Disparaging the
substantial benefits associated with EVs, PHEVs and FCVs by focusing on the upstream
emissions of the utilities that provide electric power detracts from the public policy of fostering
the manufacture and sale of vehicles capable of emitting little or no tailpipe emissions. The
proposed standards, furthermore, are aggressive and will require complex compliance planning
for manufacturers, particularly in light of uncertain economic conditions and the need to invest in
a variety of technologies; including within the compliance calculation a factor that is beyond the
control of the automobile manufacturer inserts unnecessary ambiguity into that process. [EPA-
HQ-OAR-2010-0799-9471-A1, p. 19]
Indeed, EPA's proposal to use a national average does not account for the substantial regional
differences-up to 3 times as much in the highest regions as compared to the lowest regions.
Proposed Rule at 75,010, n. 280. EPA properly notes the unfair impact on the Nissan LEAF,
which, using 2007 data, would have an upstream GHG emissions value of 161 grams per mile
based on national average electricity, and a value of 89 grams per mile based on the average
electricity in California, one of the initial Wave 1 markets for the Nissan LEAF and the state
with the most Nissan LEAF sales to date. Id. at 75,011. [EPA-HQ-OAR-2010-0799-9471-A1,
pp. 19-20]
That disparity, moreover, may be greater in MYs 2017 and beyond. EPA is proposing to use
national average GHG emissions rate of .574 grams/watt-hour for MYs 2017 and beyond. 18
Based on the EPA RIA upstream calculation method, the Nissan LEAF's upstream GHG
emissions would be about 146 grams per mile during that period. Under CARB's recently
adopted regulations, the Nissan LEAF's upstream GHG emissions value in MYs 2017 and
beyond would be about 64 grams per mile. Thus, instead of the national average resulting in
4-72
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
GHG value 1.8 times higher than it actually is (based on 2007 data), use of the national average
proposed by EPA projects to result in a GHG value 2.28 times higher than it actually is in MYs
2017 and beyond. 19[EPA-HQ-OAR-2010-0799-9471-A1, p.20]
California is not the only initial Nissan LEAF market with comparatively low electricity GHG
emissions; in fact, most initial Nissan LEAF markets have lower-than-average electricity GHG
emissions. By accounting for upstream emissions using a national average, electric vehicle
manufacturers would be penalized because their compliance standard will not be reflective of
actual upstream emissions. [EPA-HQ-OAR-2010-0799-9471-A1, p.20]
The agencies have recognized the need to consider the vitality of the electric vehicle market
during the mid-term review. At that time, the growth and potential for battery electric vehicles to
reach critical mass will be better known. While it may remain necessary to continue to encourage
electric vehicles through further incentives, the current status of the market compels continuation
of the policy and program elements put into place just 20 months ago. [EPA-HQ-OAR-2010-
0799-9471-A1, p.20]
Another factor weighing in favor of continued focus on tailpipe emissions is the upcoming
regulation of greenhouse gas emissions from electric utility steam generating units. Although
EPA has stated that 'there is currently no national program in place to reduce GHG emissions
from electric powerplants,' the current proposal and the opportunity to focus on utilities between
now and the model years covered by this proposal suggest that the agency should not force
vehicle manufacturers to carry the burden of utility generators. Id. (emphasis added). Rather, the
agency should ensure that each producer is responsible for the emissions it can control and cost-
effectively reduce. [EPA-HQ-OAR-2010-0799-9471-A1, pp.20-21]
Not only is EPA's proposal to measure EVs as zero grams per mile the best policy decision to
promote EV deployment, it is also legally required. EPA and NHTSA have chosen to utilize the
current federal test procedure for measuring fuel economy in vehicles. Significantly, those
procedures were designed to measure the tailpipe emissions from ICEs and provide for electric
vehicles to be assigned a measure according to a petroleum equivalency factor. The testing and
calculation procedures to be used in the CAFE and GHG programs do not account for upstream
emissions in the production, refining or delivery of petroleum to vehicles operating on
petroleum. [EPA-HQ-OAR-2010-0799-9471-A1, p.21]
In its previous rulemaking, in response to Nissan's suggestion that excluding upstream GHGs is
legally required under Section 202(a)(l), EPA stated that Section 202(a)(l) granted it 'broad
discretion in setting emissions standards,' and that this discretion 'included adjustments to
compliance values adopted in final rule, the multipliers [EPA] proposed, and other kinds of
incentives.' 75 Fed. Reg. at 25,437. Nissan agrees that Section 202 gives EPA discretion to
incentivize new technologies, but Section 202 does not give EPA the authority to consider non-
vehicle related emissions when setting compliance standards. Doing so would disrupt the careful
structure of the CAA. [EPA-HQ-OAR-2010-0799-9471-A1, p.21]
The CAA governs emissions from both stationary and mobile sources. Specifically, Title I of the
CAA regulates stationary sources, while Title II of the CAA regulates mobile sources.
4-73
-------
EPA Response to Comments
Regulation of stationary sources is primarily left to the states, whereas the federal government
sets nationwide emissions standards for mobile sources. See Jensen Family Farms, Inc. v.
Monterey Bay Unified Air Pollution, 644 F.3d 934, 938 (9th Cir. 2011 ). EPA relies on Section
202 of the CAA-located in Title Il-as the basis of its authority to regulation upstream emissions.
See 75 Fed. Reg. at 25,437. Congress never intended that Title II encompass consideration of
upstream emissions, however, nor has EPA ever considered these emissions. See Proposed Rule
at 75,010 ('[Traditionally the emissions of the vehicle itself are all that EPA takes into account
for purposes of compliance with standards set under Clean Air Act Section 202(a).'). [EPA-HQ-
OAR-2010-0799-9471-A1, p.21]
Section 202(a)(l) states that 'the Administrator shall by regulation prescribe (and from time to
time revise) ... standards applicable to the emission of any air pollutant from any class or classes
of new motor vehicles . .., which in his judgment cause, or contribute to, air pollution which may
reasonably be anticipated to endanger public health or welfare.' 42 U.S.C. § 7521(a) (emphasis
added). That is, Title II is limited to consideration and regulation of emissions from the vehicle,
not any other source. The House Committee report on Title II of the Clean Air Act similarly
indicated that Section 202 requires the Secretary to promulgate standards applicable 'to the
emission of substances from new motor vehicles or new motor vehicle engines.' H.R. Rep. No.
89-899, at 9 (1965) (emphasis added). Nowhere in Title II of the CAA or its legislative history
does it indicate that EPA can take into account the upstream emission associated with a motor
vehicle when establishing compliance values under Section 202. Doing so would undermine the
careful structure of the CAA, which leaves stationary source regulation primarily to the states.
Jensen Family Farms, Inc., 644 F.3d at 938. Consideration of upstream emissions from EVs
would amount to an indirect regulation of stationary sources under Title I, which is
impermissible. [EPA-HQ-OAR-2010-0799-9471-A1, pp.21-22]
Further, to the extent that EPA does decide to revise its testing procedures and consider upstream
emissions associated with EVs-which it legally cannot-it is arbitrary to consider the upstream
emissions associated with one type of vehicle and not the other. As Nissan noted in its comments
on the previous greenhouse gas rulemaking, when regulating products, 'the overriding principle
of fairness is always the same: the government must govern with an even hand.' us. v.
Undetermined Quantities of an Article of Drug Labeled as Exachol, 716 F. Supp. 787, 795
(S.D.N.Y. 1989) (holding that the FDA applied an 'uneven regulatory policy' by not treating one
product like similar situated other product). It is well-established that an agency cannot treat
similarly situated parties differently without a reasoned basis for doing so. See, e.g., Burlington
Northern and Santa Fe Ry. Co. v. Surface Transp. Bd., 403 F.3d 771, 776-777 (D.C. Cir. 2005)
('Where an agency applies different standards to similarly situated entities and fails to support
this disparate treatment with a reasoned explanation and substantial evidence in the record, its
action is arbitrary and capricious and cannot be upheld.'). There is no rational basis for EPA to
discriminate in the regulatory program based on the form of fuel used, especially when doing so
would hold manufacturers of advanced powertrains accountable for emissions they cannot
control. [EPA-HQ-OAR-2010-0799-9471-A1, p.22]
In sum, the federal test procedure, which measures emissions from a vehicle's tailpipe, measures
battery electric vehicle GHG emissions at zero grams of CC>2 per mile. See Proposed Rule at
74,964 (The 0 gram per mile value accurately reflects the tailpipe CO2 gram per mile achieved
4-74
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
by [EVs, FCVs and the electric portion of PHEVs].'). Therefore, the compliance value of these
vehicles should always be measured at zero grams per mile. EPA should not-nor does it have the
authority to-increase this value based on consideration of upstream emissions associated with
EV, PHEVs and FCVs, but not other vehicles. [EPA-HQ-OAR-2010-0799-9471-A1, p.22]
Additional Issues Relating to Upstream Emissions [EPA-HQ-OAR-2010-0799-9471-A1, p.23]
I. To the Extent Upstream Emissions Are Considered, EPA Should Adopt an Industry Wide Cap
to Reward Early Investors in Advanced Vehicle Technologies [EPA-HQ-OAR-2010-0799-9471-
Al,p.23]
Although Nissan strongly supports the exclusive focus on emissions from the tailpipe, EPA
requests comment on elements of the proposed cap structure to the zero grams per mile standard
for MYs 2022-2025, and in particular on the benefits of an industry wide cap versus a per-
company cap. The two-tier, per-company cap would allow manufacturers that sold 300,000 or
more EVIPHEV/FCVs combined in MYs 2019-2021 a cumulative production cap of 600,000 in
MYs 2022-2025, and manufacturers that sold less than 300,000 EV/PHEV/FCVs combined in
MYs 2019-2021 a cumulative production cap of200,000. Proposed Rule at 75,013. The industry-
wide cap would place an industry-wide cumulative production cap of 2 million EV/PHEV/FCVs
eligible for the zero grams per mile standard in MYs 2022-2025, which would be allocated to
individual automakers in calendar year 2022 based on cumulative EVIPHEVIFCV sales in MYs
2019-2021. Id EPA notes that a small portion of the industry-wide cap may be reserved for
manufacturers that sold zero EV/PHEVIFCVs in MYs 2019-2021. Id [EPA-HQ-OAR-2010-
0799-9471-A1, p.23]
Any regulatory cap should be industry based in order to encourage investment in electric
powertrains now for use in the coming model years, and the cap should not reserve any volume
for manufacturers selling zero electric vehicles in MYs 2019-2021. Although the per-company
cap encourages manufacturers to sell at least 600,000 advanced technology vehicles in MYs
2019-2021, the industry-wide cap will encourage manufacturers to exceed that total to maximize
its share of the zero grams per mile standard in MYs 2022-2025. [EPA-HQ-OAR-2010-0799-
9471-A1, p.23]
The per-company cap would also have the perverse effect of rewarding manufacturers that are
lagging behind and not fully committed to investing in these game-changing technologies by
allowing a guaranteed amount of vehicles to benefit from the zero grams per mile standard in
MYs 2022-2025, regardless of whether the manufacturer sold any EVs, PHEVs or FCVs in MYs
2019-2021. [EPA-HQ-OAR-2010-0799-9471-A1, p.23]
The purpose of the proposed incentives is to encourage manufacturer investment in potentially
game-changing technologies now to accelerate their adoption rate. Adopting an industry-wide
cap will serve that purpose. [EPA-HQ-OAR-2010-0799-9471-A1, p.23]
II. PA's Proposed Phase-in Approach to Measuring Upstream Emissions Beyond the Cap will
Incentivize Advanced Vehicle Investment and Increase Their Rate of Adoption [EPA-HQ-OAR-
2010-0799-9471-A1, p.24]
4-75
-------
EPA Response to Comments
EPA also requests comment on various approaches for phasing in from a 0 grams per mile value
to a full net increase in upstream emissions value. Proposed Rule at 75,013. Nissan supports
EPA's phase-in proposal, both for production beyond the cumulative cap in MYs 2022-2025, as
well as production beyond the cumulative cap for MYs 20122016. The interim period between a
zero grams per mile compliance value and full net increase in upstream emissions value should
be equal to the number of vehicles each manufacturer can assign a zero grams per mile
compliance value for MYs 2022-2025, and the interim period compliance value should be one-
half of the net increase. Nissan supports a similar approach for MYs 2012-2016 (i.e., the number
of vehicles subject to the phase in will be equal to the number of vehicles each manufacturer can
assign a zero grams per mile standard in MYs 2012-2016). This approach would further
incentivize manufacturers to invest in EVs and other advanced powertrains, increasing the rate of
adoption of these technologies. [EPA-HQ-OAR-2010-0799-9471-A1, p.24]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 129-130.]
The production credits in the proposed rule are essential to incentivizing continued manufacturer
investment in these advanced technologies, increasing their rate of adoption and the rate by
which the United States will realize a zero emission society.
We also understand that certain groups have raised concerns about upstream emissions from
energy-producing facilities that power the grids that charge the vast range of consumer goods
including electric vehicles. The solution to the issue of emissions from energy production
facilities is not to discourage the proliferation of electric vehicles or other consumer goods by
devaluing their contribution to a cleaner environment. Discouraging that fleet by diminishing the
way in which the environmental benefits are presented to the public will only serve to reduce the
market for electric-powered vehicles, delay further serious advancements in low emissions
electricity and perpetuate the domination of emission-producing internal combustion engines.
We support the continued focus on tailpipe emissions in this program. While we have no control
over the energy production facilities or their emissions, we also support public and private efforts
to move the power supply towards renewable energy sources.
6 - The theories presented in Diffusion of Innovations are widely accepted. Indeed, Diffusion of
Innovations is 'the second most-cited work in social science after Cook and Cambell's (1979)
treatise on quasi-experimentation.' Arvind Singhal & Sweety Law, A Research Agenda for
Diffusion of Innovations Scholars in the 21st Century: A Conversation with Everett M Rogers, 8
J. Develop. Comm. 39, 39 (1997). The various editions of Diffusion of Innovations have
received numerous awards. 'In 1990, the Institute for Scientific Information designated Diffusion
of Innovations as a 'Citation Classic' on the basis of the large number of citations (approximately
7,000) that it received in articles published in social science journals. This book was selected by
Inc. magazine in 1996 as one of the ten classic books in business and in 2000 was designated as a
'Significant Journalism and Communication Book of the Twentieth Century' by Journalism and
Mass Communication Quarterly. It was also awarded the first Fellows Book Award in the Field
of Communication by the International Communication Association's fellows in 2000,' Diffusion
4-76
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
of Innovations at 551. Diffusion of Innovations has also been cited in two administrative reports
from the Federal Communications Commission. See In Re: International Comparison
Requirements Pursuant to the Broadband Data Improvement Act, 26 F.C.C.R. 7378, 7393 n. 108
(May 20, 2011); Connecting America: The National Broadband Plan, 2010 WL 972375, *151 n.
29 (F.C.C. Mar. 16,2010). Finally, aWestlaw.com search of all law review articles and treatises
revealed 93 law review articles that cite Diffusion of Innovations.
11 - Section 202(b)(6)(B) of the Clean Air Act (CAA) provided that upon the petition of a
manufacturer, the EPA Administrator could waive the then-existing 1.0 grams per mile (gpm)
NOX standard to a level not to exceed 1.5 gpm for diesel-powered light-duty vehicles and engines
manufactured in MYs 1981-1984. Upon receiving several manufacturer petitions in 1980, EPA
granted waivers permitting emissions up to 1.5 gpm for MYs 1981-1982 diesel-powered light-
duty vehicles manufactured by GM, Daimler-Benz, Volkswagen, Volvo, and Peugeot. See 45
Fed. Reg. 5,480 (January 23, 1980); 45 Fed. Reg. 34,719 (May 22, 1980).
13 - The proposed incentives, moreover, do not favor one technology over another to achieve
compliance. Traditional ICE vehicles will remain a majority of the fleet and will continue to
gamer significant investment in improved and advanced technologies. The incentives for electric
drivetrains instead recognize the existing market barriers and will justify private investment in a
longer-term, transformational solution to yet more substantial environmental benefits in the
future.
14 - Examples of local governments supporting EV infrastructure development include
Chicago's 'sip and gulp' approach will made available both a limited supply of direct connect
charging stations and a more expansive number of Level 2 public charging stations. In addition,
San Francisco recently placed in 20 city-owned garages throughout the city, which are free to use
through 2013. See Cars.com, Chicago Plans Most-Electrified City in the us. (Feb. 8,2011),
available at http://blogs.cars.com/kickingtires/20 11/02/chicago-ev-stations.html (last visited
January 5, 2012); Smartplanet.com, San Francisco will charge your electric car for free until
2013 (May 9,2011), available at http://www.smartplanet.comlblog/transportation!san-francisco-
wi D-charge-your-electric-car-for- free until- 2013/380 (last visited January 5,2012).
15 - Walgreens, for instance, has installed or plans to install approximately 800 EV charging
stations across the country. See Walgreens Newsroom, First Walgreens Electric Vehicle
Charging Station in Orlando Unveiled (Oct. 12, 2011), available at http://news.walgreens.com
/article_display.cfm?article_id=5482 (last visited January 5, 2012).
16 - Examples include: Georgia Power offers a Plug-In Electric Vehicle time-of-use electricity
rate for residential customers who own an EV or PHEV. The Indianapolis Power & Light
Company offers special plug-in electric vehicle charging rates, including year-round time-of-use
based options, for residential and fleet customers who own a licensed EV or PHEV. Louisville
Gas & Electric offers a pilot Low Emission Vehicle time-of-use electricity rate for residential
customers who own an EV or PHEV (limited to 100 customers). DTE Energy (in Michigan)
offers a reduced electricity rate to qualified residential customers for charging EVs and PHEVs
during off-peak hours. Nevada Energy (NV Energy) offers discounted electricity rates to
residential customers in their Northern and Southern Service Territories who charge EVs or
4-77
-------
EPA Response to Comments
PHEVs during off-peak hours. See Department of Energy, Alternative Fuels & Advanced
Vehicles Data Center, available at http://www.afdc.energy.gov/afdc/laws/ (last visited January 5,
2012).
17 - The most recent labeling rule, which applies to MY 2013 and later vehicles, is limited to
tailpipe-only GHG emissions. 76 Fed. Reg. 39,478, 39,492-93 (July 16, 2011). The labels for
EVs, however, will include a clarifying statement, 'Does not include emissions from producing
electricity,' and vehicles fueled without grid electricity will include the statement 'Producing and
distributing fuel also creates emissions; learn more at fueleconomy.gov.' Id. For PHEVs, the text
'& electricity' will be added after the word 'fuel.' Id. The website will offer detailed information
on upstream emissions, including regional-specific values, where appropriate. Id. Nissan
supported this approach in the labeling rulemaking, and continues to do so. If EPA were to
consider listing the upstream emissions associated with an EVon the vehicle label itself,
however, it must do the same for all vehicles to prevent consumer confusion.
18 - Given the uncertainties associated with the electricity GHG emissions rate in MYs 2017
and beyond, EPA should reassess the appropriateness of the GHG emissions rate of .574
grams/watt-hour during the mid-term review, and revise it as appropriate.
19 - Upstream emissions vary not only by region, but also by service territory. For example, the
utility company Seattle City & Light uses a combination of hydroelectric power and carbon
offsets for 100% carbon free electricity, unique to the Pacific Northwest Region. Upstream
emissions also vary by customer. For example, LEAF customers in a coal-heavy region that
install solar technology on their roof will have an inaccurate measure for upstream GHG
emissions.
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Technology Incentives
NESCAUM supports EPA's proposed zero gram per mile incentive for EVs and PHEVs as a
reasonable short-term accommodation that recognizes the initial barriers to adoption of these
technologies. While the zero emission factor for electricity used to power these advanced
vehicles does not account for upstream emissions from electricity generation, application of this
zero factor for MY 2017-2021 will provide auto manufacturers with greater incentives to deploy
these technologies. We in turn support, in principle, EPA's proposed sales cap, above which
upstream emissions are included for MY2022-2025. The sales cap will help the program to
achieve greater GHG emission reductions in the long term. [EP A-HQ-OAR-2010-0799-9476-
Al,p.2]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11788, pp. 72-73.]
EPA should continue to evaluate the GHG effects of these technology incentives to ensure
preservation of the overall goals of the program. We also expect that EPA will monitor upstream
emissions from the power grid to ascertain whether the improvements assumed to occur do in
4-78
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
fact occur. In that regard, we strongly support the proposed mid-term review that will provide the
opportunity to consider appropriate revisions to these incentives and to other aspects of the
program. [This comment can also be found in section 2.4 of this comment summary.] [EPA-HQ-
OAR-2010-0799-9476-A1, p. 2]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 73.]
While for this time frame we support the concept to forego accounting for net upstream electric
power generation emissions, we in turn support in principle EPA's proposal for sales cap above
which upstream emissions are included in model years 2022 through 2025.
Organization: Pennsylvania Department of Environmental Protection
Eliminate the Two-for-One Incentive Multiplier. EPA should not increase the manufacturers'
sales incentives for EVs, plug-in hybrid electric vehicles (PHEVs) or fuel cell vehicles (FCVs)
by including a 2-for-l incentive multiplier. EPA is proposing that a manufacturer of EV s,
PHEVs, or FCVs will receive a 2-for-l incentive multiplier starting in 2017 that will decrease
over time to 1-for-l in 2025 for each EV, PHEV, or FCV sold. No cap on the number of vehicles
sold would exist until 2022. By developing a new sales incentive solely for electrically powered
vehicles, EPA is creating a disadvantage for vehicles powered by natural gas. In fact, vehicles
powered by natural gas could have fewer emissions of GHG and have an overall smaller
environmental footprint than vehicles powered by electricity in some, if not most, parts of the
country. Congress recognized this fact and provided incentives in the CAFE program to
manufacturers of all alternately fueled vehicles. In addition, the 2-for-l incentive would appear
either to be inconsistent with, or exceed the intent of, Congress as reflected in the CAFE-
program. EPA has no legal or practical basis for providing this excessive incentive for EVs. We
believe that the 2-for-l incentive multiplier offer to manufacturers should be withdrawn, but if
the incentive multiplier is not withdrawn, then gaseous alternative fuel vehicles should also be
included in this incentive mechanism. [EPA-HQ-OAR-2010-0799-7821-A1, p. 4]
In addition, EPA needs to treat all alternative fuels as alternatives and not support EVs over
vehicles alternatively fueled with gaseous fuels. [EPA-HQ-OAR-2010-0799-7821-A1, p. 5]
Organization: Pew Charitable Trusts
The proposed joint rule for model years 2017 to 2025 incentivizes the introduction of advanced
technologies that seek to decrease U.S. dependence on foreign oil. Incentives designed to spur
deployment of electric and hybrid vehicle technologies in the U.S. light duty fleet provide a clear
path for auto manufacturers to invest in research, development, and production, which can
improve the competitiveness of U.S. manufacturing and enhance exports to nations with growing
demand. Investment in the research, development, production, and deployment of advanced
vehicle technologies will help vehicle manufacturers located in the United States achieve the
proposed standards, and present an opportunity for the U.S. to lead in new markets such as
advanced batteries, which experts predict could be a $100 billion global industry annually by
2030. Pew is a strong advocate for the deployment of electric and hybrid vehicles and the
4-79
-------
EPA Response to Comments
necessary charging infrastructure, which could significantly reduce oil consumption and
consumer fuel costs. [EPA-HQ-OAR-2010-0799-9496-A2, pp. 1-2]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2009-2010-11788, pp. 18-19.]
Organization: Plant Oil Powered Diesel Fuel Systems, Inc.
2. The Proposed GHG Standards are arbitrary and capricious because their exclusive
consideration of tailpipe GHG emissions fails to take into account the relative life cycle
contribution to GHG emissions of various engine technologies and the energy sources that make
them run. The analysis of the wells-to-wheels energy inputs associated with various technologies
and fuels set forth herein demonstrates that the Proposed Regulations' apportionment of GHG
credits to various technologies and fuels is irrational because it considers only tailpipe emissions.
[EPA-HQ-OAR-2010-0799-10337-A2, p. 2]
c. re-do the weight the Agencies give to various alternative technologies and fuels according to a
wells-to-wheels approach that corresponds more accurately with their relative contribution to and
mitigation of atmospheric greenhouse gas accumulation; [EPA-HQ-OAR-2010-0799-10337-A2,
pp. 2-3]
The Proposed Regulations base the GHG accounting primarily on tailpipe emissions. The
Agencies, therefore, deem all electric vehicles to have zero emissions of CO2 and zero fuel
consumption. 76 Fed. Reg. at 74878. Through model year 2021, electric vehicles, hybrid electric
vehicles, and hydrogen fuel cell vehicles receive a multipliers of between 1.3 to 2.0 times the
amount of tailpipe CO2 emissions reduced by the technology as compared to the same engine or
vehicle without the alternative technology installed. Id. [EPA-HQ-OAR-2010-0799-10337-A2,
p. 5]
A. Electric and Electric Hybrid Vehicles [EPA-HQ-OAR-2010-0799-10337-A2, p. 6]
The GHG theory behind electric vehicles is that they eliminate GHG emissions from the tailpipe
and transfer any such emissions to less onerous upstream electricity production. The fallacy
underlying this theory is stated in the Preamble to EPA's Proposed Regulations, as
follows: [EPA-HQ-OAR-2010-0799-10337-A2, pp. 6-7]
At this time [], there is no [] comprehensive program addressing upstream emissions of GHGs,
and the upstream GHG emissions associated with production and distribution of electricity are
higher, on a national average basis, than the corresponding upstream GHG emissions of gasoline
or other petroleum based fuels, [cite omitted] In the future, if there were a program to
comprehensively control upstream GHG emissions, then the zero tailpipe levels from these
vehicles have the potential to contribute to very large GHG reductions, and to transform the
transportation sector's contribution to nationwide GHG emissions (as well as oil
consumption). [EPA-HQ-OAR-2010-0799-10337-A2, p. 7]
4-80
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
76 Fed. Reg. At 75010 (emphasis added). It makes no sense to give electric vehicles any credit,
much less a 100 percent credit, when "the upstream GHG emissions associated with production
and distribution of electricity are higher, on a national average basis, than the corresponding
upstream GHG emissions of [] petroleum based fuels." Id. [EPA-HQ-OAR-2010-0799-10337-
A2, p. 7]
Even comparing solely tailpipe emissions, "[t]he energy efficiency assigned to electric vehicles
[] does not account for the inefficiency associated with generating electricity from the
combustion of fossil fuels." National Energy Technology Laboratory, "Battery-Powered Electric
and Hybrid Electric Vehicle Projects to Reduce GHG's: A Resource Guide for Project
Development" (July 2002), n. 119 (Exhibit 3). Research conducted by Argonne National Labs
found that, "to achieve significant reductions in GHG emissions, [plug-in and battery-powered
electric vehicles] must recharge from a generation mix with a large share of non-fossil sources
(e.g., renewable or nuclear power generation)." A. Elgowainy, et al., "Well-to-Wheels Energy
Use and Greenhouse Gas Emissions Analysis of Plug-in Hybrid Electric Vehicles," Argonne
National Laboratory Report ANL/ESD/09-2 (Feb. 2009). Renewable sources contributed 10
percent of U.S. electricity generation in 2009. U.S. Energy Information Administration ("EIA"),
"How much of our electricity is generated from renewable sources?" (Web: Feb. 11, 2012)
(http://www.eia.gov/energy_in_brief/renewable_energy.cfm). In 2010, 45 percent of U.S.
electricity was generated from coal. EIA, "What is the role of coal in the United States?" (Web:
Jan. 30, 2012) (http://www.eia.gov/energy_in_brief/role_coal_us.cfm). The combustion of coal
produces 25 to 50 percent more CC>2 emissions than petroleum. Id. [EP A-HQ-OAR-2010-0799-
10337-A2, pp. 7-8]
In the absence of a program to transform emissions from the upstream production of electricity
to less carbon intensive sources, conferring on electric vehicles and hybrid electric vehicles a
preference is irrational. It only encourages the introduction to the market of electric and hybrid
vehicles that will contribute net more overall GHG emissions. Since a transforming upstream
program is within EPA's authority under the Clean Air Act, the Proposed Regulations' favoring
electric and hybrid electric vehicles is illogical and contradicts EPA's mission under the Clean
Air Act. [EPA-HQ-OAR-2010-0799-10337-A2, p. 8]
B. Hydrogen Fuel Cells [EPA-HQ-OAR-2010-0799-10337-A2, p. 8]
The manufacture and sequestration of hydrogen to power a fuel cell requires an energy input and
engenders some loss of energy content. EIA, Office of Integrated Analysis and Forecasting ,
Office of Coal, Nuclear, Electric and Alternate Fuels ("EIA OIAF-OCNEAF"), "The Impact of
Increased Use of Hydrogen on Petroleum Consumption and Carbon Dioxide Emissions," at ix
(Sept. 2008) (Exhibit 4). Reliance on hydrogen to power a mobile engine carries with it the same
drawback of electricity: "[t]he main sources of hydrogen currently are hydrocarbon feedstocks,
such as natural gas, coal, and petroleum, all of which also produce CO2." Id., at xi (Exhibit 4).
"Significant technical and infrastructure challenges" remain for the development of a large
market for hydrogen fuel cell vehicles. Id., at ix (Exhibit 4) [EPA-HQ-OAR-2010-0799-10337-
A2, pp.8-9]
4-81
-------
EPA Response to Comments
In contrast, as set forth below, POP DieselTM has overcome the technical obstacles to the use of
100 percent plant oil and low-cost infrastructure that is independent of petroleum infrastructure
is at hand. [EPA-HQ-OAR-2010-0799-10337-A2, p. 9]
Organization: Porsche Cars North America, Inc. (PCNA)
Porsche supports the proposed provisions for advanced technology multipliers. However, we
believe that larger multipliers are justified, as an incentive for faster penetration of these
technologies and to offset the significant development costs. The long-range GHG benefits of
faster penetration far outweigh the effect on short term GHG fleet averages. We also propose that
there should be no phase-out of AT multipliers for the duration of this rule. Each new application
of a particular advanced technology requires significant development cost and time. It is not
appropriate to assign an incentive to development projects over one 5-year period, and provide
no incentive in the next. [EPA-HQ-OAR-2010-0799-9264-A1, p. 6]
In addition, we believe it is not appropriate to include upstream emissions in Light Duty GHG
calculations for electric and plug-in hybrid vehicles. These emissions are not under the control of
the automakers. We believe that the provisions for zero gram/mile upstream emissions for
electric vehicles and plug-in hybrids should be made permanent. [EPA-HQ-OAR-2010-0799-
9264-A1, p. 6]
Organization: Renewable Fuels Association (RFA)
EPA/NHTSA also propose significant incentives for certain dedicated (i.e. single-fueled)
vehicles, which effectively creates an un-level playing field for FFVs. Specifically, EPA/NHTSA
propose a GHG emissions compliance value of 0 for EVs, PHEVs (for the portion of operation
that is electric), and fuel cell vehicles (FCVs). This proposal implies that operating one of these
vehicles results in no GHG emissions whatsoever, despite EPA/NHTSA's acknowledgement that
"[depending on how the electricity and hydrogen fuels are produced, these fuels can have very
high fuel production/distribution GHG emissions (for example, if coal is used with no GHG
emissions control)..." Indeed, on a full lifecycle basis, production of average electricity for use
in EVs and PHEVs actually generates nearly 30% more GHG emissions per unit of energy
delivered than petroleum.3 [EPA-HQ-OAR-2010-0799-9490-A1, p.4]
EPA/NHTSA also propose providing a multiplier for all EVs, PHEVs, and FCVs, which would
allow each of these vehicles to "count" as more than one vehicle in the manufacturer's
compliance calculation. The agencies' reasoning for offering such a multiplier is that these
vehicles, in their view, offer "the potential for game-changing GHG emissions and oil savings in
the long term." We agree that EPA/NHTSA have a role in encouraging the production of
vehicles that potentially reduce GHG emissions and oil consumption, but we believe favorable
treatment under the rules should be afforded consistently to all vehicles that offer such potential.
[EPA-HQ-OAR-2010-0799-9490-A1, pp.4-5]
While we strongly agree with EPA/NHTSA that automakers should be encouraged to produce
vehicles that "[r]educ[e] petroleum consumption to improve energy security", "save the U.S.
money" and "[rjeduce climate change impacts," we believe incentives to stimulate the
4-82
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
production of such vehicles should be constructed fairly and consistently. With regard to utility
factors for fuel economy calculations and emissions compliance values, EPA/NHTSA should be
consistent in the treatment of all dual-fueled vehicles. [EPA-HQ-OAR-2010-0799-9490-A1, p. 5]
A. To ensure consistent treatment of vehicle/fuel options, EPA/NHTSA should consider basing
emissions compliance values on direct "well-to-wheels" lifecycle GHG emissions. [EPA-HQ-
OAR-2010-0799-9490-A1, p.5]
In order to accurately portray the GHG emissions impacts of various fuel/vehicle combinations
when determining emissions compliance values, EPA/NHTSA should consider including
upstream ("lifecycle") emissions that are directly related to the production and use of the fuel.
This is particularly important for electricity because, as EPA/NHTSA acknowledge, ".. .there is
currently no national program in place to reduce GHG emissions from electric powerplants." As
proposed, compliance values would be based on an incomplete accounting of the vehicle's actual
GHG impacts. While the bulk of lifecycle emissions for petroleum fuels occur at the tailpipe
(i.e., as hydrocarbons are combusted in the internal combustion engine), the bulk of direct
lifecycle emissions for EVs and the electric operation portion of PHEVs occur upstream and are
associated with the production of electricity. For biofuels, the bulk of net lifecycle emissions also
occur upstream during biomass production and conversion, as the principles of lifecycle
accounting hold that biogenic CC>2 emissions at the tailpipe are equivalently offset by the CO2
that was removed from the atmosphere by the biofuel feedstock during growth. Basing
compliance values on full direct well-to-wheels lifecycle emissions would allow for "apples-to-
apples" treatment of the GHG emissions associated with different fuel/vehicle options, whereas
the use of tailpipe-only emissions provides only a partial picture of the GHG impacts of various
platforms. Impartial GHG accounting misrepresents the true climate impacts of the CAFE/GHG
program. [EPA-HQ-OAR-2010-0799-9490-A1, p.5]
3 - Lifecycle analysis conducted by the California Air Resources Board for the Low Carbon
Fuels Standard found the well-to-wheels GHG emissions associated with "California average
electricity" are 124.1 grams of C (^-equivalent per mega joule (g/MJ), compared to 95.85 g/MJ
for gasoline. In CARB's analysis, electric vehicles offer GHG savings relative to gasoline only
after "Energy Economy Ratios" are applied to EVs and PHEVs to account for energy efficiency
differences between electric drivetrains and internal combustion engines.
http://www.arb.ca.gov/fuels/lcfs/0227091cfs_elec.pdf
Organization: Securing America's Future Energy (SAFE)
Upstream Emissions: In the proposed rule, EPA is proposing to account for carbon emissions
from a limited number of EVs, PHEVs, and fuel cell vehicles (FCVs), by assigning to then a
carbon emission value of zero grams per mile, with no limit on the number of vehicles eligible
for such treatment, through MY 2021. Between model years (MYs) 2022 and 2025, EPA will
assign a zero grams per mile value to the first 600,000 vehicles for companies that sell 300,000
EVs, PHEVs, and FCVs in MYs 2019-2021 and 200,000 vehicles for all other manufacturers.
EPA believes that approximately 2 million cars will benefit from this treatment through MY
4-83
-------
EPA Response to Comments
2025. For additional vehicles, EPA proposes to calculate upstream emissions (using the average
carbon emissions per kWh of power generated), as estimated by EPA's Office of Atmospheric
Programs' Integrated Planning Model. [EPA-HQ-OAR-2010-0799-9518-A1, pp. 7-8]
SAFE believes that upstream emissions resulting from the operation of EVs, PHEVs and FCVs
should not be attributed to the vehicles, even after MY 2021. For its entire 35-year existence, the
fuel economy program at NHTSA, and the GHG emission program at EPA that has been
incorporated into the fuel economy framework in recent years as part of the national program,
has regulated only the direct consequences of operating a vehicle, whether the volume of fuel
that the vehicle actually burned or the emissions directly emitted from the vehicle. Automakers
have never been held responsible for the energy required to produce, process, and transport the
fuel their vehicles consumed or that was consumed in the process of manufacturing the vehicles
or any of their parts. Likewise, they have never been held responsible for the upstream emission
of other regulated pollutants attributable to the production of fuel consumed by vehicles that they
sold. [EPA-HQ-OAR-2010-0799-9518-A1, p. 8]
At the most fundamental level, automakers cannot reasonably be held accountable for the
upstream consequences of power generation for any pollutant. These are emissions that they do
not cause and over which they have absolutely no control. The emissions will vary for a wide
range of reasons, from utility to utility, hour of day to hour of day, and customer to customer,
even more so if a customer purchases "green power," a decision over which the automakers have
no influence or control. EPA should consider carefully whether, and the extent to which, it is
appropriate to hold automakers responsible for other parties' emissions that they cannot control
or affect. [EPA-HQ-OAR-2010-0799-9518-A1, p. 8]
Doing so, in fact, would be a sharp departure from how EPA has typically regulated pollution. In
each of its major programs, EPA has regulated polluters, and subjected them to regulatory
requirements or penalties as a result of their direct actions. Power plants are responsible for their
air emissions, water treatment plants for their effluent, and landfills for their leakage. We are
unaware of other situations in which EPA regulates anyone other than the generator of pollution,
even if other parties ultimately bear the financial costs of EPA's regulations. For example, water
treatment facilities' customers are not responsible for compliance with the Clean Water Act,
individuals whose trash haulers dispose of trash in landfills are not responsible for the landfill's
compliance with the Resource Conservation and Recovery Act, and consumers of power are not
held responsible for power plant emissions. Yet in this instance, the regulated party would be
even further removed from the activity causing the regulated harm. The agency would be
regulating Party A (automakers) for producing a device whose use by Party B (drivers) caused
Party C (generators) to create carbon emissions. That would be akin to imposing responsibility
for carbon emissions on Carrier, Dell, and Thermador because their HVAC systems, computers,
and electric ovens and stoves consumed power whose generation was responsible for carbon
emissions. [EPA-HQ-OAR-2010-0799-9518-A1, pp. 8-9]
While we appreciate the difficulty of regulating carbon emissions from power plants in the
absence of an economy-wide scheme to regulate carbon emissions, we do not believe that the
political challenge that EPA faces in regulating carbon emissions from power plants should be
4-84
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
used to justify deviating from its longstanding approach to regulating pollution. [EPA-HQ-OAR-
2010-0799-9518-Al,p. 9]
EPA also should consider the extent to which regulating upstream emissions would conflict with
future prospects of developing an economy-wide GHG regulatory system. Once some carbon
emissions are regulated downstream, at the appliance level, it would be very difficult to regulate
the remainder of emissions upstream, because of the inherent difficulty in separating upstream
emissions that were attributable to regulated downstream activities from upstream emissions that
were attributable to unregulated downstream emissions. Moreover, SAFE believes that
attributing upstream emissions to the downstream product is a short term approach that will
complicate EPA's long-term efforts to develop an approach to economy-wide regulation of
carbon emissions. [EPA-HQ-OAR-2010-0799-9518-A1, p. 9]
Finally, if EPA decides to regulate upstream emissions from PHEVs, EVs, or FCVs, it also
should regulate upstream emissions from all other vehicles to put all vehicles on an equal
footing. If EPA's goal is to attribute all emissions resulting from the operation of a vehicle to the
manufacturer of that vehicle, then that general principle should be fairly and equitably applied
across all vehicles regardless of technology. [EPA-HQ-OAR-2010-0799-9518-A1, p. 9]
Multiplier Credit: To help promote the adoption of EVs, PHEVs, and FCVs, EPA's proposal
creates an incentive multiplier for qualifying vehicles sold in MYs 2017 - MY 2021. The
multiplier would treat each qualifying vehicle as more than one vehicle in the compliance
calculation. The value of the multipliers is stated in Table 1. [Table 1 can be found on p. 9 of
Docket number EPA-HQ-OAR-2010-0799-9518-A1] [EPA-HQ-OAR-2010-0799-9518-A1, p.
9]
SAFE believes that the multiplier is a valuable incentive to help promote the adoption of electric
drive vehicles. Further, we believe the incentive is justified because of the critical contribution
that the technology employed in the qualifying vehicles can make in improving our economic
and national security. For the vehicles to achieve their potential, however, they will need
incentives of sufficient size and duration for the vehicles to achieve scale, reduce costs, and
penetrate the mainstream market. [EPA-HQ-OAR-2010-0799-9518-A1, p. 10]
The agencies' forecasts regarding the vehicle sales between MYs 2017 and 2021, indicates that
they do not expect PHEVs and EVs to achieve significant market penetration over this time
period. Through MY 2021, the agencies forecast cumulative sales of 381,160 EVs and PHEVs. If
we generously assume that every one of those vehicles were an EV that consumed no gasoline,
and each one replaced a vehicle with an internal combustion engine that travelled 15,000 miles a
year and achieved 30 miles per gallon, the vehicles would reduce oil consumption by 12,400
barrels of oil a day out of nearly 20.63 million barrels per day of liquid fuel that EIA forecasts
the United States will consume in 2021. Stated simply, this is a modest contribution to our
economic and energy security, reflecting the fact that EVs and PHEVs will need more time to
penetrate the marketplace. [EPA-HQ-OAR-2010-0799-9518-A1, p. 10]
If the agencies want to provide a sufficient level of assistance to help achieve an important
national goal, SAFE believes that rather than phasing the vehicle multiplier out before it can help
4-85
-------
EPA Response to Comments
EVs and PHEVs penetrate the mainstream marketplace, that EPA should keep it in place at the
initial rate of 2.0 for EVs and 1.6 for PHEVs until the midstream review. At that time, the agency
can evaluate its efficacy, and adjust it for the period through MY 2025 as appropriate. [EPA-HQ-
OAR-2010-0799-9518-Al,p. 10]
However, SAFE also believes that EPA's proposed application of the multiplier credit to PHEVs
is too narrow. EPA stated that for a PHEV to qualify for the multiplier, the vehicle must be able
to complete a full 10.2 mile EPA highway test without using any conventional fuel, or have a
minimum equivalent all-electric range of 10.2 miles as measured on the EPA highway cycle.
SAFE believes that EPA could simplify this requirement, allowing a PHEV to qualify for the
multiplier credit if it incorporates a battery with at least 4kWh of storage capacity. A midsize
PHEV that travelled 2.5 miles per kWh of power would have about 10.2 miles of range.
Moreover, Congress has determined that the use of PHEVs with a 4kWh battery is of sufficient
national importance that it is deserving of substantial incentives, in the form of a federal tax
credit. Changing the criteria to a simple minimum battery size requirement will simplify the
regulation, and maintain consistency with EPA's overall goal and the national interest. It also
would give appropriate credit to a PHEV whose design yielded substantial fuel savings even if it
operated in a blended mode that made it difficult to travel 0 miles without using any liquid fuel.
Alternatively, EPA could add a minimum battery size requirement as an alternative qualifying
criterion that would allow vehicles to qualify for treatment as PHEVs based on a clear, simple,
and objective criterion. [EPA-HQ-OAR-2010-0799-9518-A1, pp. 10-11]
PHEV Utility Factors: While calculation of energy consumption by a single fuel vehicle is
somewhat straightforward, calculation of fuel consumption of a dual fuel vehicle is more
complex because one must estimate the amount of each fuel used in the operation of the vehicle.
To calculate vehicle emissions and fuel consumption, EPA proposes relying on the use of "utility
factors," which are ratios or percentages that indicate how much energy used by a PHEV comes
from the grid and how much comes from onboard fuel. Because the operating cost for PHEVs
are typically lower than liquid fueled vehicles and their emissions profile is typically better,
utility factors that are too low will result in an overstatement of emissions, liquid fuel
consumption, and operating costs. [EPA-HQ-OAR-2010-0799-9518-A1, p. 12]
The utility factors that the agencies used in the proposal are based on a standard developed by
the Society of Automobile Engineers, SAE-J2841. The standard is based on data about daily
vehicle miles traveled for about 32,000 days of vehicle travel. Briefly, to calculate a utility
factor, the standard divides the sum of the number of miles each vehicle in the dataset traveled
that would have been charge-depleting miles by the total vehicle miles traveled for a particular
sized battery. [EPA-HQ-OAR-2010-0799-9518-A1, p. 13]
This approach makes sense on its face. Yet, SAE likely underestimated the utility factor for two
separate reasons. First, SAE assumed that people who drive PHEVs will have similar driving
patterns as those who drive traditional vehicles. SAE acknowledged the issue, even noting in an
update of the standard that its initial calculation was "highly weighted towards [vehicles making]
long distance trips." Second, the SAE standard also assumed that consumers will charge their
PHEVs only once a day. [EPA-HQ-OAR-2010-0799-9518-A1, p. 13]
4-86
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
PHEVs carry a premium purchase price in exchange for lower operating costs. Customers who
are willing to pay the premium for the vehicle, a substantial one at first, and one that they can
only hope to recover by driving "electric miles" will have a strong incentive to drive "electric
miles," either by using the vehicles for commutes that are largely within their "electric range" or
by midday charging, usually at work. The first point suggests that people who purchase PHEVs
are likely to drive fewer miles per day than the average vehicle in the whole fleet, because
drivers whose driving patterns can maximize the value of the PHEV powertrain are its most
likely customer. The second point suggests that many PHEVs whose average daily vehicle miles
travelled exceeds the electric range of the vehicle will have a strong inventive to charge their
vehicles at work or elsewhere, and that the average driver of a PHEV is likely to charge their
vehicle more than once a day. [EPA-HQ-OAR-2010-0799-9518-A1, p. 13]
SAE's approach fails to recognize this high likelihood of these sales and usage patterns. To the
extent that EPA's calculation of utility factors relies on SAE's methodology, EPA's use of utility
factors is flawed. [EPA-HQ-OAR-2010-0799-9518-A1, p. 13]
SAFE believes that it is reasonable to truncate the data set and eliminate from it trips that exceed
either an absolute distance or a distance that is some function of the charge depleting range of the
battery. SAFE also believes that a more appropriate utility factor methodology would recognize
that some portion of the vehicles that travel more than the electric range each day will be charged
more than once a day, generally (but not exclusively) at work. Doing so would more accurately
portray how the PHEVs are likely to actually be used by the people who purchase them. [EPA-
HQ-OAR-2010-0799-9518-A1, pp. 13-14]
If the agencies choose not to adjust the utility factor calculation at this point in time, SAFE
believes that the agencies should commit to evaluating the actual usage patterns of PHEVs
within the next two years of the issuance of the final rule, and update the calculation of utility
factors to reflect the manner in which the actual vehicles are really being used. Many of the
vehicles and charging facilities used collect extensive data about vehicle usage, energy
consumption, and charging patterns, which is being collected by automakers, charging
infrastructure providers, and the Department of Energy. The data required to perform such
analysis should be readily available. As part of that reexamination of utility factors, EPA and
NHTSA should commit to examining how often PHEV owners charge their vehicles to
determine if the assumption that they will only charge once a day is appropriate or needs
updating. [EPA-HQ-OAR-2010-0799-9518-A1, p. 14]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 150-152.]
That the plug-in vehicles offer these great benefits to the nation justifies the incentives for this
rule. The multiplier for EVs, for instance, will be an important incentive. We believe, however, it
should not be phased down, as proposed. 10 years after entering the market the, 2.1 — 1.9 million
hybrid vehicles on the road represent about 2.1 of the new-car market. Yet if they are getting an
average of 35 to 45 miles per gallon, they are saving the nation about 15- to 25,000 barrels a day
out of the diet of 19 million barrels a day.
4-87
-------
EPA Response to Comments
Plug-in vehicles have an opportunity to make a much greater contribution than traditional
hybrids, but they are going to need some incentives in the meantime so that consumers can
overcome their concerns about them, help bring demand up, get to economies of scale and bring
the price down.
Secondly, we believe the upstream emissions should not be attributed to the plug-in vehicles.
Until this proposal, cars had always been responsible for what comes out of the tailpipe, not the
fuel that goes into the car. If automakers are held responsible for upstream emissions, they'll be
unique in the economy as compared to manufacturers of other power-consuming appliance, such
as air conditioners, well pumps or electric ovens. They cannot control upstream emissions, which
will, in any event, vary from region to region, from consumer to consumer and over time. And in
regulating total emissions, it will make it infinitely more difficult to later have a cap and trade
program that incorporates emissions without endangering the whole count.
If, however, you do decide to regulate upstream emissions, they should be regulated for all
vehicles, including petroleum-powered vehicles.
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
Address emissions associated with Electric Vehicles: Sierra Club believes that electric vehicles
can and will play a critical role in providing Americans with oil free transportation. Automakers
are bringing electric and plug in vehicles to the market and consumers are eager for the chance to
drive without oil. Consistent with our position in the prior standards, we continue to have
concerns with the impact failing to account for the emissions associated with EVs has on the
overall emissions reductions benefits of the program. [EPA-HQ-OAR-2010-0799-9549- A2, p. 7]
The proposed rule accounts for electric vehicles as "zero-emission" in tabulating fleet-wide
averages. While electric vehicles do not have tailpipe emissions, they do draw energy from the
electrical grid, and the majority of electrical energy generation in the United States involves
emissions of greenhouse gases.27 Thus, electric vehicles - unless powered by carbon-neutral
sources of electricity, such as wind or solar - still contribute some amount of greenhouse gas
emissions. By excluding these emissions, as the proposal does, along with a multiplier, the
proposed rule gives a distorted and overstated picture of the reductions in greenhouse gas
emissions flowing from the rule. [EPA-HQ-OAR-2010-0799-9549-A2, pp. 7-8]
EPA and NHTSA should revise the final rule to account for emissions associated with electrical
generation to charge electric vehicles. In the alternative, the number of electric vehicles
considered as "zero-emission" for the purpose of calculating fleetwide averages should be
capped initially, and phased out over the course of the program. This would ensure that the final
does not deliver distorted "reductions" in greenhouse gas emissions. [EPA-HQ-OAR-2010-0799-
9549-A2, p. 8]
In this proposal, EPA has adopted an approach of applying a multiplier for MY 2017-2021 while
capping the quantity of vehicles eligible for Og/mi accounting in MY 2022-2025. The tiered
approach proposed by the EPA represents additional sales volumes of vehicles eligible for the 0
4-88
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
grams per mile credit as this credit already exists under the 2012-2016 standards. No more than 1
million electric vehicles should be treated as zero grams per mile vehicles in 2017-2025 to limit
the pollution that would result from this incentive. Although the cumulative reductions in
greenhouse gas pollution benefits from 2017-2030 is 4.3% at 1 million EV sales, it is even
greater at higher sales volume. [EPA-HQ-OAR-2010-0799-9549-A2, p. 8]
We support the transition to accurate upstream accounting for any manufacturer that exceeds its
cumulative production cap for EVs and urge that the final rule effectively limit the loss of
emissions benefits of the program. [EPA-HQ-OAR-2010-0799-9549-A2, p. 8]
Although an incentive multiplier was proposed for EVs in the 2012-2016 standard it was not
finalized as this incentive coupled with a zero emissions treatment would have reduce the
greenhouse gas benefits of the standard. However, in the 2017-2025 standard to facilitate market
penetration of advanced vehicle technologies as soon as possible, the EPA is again proposing an
incentive multiplier for compliance purposes for electric vehicles sold in MY 2017 through 2021.
EPA is proposing that EVs start with a multiplier of 2.0 in 2017 and phase down to 1.5 in MY
2021. EPA is proposing this multiplier as it deems EVs are necessary for compliance with
standards. [EPA-HQ-OAR-2010-0799-9549-A2, p. 8]
We recommend a floating industry wide cap for number of EV sales eligible for zero emissions
treatment in 2022-2025 be set at 1 million minus cumulative sales in 2017-2021 rather than the 2
million vehicle cap in the proposed rule. If sales exceed 1 million units, the zero emissions
treatment would discontinue in 2021. There are several ways the agencies can allocate the
industry wide cap among manufacturers, including an equal distribution among manufacturers
and weighted allocation based on product plans, or a first come, first served approach. EPA
proposes to phase-in an emissions factor for electric vehicles after 2022 for automakers that
exceed their cumulative caps. The agency could phase-in the emissions factor sooner to avoid
erosion of the overall program benefits. [EPA-HQ-OAR-2010-0799-9549-A2, pp. 8-9]
Plug-in hybrids should be counted in units of full plug-ins, in the same ratio as the fraction of
miles they are assumed to operate on electricity from the grid. Plug-in hybrids would be required
to achieve the same minimum all electric range as in relevant CARB regulations for its Zero
Emission Vehicle program. [EPA-HQ-OAR-2010-0799-9549-A2, p. 9]
In sum, a strong final rule should ensure that greenhouse gas benefits of the program are
maximized and the impact of the compliance flexibility afforded by the proposed EV credits
should be minimized. [EPA-HQ-OAR-2010-0799-9549-A2, p. 9]
27 See U.S. Energy Information Agency, Electric Power 2010, Table ESI, Summary Statistics
for the United States, 1999 through 2010 (Nov. 2011), available at
http://www.eia.gov/electricity/annual/pdf/tableesl.pdf (showing that in 2010 approximately 70%
of U.S. electrical generation was derived from combustion of coal, oil, or natural gas). [EPA-
HQ-OAR-2010-0799-9549-A2, p. 8]
4-89
-------
EPA Response to Comments
Organization: South Coast AQMD
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 69-70.]
To help alleviate these concerns, the South Coast AQMD staff strongly supports incentives for
the purchase of light-duty vehicles that are cleaner than the applicable standards in as early as
possible time frame. Increasing the penetration of cleaner vehicles will not only provide
additional assurances that the fleet performance will be met, but also help reduce the overall cost
of the cleaner vehicles in future years. This South Coast AQMD staff welcomes the opportunity
to work with U.S. EPA and NHTSA on mechanisms to incentivize greater penetration of cleaner
vehicles, especially zero and near-zero emission and alternative fuel vehicles.
Organization: Tesla Motors, Inc.
• EPA and NHTSA must enact a final rule that incentivizes EV technology but without
detracting from development through consideration of issues outside the scope of this
rulemaking. [EPA-HQ-OAR-2010-0799-9539-A2, p. 1]
In particular, Tesla agrees with EDTA's position that upstream GHG emissions should not be
included as a part of this rulemaking. In enacting the Clean Air Act, Congress expressly set forth
a structure of emissions regulation that would address the individual sources of air pollution. The
so-called "upstream sources" EPA would propose to include in this rulemaking are more
appropriately regulated under Titles I and V of the Act, with the former establishing stationary
source limits of air pollutants and the latter establishing a highly structured permitting
framework under which compliance can be regulated. In fact, EPA has already signaled its intent
to enact GHG regulation for stationary sources in future rulemakings. Addition of such emission
sources in the current mobile source rulemaking would be an ultra vires application of the
Agency's authority to regulate tailpipe emissions. Such an extension of authority was not
contemplated by Congress and could otherwise result in the dual regulation of a single source.
EPA should, instead, focus on regulating GHG from stationary sources under the appropriate
provisions of the Clean Air Act and limit application of this rulemaking to mobile sources
only. [EPA-HQ-OAR-2010-0799-9539-A2, p. 6]
In addition, Tesla notes that despite the difficulty recognized by EPA in establishing single
unified value for GHG emissions from electricity generation in the U.S. for EV's, the Agency is
proposing to do so through application of upstream emissions to motor vehicles. However,
application of a nationalized figure fails to account for regional variability in electricity
production, as well as the diverse distribution and use of various vehicle types throughout the
United States. Moreover, such an approach fails to take into account the continuous
improvement in emissions from major power generators. Accordingly, the attempted "one-size-
fits-all" approach is neither appropriate nor accurate. [EPA-HQ-OAR-2010-0799-9539-A2, p. 6]
Tesla also takes issue with the method by which EPA attempts to count upstream emissions for
internal combustion engines. While Tesla appreciates the Agency's consideration of our
comments to the Notice of Intent to Conduct Rulemaking for Model Year 2017 and Higher
4-90
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
Motor Vehicles where Tesla noted the failure to account for upstream GHGs for internal
combustion engines, EPA's proposed solution is far from complete. Specifically, consideration
of GHG emissions from refineries accounts for only a part of the emissions. To obtain a true
accounting in a "wells-to-wheel" manner, EPA must also look to the emissions profile of oil
exploration, production and transport. Regardless, such efforts are neither necessary nor
appropriate. Instead, EPA should remove consideration of upstream emissions in a regulation
enacted under Title II of the Clean Air Act, which should and must address tailpipe emissions
only. [EPA-HQ-OAR-2010-0799-9539-A2, p. 6-7]
Tesla also supports the EDTA statements regarding EPA's proposed automatic termination of the
credit multiplier for advanced technology vehicles in MY 2021, as well as challenging NHTSA's
legal authority to enact such multipliers. Without providing a full restatement of the EDTA
arguments, Tesla notes that incentives such as credit multipliers not only serve to accelerate the
commercialization and widespread adoption of advanced technology vehicles like, EVs, they
provide support for the businesses seeking to introduce such technology. [EPA-HQ-OAR-2010-
0799-9539-A2, p. 7]
Tesla Motors has developed a business model that seeks to introduce EVs in the classic Silicon
Valley fashion - namely, introducing low volume, high priced new technology with a unique
value proposition and then rapidly moving down the cost curve by capturing increasing
economies of scale. Much as the $5,000 cell phone of the 1980's demonstrated the capability of
the then nascent cellular network, Tesla demonstrated that long-range, high performance EVs
were possible utilizing lithium ion technology in a sports car package. This had the desired effect
of catalyzing a competitive response from major automakers like General Motors. In order to
continue that mission and move down the cost curve while ramping up the production curve,
Tesla funneled the profit from Roadster sales into the Model S design and development. This
alone, however, was insufficient to move to our next vehicle, the Model S. Accordingly, the
Company was also able to generate additional capital from a variety of sources - including
through the sale of credits earned under California's Zero Emissions Vehicle program. By being
able to monetize ZEV credits, Tesla was able to generate additional capital enabling more rapid
execution of the Company's business plan to Model S. [EPA-HQ-OAR-2010-0799-9539-A2, p.
7]
Like the California ZEV program, GHG and CAFE credits earned from production and sales of
EVs like the Model S will allow Tesla to generate revenue for more rapid EV development and
production. This will, in turn, speed the introduction of the next generation of EVs at higher
volumes and lower price points (i.e., the Gen III). In addition, this will also assist in support of
Tesla's power train business as well. EPA's automatic elimination of the credit multiplier and
NHTSA's refusal to consider a CAFE multiplier will only delay the otherwise rapid deployment
of EV technology not only by Tesla, but others as well. Accordingly, Tesla encourages EPA not
to automatically eliminate the credit multiplier, but commit, instead to reviewing whether the
multiplier is still needed as part of the mid-point review already proposed. Similarly, Tesla
encourages NHTSA to revisit its authority to enact a CAFE multiplier for the reasons provided in
EDTA's comments.
4-91
-------
EPA Response to Comments
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 94-95.]
And second, with respect to the consideration of upstream emissions, we believe that if this were
to - number one, it's adequately covered under Title V of the Clean Air Act. Moreover, pursuing
this, this provision, could result in double counting. But in any event, if this were pursued, that
we would encourage the agency to consider methodology on a well-to-wheel basis as opposed to
simply stopping at the point of generation.
Organization: Toyota Motor North America
It is unclear that EPA has authority under Title II of the Clean Air Act to regulate upstream
emissions from mobile sources. To the extent EPA is concerned with upstream emissions in
power generation or fuel production resulting from potential expansion of electric and hydrogen
fueled vehicles, it should regulate those sectors directly under other parts of the Act. [EPA-HQ-
OAR-2010-0799-9586-A1, pp.2-3]
Advanced Technology Vehicle Credits [EPA-HQ-OAR-2010-0799-9586-A1, p. 19]
EPA has proposed incentives to promote the commercialization of electric vehicles, fuel cell
vehicles, and plug-in vehicles. The agency believes these technologies warrant incentives
because they have the potential to nearly eliminate GHG emissions and petroleum use from
vehicles, but face significant barriers today in terms of costs, infrastructure, and market
acceptance. The first incentive allows an unlimited number of these vehicles to use a GHG
emissions compliance value of 0 grams per mile (only during electric operation for PHEVs)
through the 2021 model year, at which point upstream emissions are counted when production
thresholds are exceeded. The second allows these vehicles to count as more than one vehicle for
the purpose of calculating compliance with the fleet average CO2 standards. The incentives are
proposed to sunset after the 2021 model year. Toyota generally supports the intent to incentivize
advanced technology vehicles, but has some concerns that are outlined below. [EPA-HQ-OAR-
2010-0799-9586-Al,p.l9]
Upstream Emissions Accounting [EPA-HQ-OAR-2010-0799-9586-A1, p. 19]
Toyota opposes any requirement for automakers to account for upstream emissions in
determining the compliance level of vehicles. First, automakers have no control over the level of
upstream emissions and thus no ability to reduce such emissions to enhance compliance. Second,
it is unclear that EPA has authority under Title II of the CAA to regulate upstream emissions
from mobile sources. To the extent EPA is concerned with upstream emissions in power
generation or fuel production resulting from potential expansion of electric and hydrogen fueled
vehicles- it should regulate those sectors directly under other parts of the CAA. Third, if EPA
decides to include such emissions, there could be no end what other emissions automakers will
be asked to account for- including steel production emissions, rubber production emissions for
tires, and so on. Clearly, Title II of the CAA was never intended extend the responsibility to
automakers for these various emission sources. Finally, as the agencies recognized in the
preamble, 'manufacturers are unlikely [to invest in PHEVs and EVs] if vehicles with these
4-92
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
technologies are treated for compliance purposes to be no more advantageous than the best
conventional hybrid'. [EPA-HQ-OAR-2010-0799-9586-A1, pp. 19-20]
Organization: U.S. Coalition for Advanced Diesel Cars
To accomplish these goals, the Coalition supports technology-neutral regulations that create an
environment of stability and predictability for auto makers and their suppliers. [NHTSA-2010-
0131-0246-Al,p.l]
Our comments below assert that technology neutral policies and consumer acceptance are the
only proven methods for the automotive industry to move forward with certainty and with the
flexibility to seek and strive for new innovations that will dramatically improve fuel economy
and reduce emissions. [NHTSA-2010-0131-0246-A1, p.l] [This statement also cross-referenced
with section 18.1]
Members of the Coalition invest in every advanced automotive technology - not just diesel
technology. We believe, therefore, that changes to Corporate Average Fuel Economy (CAFE)
regulations should not be aimed at steering automakers to produce specific types of vehicles.
Instead, the Environmental Protection Agency (EPA) and the National Highway Transportation
Safety Administration (NHTSA) should employ technology-neutral policies that are outcome
and performance based. Without such policies, EPA and NHTSA will be picking winners and
losers, stifling innovation, limiting consumer choice, preventing significant increases in fuel
economy today and potentially stunting job growth. [NHTSA-2010-0131-0246-A1, pp. 1-2]
In 2009, the Coalition stated in response to the MY 2012-2016 joint rulemaking that the best way
to drive innovation and achieve the desired outcomes of reduced petroleum consumption and
lower greenhouse gas emissions is to provide automakers with regulations that are technology
neutral. The "2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and
Corporate Average Fuel Economy Standards Proposed Rulemaking" (NPRM) falls short of
giving automakers a pathway to innovation as EPA and NHTSA clearly attempt to steer future
vehicle production into technologies that, although promising in the future, will prevent
American's from maximizing improved fuel economy and reducing their greenhouse gas (GHG)
emissions in the near- and medium-term. [NHTSA-2010-0131-0246-A1, p.2]
The auto industry cannot afford to make investment decisions based on inaccurate EPA testing
data and inaccurate modeling. This is in stark conflict with President Obama's call for rules that
will "give our auto companies some long overdue clarity, stability and predictability." See, Pres.
Obama (press release) September 15, 2009. [NHTSA-2010-0131-0246-A1, p.3]
The Coalition urges EPA and NHTSA to refrain from expanding the system of CAFE credits
based on specific technologies and instead offer manufacturers ONYLY performance-based
credits. By supporting only performance-based credits, the agencies will have a greater role in
incentivizing fuel economy improvements and GHG reductions with improvements in Internal
Combustion Engine (ICE) vehicles. As ICEs are expected to dominate new car sales well beyond
2025, the agencies are more likely to accomplish their mission in reducing the nation's
4-93
-------
EPA Response to Comments
dependency on foreign oil and dramatically reducing GHG emissions. [NHTSA-2010-0131-
0246-A1, p.5]
Specific Technology Incentives are Unnecessary: The Coalition disagrees with the agencies'
commentary about specific technologies. As stated previously, the goal of EPA and NHTSA
should not be to identify or incentivize "advanced technologies." Instead, the focus should be
solely on advanced fuel savings and GHG emission reductions. [NHTSA-2010-0131-0246-A1,
p.5]
In stark contrast to the EPA's findings, researchers have affirmatively stated that technology
specific incentives are not necessary. Researchers at the University of Michigan's Energy
Institute & School of Natural Resources and Environment have stated that substantial
opportunities exist for ongoing fuel economy gains through evolutionary technology change.
[NHTSA-2010-0131-0246-A1, p.5]
".. .but technology neutral policy provides the best benefit/cost ratios for consumers, industry
and society. Even over a long-term time horizon — looking at 2025 as a milepost on the road to
future GHG reduction needs — there is no scientific justification for favoring grid-connected
vehicle electrification." (John M. DeCicco, Univ. of Michigan's Energy Institute & School of
Natural Resources & Environment.) [NHTSA-2010-0131-0246-A1, pp.5-6]
Performance Based Standards Will Lead to Better Market Penetration: New technologies,
changes to the driving habits of Americans and many other factors will make acceptance of
certain technologies difficult to predict. We currently have advanced technologies that are
readily available, reasonable priced and already accepted by consumers that can dramatically
improve fuel economy and reduce emissions, without the need for infrastructure investment.
[NHTSA-2010-0131-0246-A1, p.6]
In fact, a performance-based standard could achieve a remarkably higher effect on the
environment than rules that steer towards certain technologies. What is clear is that the
percentage of new vehicles sold in 2025 will be powered by internal combustion engines (ICEs).
Incentivizing alternative technologies like hybrid, EVs and PHEVs will overlook common-sense
improvements to the powertrain that will remain dominant in the marketplace throughout the
course of the NPRM. A truly performance-based standard for credits will likely increase
improvements to the ICE segment. These improvements will lead to greater fuel economy and
lower emissions much faster than incentives limited to such a small percentage of cars.
[NHTSA-2010-0131-0246-A1, p.6]
Expand Incentives to Advanced Technologies for ICEs: As stated in the NPRM, "EPA is not
expanding the list of eligible advanced vehicle technologies primarily because all of these
technologies utilize internal combustion engines, which have dominated the personal vehicle
market for the last 100 years and do not present the same level of market challenges to
automakers as EVs, PHEVs and FCVs." The goal of CAFE regulations and the Clean Air Act is
not to overcome market challenges for alternative vehicle technologies. The Coalition requests
that EPA and NHTSA expand incentives that seek to expand market penetration for all advanced
vehicle technologies in order to achieve the nation's goals. [NHTSA-2010-0131-0246-A1, p.6]
4-94
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
In the current proposed rulemaking, production multipliers for each EV, PHEV and FCV are
again proposed. These multipliers are distortive to the marketplace. Each of the "phantom"
vehicles allowed under a multiplier scheme will result in less technology implementation on a
real vehicle in the fleet; meaning more fuel consumption and more GHG emissions. The CAFE
program is intended to control the fuel consumption of vehicles that are actually manufactured
and sold into commerce, not to create market and competition distorting accounting methods that
have government picking winners and losers. [NHTSA-2010-0131-0246-A1, p.8]
A strictly performance based credit system would allow manufacturers the flexibility to innovate
and create a vehicle fleet that best suits their vision and customer base. Best of all, the
manufacturers will be focused on looking at all available options to achieve the higher incentive
levels with all available technologies. [NHTSA-2010-0131-0246-A1, p.8]
Of additional concern to the Coalition is EPA and NHTSA's decision to not calculate upstream
emissions when determining incentives (credits) associated with all vehicle technologies. Such a
decision is clear evidence that the agencies do not intend to proceed in a technology neutral
manner. Under Section III of the NPRM, the agencies acknowledge the existence of upstream
emissions but chose to only focus on GHG emissions at the tailpipe. (The NPRM justifies this
calculation by identifying electric (EV), plug-in hybrid electric (PHEV), and fuel cell (FCV)
vehicles as "game-changers.1 [NHTSA-2010-0131-0246-A1, p.8]
As in the 2012-2016 rule, EPA is proposing temporary regulatory incentives for the
commercialization of EVs, PHEVs, and FCVs. EPA believes that these advanced technologies
represent potential game-changers with respect to control of transportation GHG emissions as
they can combine an efficient vehicle propulsion system with the potential to use motor fuels
produced from low-GHG emissions feedstocks or from fossil feedstocks with carbon capture and
sequestration. EPA recognizes that the use of EVs, PHEVs, and FCVs in the 2017-2025
timeframe, in conjunction with the incentives, will decrease the overall GHG emissions
reductions associated with the program as the upstream emissions associated with the generation
and distribution of electricity are higher than the upstream emissions associated with production
and distribution of gasoline. EPA accounts for this difference in projections of the overall
program's impacts and benefits (see Section III.F). [NHTSA-2010-0131-0246-A1, p.8]
The tailpipe GHG emissions from EVs, PHEVs operated on grid electricity, and hydrogen-fueled
FCVs are zero, and traditionally the emissions of the vehicle itself are all that EPA takes into
account for purposes of compliance with standards set under Clean Air Act section 202(a).
Focusing on vehicle tailpipe emissions has not raised any issues for criteria pollutants, as
upstream emissions associated with production and distribution of the fuel are addressed by
comprehensive regulatory programs focused on the upstream sources of those emissions. At this
time, however, there is no such comprehensive program addressing upstream emissions of
GHGs, and the upstream GHG emissions associated with production and distribution of
electricity are higher, on a national average basis, than the corresponding upstream GHG
emissions of gasoline or other petroleum based fuels. [NHTSA-2010-0131-0246-A1, p.9]
Stated more simply, EPA acknowledges that: [NHTSA-2010-0131-0246-A1, p.9]
4-95
-------
EPA Response to Comments
EVs and PHEVs are responsible for more upstream GHG emissions than ICEs; [NHTSA-2010-
0131-0246-Al,p.9]
New vehicles traditionally have their emissions regulated only at the tailpipe; [NHTSA-2010-
0131-0246-Al,p.9]
The NPRM doesn't need to regulate EV and PHEV upstream criteria emissions because other
regulations will do so; and [NHTSA-2010-0131-0246-A1, p.9]
No other program actually exists to account for upstream GHG emissions. [NHTSA-2010-0131-
0246-A1, p.9]
Despite the conclusions of the agencies regarding upstream emissions, the Department of
Energy's Energy Information Administration (EIA) disproved the conclusions of the EPA and
NHTSA in January of 2009. In response to a Congressional inquiry, the EIA compared the well-
to-wheel GHG emissions of a variety of light duty vehicles. The report clearly compared the
GHG emissions of different advanced vehicle technologies and proved that the GHG emissions
of several widely available technologies compare very favorably to EVs, PHEVs and FCVs.
According to the EIA study in 2009, a well-to-wheel comparison of different vehicle
technologies ranks electric vehicles, diesel and turbocharged gasoline engine vehicles within a
10% to 15% performance band. [NHTSA-2010-0131-0246-Al, p.9] [There is an associated
figure, please refer to NHTSA-2010-0131-0246-A1, p. 10]
The study compared vehicles on an equal footing: size and performance were held constant and
only the powertrain was changed. The performance improvement of the next generation of
internal combustion engines (ICEs), hybrids and EVs was calculated, and fuel economy and
emissions were simulated on the usual U.S. standard test cycles. [NHTSA-2010-0131-0246-A1,
p.10]
The need to meet aggressive national goals regarding our energy independence should not
overshadow the reality of today's limitations faced by many advanced technologies. Primarily,
car and light truck buyers will buy the vehicles that best meet their needs. We will achieve
dramatic, game changing fuel savings and emission reductions by providing an evolutionary
pathway for the advanced technologies that have proven market acceptance and are available
today. This will provide the opportunity for new technologies to continue to develop into
reliable, cost effective options that meet consumer needs. [NHTSA-2010-0131-0246-A1, p. 13]
The investment in future technologies, such as vehicle electrification, go well beyond the engine
bay to include sourcing and developing raw materials, complex vehicle integration and
development, infrastructure support on a national level and increased costs for consumers forced
to the cutting edge of what is still a boutique technology. [NHTSA-2010-0131-0246-A1, p.14]
Embracing a strictly performance-based standard will allow America to achieve the fuel savings
and emissions reductions promised in the NPRM by the end of 2025. [NHTSA-2010-0131-0246-
Al,p.l4]
4-96
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 242-243.]
Federal government's favoritism of hybridization and electrification continues in EPA and
NHTS A's j oint NPRM with two areas of particular concern to the Coalition. First, the NPRM
presents a process of incentivizing specific technologies by establishing and awarding credits for
'game changing technologies,' such as a hybrid trucks and electric vehicles. Additionally, the
NPRM continues to ignore the EPA and NHTS A's own data that shows the majority of miles
traveled by the average American are on highway conditions instead choosing to favor and
reward a technology that is best suited to city driving and start/stop conditions. The Coalition
continues to advocate for policies that incentivize game-changing fuel savings by rewarding
outcomes, not implementation of a specific technology.
Organization: Union of Concerned Scientists (UCS)
(c) Electric Drive Vehicle Incentives
Under the current federal vehicles greenhouse gas standards, models relying partially or
completely on electricity or hydrogen receive significant extra credit towards meeting those
standards. These extra credits do not represent actual reductions in greenhouse gas emissions, but
rather were created as incentives for automakers to sell electric-drive vehicles. [EPA-HQ-OAR-
2010-0799-9567-A2, p. 9]
In the 2017-2025 proposed rule, EPA is proposing compliance ledger accounting of EVs and
FCVs (and partially for PHEVs) at zero grams per mile (g/mi) through model year 2021, well
below the 103 g/mi the agency specifies a midsize EV would emit under a 2025 grid mix. Above
and beyond that, the agency is proposing an additional "incentive multiplier" for EVs, FCVs, and
PHEVs sold in MYs 2017 through 2021, whereby an advanced technology vehicle sold would
count as more than one vehicle in the manufacturer's compliance calculation. [EPA-HQ-OAR-
2010-0799-9567-A2, p. 9]
UCS strongly opposed these incentives during the 2012-2016 rulemaking on the grounds that
they do not reflect real emissions reductions and thus erode the benefits of the National Program
and that there are other, more effective ways of accelerating the market for electric cars (e.g. the
California ZEV program, federal tax credits, loan guarantees, and other state and local
incentives). We continue to oppose them here for the same reasons, and express grave concern
that they, like many auto industry incentives over the years, will again be extended and continue
to undermine the goals of the program they serve. [EPA-HQ-OAR-2010-0799-9567-A2, p. 9]
UCS is particularly disappointed by the agency's proposal on incentive multipliers, given its
intellectual inconsistency with an EPA determination on the very same issue made only a year
and a half earlier. As the agency noted in its May 2010 final rule on MY2012-2016 vehicle
standards, "EPA is not finalizing a multiplier based on the concerns potentially excessive credits
using that incentive [sic]. EPA agrees that the multiplier, in combination with the zero
grams/mile compliance value, would be excessive." 32 [EPA-HQ-OAR-2010-0799-9567-A2, p.
9]
4-97
-------
EPA Response to Comments
EPA acknowledges this inconsistency in the proposed 2017-2025 rule, and offers up the
following as an explanation: "While the Agency rejected a multiplier incentive in the MYs 2012-
2016 final rule, we are proposing a multiplier for MYs 2017-2021 because, while advanced
technologies were not necessary for compliance in MYs 2012-2016, they are necessary, for some
manufacturers, to comply with the GHG standards in the MYs 2022-2025 timeframe." [EPA-
HQ-OAR-2010-0799-9567-A2, p. 9]
This rationale is not supported by EPA's arguments. First, EPA's new interest in incentive
multipliers is, by its own admission, rooted in catering to the industry's least-capable
manufacturers. As noted throughout the proposal, numerous compliance pathways exist for
meeting standards (including trading of credits between manufacturers, which alone should more
than address the challenge cited by EPA above). EPA should not design and incorporate program
loopholes to accommodate industry laggards when many other flexibility mechanisms already
exist. Second, EPA states these multipliers are necessary for certain manufacturers to comply "in
the MYs 2022-2025 timeframe," yet EPA is proposing that the multiplier incentive expire at the
end of MY2021. Logically, this means that either (a) industry laggards expect the agencies (or
will lobby them) to extend this incentive beyond the proposed 2017-2021 time frame, allowing
even more time for all manufacturers to take advantage of the multipliers through 2025, further
eroding National Program benefits; or (b) the industry laggards' only plan for complying with
2022-2025 standards is by using banked, inflated credits generated in 2017-2021, and are not
planning for a technology pathway that will allow them to achieve 2025 standards. Concrete
product plans for MY2022-2025 vehicles have yet to even begin; EPA should not endorse these
industry arguments and weaken its program by introducing loopholes that either have the
potential to balloon beyond proposed levels, or that encourage some in the industry to slow-walk
fuel-saving technology deployment. UCS calls upon EPA to exclude the multiplier incentive in
the final rule, on the "excessive" grounds noted previously by the agency, as well as to ensure
that 0 g/mi treatment of these vehicles does not extend beyond MY2021. [EPA-HQ-OAR-2010-
0799-9567-A2, pp. 9-10]
Though I strongly support these standards, I am concerned about possible loopholes that
automakers could exploit. Specifically: The proposal largely ignores the pollution released from
power plants when electric cars are recharged. The EPA should require automakers to fully
account for their vehicles' pollution—whether from petroleum or power plants. [EPA-HQ-OAR-
2010-0799-9713-A2, p. 2]
32 Federal Register Vol. 75, No. 88, p. 25401 [EPA-HQ-OAR-2010-0799-9567-A2, p. 9]
Organization: United Automobile Workers (UAW)
Likewise, the UAW supports the proposal by EPA to count each electric, plug-in hybrid and fuel
cell vehicle as more than one vehicle in the manufacturer's compliance calculation for model
years 2017-2021. The UAW is in strong agreement with EPA's proposal to assign a value of
zero grams per mile for these vehicles when operating on electricity for the same model years
2017-2021. The UAW believes that zero grams per mile are the most faithful representation of
4-98
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
the tailpipe pollution for a vehicle that in many cases has no tailpipe. Accordingly, while the
UAW believes that the proposed caps for zero gram per mile treatment by the EPA for model
years 2022-2025 are likely adequate to avoid assigning upstream emissions to large numbers of
these vehicles, we urge the EPA to reconsider its stance that the emissions of electricity
producers should be assigned to the products that use electricity. The proper place to measure
and regulate these emissions is of course where the electricity is produced and the grid system
that distributes electricity. [EPA-HQ-OAR-2010-0799-9563-A2, pp.3-4]
At the same time, we believe it is important to understand the changes in electricity sector
emissions that will be caused by the addition of significant numbers of electric-drive vehicles to
the fleet, and to be able to account for the net change in emissions in the switch from liquid fuels
to electricity. To that end, the UAW encourages the EPA to continue to study how real-world
electric vehicle use impacts the emissions of electricity producers. The efficiency of electric-
drive vehicles in converting energy stored as electricity into distance traveled by the vehicle can
and should be evaluated and eventually regulated. The efficiency of the charging systems for
electric vehicles should also be measured and eventually regulated, perhaps as an appliance
under existing Department of Energy authority. Improving the overall efficiency by charging an
electric vehicle and converting that energy to miles driven will lead to the most effective and
lowest cost scheme for realizing the most emissions reduction from increased adoption of
electric-drive vehicles. [EPA-HQ-OAR-2010-0799-9563-A2, p.4]
Organization: Volkswagen Group of America
- Expand the range of technologies (beyond only electrification) which would qualify for
emission incentives within the regulatory program in order to promote a broader set of fuel
saving, low-CC>2 emitting options for consumers, i.e. alternative fueled vehicles, advanced
combustion engines, etc. [EPA-HQ-OAR-2010-0799-9569-A1, p. 4]
Volkswagen proposes that the agencies expand the assortment of technologies credited within
the regulatory program. As we understand, the intention of technology credits are to promote
market availability of fuel saving and low-emission options for consumers. Currently the
program achieves this for electrification and for technologies applied to full-size pick-up trucks.
It is Volkswagen's position that a general expansion of the technology awarding credits could
drive a greater number of technologies into the field and into vehicles other than just full-size
trucks. [EPA-HQ-OAR-2010-0799-9569-A1, p. 28]
Organization: Volvo Car Corporation (VCC)
Also, the agencies proposed minimum electric or equivalent all-electric range for the definition
of a PHEV for use of this advanced technology volume multiplier. [EP A-HQ-OAR-2010-0799-
9551-A2, p. 12]
VCC supports the Alliance position that, upstream emission should be counted as 0 g/mile for
the period 2012-2025. [EPA-HQ-OAR-2010-0799-9551-A2, p. 14]
4-99
-------
EPA Response to Comments
VCC supports the advanced technology volume multipliers as proposed in the NPRM. VCC also
suggests that the proposed multiplier be reviewed during the mid-term evaluation and potentially
approved for continued use post 2021. [EPA-HQ-OAR-2010-0799-9551-A2, p. 12]
Organization: Weiner, L.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 107.]
The cap on electric vehicles should be strong so automakers cannot produce less efficient
vehicles in other parts of their fleet yet still meet overall standard. Not that it would happen, but
we want to make sure that no one games the system.
Response:
Introduction
EPA received a very large number of comments with respect to the proposed incentives
for electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles
(FCVs). Most of the comments in this section addressed the same fundamental set of issues
associated with incentives for EVs, PHEVs, and FCVs. The reader should note that most of the
comments related to electricity are addressed in this section, while most of the comments related
to diesel, compressed natural gas, ethanol, and other alternative fuels are in RTC Section 6.
Many comments raise issues relevant to both this section and Section 6, sometimes even in the
same sentence, so readers interested in a comprehensive treatment of comments on alternative
fuel vehicles should read the comments and responses in both sections. In addition, comments
related to gasoline fuel quality in general, and to ethanol/gasoline blends in particular, are
addressed in RTC Section 11.
EPA rationale for temporary regulatory incentives for EV/PHEV/FCVs
There was a wide spectrum of comments on the overall appropriateness of regulatory
incentives, ranging from complete opposition to any incentives whatsoever to support for
stronger incentives than proposed.
EPA believes that temporary regulatory incentives are permissible under CAA section
202 (a), and justifiable here. These incentives promote the commercialization of technologies
that have, or of technologies that can be critical facilitators of next-generation technologies that
have, the potential to transform the light-duty vehicle sector by achieving zero or near-zero GHG
emissions and oil consumption, but which face major near-term market barriers. 10 As such, the
incentives are part of the process of determining the "period ... necessary to permit the
10 As BMW stated in its comments, "Multipliers encourage automakers to pull-ahead early generation low
CO2 technologies such as BEV, PHEV and FCV. Multipliers should be applied on advanced technologies with
significant GHG reduction potential (which are much more expensive than mature gasoline technologies).
Therefore, they are a motivation for automakers to move forward with cost-intensive technology (low volume, high
investments) to reach full market economic viability"
4-100
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
development and application of the requisite technology" (section 202 (a)(2)) by creating
regulatory incentives to shorten the time for "development and application". Although providing
temporary regulatory incentives for certain advanced technologies will decrease the overall GHG
emissions reductions associated with the program in the near term, EPA believes it is worthwhile
to forego modest additional emissions reductions in the near term in order to lay the foundation
for the potential for much larger "game-changing" GHG emissions and oil reductions in the
longer term (EPA has adopted this strategy in previous mobile source rulemakings, such as its
Tier 2 Light-Duty Vehicle, 2007 Heavy-Duty Highway, and Tier 4 Nonroad Diesel rulemakings,
as well as the MYs 2012-2016 light duty vehicle GHG rule and the MYs 2014-2018 heavy duty
vehicle and engine GHG rule). This objective is again fully in accord with the pollutant
emission reduction goals of section 202(a). EPA accounts for the higher real world GHG
emissions and lower GHG emissions reductions associated with these temporary regulatory
incentives in all of our regulatory analyses.
Some proponents of incentives questioned EPA's legal authority to include upstream
emissions in any compliance calculation under section 202(a), maintaining that section 202 (a)
authorizes EPA to regulate only emissions "from ... any motor vehicle[e]" and that upstream
emissions are not from the vehicle (EDTA comment). EDTA also points to other provisions in
Title n (sections 206 and 207) which, in the commenter's view, rest on the same predicate of
control of tailpipe emissions only. The Alliance and other auto manufacturers argued that by
including upstream GHG emissions in compliance calculations for EVs and PHEVs de facto
requires automakers to meet utility GHG standards. A number of commenters also maintained
that EPA was arbitrary in including upstream emissions in compliance calculations for electric
vehicles but not for non-electric vehicles.
EPA disagrees with these commenters. Section 202(a) states that EPA must adopt
"standards applicable to the emission of any air pollutant from any class of new... motor
vehicle...." The provision does not directly address what the "standards applicable to" the
emissions must be, or how those standards are to be measured. It does not specify how or what
mechanisms EPA may reasonably use in applying a standard to vehicle emissions. This leaves
EPA with discretion to develop both elements of the standards and the means of measuring
compliance with them. See 75 FR at 25437.u EPA has done so in this rule, developing
compliance values for use in meeting the attribute-based standards that recognize the overall
GHG impacts of electric vehicles. Put another way, where appropriate, the standard applicable
to emissions from electric vehicles reasonably can include use of a compliance value that better
reflects the overall emissions impact of the vehicle, and this can include net upstream GHG
emissions attributable to use of the fuel that powers the vehicle. The standard employs a
compliance value to reflect those emissions when production exceeds the per-company
production caps.
EPA has long interpreted section 202(a) as providing EPA the discretion to develop
appropriate compliance calculations that in some cases differ from the actual tailpipe or leakage
values for a vehicle. For example, a multiplier or other incentives for EVs are an adjustment to
11 CAA sections 206 and 207, also referred to by the commenter, refer back to the section 202 regulations,
and so do not provide any additional support for the commenters' argument.
4-101
-------
EPA Response to Comments
the compliance calculation that does not reflect literal tailpipe emissions. EPA has authority to
apply such adjustments where they are an appropriate mechanism to promote the overall
emissions reductions achieved by the motor vehicle standards. Likewise, the use of a net
upstream compliance value for EVs is an adjustment to the compliance calculation that
appropriately reflects the overall emissions impact of the motor vehicle standards. Both of these
kinds of adjustments fall within EPA's broad discretion to determine how a standard should be
applied to emissions from motor vehicles. In the case of a multiplier for EVs, the standards are
applied by artificially adjusting the number of times the tailpipe emissions level for an EV is
used in the compliance calculation. In the case of the net upstream compliance value for EVs,
the level of the tailpipe emissions are adjusted for use in the compliance calculation. In both
cases, these adjustments to the actual tailpipe levels reflect reasonable and appropriate policy
responses that further the emissions goals of the section 202(a) standards. Ironically, if the
commenters were correct, EPA would have no authority to assign a multiplier or other incentives
for EVs, since these multipliers also do not reflect literal emissions from a vehicle.
EPA does not believe that in doing so it is requiring auto manufacturers to control GHG
emissions from utilities. As EPA explained when discussing this issue in the MYs 2012-2016
light duty vehicle GHG rulemaking, "EPA is not directly regulating upstream GHG emissions
from stationary sources, but instead is deciding how much value to assign to a motor vehicle for
purposes of compliance calculations with the motor vehicle standard. While the logical place to
start is the emissions level measured under the test procedure, section 202 (a)(l) does not require
that EPA limit itself to only that level." 75 FR at 25437.
Nor is EPA arbitrary in including upstream emissions in the compliance calculation for
the standard applicable to the emissions from electric vehicles. As shown in preamble Table
III-16 , upstream GHG emissions attributable to increased electricity production to operate EVs
or PHEVs currently exceed the upstream GHG emissions attributable to gasoline vehicles. See
preamble section III.C.2.c.v at n. 499; see also 75 FR at 25437. Moreover, as EPA found in the
MYs 2012-2016 light duty vehicle rulemaking, the difference in upstream GHG emissions for
both diesel fuel from oil and CNG from natural gas are relatively small compared to differences
associated with electricity. 75 FR at 25437.
EPA thus believes that although section 202 (a)(l) of the Clean Air Act does not require
the inclusion of upstream GHG emissions in these regulations, the discretion afforded under this
provision allows EPA to consider upstream GHG emissions, particularly when such emissions
from new technologies are higher than those from conventional vehicles. There is consequently a
rational basis for EPA to account for this net difference.
Opponents of incentives emphasized three primary arguments: 1) that regulatory
incentives are not technology neutral and therefore pick "winners and losers" among various
advanced technologies, 2) that such incentives reduce the GHG benefits of the program, and 3)
that incentives are no longer needed for technologies such as EVs.
EPA believes that the issue of technology neutrality is a much more complex issue than
some commenters suggest when they advocate for a "level playing field," suggest that a level
playing field is best achieved by no incentives, and that incentives cannot be "scientifically
justify[ed]." Given that internal combustion engines and petroleum-based fuels have dominated
4-102
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
the U.S. light-duty vehicle market for 100 years, with massive sunk investments, there are major
barriers for new vehicle technologies and fuels to be able to gain the opportunity to equitably
compete on any type of level playing field. For example, consider a hypothetical new
vehicle/fuel technology that could be superior to conventional technology from a consumer
perspective if, and only if, the vehicles and fuels could be produced at similar economies of
scale. But, it is very possible that such a hypothetical new technology would never get the
opportunity to compete at equivalent economies of scale, because of the very large investments
that are needed, up front, to support the research and development, parts and vehicle production
facilities, and fuel infrastructure, none of which are needed for conventional technology as these
investments have been made in the past. In this context, temporary regulatory incentives do not
so much "pick winners and losers" (as an inefficient or unattractive technology is not going to
achieve long-term market success based on temporary incentives) as to give new technologies
more of an opportunity to compete with the established technologies.
The agency agrees that the temporary regulatory incentives will slightly reduce the short-
term benefits of the program and in fact the Agency accounts for the lower benefits in all of our
regulatory analyses. But, as noted above, EPA believes that it is worth a limited short-term loss
of benefits to increase the potential for far-greater game-changing benefits in the longer run.
EPA also believes that temporary regulatory incentives may help bring some technologies to
market more quickly than in the absence of incentives.
Finally, EPA disagrees that such incentives are no longer needed for EVs. Although it is
true that several EV and PHEV models are now on the U.S. market, sales of EVs and PHEVs
amounted to less than 0.2% of all sales in 2011.12 Alternatively, vehicles with internal
combustion engines that operate primarily on petroleum-based fuels continue to account for over
99% of all light-duty vehicles sold in the U.S.
At the same time, EPA believes there must be limits on the use of such incentives. For
example, while temporary incentives can be justified as allowing a new game-changing
technology, the opportunity to compete in the initial stages of technology commercialization
when economies of scale are poor, permanent incentives are very different in that they would tilt
the market even after a new technology has overcome the initial low economies of scale. In this
case, the agency believes that temporary regulatory incentives best balance our dual objectives of
achieving near-term GHG emissions reductions and promoting game-changing technologies that
could provide even greater GHG emissions reductions in the longer-term.
Design of incentive multiplier for EV/PHEV/FCVs for MYs 2017-2021
Public comments on this topic mirrored those of incentives in general, i.e., those
commenters that opposed incentives in general almost always opposed the proposed incentive
multiplier for EV/PHEV/FCVs, while those commenters that supported the concept of incentives
12 Total 2011 U.S. light-duty vehicle sales were 12.8 million (see
http://online.wsj.com/article/SB10001424052970203513604577140440852581080.html. last accessed on July 10,
2012). Total 2011 U.S. EV/PHEV sales were less than 20,000 (see http://www.plugincars.com/nissan-leaf-sales-
trump-chew-volt-2011-111308.html. last accessed July 10, 2012, for total Leaf EV plus Volt PHEV sales of
17,345).
4-103
-------
EPA Response to Comments
generally supported the proposed approach. Only a few commenters suggested a different
multiplier design, i.e., higher multiplier levels or longer duration.
EPA disagrees with the comment by the Union of Concerned Scientists of "intellectual
inconsistency" with the MYs 2012-2016 standards. In that rule, EPA did not project that
advanced technologies like EVs and PHEVs were necessary to meet the MY 2016 standards so
that no further incentive was needed. In contrast, EPA projects here that, for some
manufacturers, EVs and PHEVs are in fact projected for meeting the much more stringent MY
2025 standards. As EPA stated in the proposal, providing multipliers for MYs 2017-2021 can lay
the foundation for commercialization of these technologies that can then contribute toward
compliance with standards in MYs 2022-2025. 76 FR at 75012. On the other hand, EPA
disagrees with those commenters that support higher multipliers and/or multipliers of longer
duration, as we believe that such incentives could lead to a significant reduction in program
GHG savings, particularly if the incentives were to remain in effect past MY 2021 and if
EV/PHEV/FCV sales increase significantly after that year. EPA believes it has struck a
reasonable balance in finalizing the proposed multipliers for EV/PHEV/FCVs for MYs 2017-
2021 (multipliers for CNG vehicles are discussed in Section 6). EPA reiterates that it is both
reasonable and appropriate to accept some short-term loss of emissions benefits in the short run
to increase the potential for far-greater game-changing benefits in the longer run. The agency
believes that these multipliers may help bring some technologies to market more quickly than in
the absence of incentives. In addition, the agency agrees with the Alliance of Automobile
Manufacturers about the possible unintended consequences of a variable multiplier (e.g., based
on electric range or battery capacity which, as the Alliance reasonably points out could
encourage manufacturers to install battery capacity or power not demanded by customers thereby
increasing vehicle costs), and is finalizing a fixed multiplier for all PHEVs that meet the
eligibility requirements discussed below.
PHEV eligibility requirements
EPA received only a few comments related to eligibility requirements for PHEVs to be
able to use the incentive multiplier. EPA agrees with Securing America's Future Energy that a 4
kilowatt-hour minimum battery energy storage requirement would be a reasonable approach, but
because the Agency prefers performance-based metrics when possible, we are finalizing the
proposed 10.2 miles all-electric or equivalent all-electric range that was supported by the
Alliance of Automobile Manufacturers and Ford comments.
0 gram/mile compliance treatment for EV/PHEV/FCVs with MYs 2022-2025 per-
company cap and net upstream GHG emissions compliance beyond cap
A large number of the above commenters addressed the related issues of the
appropriateness of the proposed 0 grams/mile (g/mi) compliance treatment for EV/PHEV/FCVs,
and of the proposed cumulative per-company vehicle production cap for this compliance
treatment in MYs 2022-2025.
For an extensive summary of the key comments and EPA's response to the key
comments, see Preamble Section III.C.2.c.v. As proposed for EV/PHEV/FCVs, EPA is
finalizing the 0 g/mi compliance treatment with a cumulative per-company vehicle production
4-104
-------
Incentives for Electric Vehicles, Plug-In Hybrid Electric Vehicles, and Fuel Cell Vehicles
cap for MYs 2022-2025, and net upstream GHG emissions compliance for production in excess
of the cap. The cumulative per-company vehicle production cap for MYs 2022-2025 is 600,000
EV/PHEV/FCVs for those manufacturers that sell at least 300,000 such vehicles in MYs 2019-
2021, and is 200,000 EV/PHEV/FCVs for all other manufacturers.
Methodology for determining net upstream GHG emissions compliance for EV/PHEVs
beyond the MYs 2022-2025 per-company vehicle production cap
EPA proposed a relatively simplistic approach for calculating the net upstream GHG
emissions compliance values for EVs and the electric portion of PHEVs, but signaled its
intention to consider a more technically robust approach in the final rule. EPA received a few
comments, which directly or indirectly supported a more sophisticated modeling approach based
on better projections of the future electric power sector, a plausible regional distribution of plug-
in electric vehicles, etc.
See Preamble Section III.C.2.c.vi for an extensive discussion of the key comments and
multiple changes that EPA is finalizing, based on new work that EPA has carried out with the
EPA Integrated Planning Model, a state-of-the-art electric power sector model. The results are
new projections for the average GHG emissions factor for electricity used to support EV/PHEVs
in the future, as well as for the multiplicative factor used to project the additional GHG
emissions associated with electricity feedstocks.
The Edison Electric Institute commented that it would be better for EPA to wait until the
midterm evaluation to adopt an electricity upstream GHG emissions factor. EPA disagrees with
this comment. EPA believes it is critical to provide the automobile manufacturers, for their long-
term compliance planning, a value that we expect to be used for compliance purposes in MYs
2022-2025, for those manufacturers who exceed their vehicle production caps for EVs and
PHEVs since this value will become a part of their standard. We understand that there are many
factors that could lead to an electricity upstream GHG emissions factor for EVs and PHEVs that
may be higher or lower than our latest projection, such as future regulations, market forces,
regional distribution of EV/PHEV sales, and vehicle charging patterns. EPA will continue to
evaluate these factors, including in the mid-term evaluation.
Applicability of other program credits for EV/PHEV/FCVs
The Natural Resources Defense Council commented that, if necessary, other program
credits should be limited such that no vehicle would effectively have a "negative" compliance
value. EPA is finalizing, as proposed and consistent with the MYs 2012-2016 program, no
restrictions on the use of GHG emissions credits for those vehicles eligible for the 0 g/mi GHG
emissions compliance treatment, i.e., EV/PHEV/FCVs can earn air conditioner efficiency, air
conditioner refrigerant, and off-cycle credits. EPA will be accounting for these credits at the
manufacturer fleet level, not at the individual vehicle model level, though we accept the point by
NRDC that, in effect, if one were to assess the actual credits earned on a per vehicle basis, the
overall compliance value would appear to be negative. Because of the relatively small number
of EV/PHEV/FCVs expected during MYs 2017-2025, EPA expects the fleetwide impact of these
additional credits to be very small, and EPA does not want to discourage improvements in air
4-105
-------
EPA Response to Comments
conditioner and other technologies for EV/PHEV/FCVs that provide real world GHG emissions
benefits.
4-106
-------
Advanced Technology Credits for Full-Size Pickup Trucks
5. Advanced Technology Credits for Full-Size Pickup Trucks
Organizations Included in this Section
Alliance of Automobile Manufacturers (AAM)
America's Natural Gas Alliance (ANGA) and American Gas Association (AGA)
American Honda Motor Co., Inc.
American Petroleum Institute (API)
American Public Gas Association (APGA)
Association of Global Automakers, Inc. (Global Automakers)
Center for Biological Diversity
Chrysler Group LLC
Clean Energy
Eaton Corporation
EcoMotors International, Inc.
Encana Natural Gas Inc.
Ford Motor Company
General Motors Company
Honeywell Transportation Systems
Hyundai America Technical Center
International Council on Clean Transportation (ICCT)
Marz, Loren C.
Mercedes-Benz USA, LLC
Motor & Equipment Manufacturers Association (MEMA)
National Wildlife Federation (NWF)
Natural Resources Defense Council (NRDC)
NGV America
Northeast States for Coordinated Air Use Management (NESCAUM)
Toyota Motor North America
U.S. Coalition for Advanced Diesel Cars
United Automobile Workers (UAW)
VNG.Co (VNG)
Volkswagen Group of America
Volvo Car Corporation (VCC)
Organization: Alliance of Automobile Manufacturers (AAM)
The following comments address EPA's proposed changes to 40 C.F.R. §600.116-12(c)
for determining the proportion of recovered braking energy for hybrid electric vehicles. In 40
C.F.R. §600.116-12(c)(l)(i)(A) and (B), it is unclear whether road load power and applied
deceleration power are to be calculated from scheduled speed or measured speed. We
recommend that Vmph, V and Vt+1 be defined as "measured velocity in miles/hour, rounded to
the nearest 0.01 miles/hour..."
5-1
-------
EPA Response to Comments
In 40 C.F.R. §600.116-12(c)(l)(C), EPA proposes to determine braking power by the
following equation:
Pbrake = Paccel - Proadload
We recommend that the equation be changed to the following:
Pbrake = Paccel + Proadload and if Pbrake >0, set Pbrake = 0
The Proadload should decrease the magnitude of the Pbrake term. As it is currently
written, the magnitude of Pbrake is not decreased by Proadload during deceleration. If Pbrake
isn't decreased by Proadload, the Emax equation would assume that the roadload force could be
recovered by regenerative braking, and this would cause the Emax calculation to give a higher
value than is possible (thus lowering the eventual Energy Recovered %).
As can be seen in the following chart, the proposed equation would indicate that roadload
during steady cruising would be able to be recaptured as regeneration (red line). The green line is
Emax when you replace the "-" sign with a "+" sign in the Pbrake equation and revise the Pbrake
= 0 criteria, [see figure on p.8, EPA-HQ-OAR-2010-0799-9487, Appendix 7]
Therefore, it would be more appropriate if the equation were written as Pbrake = Paccel +
Proadload with the additional criteria that Pbrake = 0 whenever the calculation results in a
positive value.
In addition, the following clerical errors were discovered during our review of the
NPRM:
§600.116-12(c)(l)(i)(A): Road load equation has an extra "x" between 0.47704 and 4.448
§600.116-12(c)(3)(iii): "battery" is misspelled as "batter"
§600.116-12(c)(4)(3)(iii): Definition of Erec under the Energy Recovered % equation
references paragraph (c)(2)(iii), should reference paragraph (c)(3)(iii) instead
§600.116-12(c)(4)(3)(iii): Conflicting nomenclature. Energy Recovered % equation uses
Emax, which appears to be called Ebrake in the paragraph referenced by the Emax definition,
§600.116-12(c)(2).
Further, prior to the final rule, we plan to engage the agency technical experts to ensure
that the test procedure specifications and regulatory language for determining the proportion of
recovered braking energy is clear, accurate and consistent with previous hybrid procedural
guidance (e.g., SAE J1711, Part 86, Part 600), where applicable. [EPA-HQ-OAR-2010-0799-
9487, Appendix 7, p. 7-9]
Organization: America's Natural Gas Alliance (ANGA) and American Gas Association (AGA)
"Game-Changing Pickup Technologies"
EPA has also proposed to "incentivize the penetration into the marketplace of 'game changing'
technologies for full size pickups . . . [and] for that reason, EPA is proposing credits for
manufacturers that hybridize a significant quantity of their full size pickup trucks, or use other
technologies that significantly reduce CC>2 emissions and fuel consumption." 76 FR 75016. If the
agencies do not provide a multiplier incentive for NGVs as requested above, we ask that EPA
5-2
-------
Advanced Technology Credits for Full-Size Pickup Trucks
clarify that natural gas-powered pickups would be able to qualify as a technology eligible for the
proposed credits. [EPA-HQ-OAR-2010-0799-9548-A1, p. 8]
Assuming that NGVs are eligible for those credits, we note that for non-hybrid pickups to
receive the proposed credits, they must achieve a "15 percent or 20 percent, respectively, better
CO2-reduction than their footprint based target in a given model year." Id. at 75017. However,
hybrid pickups do not have to meet any CO2-reduction performance target in order to receive
comparable credits, and we believe it would be appropriate and consistent to either apply
identical performance targets to hybrids or, alternatively, eliminate the targets for "other
technologies" that achieve equal or better GHG reductions. We also believe that the proposed
thresholds (as a percentage of their full-size pickup production) that a manufacturer must meet
before being able to receive these credits are way too high: starting at 15% in 2017, and ramping
up to 40% in 2021 for the 15% CO2-reduction credit and 10% for all model years for the 20%
CC>2- reduction credit. Id. at 75017. If the goal of the incentive is to encourage deployment of
these technologies, the initial levels should be far more modest. [EPA-HQ-OAR-2010-0799-
9548-A1, p. 8]
Organization: American Honda Motor Co., Inc.
The preamble in the section titled "Incentives for "Game-Changing" Technologies Including Use
of Hybridization and Other Advanced Technologies for Full-Size Pickup Trucks" notes that "the
standards under consideration for MY 2017-2025 will be challenging for large trucks, including
full size pickup trucks that are often used for commercial purposes and have generally higher
payload and towing capabilities, and cargo volumes than other light-duty vehicles." Honda
believes that the same is true for minivans and SUVs and that these similarly situated vehicles
ought to be treated in a similar fashion. Honda's Pilot SUV and Odyssey Minivan are among the
most popular vehicles in their segments. These vehicles have passenger load capabilities of up to
8 occupants and also are often used by families for the kind of high load usage described in the
preamble. The 2012 Pilot 4WD, for example, is capable of carrying 8 occupants and also is
capable of towing loads up to 4,500 Ibs with the driver and one passenger. This kind of
demanding use by consumers is similar in concept to the justification for the pick-up truck
incentives proposed by the agencies. Honda believes that the incentives for "game changing"
technologies be applied equally to 7 and 8 passenger vehicles with towing capabilities. [EPA-
HQ-OAR-2010-0799-9489-A1, p. 2]
As noted above in #1, above, the stringency for the larger footprint light trucks is very low,
compared to the smaller footprint light trucks. The combination of the lower stringency and the
"game changing" credits cannot be justified as a matter of science, in furtherance of social goals
and objectives or as a matter of simple fairness and equity. Not only are large footprint pick up
trucks required to do very little (no stringency increase for a number of years), they are overly
rewarded if they do increase their performance: in other words, required to do nothing, and
highly rewarded for doing something. [This comment can also be found in section 2.2.3 of this
comment summary] [EPA-HQ-OAR-2010-0799-9489-A1, p. 2]
Organization: American Petroleum Institute (API)
5-3
-------
EPA Response to Comments
While API has no comment on the stringency of the proposed fuel economy and CC>2 standards,
we are concerned that the proposal provides a number of incentives that appear to reflect an
attempt to pick winning and losing technologies in the marketplace, an action which could
potentially limit consumer choice and increase societal costs. [This comment can also be found
in sections 4 and 6 of this comment summary.] [EPA-HQ-OAR-2010-0799-9469-A1, p. 1]
Incentives for Hybridization for Full-Size Pick-Up Trucks — EPA is proposing an additional
per vehicle credit for mild and strong hybrid electric (HEV) full size pickup trucks if this
technology is utilized across a designated percentage of a manufacturers' full size pickup trucks.
[EPA-HQ-OAR-2010-0799-9469-A1, p. 1]
Organization: American Public Gas Association (APGA)
With respect to pickup trucks, EPA also has proposed a special credit for pickup trucks that
utilize GHG reducing technology. This credit would be worth 10 g/mi or 20 g/mi depending on
the reductions. In order to get the 20 g/mi credit technology would have to provide a 20%
reduction in GHG emissions. To qualify, technology would have to be used on at least 10% of
full size pickups for manufacturers and credits limited to 5 MYs. APGA strongly supports this
change and believes that it will be very beneficial in aiding the deployment of NGV pickup
trucks and refueling infrastructure. [EPA-HQ-OAR-2010-0799-9448-A1, p. 3]
Organization: Association of Global Automakers, Inc. (Global Automakers)
The advanced technology credits provide an incentive for manufacturers to continue to develop
and market these technologies, which have the potential for substantial long term improvements
in fuel efficiency and emissions performance. [EPA-HQ-OAR-2010-0799-9466-A1, p. 1]
Global Automakers supports the inclusion of advanced technology incentives as an integral part
of the MY 2017-25 standards program. As stated in the agencies' proposal, such vehicles have
the potential to achieve major emission reductions and improvements in fuel efficiency, but face
near-term market barriers relating primarily to price and fueling infrastructure. The incentives
proposed by EPA provide a bridge to overcome these near-term obstacles. [EPA-HQ-OAR-
2010-0799-9466-A1, p. 7]
The agencies also propose an incentive for "game-changing" technologies used in large pick-up
trucks. Also provided as an incentive for larger trucks are certain adjustments to the slope of the
truck curve, to reduce the stringency of standards for those vehicles. The agencies justify these
incentives based on what they see as special compliance burdens of these vehicles, including
"generally higher payload and towing capabilities and cargo volumes than other light duty
vehicles." See 76 FR 74944. In our view, other classes of vehicles may face similar compliance
obstacles, or obstacles that, while different in nature, are still significant. [EPA-HQ-OAR-2010-
0799-9466-A1, pp. 7-8]
We urge the agencies to consider extending "game-changing credits" to other vehicle classes,
such as minivans or SUVs with towing capabilities. These credits should also be reassessed as
5-4
-------
Advanced Technology Credits for Full-Size Pickup Trucks
part of the mid-term review process, to determine whether they should be modified. [EPA-HQ-
OAR-2010-0799-9466-A1, p. 8]
Organization: Center for Biological Diversity
In addition to the improper credits discussed below, the NPRM contains yet another sweetener
that cannot but lead to even more pickup trucks used as passenger vehicles. EPA is seeking
comment on changing the definition of a full-size pickup truck by reducing the minimum
wheelhouse width requirement from 48 inches to about 42 inches, as long as the vehicle remains
capable of towing at least 6,000 Ibs. Such a redefinition is entirely inappropriate. The Agencies
provide no reasonable basis for this request, and entirely overlook the fact that it would enable
virtually every pickup truck to fall into the full-sized pickup truck definition and escape higher
fuel efficiency standards. The Agencies must not take this step backward. [EPA-HQ-OAR-2010-
0799-9479-A1, p. 14]
2. The pickup truck credits must be eliminated
As yet another preference for the dirtiest vehicles in the fleet, the Agencies propose a credit of 10
g/mile for each pickup truck that either has mild hybrid technology or achieves an emission rate
15% higher than the standards in any year from MY 2017 to 2021 (if certain minimum
production rates are met); and a credit of 20 g/mile for each pickup truck that is either uses
strong hybrid technology or achieves an emission rate 20% higher than the standard for that year
(if minimum production rates are met). [EPA-HQ-OAR-2010-0799-9479-Al, p. 22]
This give-away is ill-conceived for a number of reasons. First, hybrid technology is one of the
most effective technologies to improve these vehicles' fuel efficiency. It is both technologically
and economically feasible, 103 and failing to require - rather than to incentivize - its use is
contrary to statutory intent. In fact, none of the factors the Agencies must consider in setting
standards argues for anything other than immediate and mandatory application of this technology
across the entire fleet as quickly as possible. In addition, as with all other credits, it would
displace the implementation of other fuel efficiency measures such as stronger hybrids or EV
vehicles. Moreover, the Agencies admit that these credits do not correspond to the actual
improvements obtained. 104 [EPA-HQ-OAR-2010-0799-9479-Al, p. 22]
103 Ford and Toyota have already announced a joint venture to develop the systems for pickup
trucks. ICCT Comments at 36. The profitability of trucks, discussed above, nullifies any cost
concerns, even when the hundreds of billions in other benefits flowing from increased fuel
efficiency standards are disregarded. [EPA-HQ-OAR-2010-0799-9479-A1, p. 22]
104 NPRM, 76 Fed. Reg. 74879. [EPA-HQ-OAR-2010-0799-9479-A1, p. 22]
Organization: Chrysler Group LLC
5-5
-------
EPA Response to Comments
Chrysler agrees with the Agencies' support for "game-changing" full-size pickup truck
technology and recommends improvements for its regulatory implementation. (Attachment 3)
Chrysler agrees with the Agencies expectation that the proposed standards will be challenging
for fullsize light-duty trucks. The proposed rules will provide additional incentives to
manufacturers for early development of the technologies which will be needed to meet 2022-
2025 MY light-duty truck standards. Chrysler recommends that the agencies retain as much
flexibility as possible both for which light-duty trucks will qualify and for how those light-duty
trucks are defined. The proposed definitions for qualifying vehicles need to be defined so as to
capture the intended population of vehicles. Also, establishing minimum penetration rate
thresholds is an unnecessary additional constraint on the use of these incentives. [EPA-HQ-
OAR-2010-0799-9495-A1, p. 6]
Chrysler supports EPA's proposed incentives for "game-changing" technologies on fullsize
pickup trucks and other high-utility light-duty trucks.
Full-size pickup trucks are frequently purchased by customers who need varying combinations of
payload, trailer towing, four wheel drive, and passenger carrying capability. These utility-adding
features enable Chrysler's customers to satisfy their transportation, business, and recreational
needs. However, adding features to enable increased cargo and trailer tow capabilities can
challenge high-utility vehicle energy efficiency. [EPA-HQ-OAR-2010-0799-9495-A1, p. 12]
Some "game-changing" technologies already exist, or are under development, but such
technologies come at a cost-premium and may compromise vehicle utility. For example, vehicle
hybridization and advanced diesel engines are significantly more expensive than conventional
gasoline powertrains. These technologies also increase vehicle curb weight, thereby reducing
payload and towing capability unless further modifications are made to the vehicle. [EPA-HQ-
OAR-2010-0799-9495-A1, p. 12]
It is appropriate to encourage "game-changing" technologies in this segment and help to
minimize the tradeoffs between efficiency and utility. [EPA-HQ-OAR-2010-0799-9495-A1, p.
12]
The definitions for a "full-size" vehicle should capture the intended vehicles both now and in the
future.
The automotive market continues to evolve. Given that this regulation will affect vehicles
produced far into the future, the agencies should strive to leave vehicle-based definitions as
broad as possible. Establishing narrow definitions for what vehicles qualify for "full-size" game-
changing technology incentives may lock manufacturers into producing vehicles within these
design constraints instead of creating innovative ways to provide similar or better utility and
game-changing fuel economy for future customers. [EPA-HQ-OAR-2010-0799-9495-A1, p. 12]
Chrysler agrees that the definitions which qualify light-duty trucks for "game-changing"
technology incentives should reflect utility-adding features.
5-6
-------
Advanced Technology Credits for Full-Size Pickup Trucks
Chrysler agrees that payload and towing capability are two key utility-adding features. EPA and
NHTSA recognized these features as "work-based attributes" in their medium- and heavy-duty
truck greenhouse gas and fuel efficiency rules for heavy-duty pickup and van standards. The use
of payload and towing capability to define a higher utility light-duty truck is a logical extension
of the reasoning provided by EPA and NHTSA therein. [EPA-HQ-OAR-2010-0799-9495-A1, p.
13]
Light-duty trucks which meet minimum payload and/or towing capability should qualify for the
"full-size" hybrid and performance-based incentives - an open cargo box should not be required.
EPA and NHTSA are proposing that these incentives be applicable only to full-size pickup
trucks, with one qualification being an "open cargo box". However, large light-duty trucks
without open cargo boxes include many of the same utility-adding features as full-size pickup
trucks. For example, a number of Chrysler's Dodge Durango and Jeep Grand Cherokee variants
meet or exceed the capabilities of full-size Ram 1500 pickup trucks, as shown in Figure 1 below.
[See Figure 1 on p. 13 of Docket number EPA-HQ-OAR-2010-0799-9495-A1] [EPA-HQ-OAR-
2010-0799-9495-A1, p. 13]
These higher utility vehicles are purchased by customers not only for their passenger-carrying
capability, but also for their payload and towing utility. Many of Chrysler's customers desire
vehicles which can transport both a family and commercial or recreational trailers. [EPA-HQ-
OAR-2010-0799-9495-A1, p. 14]
These utility requirements can create the same vehicle efficiency challenges in these other large
light-duty trucks as they do in full-size pickup trucks. In incentivizing technology which causes
"game-changing" vehicle efficiency improvements while maintaining vehicle utility, non-pickup
large light-duty trucks should also be encouraged to make similar improvements. Therefore,
Chrysler recommends that any light-duty trucks which meet minimum payload or towing
capability requirements qualify for these incentives. [EPA-HQ-OAR-2010-0799-9495-A1, p. 14]
If finalized, open cargo box requirements should allow greater flexibility in dimensions and
"open" criteria; Chrysler recommends reducing minimum box size requirements and permitting
greater flexibility in bed area coverage.
The agencies propose to set minimum open cargo box dimensions which appear to be based on
today's largest pickup trucks. By setting the minimum dimensions to today's largest pickup
trucks, the agencies drive the unintended consequence of also incentivizing manufacturers to
design to these dimensions. If the agencies were to instead reduce or eliminate the minimum
dimensions of an open cargo box, manufacturers would have more freedom to invent new
designs which could satisfy customer cargo carrying needs in a more efficient manner. [EPA-
HQ-OAR-2010-0799-9495-Al,p. 14]
The agencies also propose that a full-size pickup include an "open box", defined as "a vehicle
where the cargo box does not have a permanent roof." The restriction that the roof not be
permanent is a distinction that may encourage manufacturers to make use of potentially less
aerodynamically efficient designs to qualify a vehicle for the "game-changing" technology
5-7
-------
EPA Response to Comments
incentives. In contrast, keeping the "open box" definition flexible, for example to allow a design
with a permanent pickup truck cap (extending the roofline of the cab to rear of the box) could be
an aerodynamic improvement if designed properly. Chrysler recommends that if the "open cargo
box" requirement is finalized, the definition also include that "a covered box not readily
accessible from the passenger compartment will be considered an open cargo box for the
purposes of this definition". [EPA-HQ-OAR-2010-0799-9495-A1, p. 14]
Chrysler recommends that the Agencies set the minimum payload capacity at 1,300 Ib. and the
minimum towing capacity at 3,500 Ib.
The agencies propose to limit applicability of "game-changing" full-size pickup truck incentives
to vehicles which meet a minimum payload capability of 1,700 Ib. or which meet a minimum
towing capability of 5,000 Ib. The Agencies intended that these limits would qualify larger
pickup trucks while excluding smaller pickup trucks. 17 However, these limits exclude a number
of Chrysler's full-size 2012 MY Ram 1500 pickup truck variants, (as demonstrated in Figure 2),
that were designed to meet customer utility requirements, and therefore which should not have
be excluded from the "game-changing" technology incentives. [EPA-HQ-OAR-2010-0799-
9495-A1, p. 14]
Chrysler notes that virtually none of the 2012 MY full-size Ram 1500 pickup trucks are capable
of meeting the minimum payload requirements as proposed, even though these full-size trucks
provide significant payload carrying capability and are designed to meet the utility needs of our
customers. We recommend lowering the minimum payload capability requirement to 1,300 Ib.
[See Figure 2 on p. 15 of Docket number EPA-HQ-OAR-2010-0799-9495-A1] [EPA-HQ-OAR-
2010-0799-9495-A1, p. 14]
Similarly, Chrysler recommends that the minimum towing capability be lowered to 3,500 Ibs if
the proposed towing capability definition is finalized. Under the proposed definition, certain
current and potential future Ram full-size trucks with maximum trailer capacities greater than or
equal to 5,000 Ib. are excluded. An alternative to lowering the minimum towing capability would
be to strike the proposed definition of trailer tow capability (GCWR - GVW) and to define
towing capability as meaning "the value specified by the manufacturer as the maximum towable
trailer weight, consistent with good engineering judgment. For example, compliance with SAE
J2807 is generally considered to be consistent with good engineering judgment." [EPA-HQ-
OAR-2010-0799-9495-A1, pp. 14-15]
Minimum penetration rate requirements increase uncertainty for manufacturers and are an
unnecessary constraint. [EPA-HQ-OAR-2010-0799-9495-A1, p. 15]
The agencies propose that to qualify for the "full-size" hybrid and performance-based incentives,
a manufacturer must meet a minimum penetration rate. These minimum penetration rates add a
level of uncertainty for manufacturers and are an unnecessary additional constraint for incentives
offered on a per-vehicle basis. [EPA-HQ-OAR-2010-0799-9495-A1, pp. 15-16]
Minimum penetration rates add a level of uncertainty for manufacturers. If a manufacturer
invests in the technologies necessary to hybridize a full-size vehicle, or to significantly over-
-------
Advanced Technology Credits for Full-Size Pickup Trucks
perform to a vehicle's footprint-based target, it still may not meet the required minimum
penetration rate if market demand is not sufficient. For example, manufacturers could choose to
invest in the necessary technologies, but if market demand is only 9% against a required 10%
penetration threshold, those investments would not generate the credits expected by a
manufacturer. Before approving funding for such investments, manufacturers need certainty that
their investment will realize expected benefit of making those investments. Introducing the
uncertainty of minimum penetration rate requirements creates a disincentive to adoption of
game-changing technologies until market demand is proven. [EPA-HQ-OAR-2010-0799-9495-
Al,p. 16]
Minimum penetration rate requirements are also an unnecessary additional constraint on the
proposed incentives. Because the incentives are offered on a per vehicle so-equipped basis,
manufacturers are incentivized to apply game-changing technologies as broadly as market
demand allows. Technologies with lower penetration rates will produce less credit than those
with higher penetration rates. This approach also provides a level playing field for all
manufacturers. Further discouragement of technologies based on penetration rates actually works
against the intent of early adoption of game changing technologies. [EP A-HQ-OAR-2010-0799-
9495-A1, p. 16]
Chrysler supports broad technology definitions for mild and strong HEV technology
Given the long-term timeframe of this rulemaking, Chrysler supports maximum flexibility in the
definition of hybrid technology. [EPA-HQ-OAR-2010-0799-9495-A1, p. 16]
The definitions of mild and strong hybrids should not use technology-specific terms; Chrysler
recommends that the term "mild hybrid vehicle" be used instead of "mild hybrid gasoline-
electric vehicle" and "strong hybrid vehicle" be used in place of "strong hybrid gasoline- electric
vehicle". [EPA-HQ-OAR-2010-0799-9495-A1, p. 16]
The agencies refer to mild and strong hybrid technologies which qualify for "game-changing"
technology credits using the term "gasoline-electric". The use of this term implies that the only
hybrid technology acceptable is a gasoline and electric powertrain combination. Not only are
other fuels possible (e.g. E85, diesel, and CNG), but other "hybrid" types other than electric are
also possible (e.g. hydraulic hybrids and flywheel energy storage systems). The agencies should
strive for both fuel and hybrid technology neutrality in this rulemaking and provide this incentive
to any system that can capture a minimum fraction of otherwise wasted energy and convert it to
tractive power. [EPA-HQ-OAR-2010-0799-9495-A1, p. 16]
The required energy recovery rate definition for full-size strong hybrids should be reevaluated.
EPA proposes that a "strong" hybrid must recapture at least 75 percent of available braking
energy over the Federal Test Procedure. This target may be appropriate for passenger cars, but is
very aggressive for full-size trucks. For example, hybrid systems for full-size truck applications
may have difficulty in meeting the proposed 75% energy recovery rate because of the need to
design the braking system for maximum payload and trailer capability while maintaining
drivability in the absence of these loads. Chrysler recommends reducing the requirement to 50%.
5-9
-------
EPA Response to Comments
This value will help maintain the distinction between strong and mild hybrids, but recognizes
some of the design constraints for large high-utility vehicle hybrid systems. [EPA-HQ-OAR-
2010-0799-9495-A1, p. 16]
Performance-Based Incentive
Chrysler supports the tiered incentive system based on varying levels of over-performance.
The agencies propose to offer two levels of performance-based incentives, with a greater
incentive offered for greater levels of performance. This methodology incentivizes
manufacturers to maximize the fuel economy performance of full-size trucks and to take
additional incremental steps if possible. [EPA-HQ-OAR-2010-0799-9495-A1, p. 17]
Chrysler supports the agencies' proposal to base the credit on over-performance in the first year
of production.
The agencies propose to begin the performance-based incentive in the model year of introduction
and to extend that incentive for up to five years. Chrysler agrees with this approach. Requiring
the vehicle to make continuous improvements to maintain its original over-performance to a
standard would not respect automotive design cycles and the resources required to make
significant improvements. [EPA-HQ-OAR-2010-0799-9495-A1, p. 17]
Organization: Clean Energy
Advanced Pickup Truck Credits [EPA-HQ-OAR-2010-0799-9511-A1, p.6]
For 2017-2025, EPA and NHTSA have proposed special credits for pickup trucks. There is a
credit for mild and also for strong-hybrid pickups, and a separate credit for pickups that are able
to meet prescribed GHG reductions. The description in the proposed rule appears to indicate that
hybrid pickups and pickups that satisfy the GHG performance criteria will earn GHG and FE
credits. We recommend that the agencies also consider and include additional credits for
dedicated, dual-fuel and hybrid NGV applications on pickup trucks. Clean Energy would be
happy to work with the agencies to develop credits that fully recognize the benefits that natural
gas can provide on these trucks. [EPA-HQ-OAR-2010-0799-9511-A1, pp.6-7]
Organization: Eaton Corporation
• Provides incentives to promote the adoption of advanced vehicle technologies that over comply
with the targets set forth in the rule while not pre-selecting winners and losers in the
marketplace. [EPA-HQ-OAR-2010-0799-9494-A1, p. 2]
The rule has the potential of accelerating adoption of game-changing technologies that otherwise
would not have been adopted. However, we offer the following comments to recommend that the
concept of'technology neutral' is adhered to in the Light-Duty Truck Program. [EPA-HQ-OAR-
2010-0799-9494-A1, p. 2]
5-10
-------
Advanced Technology Credits for Full-Size Pickup Trucks
'Game Changing' Technology Credits for light Duty Trucks
We applaud the inclusion of a credit program that includes mild hybrids. Mild hybrid
technologies show great promise for cost-effective fuel consumption and GHG reductions.
[EPA-HQ-OAR-2010-0799-9494-A1, p. 2]
Eaton recommends that the definition of hybrids and mild-hybrids under the 'Game Changing'
Technologies for Full-Size Pick-up Trucks be technology neutral. The phrase 'gasoline-electric'
is too narrow and would eliminate other non-battery internal combustion based technologies
from being considered. All full-hybrid and mild-hybrid technologies should qualify for credits.
Also, the penetration rate thresholds for full-size pick-up trucks should be significantly reduced
or eliminated so that market and economic uncertainties do not prevent innovation from being
introduced. [EPA-HQ-OAR-2010-0799-9494-A1, pp. 2-3]
Organization: EcoMotors International, Inc.
EPA is proposing CC>2 credits for manufacturers that hybridize a significant quantity of their full-
size pickup trucks, and the agencies are also proposing that manufacturers be able to include 'fuel
consumption improvement values' equivalent to EPA CC>2 credits in the CAFE program. Access
to the incentives is conditioned on a minimum penetration of mild and strong hybrid electric
vehicle (HEV) technologies in an OEM's full-size pickup truck fleet. [This comment can also be
found in section 8 of this comment summary.] [EPA-HQ-OAR-2010-0799-9594-A2, p. 8]
EcoMotors endorses the agencies' incentives to promote the use of advanced vehicle
technologies in both full-size and smaller size pick-up trucks. However, for all of the reasons
noted above, other less-costly and equally energy efficient and environmentally beneficial
vehicle technologies - available today - should be afforded equally beneficial regulatory
incentives. Near-term development and commercialization of advanced ICEs, such as the dual-
module opoc engine performing as a mechanical hybrid, remains an extremely important path for
emissions reduction and fuel economy improvements in pick-up trucks and should also be
encouraged by national policy. In a dual-module, mechanical hybrid configuration, the EM 100
base opoc engine would provide fuel savings exceeding 45%. [EPA-HQ-OAR-2010-0799-9594-
A2, p. 8]
EcoMotors believes that the market penetration requirements established for the hybridization
incentives should be removed in the Final Rule. New technologies typically take years to prove
themselves and attain significant market penetration. In the past, it has taken a decade for a
technology to prove itself and attain a sales fraction of 40-50%, and has taken as long as another
5-10 years to reach maximum market penetration. Thus, establishing a 30% market penetration
rate threshold for MY2017 (mild HEV pickups) is unrealistic. Even the 10% annual market
penetration suggested for strong HEV pickups is problematic. It will likely be necessary to
provide incentives to OEMs just to get within reach of these thresholds. [EPA-HQ-OAR-2010-
0799-9594-A2, p. 8]
• Specific Recommendation: EcoMotors strongly encourages the agencies to extend CO2
and fuel economy credits to OEMs that manufacture mechanical hybrid pick-up trucks,
5-11
-------
EPA Response to Comments
hydraulic hybrid pick-up trucks, and similar advanced technology hybrid pick-ups. This
would place other significant, game-changing vehicle technologies -like the dual-module
opoc engine - on a level playing field with HEVs. EcoMotors also encourages the
agencies to completely eliminate the market penetration requirements established for the
credits, to better reflect historic market penetration issues facing new technologies. [EPA-
HQ-OAR-2010-0799-9594-A2, p. 8]
EPA is proposing performance-based incentive credits and equivalent fuel consumption
improvement values for CAFE for full-size pickup trucks that achieve an emission level
significantly below the applicable CC>2 target. The performance-enhancing technology must be
used on a minimum percentage of a manufacturer's full-size pickup trucks. [EPA-HQ-OAR-
2010-0799-9594-A2, p. 12]
EcoMotors strongly endorses this technology-neutral incentive to promote the use of advanced
vehicle technologies in both full-size and smaller-size pick-up trucks. By establishing
performance-based incentives, the agencies are enabling OEMs to choose their own cost-
efficient path for achieving CC>2 reductions and fuel economy improvements, consistent with
their specific product plans. [EPA-HQ-OAR-2010-0799-9594-A2, p. 12]
EcoMotors encourages the agencies to remove the market penetration requirements established
for the credits, to better reflect historic market penetration issues facing new technologies. As
discussed above, new technologies typically take years to prove themselves and attain significant
market penetration. Thus, even the lowest rate associated with this incentive - 10% - is likely set
too high for OEMs to secure these credits. [EPA-HQ-OAR-2010-0799-9594-A2, p. 12]
• Specific Recommendation: EcoMotors supports the agencies' performance-based
incentive program for full-size pick-ups and encourages the agencies to extend it to
somewhat smaller pickups as well. EcoMotors encourages the agencies to remove the
market penetration requirements established for the credits in order to better reflect
historic market penetration issues facing new technologies. [EPA-HQ-OAR-2010-0799-
9594-A2, p. 12]
Organization: Encana Natural Gas Inc.
Advanced Pickup Truck Credits
For 2017 - 2025, the EPA and NHTSA have proposed special credits for pickup trucks. There is
a credit for mild and also for strong hybrid pickups, and a separate credit for pickups that are
able to meet prescribed GHG reductions. The description in the proposed rule appears to indicate
that hybrid pickups and pickups that satisfy the GHG performance criteria will earn GHG and FE
credits. [EPA-HQ-OAR-2010-0799-9585-A2, p. 6]
First, we offer the following comments with respect to the hybrid credits, like other credits
proposed in the rulemaking, the mild and strong hybrid credits are not tied to specific GHG or
FE performance metrics but rather attempt to incentivize a specific type of technology in order to
encourage manufactures to sell such vehicles. Encana recommends an approach that regulates all
5-12
-------
Advanced Technology Credits for Full-Size Pickup Trucks
alternative fuel technologies equally. In order to provide equitable treatment, the proposed rule
should provide similarly strong incentives for NGVs. We have outlined the types of incentive we
believe are necessary to encourage the development and sale of light duty NGVs. Encana
believes that it is appropriate to provide incentives like those proposed for hybrid trucks as long
as similarly strong incentives are provided for other technologies. [EPA-HQ-OAR-2010-0799-
9585-A2, p. 6]
Second, with respect to the performance-based credits provided for pickup trucks, we offer the
following comments. We agree that all technologies should have the opportunity to earn credits
under this provision. Also, we believe that, if specific credits are provided elsewhere in the rules
for NGVs, that such vehicles, like hybrids, should not earn double credits under those provisions
and also under the pickup truck credit provision. If no additional credits, as described earlier in
our Public Comment letter, are provided for NGVs, then they should have the potential to earn
credits under the Advance Pickup Truck Credits provisions. [EPA-HQ-OAR-2010-0799-9585-
A2, p. 6]
We also believe that targets for introduction are simply too high with respect to NGVs and that
the EPA and NHTSA should amend the proposal to provide a lower-threshold. In the Proposed
Rule, the EPA and NHTSA provide a 10 g/mi GHG credit if advanced pickup truck production is
at least 15% of a company's full sized pickup production in MY 2017 with a ramp up to at least
40% in MY 2021. Additionally, a 20 g/mi credit is provided if advanced pickup truck production
is at least 10% of a company's full sized pickup production in each year over the model years
2017-2025. These proposed production goals are unattainable for NGVs and simply precludes
NGVs from receiving this incentive. [EPA-HQ-OAR-2010-0799-9585-A2, p. 6]
The US Energy Information Administration - AEO 2011 projects sales of alternative fueled
vehicles2. At no time during the 2017-2025 time period does the EIA project light truck sales to
exceed even 0.1% of total new light truck sales (sic). Encana proposes that there should be no
production minimum for MYs 2017 through MY 2020. For MYs 2021 and beyond, a meaningful
stretch goal would be 0.5% of production. [EPA-HQ-OAR-2010-0799-9585-A2, pp. 6-7]
Encana appreciates the opportunity to provide public comment on this rulemaking. Encana
requests that the EPA and NHTSA incorporate the additional incentives described in this letter
for natural gas vehicles. The following summarizes the additional incentives Encana believes
will provide fair and equitable treatment of NGVs: [This comment can also be found in section
6.2 of this comment summary] [EPA-HQ-OAR-2010-0799-9585-A2, p. 7]
• Modify the Advanced Pickup Truck Credit provisions to include NGVs. [EPA-HQ-OAR-2010-
0799-9585-A2, p. 7]
http://www.eia.gov/oiaf/aeo/tablebrowser/#release=AEO2011&subject=0-AEO2011&table=48-
AEO2011 ®ion=l -0&cases=ref2011 -d020911 a
Organization: Ford Motor Company
5-13
-------
EPA Response to Comments
• Auxiliary transmission oil coolers
• Upgraded radiators
• Trailer hitch connectors and wiring harness equipment
• Different steering ratios, upgraded rear bumpers and different springs for heavier tongue
load (for upgraded 'max' trailer tow packages)
• Body on frame (vs. unibody) construction to support capability and an aggressive duty
cycle
• Lower axle ratios for better pulling power/capability [EPA-HQ-OAR-2010-0799-9463-
Al,p.9]
In addition, vehicles with towing capability generally have increased aerodynamic drag caused
by a modified frontal area, increased rolling resistance, and a heavier frame and suspension to
support this additional capability. [EPA-HQ-OAR-2010-0799-9463-Al, p. 9]
We are seeing a continuing trend that our customers are purchasing these vehicles for work
purposes. Based on 2011 segmentation models for our full size pick-up trucks, Business users
account for approximately 30% of the market. The Business category includes fleet and work
trucks (e.g. small business owner, farmer, foreman), as well as those customers who use their
truck for occupational purposes during the week and personal use on the weekend. About 58% of
the market is comprised of Recreational users, including hunters, boaters, fisherman, etc. These
consumers rely on their vehicles for hauling and towing to support their recreational activities.
Only a relatively small segment (12%) of the market is comprised of consumers who do not
make significant use of the towing/ hauling/off-road capabilities of the truck. Based on the trends
we have seen in the market, we fully anticipate that such buyers will continue to be a shrinking
portion of our market. We believe that within a few years, the Business category will increase to
over 40% of the market, and the combined Business/Recreational users will increase to over 90%
of the market for full size pick-up trucks. [EPA-HQ-OAR-2010-0799-9463-Al, p. 9]
And to further demonstrate the importance of these vehicles to the American economy, the
following graph demonstrates that new home construction, a key financial indicator, and the
sales of the trucks needed to help this industry, go hand in hand. [EPA-HQ-OAR-2010-0799-
9463-Al,p. 9]
Game Changing Technologies for Full Size Pick-up Trucks
Ford supports the agencies' proposal to provide additional "game changing technology"
incentives for full-size pick-up trucks. We agree with the agencies' statement that this incentive
".. .provides the opportunity to begin to transform the most challenging category of vehicles in
terms of the penetration of advanced technologies, which, if successful at incentivizing these
"game changing technologies," should allow additional opportunities to successfully achieve
the higher levels of truck stringencies in MYs 2022-2025." (76 Fed. Reg. 74879) [EP A-HQ-
OAR-2010-0799-9463-A1, p. 21]
As noted previously, weight-based vehicle attributes such as payload and towing capability are
key among the parameters that characterize differences in the design of these work vehicles, as
5-14
-------
Advanced Technology Credits for Full-Size Pickup Trucks
well as differences in how the vehicles will be utilized. Vehicles with towing capability generally
have increased aerodynamic drag caused by a modified frontal area, increased rolling resistance,
and a heavier frame and suspension to support this additional capability. Manufacturers are faced
with the challenge of applying technologies to significantly improve fuel economy without
sacrificing the utility required by our customers. [EPA-HQ-OAR-2010-0799-9463-A1, p. 21]
• Pick-up Truck Definition: The current proposal for cargo box size, towing capability and
payload capability encompasses the majority of full-size pick-up trucks on the road
today. While it is difficult to forecast future customer needs and expectations for vehicles
that we will be building 10 years from now, Ford believes the proposal incorporates the
appropriate size and work factor related attributes to define a full-size pickup
truck. [EPA-HQ-OAR-2010-0799-9463-A1, pp. 21-22]
• Hybrid Electric Vehicle Pick-up Truck Definition: Ford supports the proposed
performance-based definitions for both mild and strong FIEV pick-up trucks, which
provide manufacturers flexibility in technology deployment, taking into consideration
customer expectations, while still providing the anticipated efficiency benefit. We also
support the comments provided by the Alliance on proposed changes to 40 CFR §
600.116-12 for determining the proportion of recovered braking energy for hybrid
electric vehicles. However, in addition to those recommendations, we also believe the
definition of a strong hybrid should be expanded beyond the currently proposed energy
recovery methodology, which does not allow braking energy to be easily segregated from
other battery charging sources, such as the engine. As proposed, we believe there is a
potential for gaming that could allow a mild hybrid to qualify as a strong hybrid. Also,
the level of capture of regenerative energy is only one of the important functional
elements delivered by a strong hybrid system. As such, Ford recommends the following
improvements to the proposed methodology, including the addition of a new metric,
fedrive, the fraction of electric driving. [EPA-HQ-OAR-2010-0799-9463-A1, p. 22]
1. Calculate Erec using the proposed formula, only during deceleration.
2. Calculate Ebrake_max using the proposed formula, from the measured speed trace, in lieu of using the
scheduled speed trace.
3. Calculate the energy recovered percentage using the values from (1) and (2), as proposed.
4. Calculate a new metric, the percent fraction of electric drive, fedrive, using the formula:
f = 1 OP - e-fractive-Paccel>0
'edrive I UU X
Etractive, Paccei>o, the total tractive energy under positive acceleration conditions is equal to the sum over
the FTP cycle of the absolute values of Paccei+Proadioadforthe condition Paccei>0 divided by 36,000 and
rounded to the nearest 0.01 kW-hr.
5-15
-------
EPA Response to Comments
Ee-tractive, Paccei>o, the total electric drive tractive energy under positive acceleration conditions is equal to
the sum over the FTP cycle of the absolute values of Paccei+Proadioadforthe conditions Paccei>0 and engine
speed = 0 divided by 36,000 and rounded to the nearest 0.01 kW-hr.
To qualify as a strong hybrid, Ford recommends that the following thresholds be used:
Energy Recovered % > 40%
fedrive > 10%
[See calculations on p. 22 of Docket number EPA-HQ-OAR-2010-0799-9463-A1]
Based on the recommended change to measure Ereconly during deceleration, only braking energy
will be included in the calculation, as opposed to including energy from the engine or other
sources. As a result of this procedural revision, the threshold to qualify as a strong hybrid must
be reduced. Ford believes that 40% is an appropriate level for full size pickup trucks because the
higher weight of such vehicles and rear wheel braking stability constraints will limit braking
energy recovery potential. In addition, wheel-to-traction motor losses will be larger for feasible
full size pick-up truck strong hybrid system architectures compared with smaller front wheel
drive passenger cars. We also believe setting the fedrive metric at 10% should allow all
applicable strong hybrids to achieve the credit, but would prevent any mild hybrid from being
able to meet that target. [EPA-HQ-OAR-2010-0799-9463-Al, p. 23]
Further, from a technical perspective, certain sections of the proposed regulation were written in
an inconsistent manner. 40 CFR § 600.116-12(c)(3)(ii) and (iii) reference a confusing mix of
incompatible units (e.g. "... current in Watt hours...""... .the total energy recovered by the
hybrid battery system, in kilowatt hours, is the sum of the positive current values..."). The
equation given for dSOC is also incorrect. The equation as shown represents change in energy,
not state of charge. Further, battery current in A is measured directly in the test, not state of
charge (SOC). [EPA-HQ-OAR-2010-0799-9463-Al, p. 23]
To correct this, we recommend revising 40 CFR 600.116-12(c)(3)(ii) to specify clearly that the
recovered braking energy should be determined from an integration of the battery charge power
during decelerations over the course of the drive cycle where the battery charge power is the
product of measured current and voltage at the battery terminals, i.e.: [See calculation on p. 23 of
Docket number [EPA-HQ-OAR-2010-0799-9463-Al]
In addition, for nominal voltage, Ford requests that the definition of "nominal" be published
within the regulations to avoid confusion and the usage of differing methodologies for its
determination. [EPA-HQ-OAR-2010-0799-9463-Al, p. 23]
As noted above, the specific technical details of the voltage and current measurements and the
subsequent calculations with consistent units need to be worked out with appropriate industry
and EPA technical experts. The goal will be to define test procedure specifications and
regulatory language for determining the recovered braking energy that are clear, accurate, and
consistent with previous hybrid procedural guidance (e.g. SAE J1711, Part 86, Part 600). Ford
plans to discuss these recommendations with the agencies in more detail and would be happy to
5-16
-------
Advanced Technology Credits for Full-Size Pickup Trucks
provide additional input to help develop the procedure and appropriate metrics for this important
regulatory flexibility. [EPA-HQ-OAR-2010-0799-9463-Al, p. 23]
• Performance Based Incentives: Other technologies are available beyond hybridization to
provide game changing greenhouse gas reduction and fuel economy improvement, for
full-size pick-up trucks. The performance based incentive offers a technology neutral
alternative to pursue these other strategies. The provision of the 5 model year carry-over
of the credit will encourage earlier adoption of these technologies. [EPA-HQ-OAR-2010-
0799-9463-A1, p. 23]
• Incentive Levels: The proposed incentive levels are aligned with the anticipated
development and implementation costs, as well as the expected benefits, associated with
implementing game-changing technologies on the full-size pick-up trucks. [EPA-HQ-
OAR-2010-0799-9463-A1, p. 24]
• Minimum Penetration Thresholds: The thresholds proposed pose a significant concern.
The intent of the credit is to drive advanced technologies that are typically more
challenging in heavy truck applications, giving manufacturers the opportunity to gain
experience with these applications and giving consumers the chance to become more
accustomed to certain advanced technologies in pickup trucks. As these are achieved, the
expectation is that the technology penetrations will increase and high fuel efficiency can
be affordably implemented amongst the heavier trucks. [EPA-HQ-OAR-2010-0799-
9463-A1, p. 24]
However, the aggressive, minimum penetration rates actually thwart that attempt. First, because
significant early investment is required to develop and implement the "game changing
technologies", manufacturers will need the certainty that the credit will be achievable when the
product goes to market. The uncertainty of the market acceptance, and affordability of the
subsequent products make it difficult, if not impossible, to establish the necessary assurance that
there will be a return on investment. If, for example, we plan on a 10% market penetration of full
size hybrid pick-up trucks, but external conditions result in a 9% acceptance rate, our investment
will not have yielded the anticipated credit and could threaten an otherwise compliant
strategy. [EPA-HQ-OAR-2010-0799-9463-Al, p. 24]
Similarly, the aggressive year over year increases in the fleet thresholds for mild hybrids and
performance based technologies do not align with typical product plans and strategies. For
example, a particular truck platform/engine may be better suited for the application of the game
changing technology, but requiring large year over year volume increases would require those
same technologies applied to a broader range of products - some or many of which may not be
suited to those particular advanced technologies. Again, without assurance that the credits can be
achieved, the decision to proceed with the development of these game changing technologies
may not be supportable in a sustainable business strategy. [EPA-HQ-OAR-2010-0799-9463-Al,
p. 24]
Organization: General Motors Company
5-17
-------
EPA Response to Comments
GM supports the proposed methodology to incentivize hybridization of pickup trucks. Additional
supporting information and some technical suggestions are provided in the Appendix of these
comments. [EPA-HQ-OAR-2010-0799-9465-A1, p. 3]
Pickup Truck Credits
General Motors supports the agencies' proposal to provide additional "game changing
technology" credits for pickup trucks. We agree with the agencies' assessment, as noted in the
Technical Support Document, that the proposed standards are most challenging to the larger
trucks. Consumers use these vehicles for a wide variety of work purposes and expect them to
provide durability and reliable towing and hauling capability. [EPA-HQ-OAR-2010-0799-9465-
Al,p.6]
Weight-based vehicle attributes such as payload and towing capability are key among the
parameters that characterize differences in the design of these work vehicles, as well as
differences in how the vehicles will be utilized. Vehicles with towing capability generally have
increased aerodynamic drag caused by a modified frontal area, increased rolling resistance, and a
heavier frame and suspension to support this additional capability. Manufacturers are faced with
the challenge of applying technologies to significantly improve fuel economy without sacrificing
the utility required by our customers. The incentives proposed by the agencies will encourage the
development of innovative and more expensive technologies, to achieve breakthroughs in fuel
consumption improvement on these products. These credits are consistent with the agencies'
objectives to foster new and cost-effective technologies to achieve environmental
benefits. [EPA-HQ-OAR-2010-0799-9465-A1, p. 6]
Pickup Truck Box Definition
As discussed in the draft Joint TSD (Section 5.3.1) as well as the Section III of the NPRM, EPA
is seeking comment on expanding the scope of the hybridization credit to slightly smaller
pickups (with a minimum distance between the wheel wells of 42 inches), provided they have the
towing capabilities of the larger full-size pickups (for example a minimum towing capacity of
6,000 pounds). GM agrees with EPA that this could incentivize hybridization on pickups which
offer much of the utility of the larger pickups, but overall have lower CC>2 emissions. GM agrees
that providing an advanced technology incentive credit for a slightly smaller boxed, but greater
towing capacity vehicle, would promote the overall objective of the proposed standards. [EPA-
HQ-OAR-2010-0799-9465-A1, p. 6]
Pickup Truck Utility Definition
The current proposal for towing capability and payload capability include the key parameters to
define a work vehicle and are appropriate. While it is difficult to forecast future customer needs
and expectations for vehicles that we will be building 13 years from now, GM supports the
agencies reliance upon utility-adding features such as towing or payload capability and agrees
with the agency's direction to set these thresholds at a level representing significant utility
capability. Further, we believe that the methodology for calculating the appropriate parameters
5-18
-------
Advanced Technology Credits for Full-Size Pickup Trucks
should be tied to SAE J2807. It is also appropriate for these parameters to be evaluated at the
mid-term review. [EPA-HQ-OAR-2010-0799-9465-A1, p. 6]
Hybrid Electric Vehicle Pickup Truck Definition
GM supports the proposed hybrid system definitions for both mild and strong HEV pickup
trucks. We believe they are technically sound and reasonable. [EPA-HQ-OAR-2010-0799-9465-
Al,p.7]
Minimum penetration thresholds
The purpose of the "game changing" incentive provisions in the proposed rule is to encourage
early introduction of advanced technologies. However, the proposed minimum volume
thresholds for mild hybrid incentives are overly aggressive and may well significantly out-pace
market demand for these technologies. The proposed minimum penetration rates for mild
hybridization are not aligned with a historic rate of customer acceptance of any new and/or
advanced technology. An alternative minimum penetration rate for mild hybrid incentives, which
is still quite aggressive, but more respectful of historic technology penetration phase-in rates, is
that which EPA proposed for the performance based incentives in Section II. F. 3 of the proposal
on page 74,945. [EPA-HQ-OAR-2010-0799-9465-A1, p. 7]
GM recommends that the agencies harmonize the mild hybrid incentive rates with those
proposed for the performance based incentives. Further, GM recommends that both the incentive
level and the appropriate penetration rates be evaluated at the mid-term review. [EPA-HQ-OAR-
2010-0799-9465-A1, p. 7]
Organization: Honeywell Transportation Systems
The agencies have proposed various incentive programs. Credits for hybridizing full-size pickup
trucks are also proposed. The truck program also includes an incentive applicable to full-size
pickup trucks where a credit of either 10 g/m (0.001125 gal/m) or 20 g/m (0.002250 gal/m)
applies to those vehicles achieving 15 percent or 20 percent better CC>2 performance than their
footprint based target once a fleet penetration target is reached. [EP A-HQ-OAR-2010-0799-
9474-A1, pp.4-5]
Should the agencies finalize any of the proposed incentives for electric drivetrains, the agencies
should also include an incentive for ICE vehicles that achieve substantially better CO2
performance than their footprint based target as measured by the fuel economy test cycles. For
purposes of this incentive, Honeywell suggests that micro-hybrid technology such as start/stop
technology not preclude application of the incentive since that technology is available for an off-
cycle credit regardless of the applicable drivetrain.4 The agencies have offered as much as 10
g/m for adding off-cycle technologies to vehicles. An OEM should similarly be able to obtain 5
or 10 g/m (and the equivalent value in the CAFE program) for ICE vehicles that perform 15
percent or 20 percent better than their applicable footprint-based target. [EP A-HQ-OAR-2010-
0799-9474-A1, p.5]
5-19
-------
EPA Response to Comments
An incentive for high performing ICE vehicles would encourage manufacturers to improve their
vehicles beyond what is necessary for compliance alone and would help to detract from any
reliance on the EV credit multipliers for fleetwide compliance. In addition, further improvements
made in an effort to gain these credits can proliferate beyond the individual vehicle and, as a
result, improve the performance of the fleet overall. [EPA-HQ-OAR-2010-0799-9474-A1, p.5]
The performance credit proposed for full-size pickup trucks presents a model to promote
technology neutrality in the remainder of the fleet as well. [EPA-HQ-OAR-2010-0799-9474- Al,
p.5]
Organization: Hyundai America Technical Center
The agencies have provided two incentives for full size pick-up trucks recognizing it will be
challenging for manufacturers of these vehicles to meet the proposed targets and because they
want to incentivize 'game-changing' technologies. One is a technology-based CO2/mpg credit for
manufacturers that hybridize full-size pick-ups. The other is a performance-based CO2/mpg
credit for full size pick-up trucks that exceed their applicable target. Hyundai supports
technology-neutral and performance-based incentives for large pick-up trucks. However,
Hyundai questions the need for both types of incentives as we believe the performance-based
incentives achieve the same objective as hybridization incentives. Additionally, Hyundai asks
that the agencies consider extending the performance-based incentives for pick-up trucks to all
classes of vehicles. If the agency truly wants to incentivize performance and 'game changing'
technologies, it makes sense that the agency would support game-changing technology for any
class of vehicle. [EPA-HQ-OAR-2010-0799-9547-A1, p.3]
Starting in MY 2017, if a full-size pickup truck achieves either a 15 or 20% fuel efficiency/GHG
improvement, the agencies will provide credits equivalent to approximately 2 mpg or 4 mpg,
respectively. The 4 mpg credit would be available from MY 2017 through 2025 as long as the
fuel efficiency of the first year is maintained. In addition to maintaining the first year's fuel
efficiency over the entire nine year period in order to be eligible, Hyundai suggests that the
agencies also consider the possibility of fuel efficiency/GHG improvement during that period.
(The current proposal requires only increased penetration rates of the fuel efficiency/GHG
improvement for a model) Additionally, Hyundai notes that if automakers are capable of
exceeding large truck fuel efficiency targets by 15 or 20%, this will be valuable information to
the agencies at the time of the mid-term review. [EPA-HQ-OAR-2010-0799-9547-A1, p.3]
Finally, while we support performance-based incentives, we do acknowledge that it is possible
that these incentives could shift the fleet mix toward the full-size truck segment, thus reducing
the overall benefits of the proposed requirements. [EPA-HQ-OAR-2010-0799-9547-A1, p.3]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 173.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 23.]
5-20
-------
Advanced Technology Credits for Full-Size Pickup Trucks
Others are improving the fuel efficiency of cargo-carrying larger pickup trucks, and the agency is
providing incentives to provide that technology.
Organization: International Council on Clean Transportation (ICCT)
14. Similarly, the full-size pickup truck credits also violate the principle that efficiency and
greenhouse gas standards should be technology neutral, and reduce the benefits from the rule. As
a minimum, the credits should only be given if the sales targets are met each year and the credits
should be phased out in the final rule. [EPA-HQ-OAR-2010-0799-9512-A1, p. 4]
15. Full-size pickups have been defined by the ability to fit four foot wide construction materials
between the wheel wells at least since the introduction of the F-series pickup in 1948. The full-
size pickup truck credits should not be expanded to pickups with less than 48 inches wheelhouse
width. [EPA-HQ-OAR-2010-0799-9512-A1, p. 4]
14) Pickup Truck Credits
A second type of technology-specific bonus credit currently in the proposed rule applies to full-
size pickup trucks. For the same reasons we expressed in the last section on upstream credits, the
ICCT encourage US EPA to eliminate the proposed bonus credits for pickup trucks. [EPA-HQ-
OAR-2010-0799-9512-A1, p. 35]
The NPRM proposes two types of pick-up bonus credits. First, the NPRM proposes a bonus
credit of 10 g/mile for each full-sized pickup truck that is either equipped with mild hybrid
technology, or achieves an emission rate 15% better than the standard in any year from MY2017
to MY2021 (assuming minimum fleet deployment rates are met). Second, the NPRM proposes a
bonus credit of 20 g/mile for each full sized pickup that is either equipped with strong hybrid
technology, or achieves an emission rate 20% better than the standard in any year (assuming
certain fleet deployment rates are achieved). [EPA-HQ-OAR-2010-0799-9512-A1, p. 35]
These proposed credits are not related to any additional fuel or CO2 reductions and could hinder,
rather than promote, additional technology advancement for two reasons. First, there is no
inherent reason why hybrid systems for pickup trucks would be different from hybrid systems for
other vehicles. Even if hybrid development proceeded initially on other vehicles, it could easily
be spread to pickup trucks when it is ready. In fact, Toyota and Ford have already announced a
joint venture to develop hybrid systems for pickup trucks.65 [EPA-HQ-OAR-2010-0799-9512-
Al,p.35]
Second, OEMs could use the bonus credit to delay introducing this technology on other models
and/or delay introduction of stronger hybrids, zero tailpipe emission vehicles, and other superior
technologies. In addition, once a vehicle qualifies in a given year, future production of the model
can also qualify for the 10 g/mile credit up until 2021, even as the expected benefit over the
standard shrinks toward zero. [EPA-HQ-OAR-2010-0799-9512-A1, p. 35]
Technology-neutral standards, without the 10 g/mile and 20 g/mile pick-up credits, would best
achieve the valuable benefits of this rulemaking. [EPA-HQ-OAR-2010-0799-9512-A1, p. 35]
5-21
-------
EPA Response to Comments
As a minimum, OEMs should be required to achieve a performance standard of 15% (10 g/mile
credit) or 20% (20 g/mile credit) better than the compliance curve for a given model in each year
that the credit is awarded to that model. In addition, the pickup truck credits should be phased
out in the final rule and not be allowed to continue indefinitely. [EP A-HQ-OAR-2010-0799-
9512-Al,p. 36]
15) Pick-up Truck Definition
For the purposes of the full size pickup truck hybrid technology incentive credit or the full size
pickup truck performance-based incentive credit, EPA is seeking comment on expanding the
definition of a full-size truck by reducing the minimum wheelhouse width requirement from 48
inches to a value around 42 inches, provided the vehicle is able to tow at least 6,000 Ibs. Note
that this is 1,000 Ibs higher than the requirement for 48 inch wide pickup trucks. [EPA-HQ-
OAR-2010-0799-9512-A1, p. 36]
It is inappropriate to expand the definition of full size pickup trucks to include trucks with less
than 48 inches between the wheelhouse. The ability to haul standard four foot wide building
sheets, such as plywood and drywall, between the wheelhouse has been the marketing definition
of a full size pickup at least since the introduction of the F-series pickup in 1948. Reducing the
wheelhouse width to 42 includes will allow virtually all pickup trucks to qualify for the artificial
pickup truck credits, further distorting technology requirements and reducing the benefits of the
rule. [EPA-HQ-OAR-2010-0799-9512-A1, p. 36]
ICCT strongly opposes expansion of the full size pickup credits to pickups with less than 48
inches wheelhouse width. [EPA-HQ-OAR-2010-0799-9512-A1, p. 36]
65 http://www.nytimes.com/2011108123IbusinessIford-and-toyota-to-work-together-on-
hybridtrucks.html
Organization: Marz, Loren C.
However, I do not support the 'Incentives for Advanced Technologies Including Hybridization
for Full-Size Pick-Up Trucks' unless diesel technology is also included in some fashion.
[NHTSA-2010-0131-0213-A1, p.l]
Organization: Mercedes-Benz USA, LLC
• DAG supports credits applicable to the hybridization of vehicles with footprints less than 40
square feet. Additional credit opportunities would provide significant assistance in overcoming
the cost-benefit barriers to investment in hybrid powertrains in this market segment. [EPA-HQ-
OAR-2010-0799-9483-A1, p. 2]
DAG proposes that EPA provide a further credit to assist manufacturers in hybridizing smaller
vehicles, i.e., those 40 square feet or less. This category would currently include approximately
5-22
-------
Advanced Technology Credits for Full-Size Pickup Trucks
9Q
14 vehicles, including the smart car, the Mini Cooper, the Ford Fiesta and the Toyota iQ. Only
Honda is offering hybrid vehicles in this size category.30 [EPA-HQ-OAR-2010-0799-9483-A1,
p.A-15]
Vehicles within this category generally achieve EPA-combined fuel economy in the range of 30-
35 mpg, primarily by virtue of their size and weight. In comparison, however, hybridization is
more cost-effective for vehicles in larger segments. Larger vehicles with hybrid engines, such as
the Prius and the Honda Civic hybrid, achieve substantially greater EPA-combined fuel
economy, in the range of 40-50 mpg. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-15]
For small-size cars, however, the barriers to hybridization include architecture and cost
impediments to hybridizing smaller vehicles.31 Indeed, press reports indicate that while
companies have explored hybridizing in this category; as of yet, however, only Honda has thus
far decided to offer hybrid vehicles in this segment. The vast majority of companies appear to
have determined that it is not commercially feasible to hybridize in this category. [EPA-HQ-
OAR-2010-0799-9483-A1, p. A-15]
Hybridizing this market segment, however, could garner significant benefits. The fuel
efficiencies of smaller vehicles are generally associated with steady state driving, mostly on
highways and in rural areas. The power-to-weight ratio of vehicles in this class are typically 15-
20% worse than the next larger vehicle class. As a result, fuel efficiency in fact suffers in smaller
vehicles when driven in urban settings because in that setting they are being driven outside their
most fuel-efficient envelopes. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-15]
Urban city modes tend to impose greater transient demands on the engine. On urban
expressways, extended higher-rpm acceleration is often required. Hybrid vehicles offer the
opportunity to enhance fuel efficiency by supplanting, with hybrid propulsion, the power
required for acceleration which would otherwise occur at a less than optimum efficiency. Outside
of urban areas, the hybrid propulsion can serve as a range extender during steady state cruising to
supply power at times, such as long grades, that would otherwise require the engine to operate at
less than optimal fuel consumption. As a result, hybridizing smaller vehicles would offer
substantial fuel efficiency gains and CO2 reductions while providing enhanced consumer
functionality in both urban and highway settings. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-15]
DAG proposes a credit of 10 g/m, consistent with the credit proposed for hybridizing larger
trucks, for hybrid vehicles in this class once a penetration rate of 10% is reached. The application
of a penetration rate recognizes that there may be individual companies that are able to invest in
particular models, but that for most manufacturers investment in this segment is not feasible or
likely to provide enough benefit to justify the costs. A 30% penetration rate ensures that the
incentive is in fact encouraging investment. A substantially higher penetration rate requirement
would render the incentive infeasible. [EPA-HQ-OAR-2010-0799-9483-A1, pp. A-15-A-16]
5-23
-------
EPA Response to Comments
29 The category would also include the Chevrolet Aveo, the Fiat 500, the Toyota Yaris, the
Mazda2, the Honda Fit, the Hyundai Accent, the Kia Rio, the Ford Fiesta, the Scion xD and the
Chevrolet Spark 2013. The list is based on EPA's 'small size' car list for MY 2012.
30 Honda currently offers the hybrid CR-Z and has announced plans to offer the hybrid Honda
Fit. We do not believe other companies will follow in the absence of a government production
incentive to do so. The Mitsubishi i-MiEV also falls within this size range, but is a full electric
vehicle.
31 Hybridization in this context should refer to regenerative braking and/or electric motor drive
assist.
Organization: Motor & Equipment Manufacturers Association (MEMA)
Incentives for "game changing" technologies performance for full-size pickup trucks including
hybridization is too limiting and requires revisions. These incentives should not be limited to this
vehicle segment. Also, incentive metrics for hybrids need to be based on vehicle performance,
not architecture; other technical possibilities for full-size pickup truck hybrids should be
considered; and, the penetration rate requirement should be eliminated. [EPA-HQ-OAR-2010-
0799-9478-A1, p.2]
Essentially, any technology that is "game changing," as stated in the NPRM, should qualify for
the same incentives. The quantification of significant improvement is a reasonable definition of
"game changing," and should therefore apply to any technology and vehicle segment. No one
vehicle segment should be the beneficiary of "game-changing" technologies. Such focus on one
segment could also have unintended consequences. As a hypothetical example, if the OEM
concentrates their efforts on full-size pickup trucks and thereby generates a large number of
credits, there is a possibility they may not apply advanced technologies to large SUVs. Instead,
they may use those credits from the pickup trucks to offset their SUVs that do not meet the
standard. Thus, the overall effect on emissions and fuel consumption goes in the wrong direction.
[EPA-HQ-OAR-2010-0799-9478-Al,p.3]
Second, with respect to full-size it is our understanding, that if full-size pick-ups demonstrate a
15 or 20 percent performance improvement pre-MY2017 (i.e. during MYs2014, -15, -16) then
those vehicles would not be eligible to be pulled through as a carry-forward credit in the form of
a full-size pick-up performance improvement credit post-MY2017. Under this scenario, MEMA
asks that the agencies clarify if these full-size pickups would instead be eligible for an early
compliance credit. This important point needs to be clarified primarily because the multiplier for
early credit and the performance improvement credit for this vehicle class would be different
(flat 1 versus 1.5). If these pickups would not be eligible as a performance improvement credit
and carried forward as such, then there may not be as large of an incentive to research, develop,
produce and implement technologies more rapidly. [EPA-HQ-OAR-2010-0799-9478-A1, pp.9-
10]
A. "Game Changing" Technologies Should Apply to All Vehicle Segments [EPA-HQ-OAR-
2010-0799-9478-Al,p.lO]
5-24
-------
Advanced Technology Credits for Full-Size Pickup Trucks
As MEMA stated earlier in Section II, the credits for "game changing" technologies should not
be limited to just full-size pickup trucks. Any technology that is "game changing" should qualify
for the same incentives and have the same hurdles to meet. No one, single segment should be the
beneficiary of "game changing" technologies. For example, systems like Higher Voltage Stop-
Start/Belt Integrated Starter Generator (BISG), can be utilized in other vehicle categories. If
there is a technology that improves any vehicle segment by a given percentage or target
(performance-based criteria) and subsequently the criterion is exceeded, then an incentive/credit
should apply across the board. [EPA-HQ-OAR-2010-0799-9478-A1, p. 10]
By making this change, these "game-changing" technologies can be implemented to other
vehicles, such as large SUVs. In many ways, large SUVs face some of the same challenges as
full-size pickup trucks. It would be prudent for the agencies to treat all vehicle segments equally
so that the rule does not drive certain types of vehicles to be made available to consumers. Such
a constraint not only influences and favors vehicle "winners and losers" and prescribes a
technology pathway, but also influences the offsets for those vehicles that may not meet the
standard. This direction is counter to the intent of the Program's goals. All opportunities to
improve real-world emissions and fuel consumption should not be limited exclusively to any one
vehicle segment. Therefore, MEMA urges the agencies to consider applying "game changing"
performance-based improvements to all vehicle segments and not just full-size pickup trucks.
[EPA-HQ-OAR-2010-0799-9478-Al,p.lO]
B. Mild and Strong Hybrids Should be Based on Vehicle Performance, Not Architecture [EPA-
HQ-OAR-2010-0799-9478-A1, p. 10]
If the agencies will not apply "game changing" technologies to all vehicle segments, MEMA
urges that changes are made to the treatment of mild and strong hybrids in the rule. In the
NPRM, hybrid electric vehicles have been categorized as "mild" or "strong" in a manner based
more on hybrid architecture than on any specific performance definition. There are many
different architectures employed using single, dual, or multiple electric motors performing
various functions including traction drive, power generation (both while driving and braking),
and battery charging. These electric drive systems cover a continuum of power levels. [EPA-HQ-
OAR-2010-0799-9478-A1, p. 10]
In real-world driving, regenerative braking efficiencies can be similar for both mild and strong
hybrids when the driver coasts to a stop. A strong hybrid is capable of a higher regenerative
braking level and the vehicle will coast to stop sooner. Thus, the regenerative braking efficiency
is not a representative metric when classifying mild or strong hybrids. It is recognized that when
following a defined deceleration rate on a specific driving cycle there will be differences in
regenerative braking energy levels between mild and strong hybrids. [EPA-HQ-OAR-2010-
0799-9478-Al,p.lO]
If regenerative braking efficiency is used as a metric for incentives, then vehicle manufacturers
will focus on this and not the goal of maximizing fuel efficiency at an affordable cost. An
architecture that could maximize regenerative braking efficiency and meet the 75 percent
breakpoint is one that uses four-wheel motors. This is unlikely to be used in mass-market
vehicles due to the high cost of implementation. On a full-size pickup truck with rear-wheel
5-25
-------
EPA Response to Comments
drive, optimum regenerative braking could use an electric motor on the front axle, commonly
referred to as a "through-the-road" hybrid. Typical vehicle braking is done with 70 percent on
the front and 30 percent on the rear, which also provides stability under braking. [EPA-HQ-
OAR-2010-0799-9478-A1, p. 11]
Hybrid architectures for large pickup trucks - both mild and strong - more typically provide
electrical boost through the drivetrain to the rear wheels. This configuration is able to employ
regenerative braking on the rear and friction braking on the front to retain vehicle safety and
stability. In this architecture the system is incapable of meeting a 75 percent regenerative braking
efficiency, as defined in the NPRM, whether or not it is a mild or strong hybrid. Drivetrain losses
and engine pumping losses also reduce the amount of recovered energy. [EPA-HQ-OAR-2010-
0799-9478-Al,p.ll]
For these reasons, MEMA urges that the calculated incentive be based on vehicle performance
(i.e. the improvement in fuel efficiency of the hybrid compared to a conventional vehicle) and
using a formula that provides a continuous value that does not require a breakpoint and a
definition of "strong" versus "mild." MEMA further recommends that this incentive is calculated
using the " Autonomie" modeling and simulation program developed by Argonne National
Laboratory. This program is widely recognized for its ability to model different architectures to
determine vehicle performance, including fuel efficiency. [EPA-HQ-OAR-2010-0799-9478-A1,
p.ll]
In this same section, § 86.1866-12 (e) Paragraph (2) (i) and (ii), the proposal defines penetration
rate thresholds for full-size pickup trucks.11 Based on current penetration rates of light-duty
hybrid vehicles of 2.4 percent in 2010 and 2.2 percent in 2011, the proposed threshold
penetration rates are unlikely to be achieved. Further, there is close correlation between the
number of hybrid vehicles sold and the price of gasoline. MEMA recommends that the
penetration rate thresholds be eliminated because these factors are impossible to predict.
Therefore, the credit should be given according to the actual number of vehicles actually
produced. [[EPA-HQ-OAR-2010-0799-9478-A1, pp. 11-12]
Incentives for "game-changing" technologies should available to all vehicle segments, not just
full-size pickup trucks. [EPA-HQ-OAR-2010-0799-9478-A1, p. 13]
Metrics and terminologies for hybrids should be modified. [EPA-HQ-OAR-2010-0799-9478-A1,
p.13]
Organization: National Wildlife Federation (NWF)
NWF supports provisions in the rule that encourage more rapid adoption of the most fuel
efficient technology at scale - especially the incentive for "game changing" technologies for full
size pickup trucks. [EPA-HQ-OAR-2010-0799-9887-A2, p. 4]
In principle, we also support incentives for plug-in hybrid electric and electric vehicle
technology and for real off-cycle CO2 reductions, and we look forward to continuing to work
with automakers, the agencies and consumers to maximize the effectiveness of these credits and
5-26
-------
Advanced Technology Credits for Full-Size Pickup Trucks
other measures which enable rapid adoption of new technology, and to optimize short and long
term emissions impacts. [EPA-HQ-OAR-2010-0799-9887-A2, p. 4] [[This comment can also be
found in Outline Headings 4. and 7.]]
Organization: Natural Resources Defense Council (NRDC)
2. Incentives for Full-Size Pickup Trucks Should Require Wide Scale Technology Deployment
and Phase Out during Model Years 2017-2025
NRDC agrees that the proposed truck incentives should be limited to just full-size pickups.
While full size pickup trucks may often be used for the main purpose of transporting just
passengers, these trucks are the most likely light-duty vehicles to have legitimate non-passenger
applications such as handling large and heavy cargo payloads and/or towing. NRDC believes that
known technologies can be applied to address the payload needs while also significantly
improving fuel efficiency and reducing GHG emissions. However, these technologies only
deserve special incentives if they can be scaled up for widespread application. [EPA-HQ-OAR-
2010-0799-9472-A2, p. 12]
NRDC supports the proposed requirement that manufacturers reach minimum volume levels in
order to be eligible for the full-size pick truck incentives. The minimum volumes require a
commitment from manufacturers for wide scale production and deployment. [EPA-HQ-OAR-
2010-0799-9472-A2, p. 12]
Among the truck incentives being proposed, NRDC appreciates the inclusion of a technology-
neutral, performance-based credit structure. Performance-based targets allow for new innovation
but can also bring uncertainty in the verification of real-world results. Due to the uncertainty,
NRDC supports constraining the credit allowance to truck credit to no more than five
consecutive model years or until emissions increase. [EPA-HQ-OAR-2010-0799-9472-A2, p.
13]
NRDC agrees that vehicles receiving the performance-based credit be prohibited from receiving
hybrid truck credits. [EPA-HQ-OAR-2010-0799-9472-A2, p. 13]
NRDC also agrees that the mild hybrid truck incentive be no more than 10 g/mi. When analyzing
the effectiveness of the mild hybrid technology—which EPA notes has not been done for the
NPRM—EPA should consider reducing the maximum credit available to be consistent with the
analysis. [EPA-HQ-OAR-2010-0799-9472-A2, p. 13]
Organization: NGV America
Advanced Pickup Truck Credits
For 2017-2025, EPA and NHTSA have proposed special credits for pickup trucks. There is a
credit for mild- and also for strong-hybrid pickups, and a separate credit for pickups that are able
to meet prescribed GHG reductions. The description in the proposed rule appears to indicate that
5-27
-------
EPA Response to Comments
hybrid pickups and pickups that satisfy the GHG performance criteria will earn GHG and FE
credits. The descriptions of the incentives contained in the proposals are reprinted here:
As with the HEV-based credit, the performance-based credit/value requires that the technology
be used on a minimum percentage of a manufacturer's full-size pickup trucks. That minimum
percentage for the 10 g/mi GHG credit (equivalent to 0.001125 gal/mi fuel consumption
improvement value) would be 15 percent of a company's full sized pickup production in MY
2017 with a ramp up to at least 40 percent of production in MY 2021.
The minimum percentage for the 20 g/mi credit (equivalent to 0.002250 gal/mi fuel consumption
improvement value) would be 10 percent of a company's full sized pickup production in each
year over the model years 2017-2025.
First, we recognize that pickup trucks are among the most challenging in terms of meeting
aggressive future requirements. As a result, we recommend that the agencies provide the
broadest array of credits for game changing technologies implemented on these vehicles. The
agencies have proposed credits for either hybridizing these vehicles or providing superior
emissions performance. We recommend that the agencies also consider and include additional
credits for natural gas applications on pickup trucks. We would be happy to work with the
agencies to develop credits that fully recognize the benefits that natural gas can provide on these
trucks. We have outlined earlier the types of incentive we believe are necessary and appropriate
to encourage the development and sale of light-duty NGVs.
Second, with respect to the performance-based credits provided for pickup trucks, we offer the
following comments. We agree that all technologies should have the opportunity to earn credits
under this provision, and we expect NGVs will qualify based on the performance levels
proposed. Also, we believe that, if specific credits are provided elsewhere in the rules for NGVs,
that such vehicles, like for gasoline-hybrids, should not earn double credits under those
provisions and also under the pickup truck credit provision. If no additional credits are provided
for NGVs, then they should have the potential to earn credits under this program. Regardless, we
believe that the proposed targets — 10% - 15% of production — for introduction are simply too
high with respect to NGVs, and that EPA and NHTSA should amend the proposal to provide a
lower threshold. We propose that a more reasonable target for NGVs would be tied to
penetration of the commercial and public fleet market as opposed to the overall market for trucks
since NGVs and other alternative fuel vehicles likely will be targeted mostly to fleets during
their initial introduction for a number of reasons. [EPA-HQ-OAR-2010-0799-9461-A1, pp. 13-
14]
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
NESCAUM supports EPA's proposal to include flexibility mechanisms to provide manufacturers
with the means to incorporate a range of technologies to meet the requirements of the proposed
standards. [EPA-HQ-OAR-2010-0799-9476-A1, p. 2]
Organization: Toyota Motor North America
5-28
-------
Advanced Technology Credits for Full-Size Pickup Trucks
The agencies have proposed to provide 'credits' for deployment of hybrid electric technology on
full-size pick-up trucks (FSPUs). Toyota appreciates and supports the agencies' objective to
promote hybrid electric technology in vehicle segments that have proven difficult to penetrate,
but numerous market segments currently have a lower penetration rate of hybrid electric
technology than does the FSPU segment. Therefore, limiting the proposed credits to FSPUs
appears arbitrary. [EPA-HQ-OAR-2010-0799-9586-A1, p.2]
Full Size Pick Up (FSPU) Credits [EPA-HQ-OAR-2010-0799-9586-A1, p. 14]
The agencies have proposed incentives for the adoption of'game changing' technologies that
could provide significant environmental and energy benefits for full-size pick-up trucks (FSPUs)
while preserving their utility characteristics. Two specific credit incentives are proposed; (1) for
FSPUs that perform 15-20 percent better than the vehicle's CAFEI CC>2 attribute targets
regardless of the technology used on the vehicle- and (2) for FSPUs using hybrid technology
once certain sales thresholds are met. As proposed, a given FSPU could not qualify for both of
these credits. [EPA-HQ-OAR-2010-0799-9586-A1, pp.14-15]
Toyota appreciates the challenge of reducing emissions and improving the fuel economy of
FSPUs. However, as explained in more detail below, Toyota has concerns about both of these
provisions. [EPA-HQ-OAR-2010-0799-9586-A1, p. 15]
Credit for FSPUs Achieving 15-20 Percent Better than Target [EPA-HQ-OAR-2010-0799-95 86-
Al,p.l5]
The agencies have proposed a variety of reasonable and necessary flexibilities related to
advanced technology vehicles that span all vehicle segments, including FSPUs (for example,
sales multipliers for plug-in hybrids, electric vehicles and fuel cells). The agencies have also
proposed credits for FSPU hybrids (discussed below). Therefore, it remains unclear to Toyota
why the credit provision for 15-20 percent above target is needed for the FSPU segment. Toyota
requests that, based on the myriad other proposed flexibilities available for this segment, and the
generally less stringent target curves proposed for large trucks, the agencies drop this provision.
[EPA-HQ-OAR-2010-0799-9586-Al,p.l5]
Scope of the FSPU Hybrid Technology Provision [EPA-HQ-OAR-2010-0799-9586-A1, p.15]
The agencies appear to have arbitrarily limited which trucks are eligible for hybrid credits. While
Toyota appreciates and supports the agencies' objective to promote hybrid technology in vehicle
segments that have proven difficult to penetrate, numerous market segments currently have a
lower penetration rate of hybrids than does the FSPU segment. According to EPA-published data
for 2010 model year4 shown in Appendix 2, the FSPU segment is not unique in terms of low
hybrid penetration. In fact, a number of car and truck segments have an even lower penetration
than the 'large' pick-up truck segment. Among all truck segments, hybrid share for 2010 model
year was only 1.6 percent industry-wide. Clearly, hybrid penetration is an issue for the entire car
and truck fleet, and particularly so for the truck fleet. Toyota's own data supports this view as
well. For the 2011 model year, hybrids comprise 1.5 percent of Toyota's entire light-duty truck
5-29
-------
EPA Response to Comments
product line, which is an order of magnitude less than the 15.6 percent penetration rate for
Toyota passenger cars during the same model year. [EPA-HQ-OAR-2010-0799-9586-A1, p. 15]
Toyota requests that the credit for hybrid FSPUs be extended to all truck segments.
Notwithstanding this request, the comments below address specific details of the proposed FSPU
hybrid credit. [EPA-HQ-OAR-2010-0799-9586-A1, p. 15]
Minimum Sales Volume Threshold for FSPU Hybrid Credits [EPA-HQ-OAR-2010-0799-9586-
Al,p.l5]
The agencies are proposing minimum sales percentages of a manufacturer's full-size pick-ups be
equipped with hybrid technology before credits can be generated. These minimum sales
percentages vary by model year, and whether the hybrid system is 'strong' or 'mild'. As explained
previously for off-cycle technology credits, arbitrary sales thresholds, absent market demand,
will do nothing to speed deployment. The likelihood of falling short of the sales thresholds are
far greater for hybrids compared to off-cycle technologies given the higher cost of hybrid
technology and the higher minimum sales percentages required. We again refer the agencies to
Appendix 1, which contains analysis of technology penetration rates. For additional reference,
Toyota has only reached 1.5 percent hybrid penetration rate for trucks after nearly 8 years of
marketing hybrid trucks in the U.S. [EPA-HQ-OAR-2010-0799-9586-A1, pp.15-16]
We understand the agencies' goal for the thresholds is to reward meaningful hybrid technology
deployment. However, we are concerned that thresholds will be counterproductive to achieving
this goal. In fact, a maximum threshold appears more appropriate than the proposed minimums
because commercially viable technologies eventually attain a level of market acceptance where
incentives are no longer necessary. The proposed minimum thresholds would guarantee credits
for extremely high penetration rates that clearly no longer warrant incentives. [EPA-HQ-OAR-
2010-0799-9586-Al,p.l6]
Hybrid Credit Technical Issues [EPA-HQ-OAR-2010-0799-9586-A1, p. 16]
To ensure that participating manufacturers employ hybrid technology that meets the intent
behind the incentives, EPA is proposing definitions of'mild' and 'strong' hybrid. Toyota supports
EPA's intention to distinguish between strong and mild hybrids for the purpose of awarding
FSPU credits. After careful analysis of EPA's metrics being proposed to define strong and mild
hybrids, Toyota would like to offer the following comments based on our hybrid experience and
expertise which would enhance the technical accuracy and robustness of this proposed FSPU
provision. [EPA-HQ-OAR-2010-0799-9586-A1, p. 16]
(i) Total Braking Energy (reference Chapter 5 of the TSD, section 5.3.3.2). The equation for
determining Ebrake_max is incorrect. Specifically, EPA is proposing: [EPA-HQ-OAR-2010-
0799-9586-A1, p. 16] [There is an associated figure, please refer to EPA-HQ-OAR-2010-0799-
9586-Al,p.l6]
Toyota recommends the following revision: [EPA-HQ-OAR-2010-0799-9586-A1, p. 17] [There
is an associated figure, please refer to EPA-HQ-OAR-2010-0799-9586-A1, p. 17]
5-30
-------
Advanced Technology Credits for Full-Size Pickup Trucks
(ii) Measurement of Recovered Braking Energy (reference TSD, section 5.3.3.1). EPA proposes
to incorporate a metric - the total percentage of available vehicle braking energy recovered over
the test cycle (T]recovery) - as a way to define levels of hybrid vehicles. Toyota agrees that this
metric can be a way to simplify the characterization of a hybrid as a 'mild' or 'strong' hybrid
because batteries and motors will increase in scale to recover the relative braking energy. EPA's
metric involves calculating the available braking energy on the FTP city cycle and comparing the
actual energy recovered by the vehicle during FTP city cycle testing. The measured energy into
the battery is divided into the total calculated braking energy to determine if the vehicle is a mild
or strong hybrid. For a mild hybrid, EPA is proposing that the recovered energy must be greater
than 15 percent and less than 75 percent of the calculated available braking energy. For a strong
hybrid, EPA is proposing that the recovered braking energy must be greater than 75 percent of
the calculated available braking energy. Toyota is providing specific comments on three
particular aspects of the metric being proposed by EPA: [EPA-HQ-OAR-2010-0799-9586-A1,
p. 17] [There is an associated figure, please refer to EPA-HQ-OAR-2010-0799-9586-A1, p. 17]
(A) EPA's definition of the Erecovered term does not match the equation. Toyota believes that
Erecovered should be calculated based on charging energy recovered only when the vehicle is in
deceleration mode. As is currently proposed, EPA's method incorrectly includes battery charge
energy supplied by the engine. Toyota recommends that EPA revise the methodology to include
the condition of'onlv during deceleration' for the Erecovered calculation. [EPA-HQ-OAR-2010-
0799-9586-A1, pp. 17-18]
(B) EPA's equation for Ebrake_max is calculated by integrating required braking power at each
point in the FTP test cycle, over the entire test. For technical accuracy, Toyota recommends that
Ebrake_max be calculated from the measured vehicle speed trace instead. [EPA-HQ-OAR-2010-
0799-9586-Al,p.l8]
(C) In concert with adoption of the technical change recommended in paragraph (A), EPA's
strong hybrid threshold of 75 percent would need to be revised because this threshold would be
too high to be met only by battery charging during regenerative braking. Toyota's assessment of
future concept hybrid systems shows an energy recovery efficiency threshold (TVecovery) to be
within the range of 35- 48 percent. Toyota's analysis shows that 1 Irecovery becomes less as the
vehicle weight increases. This reduction in recovery efficiency is because the traction motor
cannot absorb all of the braking energy and the wheel-to-motor losses will increase for heavier
vehicles. As a result, Toyota recommends that an appropriate threshold for 1 Irecovery >40
percent. [EPA-HQ-OAR-2010-0799-9586-A1, p. 18] [There is an associated figure, please refer
to EPA-HQ-OAR-2010-0799-9586-A1, p.18]
(iii) Additional Metric Needed. Toyota remains concerned that the proposed llrecovery metric
and associated thresholds would not be sufficiently robust in distinguishing between strong and
mild hybrids. To clearly identify a strong hybrid system, Toyota supports inclusion of an
additional metric, fedrive, to clearly distinguish between strong and mild hybrids. The feddve
metric would represent the amount of tractive effort a vehicle can achieve with electric drive
only. A description of this metric and appropriate threshold value is provided below. [EPA-HQ-
OAR-2010-0799-9586-A1, pp.18-19] [There is an associated figure, please refer to EPA-HQ-
OAR-2010-0799-9586-A1, p. 19]
5-31
-------
EPA Response to Comments
Organization: U.S. Coalition for Advanced Diesel Cars
The Coalition embraces the Obama Administration's support for investments in technologies
that, in the future, will lead to the wide-spread adoption of new "Game-Changing" technologies.
Still, these technologies, will not significantly penetrate the marketplace until well beyond 2025 -
the timeline for this rulemaking. This is why the Coalition strongly urges EPA and NHTSA to
focus more on incentivizing "Game-Changing" fuel savings based on the ability of automakers
to incorporate as many existing and developing technologies that can have the broadest impact
for fuel economy for model years 2017 and 2025. [NHTSA-2010-0131-0246-A1, p.2]
Only a performance-based system for awarding credits to manufacturers - specifically with
regard to full-sized pickup trucks - that is consistent across all technologies; [NHTSA-2010-
0131-0246-Al,p.2]
The Coalition opposes EPA and NHTSA's intention to offer manufacturers incentives for hybrid
technology utilized in the full-sized pickup truck market. The Coalition supports a single
performance-based credit and argues that a separate hybrid credit is unnecessary and poorly
conceived. [NHTSA-2010-0131-0246-A1, p.3]
Specifically, incentives, in the form of credits, will be offered in one of two ways - to
manufacturers that produce hybrid electric vehicle (HEV) pickup trucks and to those that
produce pickup trucks that meet a performance based standard. As stated earlier, the Coalition
opposes any credit that is used to incentivize a particular technology in a specific vehicle class as
opposed to incentives based solely on fuel economy increases and GHG emission reductions.
[NHTSA-2010-0131-0246-A1, p.3]
In its current form, the hybrid full-sized pickup truck credit should be revised or eliminated from
the Final Rule for the following reasons. [NHTSA-2010-0131-0246-A1, p.3]
GHG Reduction Target for Full-Sized Pickup Trucks' HEV Credit: The NPRM's description of
the HEV pickup truck credit does not carry any CO2 reduction requirements whatsoever.
Although the agency outlines the dimensions of a pickup truck that can qualify for the credit, to
the NPRM does not mention the volume of CO2 or gallons of fuel these HEV trucks are
supposed to save for the consumer and for the nation. Furthermore, at no point in the NPRM or
the Draft Joint Technical Standards Document do the agencies support the need for a separate
HEV incentive from the Performance Based Incentive. [NHTSA-2010-0131-0246-A1, p.3]
The Credit Does Not Include a Minimum Fuel Economy Threshold Provisions: While EPA
specifies the amount of recovered break-energy these HEV trucks must achieve, EPA does not
specify how that recovered energy should be used to benefit the environment or reduce national
petroleum consumption. The proposed rule is void of any language that communicates anti-
backsliding provisions that were once at the core of EPA's mobile source rulemaking. Under the
language of this proposal, a "horsepower war" in the full size pickup truck market could emerge
as long as these trucks carry a battery pack. EPA's authority should be used to ensure reduced
emissions and fuel consumption without ambiguity. [NHTSA-2010-0131-0246-A1, pp.3-4]
5-32
-------
Advanced Technology Credits for Full-Size Pickup Trucks
Larger GHG Footprint and Decreased Fuel Economy: EPA is proposing a 20 g/mile credit for
hybrid pickup trucks without requiring any GHG reduction or fuel economy improvement over
the baseline foot print target. Without prescribing technology performance benefits, EPA's
proposal could incentivize vehicles that undermine, rather than advance, the nation's policy
objectives. As such, the Coalition requests that EPA and NHTSA require qualifying vehicles to
actually reduce CC>2 and petroleum use in the real-world by 20 percent below the footprint target.
[NHTSA-2010-0131-0246-A1, p.4]
Furthermore, the EPA and NHTSA identify the need that these vehicles have for more power
based on traditional towing and hauling needs yet fail to clarify how the traditional drive cycle of
the full-sized pickup truck driver would benefit from the hybridization of these vehicles.
Assuming the need for more towing power and use at highway speeds, these owners will not
enjoy any improved fuel economy or GHG reduction as a result of the hybridization. While other
technologies added to the truck may improve fuel economy at highway speeds, there is no
indication that GHG reductions from the hybrid credit will be "Game-Changing." [NHTSA-
2010-0131-0246-A1, p.4]
As such, the Coalition requests that EPA or NHTSA publish any real-world data that indicates
drivers of full-sized pickup trucks predominately are used in a stop and go driving pattern or that
the credit as offered will be designed to significantly improve fuel economy and GHG emission
reductions at highway speeds. [NHTSA-2010-0131-0246-A1, p.4]
Erasing Market Challenges: EPA states that it intends to utilize "game changing credits" to
overcome market challenges faced by hybrid pickup trucks. The agencies have cited the expense
to bring this technology to the light truck segment. These credits, however, cannot guarantee
demand. Hybrid powertrains have been available on pickup trucks in the U.S. market since MY
2005. Since that time, some hybrid variants have been dropped by manufacturers due to the lack
of customer demand. By 2011, in fact, less than one-quarter of a percent (0.23%) of customers
selected the hybrid pickup truck option where it was available as an option. In contrast,
depending on the model, 15% to 50% of customers selected a diesel powertrain when such an
option was offered. [NHTSA-2010-0131-0246-A1, p.4]
The Coalition does not believe that offering the full-sized pickup hybrid trucks a credit will
overcome the enormous market challenges that these vehicles have faced for the last 7 Model
Years. We see as evidence that even offering a $7,500 credit has not helped the electric vehicle
market hit predicted sales targets. The Coalition urges EPA and NHTSA to focus solely on a
performance based standard aimed at encouraging manufacturers to add all advanced
technologies to this segment. A technology neutral credit will lead to faster adoption and greater
fuel economy gains. [NHTSA-2010-0131-0246-A1, p.4]
Small Pickup Truck Market: The agencies have requested comments on expanding the scope of
its performance credits to include somewhat smaller pickup trucks. The Coalition strongly
supports expansion of this definition to encourage the broadest possible adoption rates for
advanced, fuel saving technologies in the fleet, but ONLY under the performance-based rules
where the vehicles that the EPA is incentivizing actually reduce emissions and fuel consumption.
[NHTSA-2010-0131-0246-A1, p.5]
5-33
-------
EPA Response to Comments
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 243-246.]
In the NPRM, EPA and NHTSA outline proposals that offer manufacturers incentives to
incorporate game-changing technologies into the full-sized pickup truck market. These
incentives in the form of credits come in two forms. One will provide credits to manufacturers to
produce hybrid electric pickup trucks, another will award credits to manufacturers that produce
pickup trucks that meet a similar performance-based standard.
EPA and NHTSA argue the HEV technology in pickup trucks is an emerging technology that
faces substantial challenges in gaining initial market penetration. The Coalition finds this
argument tenuous on a number of levels. First, the Coalition believes the HEV technology,
which has been on the market for over a decade, is not an emerging technology today, and
certainly will not be an emerging technology in 2017 when these credits are set to go into effect.
To the contrary, light-duty HEV's have been a viable option for a number of consumers,
particularly those who drive in urban conditions. It might be considered an emerging application
of an existing technology, but it certainly cannot be described as an emerging technology almost
20 years of being on the market, which will be the case when this rule goes into effect. In fact,
the GMC Sierra and Chevy Silverado hybrid applications in the truck segment have been on the
market for nearly a decade.
Second, EPA and NHTSA state that because of the substantial cost required to produce full-sized
HEV pickup trucks, automakers have difficulty justifying the investments necessary to produce
these vehicles without a government incentive. The Coalition believes that government
incentives to create a market for specific technologies are the wrong path to achieve fuel
efficiency gains and emissions reductions. Examining consumer acceptance of alternative
vehicle technologies in light-duty vehicles where hybrid technology is already well established
foreshadows the pratfalls of choosing a single technology winner for the full-sized pickup truck
segment on a technology neutral approach that promotes all advanced technologies will achieve
real results.
Despite inquiries to the agencies and with suppliers, we are unaware of any data that
demonstrates that most full-sized pickup truck owners accumulate the majority of miles under
urban conditions and duty cycles. Conversely, these light trucks will be burdened with carrying
the significant weight of the battery technology at highway speeds while using a gasoline or a
diesel-powered engine.
By driving conditions that do not utilize the benefits of hybridization, it is unclear that the fuel
economy gains and emissions reductions have predicted to result from this game-changing
technology are actually attainable.
The Coalition sees no benefit in maintaining a performance-based credit and a separate credit for
full-sized HEV pickup trucks when the latter can, and should, qualify under a strictly
performance-based structure. Instead of sending a strong signal to both manufacturers and
consumers that hybrid trucks represent the best technology option, EPA and NHTSA should
make the case for any technology that meets the aggressive guidelines set forth by the NPRM.
5-34
-------
Advanced Technology Credits for Full-Size Pickup Trucks
Organization: United Automobile Workers (UAW)
The UAW also believes that the agencies are wise to offer an incentivized path for the
application of technologies other than hybridization for large pick-up trucks. This technology-
neutral option offers CC>2 credits and fuel-economy calculation adjustments for vehicles that
substantially over-comply with the applicable footprint-based target. The proposals take
appropriate measures to prohibit double counting the available incentives for large pick-up
trucks. [EPA-HQ-OAR-2010-0799-9563-A2, p.3]
The UAW is especially supportive of EPA and NHTSA's proposed incentives for the addition of
advanced technologies to large pick-up trucks and the proposed performance-based credits for
large pick-ups that significantly exceed the applicable footprint-based target. [EPA-HQ-OAR-
2010-0799-9563-A2, p.3]
We believe the credits proposed by EPA and the fuel-economy calculation adjustments proposed
by NHTSA for significant hybridization of a manufacturer's full-size pick-up fleet are
worthwhile incentives that will quicken the pace of introduction of these advanced technologies
in a market segment that faces unique challenges in improving efficiency while maintaining full
functionality. The proposed incentives are sensible because these technologies can improve
efficiency without compromising functionality, even though they will certainly be expensive in
the early years of the proposed rule. The UAW believes that these incentives will hasten the
transformation of the large pick-up segment, and will ultimately result in a full-size pick-up fleet
that is significantly more efficient much sooner than would be the case without the additional
incentive. [EPA-HQ-OAR-2010-0799-9563-A2, p.3]
Organization: VNG Co (VNG)
Unlike electricity, natural gas is a viable option for the full range of vehicle classes including
larger vehicles like pickups and other light trucks, which have vehicle envelopes that can easily
accommodate CNG tanks. Given that light trucks account for slightly more than half of all US
vehicle sales today (and 60 percent or more of Big Three sales),! 1 light-truck friendly NGV
technology can play a major role in ensuring the 'economic practicability' of these rules. As
defined in the NPRM:
'Economic practicality refers to whether a standard is one 'within the financial capability of the
industry, but not so stringent as to lead to adverse economic consequences, such as a significant
loss of jobs or the unreasonable elimination of consumer choice.'" [EP A-HQ-OAR-2010-0799-
7941-A2, p. 4]
As discussed below, the Agencies have already acknowledged the importance of the pickup truck
segment for meeting this economic practicality criterion with their proposal for special credits to
encourage deployment of'game-changing' technologies in these vehicles. By extension, the
economic practicability of these and future regulations will be greatly enhanced if they provide
appropriate, fair and consistent support for the production of NGVs, which will provide a much-
needed long-term platform for reducing emissions and petroleum consumption for the entire light
truck segment of the market. [EPA-HQ-OAR-2010-0799-7941-A2, p. 4]
5-35
-------
EPA Response to Comments
• Incentives for 'game-changing' GHG-reducing technologies deployed in fullsized pickups could
be a significant benefit to natural gas, which is the most viable alternative fuel for this critical
vehicle segment; [EPA-HQ-OAR-2010-0799-7941-A2, p. 5]
Game-Changing Pickup Truck Credits
VNG understands the challenges that automakers face in terms of achieving the 2025 standards
for full-size pickup trucks and we strongly support the Agencies' decision to provide special
incentives to facilitate the adoption of advanced technologies in this segment. Moreover, we
believe that the technology-neutral 'performance-based' credit, based on GHG emission
reductions, is an important option for automakers that could help facilitate the production of
significant numbers of natural gas-fueled pickups. [EPA-HQ-OAR-2010-0799-7941-A2, p. 7]
With tailpipe GHG emission reductions from CNG of 24 percent compared to gasoline,23 both
dedicated and dual-fuel NGV pickups with significant range (assuming use of utility factor
methodology) are likely to qualify for the 20 percent GHG reduction threshold. Moreover, unlike
plug-in electric capability, which is not expected to be achievable for this segment due to
'tradeoffs in terms of cost, electric range, and utility," dual-fuel natural gas capability is
particularly well suited to pickups due to the relative ease of incorporating CNG tanks in large
vehicle envelopes. Indeed, both GM and Chrysler have already announced plans to produce
NGV pickup trucks this year.25, 26 Due to their significant fuel use and popularity as fleet
vehicles, the pickup segment can be the base market for the broader development of NGVs.
[EPA-HQ-OAR-2010-0799-7941-A2, p. 7]
Given the importance of the pickup truck segment to maintaining a full range of consumer
choice, as well as the desirability of moving as many vehicles as possible towards the use of low-
emission, alternative fuels, VNG supports the Agencies' consideration of expanding eligibility
for these credits to include smaller pickup trucks with similar towing capacity. [EPA-HQ-OAR-
2010-0799-7941-A2, p. 8]
We also believe that the minimum penetration thresholds (of 10 percent for the 20 g/mi credit
and 15-40 percent for the 10 g/mi credit) for all of the game-changing pickup credits should be
eliminated. Automakers should be encouraged to produce even limited quantities of these
vehicles, which may be a necessary first step to test consumer acceptance in early years. [EPA-
HQ-OAR-2010-0799-7941-A2, p. 8]
Finally, the Agencies offer no rationale for imposing a five-year limit on the performance-based
20 g/mi credit for a specific pickup model, where no such limit exists for equivalent hybrid-
electrics. Given the similar impacts of both hybrids and performance-based credit pickups on
emissions, as well as the broader importance of facilitating technological evolution in this
segment, there is no justification for placing special limits on performance-based credits. Thus,
the 5-year cap should be eliminated. [EPA-HQ-OAR-2010-0799-7941-A2, p. 8]
11 http://online.wsLcom/mdc/public/page/2 3022-autosales.html
5-36
-------
Advanced Technology Credits for Full-Size Pickup Trucks
23 http://greet.es.anl.gov/results
25 http://www.csnews.com/top-story-cng_the_fuel_alternative_of_the_future-60215.html
26 http://www.businessweek.com/news/2012-0 1-13/chrysler-to-begin-natural-gas-truck-sales-
to-fleets-in-2012.html
Organization: Volkswagen Group of America
Prescribe restrictions on the use of targeted, segment exclusive credits which we predict will
provide a windfall for competitors marketing high-emitting large trucks and pick-ups. [EPA-HQ-
OAR-2010-0799-9569-A1, letter p. 2]
Expand the range of technologies included within several flexibilities and incentives in order to
promote the introduction of a broader set of fuel saving, low-emission options. [EPA-HQ-OAR-
2010-0799-9569-A1, letter p. 2]
- Prescribe restrictions on the use of targeted, segment exclusive credits to avoid a windfall for
competitors marketing high-emitting large trucks and pick-ups; and [EPA-HQ-OAR-2010-0799-
9569-A1, p. 4]
c. Broad flexibilities and program credits available to all fleet segments
Continue to build upon the credits and flexibilities provided in the 2012-2016 regulatory
program. Credits and flexibilities should be equal for passenger cars and light trucks due to
similar requirements for investment and overall impact on CC>2 reduction. [EPA-HQ-OAR-2010-
0799-9569-A1, p. 5]
Further the trading flexibility within and across compliance fleets should be sufficient to cover
any vehicles with additional challenges in complying with 4%. [EPA-HQ-OAR-2010-0799-
9569-A1, p. 5]
e. includes substantial compliance credits that are available for only a limited range of
technologies, or are available only for specific segments (Full-Size Pick-Up Trucks); and
f Fails to provide credit mechanisms that would have encouraged greater use of biofuels. [EPA-
HQ-OAR-2010-0799-9569-A1, p. 6]
In addition, in contrast to Volkswagen's principle of equal credit opportunities across all
segments, the proposal once again targeted benefits towards larger trucks by providing a
significant credit opportunity only available to full-size pick-up trucks. Volkswagen contends
and will describe below how this segment exclusive credit has the potential to create a windfall
of excess truck credits that can then be transferred to the passenger car segment. [EPA-HQ-
OAR-2010-0799-9569-A1, p. 6]
5-37
-------
EPA Response to Comments
EPA is proposing a suite of CC>2 incentives exclusive to full-size pick-up trucks for 2017-2025.
This flexibility provides 10 or 20 g/mi for hybridization and a separate 10 or 20 g/mi incentive
for non-hybrid low emitting vehicles. Volkswagen opposes this provision within the NPRM.
[EPA-HQ-OAR-2010-0799-9569-A1, p. 22]
First, as illustrated above in Section 2.6, it is Volkswagen's position that the full-size truck
segment is not uniquely challenged by this proposal and that these vehicles do not face a
disproportionately more stringent requirement than other segments. Again we refer to Table 2-7
above which summarizes the continuing minimal reduction requirements for large trucks. [See
Table 2-7 on p. 19 of Docket number EPA-HQ-OAR-2010-0799-9569-A1] [EPA-HQ-OAR-
2010-0799-9569-A1, p. 22]
The Joint TSD indicates an approximate effectiveness for mild and P2 hybridization for large
trucks on the order of 8-15%. Section 2.6 described an example full-size pick-up truck from the
RIA (Chapter 3) which was 4% above its MY2017 target of 347 g/mi (72ft2 footprint target).
This includes estimated A/C credits which according to Table III-2 in the NPRM amount to 12
g/mi. Strong hybridization would provide 56 g/mi (estimated TSD effectives of 15%) reduction
captured in the two-cycle city/highway test used for compliance. According to the definition for
Mild and Strong hybrid within the full-size truck credit section, these vehicles must be equipped
with stop/start technology. Stop/Start technology is also being rewarded an additional 4.5 g/mi
under the off-cycle technology 'list'. There is no stipulation in the rule that vehicles claiming the
Full-size Truck hybrid credit cannot also claim the start/stop off-cycle credits even though one is
required for the other. Therefore we must assume that the credit available is actually 14.5 or 24.5
g/mi. [EPA-HQ-OAR-2010-0799-9569-A1, p. 22]
As summarized in Table 2-8 this hybridized pick-up would earn upwards of 67.5 g/mi credits
beyond its footprint target (0.3% stringency from 2016) which if transferred to the passenger car
fleet would be inflated through VMT to upwards of 77 g/mi. [See Table 2-8 on p. 23 of Docket
number EPA-HQ-OAR-2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1, p. 22]
This calculation does not include further conventional technology improvements which in
Section 2.6 illustrated that hybridization would not even be necessary for this vehicle to comply.
Hybridization of the truck would require a significant investment by the manufacturer and the
reward in credits is warranted, however in this case the full-size truck credit (in addition to the
accompanying stop/start credit) amounts to an excessive pool of credits that can be transferred to
other market segments, including smaller trucks and/or passenger cars. This transfer of excess
credits may result in a CC>2 disbenefit to the extent that the credit transfer reduces the need for
other segments, many of which face more stringent reductions with fewer qualifying credits 6, to
make improvements. [EPA-HQ-OAR-2010-0799-9569-A1, p. 23]
Figure 2-10 illustrates the transfer and maximum potential tailpipe emissions that a 45ft2
footprint passenger car could have and still remain compliant. Credit transfers will extend the
reach of the large truck reduced stringency and full-size truck incentives to smaller trucks, or
passenger cars. Manufacturers with significant quantities of large trucks may accumulate a
windfall of credits which can then offset the CO2 reduction obligations for their remaining
smaller truck and car fleet. Companies that do not manufacture large pick-ups will be obligated
5-38
-------
Advanced Technology Credits for Full-Size Pickup Trucks
to meet the passenger car targets without the benefit of these offsetting credits. [See Figure 2-10
on p. 24 of Docket number EPA-HQ-OAR-2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-
9569-A1, p. 23]
A car receiving the full transfer of credits from the full-size truck could theoretically retain
tailpipe emission levels in excess of 300 g/mi. This is higher than 2012 MY standards by a
significant margin. Even in a case where only the full-size truck credit and stop/start credit were
transferred to the car fleet (28 g/mi VMT adjusted), the car's tailpipe level could reach 252 g/mi
and remain compliant. This is less than the 2013 target. In this scenario the passenger car would
be able to compete in the marketplace against other vehicles with a 40 g/mi investment
advantage. This could result in that vehicle having a significant sales price advantage relative to
other segment competitors. [EPA-HQ-OAR-2010-0799-9569-A1, p. 24]
This not only detracts from program CC>2 goals, but also amounts to an economic advantage for
manufacturers of large trucks. The full-size truck credit does not represent real-world CC>2
reductions and in fact may offset real world CO2 savings in other segments. [EPA-HQ-OAR-
2010-0799-9569-A1, p. 24]
This means that the flexibility must be judged in light of the economics instead of environmental
benefits. This is contrary to some of the other credits being offered within the program.
Volkswagen does recognize that the same argument can be made with respect to credits being
provided for electrified vehicles through the EV multiplier. However, in light of the economics
context, we do note that EPA's cost estimates for plug-in electrification (either full EV or PHEV)
far exceeds EPA's cost estimates for mild or even strong (P2) hybridization. The extent of
investment needed to take advantage of the EV multiplier far outweighs the investment that
would be required for a manufacturer to equip a vehicle with an open bed and regenerative
braking. [EPA-HQ-OAR-2010-0799-9569-A1, p. 24]
In addition, EPA has cast the credit flexibility as incentivizing 'game-changing' technologies.
Volkswagen disagrees with this notion and believes that this terminology is misleading.
Hybridization of any vehicle remains an expensive and challenging technical endeavor, but we
feel that this is equally true amongst all vehicle classes. Employing the term, 'game changing',
leads one to believe that the technology has never before been attempted or that there has been a
leap forward in capability to somehow make the technology significantly more effective in its
application 7. We fail to see how regenerative braking on a vehicle with an open bed represents a
"leap forward" in automotive technology, at least to the extent that it is awarded such a generous
credit. [EPA-HQ-OAR-2010-0799-9569-A1, pp. 24-25]
As previously discussed in Section 2.6, Volkswagen's analysis of a market leading full-size truck
indicated that the need to award additional, segment exclusive credits is unwarranted. Even
without the available HEV incentive, a modest application of low-cost conventional technologies
to this sample vehicle resulted in a significant pool of credits being generated. This is the simply
the result of large trucks being provided with a low stringency. [EPA-HQ-OAR-2010-0799-
9569-Al,p. 25]
5-39
-------
EPA Response to Comments
EPA has stated that in the aggregate they predict the full-size truck credits will have around 1
g/mi impact on the overall industry truck compliance. However, Volkswagen is concerned with
the effect that large truck credit windfalls may have when examining the implications at the
manufacturer level. Although EPA's assessment at the industry level may seem insignificant, at
the manufacturer level, the level at which we compete, the truck credits may provide significant
company level advantages. Figure 2-11 shows the disparity in vehicle composition between
competitors in the marketplace. The manufacturer on the left has a truck heavy fleet composed of
upwards of 25-30% of a single full-size pick-up model. Clearly the full-size truck benefits would
provide an economic and competitive benefit for this manufacturer. Volkswagen's fleet
illustrated on the right side of Figure 2-11 is dominated by low-emitting small and medium sized
passenger cars, both of which are subjected to the more stringent standard without the benefit of
truck credits. [Figure 2-11 can be found on p. 25 of Docket number EPA-HQ-OAR-2010-0799-
9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1, p. 25]
In some cases, there are some manufacturers who sell more full-size pick-up trucks than
passenger cars combined. In comparison, the majority of Volkswagen's sales are passenger cars.
This segment faces the higher 5% stringency without the benefit of segment specific credits. In
addition, the car segment is awarded fewer credits than trucks in A/C and off-cycle
technologies. [EPA-HQ-OAR-2010-0799-9569-A1, p. 26]
It is not a stretch to imagine that manufacturers with pick-up focused fleets will easily be able to
accumulate credits from both the lower stringency and available additional flexibilities. These
credits can be transferred to offset investment in CO2 reducing technologies for other segments,
in turn reducing the price for consumers. This is not a transfer of real CO2 from an over-
compliant vehicle to under-compliant vehicle, but rather an economic transfer. Manufacturers
who are not marketing full-size trucks will be offered no such economic benefit. Although
Volkswagen understands that it is EPA's intention through this credit to help full-size trucks
comply, we certainly do not believe it is EPA's intention to expand the number of OEMs
marketing full-size pick-up trucks. Regardless that may very well be the result. [EPA-HQ-OAR-
2010-0799-9569-A1, p. 26]
5 S/S is Off-cycle credit for stop/start technology. S/S is a necessary technology for qualification
for Mild and Strong HEV under the full-size pick-up credits. Valued at 4.5 g/mi for trucks.
6 VW notes that not only are full-size trucks qualified for the 'game-changing' credits, but also
qualify for higher credits under the A/C and off-cycle programs. This further compounds the
inequity.
7 An immediate example of 'game changing' technology may be the introduction by Cadillac of
the electric starter which opened up vehicle operation and ownership to people regardless of
physical strength and free from the fear of injury.
Response:
5-40
-------
Advanced Technology Credits for Full-Size Pickup Trucks
Comments For and Against the Credit Program
Most of the commenters supported the large truck credit concept. ICCT, Volkswagen,
and CBD opposed adopting the proposed incentive, arguing that this vehicle segment is not
especially challenged by the proposed standards, that hybrid systems would readily transfer to it
from other vehicle classes, and that the credit essentially amounts to an economic advantage for
manufacturers of large trucks. CBD also commented that this credit should not be adopted, since
they believe hybrid technology should be forced by aggressive standards rather than encouraged
through regulatory incentives. Some environmental organizations also expressed concern about
the real-world impacts of offering this credit, and suggested various ways to tailor it to ensure
that fuel savings and emissions reductions associated with it are genuine.
Arguments made by commenters for not adopting the large truck technology credit are
not convincing. Although there may not be inherent reasons for a lack of hybrid technology
migration to large trucks, it is clear that this migration has nevertheless been slow to materialize
for practical/economic reasons, including in-use duty demands and customer expectations.
These issues still need to be addressed by the designers of large pickups to successfully introduce
these technologies in these trucks, and we believe that assistance in the form of a focused, well-
defined incentive program is warranted.
CBD expressed concern about how well the credits correspond to the actual
improvements obtained. As in past EPA incentive programs aimed at encouraging advanced
technology several years into the future, this is very difficult to assess quantitatively ahead of
time. We discuss the value of incentive programs such as this one in response to comments
regarding "level playing field" and short-term vs. long-term benefits of incentives in section 2 of
this document, and in response to comments regarding the value of temporary regulatory
incentives in section 4 of this document. We note too that, beyond its value in encouraging
advanced technology in the full-size pickup truck sector, this credit program has added potential
benefits because of the possibility of migrating the technology to even larger trucks. (See the
heavy-duty vehicle GHG final rule for discussion of incentives to encourage the introduction of
hybrid heavy-duty trucks—76 FR 57106, September 15, 2011.) The concerns expressed by
Volkswagen and ICCT that the pool of credits generated by hybrid trucks will be excessive, and
may result in an overall CO2 disbenefit and significant delay in technology introduction to other
sectors, also seem unwarranted. The relatively small size of the full-size truck fleet compared to
the rest of the light-duty sector, combined with our criteria for qualifying for the credits, limits
the likelihood of a flood of market-shifting credits into the lighter vehicle sectors. Obviously,
manufacturers who do not make full-size trucks will not be able to earn credits, but we believe
the controls we are exercising in implementing the program (minimum production thresholds,
truck definitions, limited model years, and performance criteria, etc.) serve to carefully target the
incentives without creating undue advantages.
Our targeting this incentive program to full-size trucks is based on the challenge of
applying the advanced technologies to them. As evidence that this challenge is substantial, we
point to the fact that two companies ranking among the leaders in automotive hybrid technology,
Ford and Toyota, have found it helpful to team up and work jointly on developing truck and
5-41
-------
EPA Response to Comments
SUV hybrid technology over a multi-year span.13 We also highlight Chrysler's comments that a
major part of the challenge is applying advanced technologies in a way that preserves a truck's
utility and accounts for added costs (as considered in the feasibility analysis for this rulemaking),
both of which are critical for purchaser acceptance. The acceptance issues are especially
important for large truck hybrids because the smaller engines that facilitate much of a hybrid's
benefit are typically at odds with the importance some pickup truck buyers place on engine
horsepower and torque, whatever the vehicle's real performance.
The U.S. Coalition for Advanced Diesel Cars questioned the granting of credits for
hybrid technology, relying as it does on stop-start and regenerative braking technologies, in light
of the lack of data on full-size pickup truck driving patterns. We agree that driving pattern data
specifically for these large trucks are not plentiful, but do not agree with the implication that the
trucks are driven extensively without sufficient braking and stopping activity so as not to warrant
application of hybrid technology (and by extension that the credit would not reflect real-world
environmental benefit). For example, many of these trucks are owned by urban and suburban
small businesses engaged in construction, home maintenance, lawncare and the like, with daily
travel activities involving frequent slowing and stopping. Full-size truck use on farms would
also involve non-highway patterns requiring substantial braking. Furthermore, should hybrid
technology, added at considerable cost, not yield real-world fuel consumption benefits for
purchasers, it is doubtful that manufacturers would pursue it simply to gain credits.
By way of clarification prompted by the Coalition's comments, both the hybrid and
performance-based credits are equally available for vehicles of all fuel types, including diesel.
The Coalition also expressed concern that the program does nothing to discourage a "horsepower
war" among the full-size truck manufacturers, exacerbated by the need for the trucks to carry the
added weight of battery packs. In response we note that the standards remain on a gram per mile
basis, so any future increases in horsepower for reasons related to curb weight or marketing will
not make it easier to comply under our program— the footprint-based standard applies without
regard to horsepower, and likewise the credit amount does not depend on horsepower.
Definition for Large Pickup Trucks and Extension of Credits to Smaller Vehicles
Some OEM commenters argued that these credits should be extended to other vehicles
such as SUVs and minivans. We believe that doing so would greatly expand, and therefore
dilute, the intended credit focus. The agencies do not believe it is necessary to provide such
incentives for application of hybrid technology in these additional categories, beyond what is
appropriate to account for off-cycle performance, or that the performance levels required of non-
hybrid technologies eligible for credits are of such stringency that extending credits to all or most
light-duty trucks would amount to anything more than a de facto lowering of overall program
stringency. Although commenters rightly pointed out that some of these non-truck vehicles do
have substantial towing capacity, most of them are not much used as towing vehicles, in contrast
13 "Ford, Toyota to Collaborate on Developing New Hybrid System for Light Trucks, SUVs; Future
Telematics Standards", http://tovotanewsroom.com/releases/ford+tovota+hybrid+trucks+suvs+telematics.htm.
August 22, 2011.
5-42
-------
Advanced Technology Credits for Full-Size Pickup Trucks
to full-size pickup trucks that often serve as work vehicles.14 Moreover, the smaller footprint
vehicles fall on the lower part of the light-duty truck curve, and so have a higher rate of
improvement (in stringency) than the larger trucks, thus making them more comparable to cars in
terms of technology access and effectiveness. See preamble section III.D.7.
Mercedes-Benz suggested that the small car market (vehicles with footprints of 40 square
feet or less) is also challenging for hybrid technology, for reasons of cost and architecture, and
deserving of similar credit opportunities. Our expectation is that the primary barrier to hybrids in
this market, the cost of hybrid technology compared to typical vehicle prices, is likely to
diminish as battery costs decline over time. We do not believe that extension of the full-size
truck credit program into this small car sector would be especially helpful in this regard. This
differs from the large truck challenge where others factors such as preserving utility for work
applications and purchaser acceptance are also key.
EPA sought comment on extending the pickup truck credits to smaller pickup trucks,
specifically to those with narrower beds, down to 42 inches, but still with towing capability
comparable to large trucks. This request for comment produced mixed reactions among truck
manufacturers, and some argued that EPA should go further and drop the bed size limit entirely.
ICCT and CBD strongly opposed any extension of the provision's scope to smaller bed trucks,
arguing that adopting the 42" bed width criterion would allow virtually all pickup trucks to
qualify, thereby distorting technology requirements and reducing the benefits of the rule.
Beyond a general expression of support, there were no detailed comments backing the narrower
bed width limit.
Chrysler commented that the proposed payload and towing capability minimums are too
restrictive, making a sizeable number of Ram 1500 configurations ineligible to earn credits.
However, the company provided no sales information to enable the agencies to reassess this
issue. Moreover, the agencies did not premise the proposed incentive on every full-size truck
configuration being eligible. Manufacturers typically offer a variety of truck options to suit
varied customer needs in the work and recreational truck markets, and the fact that one
manufacturer (or more) markets to applications lacking the towing and payload demands of the
core group of vehicles in this segment does not, in the agencies' view, justify a revision of the
hauling requirements that were a fundamental consideration in establishing the credit.
Definitions for Strong and Mild Hybrids
EPA received a number of manufacturer comments on these proposed definitions. Some
industry commenters objected to EPA's characterization of the credit provisions as applying to
hybrid "gasoline-electric" vehicles. We agree that this would be an overly narrow
characterization, and are clarifying that the provisions also apply to non-gasoline (including
diesel-, ethanol-, and CNG-fueled) hybrids. However, further extension to hybrids employing
non-electric battery storage (including hydraulic-, capacitive-, and mechanical-energy storage),
as urged by commenters such as EcoMotors, is complicated by the difficulty in developing
regulatory procedures for all conceivable energy-storage media. We believe that these
14 The 2011 segmentation and trend information provided in Ford's written comments demonstrates the
ongoing trend toward greater use of full-size trucks for work purposes.
5-43
-------
EPA Response to Comments
technologies are not hampered in participating in the large truck credit program because
manufacturers using these technologies can utilize the alternative, performance-based pathway to
gain the credits (assuming significant emissions reductions).
Ford, Toyota, and the Alliance of Automobile Manufacturers suggested improvements to
the proposed procedure for determining whether hybrid technology is categorized as strong,
mild, or having energy recovery too minimal to warrant credits. Most importantly, they argued
that the proposed approach improperly integrated energy contributions over the entire city cycle
FTP, thereby capturing more than just the intended recovered braking energy and creating an
opportunity for gaming through tailoring of the direct addition of energy from the engine. They
offered alternative procedures and corresponding recovered energy threshold levels based on
energy input only during decelerations, with the recovery efficiency cutpoint between strong and
mild hybrids correspondingly reduced from 75% to 40%. Chrysler maintained that a 75%
energy recovery rate would be challenging for large pickups, even using the proposed procedure,
because of the need to design the braking system for maximum payload and trailer capability
while maintaining drivability in the absence of loads. Chrysler's specific recommendation was
for a cutpoint of 50% energy recovery rate. Ford and Toyota also suggested an additional metric
for qualifying strong FtEVs - that at least 10% of the total tractive energy during positive
accelerations on the FTP must be from the electric drive with the engine off.
As discussed in detail in section 5.3.3 of the TSD, we have evaluated these concerns and
the suggested changes and have concluded that the proposed metric remains adequate for our
purposes, and furthermore has the advantage of being simpler and easier to measure than other
metrics. However, based on the comments received from Chrysler and follow-up testing
described in section 5.3.3 of the TSD, showing that the only large hybrid truck currently
marketed would not satisfy the proposed 75% metric, we believe that 65% is a more appropriate
threshold for defining strong hybrid energy recovery, and so are adopting this threshold in the
final regulations. We are retaining the proposed 15% threshold for mild hybrid energy recovery;
we received no comments opposing this threshold.
Other commenters suggested dropping the hybrid-specific metric altogether, in favor of a
CO2 performance-based metric instead, effectively removing the hybrid-specific credit. We
favor retaining the hybrid-specific metric in addition to the more general performance-based
credit option, because it more directly focuses the performance demonstration on the degree of
hybrid technology utilization (a known technology with clear promise), while still making room
for other technologies, including any innovations still beyond the horizon, through the
performance-based credit option. In response to the Diesel Coalition's comments, the efficiency
gains (which correspond to reductions in CO2 and fuel consumption) from hybrid vehicles are
discussed in section 3.3.3 of the Joint TSD.
Ford, Toyota, and the Alliance of Automobile Manufacturers also recommended a
number of edits and technical changes to the proposed hybrid procedures and equations:
clarification of plus and minus current flows, dropping of incorrect use of battery state of charge,
corrected references to other regulation paragraphs, spelling corrections, correction of conflicting
nomenclature and units, and use of measured rather than scheduled speed traces. These changes
are reflected in Section 5.3.3 of the Joint TSD and in the final regulatory text. Also, in response
5-44
-------
Advanced Technology Credits for Full-Size Pickup Trucks
to comments requesting clarification of how nominal voltage is determined, we are defining
nominal voltage as described in section 5.3.3 of the Joint TSD.
Volkswagen is correct that use of stop-start technology has significance under both the
off-cycle and full-size truck credit provisions. However, each of these credit programs has its
own additional criteria that must be met (such as proof of off-cycle performance, minimum
hybrid sales thresholds, and demonstration of hybrid regenerative braking performance).
Furthermore, the inclusion of stop-start capability in the hybrid pickup truck definition is
intended to help distinguish what is and is not a hybrid. In this broad context it is not meant to
be viewed in isolation, as though it justified a portion of the full-size pickup truck credit all by
itself and could thereby be construed as double-counted. In fact, of the criteria for qualifying as
a hybrid, it is of lesser importance than the recovered energy threshold. This contrasts with the
focus of the off-cycle credit for stop-start technology which does not consider energy recovery
and usage. Volkswagen also expressed the view that simply introducing regenerative braking on
open bed trucks does not comprise a leap forward in automotive technology worthy of credits.
We have taken care to adopt meaningful and verifiable criteria for hybrid performance, truck
size, and market penetration, to ensure that the credits earned are justified by the technical and
marketing challenges involved rather than a superficial offering of a niche product claiming to
use hybrid technology.
We disagree with MEMA's view that the credit program's definitions of mild and strong
hybrids are too dependent on hybrid architecture. We proposed and are adopting definitions that
are not specific to hybrid architecture, and are intentionally kept as simple and technology-
neutral as reasonably possible. More broadly, a number of commenters contended that our
proposed hybrid credit program effectively amounted to picking technology or fuel-type
"winners and losers". We believe that the above-discussed clarification regarding inclusion of
non-gasoline hybrids, as well as the inclusion of the two performance-based credit options (with
identical credit amounts as the hybrid provisions), delivers a program that is fundamentally fuel-
and technology-neutral. We note in response to comments from the natural gas industry in
particular that, in addition to the natural gas vehicle multiplier, full-size natural gas pickup trucks
are eligible for both the hybrid and performance-based credits in the same way that gasoline
vehicles are.
Minimum Market Penetration Thresholds
EPA received comments from NRDC in support of the proposed minimum penetration
thresholds. Adverse comments came primarily from manufacturers arguing that the thresholds
should be reduced or eliminated. These commenters felt that the requirements run counter to the
agencies' goal of creating incentives for technology introduction, because they add uncertainty
over whether the investment in a technology, a commitment that is made years ahead of time,
will reap the credits if sales fall short of the minimum in a model year. These commenters also
noted that new technologies are often phased in at rates lower than the proposed minimum
penetration rates in order to gauge consumer interest and acceptance. GM specifically objected
to the proposed rapid ramp up of the mild hybrid penetration rate as not being aligned with
historic rates of customer acceptance of new and/or advanced technologies. GM requested that
the levels be instead cut in half to match those proposed for the "15 percent better" performance-
based credits.
5-45
-------
EPA Response to Comments
Our reason for setting ambitious market penetration thresholds remains— our goal is to
create an incentive for manufacturers to commit to the large-scale application of hybrids and
other advanced technologies in the challenging large truck sector and specifically that at least
mild hybrid or comparable technology becomes a standard technology feature for large pickup
trucks. Eliminating or greatly tempering the minimum penetration requirements might retain the
incentive for niche applications but would lose any assurance of widespread "game-changing"
technology introduction and substantial penetration. We do agree with comments that the
ambitious penetration levels proposed for mild hybrid credits in the initial model years may be
counter-productive, as launching a complex new technology on almost a third of first-year sales
could be a risky business strategy in this highly competitive large truck market segment. As a
result, we are scaling this requirement back to 20 and 30% in model years 2017 and 2018
(compared to the proposed levels of 30 and 40% in MY 2017 and 2018, respectively), to help
facilitate the smooth introduction of mild hybrid technology. However, we are retaining the
substantial penetration requirements that were proposed for later model years to maintain our
focus on encouraging this technology to be more or less standard on large trucks. We note that a
manufacturer that is unable to meet these penetration requirements may continue to generate
credits through the 2021 model year for mild hybrid trucks under the performance-based credit
option, assuming the less aggressive penetration threshold requirements for the performance-
based credit provision are satisfied.
Concerns that consumer acceptance uncertainty existing today makes it challenging for
manufacturers to plan for the sales ramp-ups required under the thresholds are reasonable, but
the large ramp-ups are only required for the less risky credit options - mild hybrid and 15%
performance improvement - and we feel that such widespread penetration of these more modest
technologies is far from out of reach in this timeframe. The issue also tends to be self-limiting;
that is, even if we were to entirely drop the thresholds, marginal sales would yield only marginal
credit production and thereby make the credit program inconsequential for a manufacturer.
Toyota's view that maximum sales thresholds are more appropriate than minimum sales
thresholds because credits are not warranted once a technology has largely phased in is, we
believe, better addressed through the limiting of credit availability to certain model years, and to
a shorter period (through MY 2021) for the less challenging credit options.
Credit Fungibility and Available Model Years
Volkswagen commented that any HEV or performance-based credits generated by large
trucks should not be transferable to other vehicle segments, arguing that if compliance for the
large truck segment is really as challenging as predicted, there should be no excess of credits to
transfer anyway. This may be the case, but we do not agree that it argues for restricting the use
of large pickup truck credits. We think the sizeable technology hurdle involved and the limited
model years in which credits are available preclude the potential for credit windfalls.
Furthermore, neither the size of the large truck market nor the level of the per-vehicle credit are
so substantial that they could lead to a large pool of credits capable of skewing the competition
in the lighter vehicle market. As described in Preamble Section HID, EPA will continue to
monitor the net level of credit transfers from cars to trucks and vice versa in the MYs 2017-2025
timeframe.
5-46
-------
Advanced Technology Credits for Full-Size Pickup Trucks
ICCT opposed allowing vehicle models that earn performance-based credits in one year
to continue receiving them in subsequent years as the increasingly more stringent standards
progressively diminish the vehicle's performance margin compared to the standard. We view the
incentive over the longer term, as a multi-year package, intending it to encourage investment in
lasting technology shifts. The fact that it is somewhat easier to exceed performance targets by 15
or 20% in the earlier years, when the bar is set lower, and, once earned, to retain that benefit for a
fixed number of years (provided sales remain strong), works to focus the credit as intended—on
creating an incentive for the introduction of new technology as early in the program as possible.
The mild hybrid credit is available only through MY 2021 because the penetration threshold is
high enough by then (80%) to essentially constitute fleetwide application of the technology.
VNG questioned the 5-year limit on availability of the 20 g/mi performance-based credit,
given that the corresponding strong hybrid credit has no such limit. The 5-year limit is intended
to deal with the general nature of the performance-based credit, which does not involve any
requirement to identify what technology package is being applied to earn the credit. The vehicle
design may evolve somewhat in this 5-year period (corresponding to a typical redesign cycle)
without voiding the credit, unless CO2 emissions increase. A major vehicle redesign triggers
eligibility for a new 5-year eligibility period (but not past the 2025 model year). No such
artificial construct is needed in the case of hybrids, as the "game changing" technology being
introduced (hybrid-electric) is clear.
We agree with MEMA that, although full-size pickup truck technology credits are not
available in model years 2014-2016, credit for "early compliance" is provided in that these
pickups can still generate credits like any other vehicle in model years 2014-2016, and these
credits can be carried forward and used in later model years.
5-47
-------
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
6. GHG Emissions Compliance Treatment of Plug-In Hybrid Electric,
Compressed Natural Gas, Ethanol, Diesel, and Other Alternative
Fueled Vehicles, and CAFE Issues
Introduction
EPA received a very large set of comments with respect to issues associated with the
compliance treatment for vehicles that can run on fuels other than gasoline. Section 4 addresses
those comments that primarily focus on specific issues associated with GHG emissions
incentives for EVs, PHEVs, and FCVs. This section addresses those comments that primarily
relate to the use of utility factors for PHEVs, as well as all comments that primarily focus on
compressed natural gas, ethanol, diesel, and other alternative fuels. In this section, the comments
are divided into five sub-sections: PHEVs (6.1), CNG (6.2), ethanol (6.3), diesel (6.4), and other
alternative fuels and miscellaneous comments (6.5). In addition, there is a sixth sub-section (6.6)
that contains no unique comments, but which addresses issues that are relevant to multiple fuels,
including CAFE issues (issues discussed here are often included in comments throughout the rest
of this section). Many comments raise issues relevant to multiple sub-sections of this section as
well as to Section 4, so readers interested in a comprehensive treatment of comments on
alternative fuel vehicles should read the comments and responses in both sections, as well as the
relevant preamble discussions. In addition, comments related to gasoline fuel quality in general,
and to ethanol/gasoline blends in particular, are addressed in Section 11.
6.1. Plug-In Electric Vehicles
Organizations Included in this Section
American Council for an Energy-Efficient Economy (ACEEE)
American Petroleum Institute (API)
Electric Drive Transportation Association (EDTA)
Fisker Automotive, Inc.
Motor & Equipment Manufacturers Association (MEMA)
Organization: American Council for an Energy-Efficient Economy (ACEEE)
For PHEVs, EPA proposes to use cycle-specific utility factors (UFs) for determining electricity
use (NPRM p.75018), which we support. EPA also references the fuel economy and
environmental labeling rule in this context, which raises questions about the details of the
approach. First, an important step in calculating realistic UFs is applying the shortfall correction
to the fuel economy test values, or more specifically the miles traveled in charge depleting mode.
While this is part of the calculation used for labeling purposes, EPA does not indicate in the
NPRM that any such adjustment is to be made for purposes of the fuel economy and GHG
emissions rule. While we understand that the EPA does not contemplate switching to "real-
6-1
-------
EPA Response to Comments
world" emissions rates for purposes of this rule, failure to adjust charge-depleting range will lead
to utility factors that are far too high. Also, while the labeling rule uses Multi-Day Individual
Utility Factors (MDIUFs), this rule should instead use the lower Fleet UFs, which will better
capture the expected use of petroleum by the fleet of PHEVs. Information on the values of the
UFs used to evaluate the performance of each PHEV model under the rule should be publically
available. EPA-HQ-OAR-2010-0799-9528-A2, p.9]
EPA proposes a lower bound of 10.2 miles for the "all-electric range" of a PHEV to receive the
special treatment accorded to EVs (for electric operation only). While we do not object to this
proposal, we believe that, to be treated as an FFV for CAFE purposes prior to 2020, this range is
not sufficient. A PHEV with an all-electric range of 10 miles has a UF of under 25 percent, yet
would be treated for CAFE purposes as if it were driven half of the time on electricity.
Moreover, CAFE credits generated by PHEV FFVs, unlike those generated by FFVs of other
types, are not capped. Hence PHEVs should only be treated as FFVs if they can be expected to
drive half the time on electricity. On the other hand, PHEVs that drive more than half the time on
electricity would be disadvantaged by their treatment as FFVs. This problems would best be
solved by advancing the use of UFs to determine the fuel economy of PHEVs to MY2017. EPA-
HQ-OAR-2010-0799-9528-A2, p.9]
Organization: American Petroleum Institute (API)
Comments on the Proposed Approach to Measure Compliance with Fuel Economy and GHG
Standards for Dual-Fuel CNG vehicles
EPA and NHTSA note that the statutory incentive for dual-fueled vehicles in 49 U.S.C 32906
and the measurement methodology specified in 49 U.S.C 32905 (b) and (d) expire in MY 2019
and request comment on proposed options going forward. The agencies are proposing to directly
extend the PHEV utility factor methodology to dual-fuel CNG vehicles, using the same
assumptions about daily refueling. Under the utility factor approach, the vehicle range on the
alternative fuel would be used to estimate the fraction of average daily travel that the range
represents based on SAE Standard J2841. For example, a plug-in hybrid electric vehicle (PHEV)
with an all-electric range of 40 miles would be assigned a utility factor of 0.617, while a dual-
fuel natural gas vehicle (NGV) with a range on natural gas of 150 miles would be assigned a
utility factor of 0.925. [EPA-HQ-OAR-2010-0799-9469-A1, p. 7]
We have several concerns with this proposed approach. First, it relies on the implicit assumption
that the driving behavior of owners/operators of PHEVs is identical to that of owners/operators
of dual-fuel CNG vehicles; an assumption which we do not believe is (or has been) demonstrably
supported by any underlying data, yet should be. (A related question is whether the driving
behavior and vehicle use characteristics of that element of the population sometimes termed
"early technology adopters" is similar to, or different than, the "national average" database of
travel characteristics from which the Utility Factors were created.) 13 Second, although the use of
the utility factor is an improvement over the simple 50/50 split used previously, this approach
inherently assumes that the vehicle begins each day with a full state of charge (PHEVs) or a full
natural gas tank (NGVs). It is unclear that this will occur in practice, and it may significantly
overestimate the calculated benefits of the alternative fuel. Additionally, the vehicle range on the
6-2
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
alternative fuel is established based on 2-cycle testing (i.e., the FTP and the highway fuel
economy test) that is used to determine compliance with the CAFE and GHG standards. This
clearly overestimates the range on the alternative fuel, and the proposed rule should be revised to
reflect real-world vehicle range based on 5-cycle test results or other data that better represent
real-world performance. This is not at all inconsistent with the use of 2-cycle tests for CAFE and
GHG emissions compliance, as the real-world range would only be used to establish the
appropriate utility factor, which, in turn, was based on real-world driving statistics. [EPA-HQ-
OAR-2010-0799-9469-A1, pp. 6-7]
Organization: Electric Drive Transportation Association (EDTA)
4. Use of SAE J2841 to Determine Utility Factor for PHEVs
EPA is proposing to use the utility factor methodology developed by the Society of Automotive
Engineers (SAE) in the publication SAE J2841, "Utility Factor Definitions for Plug-In Hybrid
Electric Vehicles Using Travel Survey Data"(Sept. 2010). EPA first adopted SAE J2841 in its
July 2011 final rule on vehicle labeling requirements. [EPA-HQ-OAR-2010-0799-9449-Al, p. 7]
EDTA recognizes the need for a utility factor as a means of estimating the portion of the driving
cycle that involves electric-only operation. EDTA supports using the utility factor methodology
adopted by the SAE in the publication J2841. EDTA also supports use of a unique utility factor
for each vehicle model, taking into account the characteristics of the vehicle and the expecting
operating and charging behavior of the users of that type of vehicle. [EPA-HQ-OAR-2010-0799-
9449-A1, p. 7]
EDTA urges EPA to ensure that each manufacturer is given an appropriate opportunity to
provide input into the development of the utility factor for that manufacturer's PHEV models,
including notice of the proposed utility factor and an opportunity to submit comments prior to
final adoption of that utility factor. [EPA-HQ-OAR-2010-0799-9449-A1, p. 7]
Organization: Fisker Automotive, Inc.
Support the continued use of the utility factor (UF) approach in calculating GHGs and support
the adoption of this approach for CAFE calculation as proposed
Fisker believes the utility factor approach is a fair means of weighting the fraction of driving
performed in electric and gasoline modes. We believe this approach is based on a more robust set
of assumptions than the current 50-50 weighting in the dual-fuel vehicle approach used currently
by CAFE standards, so we encourage the application of the utility factor to CAFE standards as
soon as possible. [EPA-HQ-OAR-2010-0799-9266-A1, p. 5]
Organization: Motor & Equipment Manufacturers Association (MEMA)
On Page 75018, Col. 2 of the NPRM, "Based on this utility factor approach, EPA calculates the
GHG emissions compliance value for an individual PHEV as the sum of (1) the GHG emissions
value for electric operation ... multiplied by the utility factor, and (2) the tailpipe CO2 emissions
-------
EPA Response to Comments
value on gasoline multiplied by (1 minus the utility factor)." Please confirm in the final rule that
where a PHEV has a diesel engine, that the calculation would also apply to diesel. In other
words, it is not just limited to gasoline. If that is indeed the case, the agencies should consider
revising that to read "gasoline/diesel." (Please refer to Section VIII.C. for explanation.) [EPA-
HQ-OAR-2010-0799-9478-A1, p. 12]
Response:
Issues related to incentives for PHEVs are discussed in Section 4. This sub-section addresses
issues related to EPA's adoption of utility factors to weight electricity and gasoline GHG
emissions in PHEV compliance calculations.
See Preamble Section III.CAa.i for a discussion of why the Agency is adopting the cycle-
specific fleet-based utility factors as developed by the Society of Automotive Engineers (SAE).
Commenters raised a few additional issues that were not addressed in Preamble Section
III.CAa.i.
ACEEE and API suggested that PHEV utility factors should be based on 5-cycle range rather
than 2-cycle range. EPA agrees that this would be a reasonable approach, but EPA is retaining
the 2-cycle basis at this time because the limited real-world data on electricity and gasoline
operation from the Chevrolet Volt suggests that the utility factors based on 2-cycle range appear
to be closer to the real world experience than lower utility factors based on 5-cycle range. Range
is just one of many assumptions involved in the utility factor methodology, and EPA commits to
monitoring real world data from PHEV operation to evaluate the overall appropriateness of the
SAE utility factors based on 2-cycle range.
EDTA suggested a notice and opportunity process for EPA calculation of PHEV utility
factors. While EPA believes it is neither necessary nor efficient to implement a formal notice and
opportunity process, EPA does commit to working closely with manufacturers to explain how we
apply the utility factor regulations to individual vehicles.
Finally, in response to the MEMA comment, EPA will develop GHG emissions compliance
values for all PHEVs the same way, regardless of whether the PHEV internal combustion engine
operates on gasoline, diesel, or any other fuel.
6.2. Compressed Natural Gas Vehicles
Organizations Included in this Section
Alliance of Automobile Manufacturers
America's Natural Gas Alliance (ANGA) and American Gas Association (AGA)
American Clean Skies Foundation (ACSF)
American Honda Motor Co., Inc.
American Petroleum Institute (API)
American Public Gas Association (APGA)
6-4
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
Association of Global Automakers, Inc. (Global Automakers)
Boyden Gray & Associates PLLC
Chrysler Group LLC
Clean Energy
Edison Electric Institute (EEI)
Encana Natural Gas Inc.
Ford Motor Company
Manufacturers of Emission Controls Association (MECA)
Mercedes-Benz USA, LLC
National Propane Gas Association (NPGA)
Natural Resources Defense Council (NRDC)
NGV America
Northeast States for Coordinated Air Use Management (NESCAUM)
Pennsylvania Department of Environmental Protection
Plant Oil Powered Diesel Fuel Systems, Inc.
Toyota Motor North America
Vehicle Production Group LLC (VPG)
VNG Co. (VNG)
Organization: Alliance of Automobile Manufacturers
Dual-Fuel CNG and LPG Gasoline Vehicles [EPA-HQ-OAR-2010-0799-9487-A1, p.69]
CNG and LPG vehicles are another option that our country has to diversify the vehicle fleet and
use a domestically available energy source. The Alliance supports the development of a utility
factor approach very similar to the SAE standard mentioned above for PHEVs. The Alliance is
also in favor of the option to allow manufacturers to use the proposed utility factor-based
methodology as a "pull-ahead" option for MYs 2012-2015. [EP A-HQ-OAR-2010-0799-9487-
Al,p.69]
Based on the added cost of the vehicle technology and the cost advantage of using CNG and
LPG fuel relative to gasoline, customers that purchase a dual-fuel CNG or LPG vehicle will, to
the extent possible, use the intended alternative fuel. [EPA-HQ-OAR-2010-0799-9487-A1, p.69]
Many companies may leverage global designs in developing dual-fuel CNG and LPG vehicles
for the U.S. market. It is important that the variety of global design features available be allowed
into the U.S. market. Rather than making specific design requirements in the rules, a better
approach would be have these design features be factors in the calculation of the CNG and LPG
utility factors. The Alliance would like to propose a work group to discuss the constraints
mentioned in the NPRM for dual-fuel CNG and LPG vehicles. [EP A-HQ-OAR-2010-0799-
9487-A1, p.69]
In the NPRM, EPA specifically requested comments on the merits of providing sales multiplier
(similar to the EV/PHEV incentives) for dedicated and/or dual-fuel compressed natural gas
vehicles. The Alliance believes CNG and LPG technology also deserve multipliers. [EPA-HQ-
OAR-2010-0799-9487-A1, p.69]
6-5
-------
EPA Response to Comments
Organization: America's Natural Gas Alliance (ANGA) and American Gas Association (AGA)
I. NATURAL GAS VEHICLES FULFILL EACH OF THE GOALS OF THIS PROGRAM
The Presidential Memorandum calling for this program stated that its goals were "to improve
fuel efficiency and to reduce greenhouse gas emissions of passenger cars and light-duty trucks of
model years 2017-2025", and thus take advantage of an "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." Presidential Memorandum Regarding Fuel
Efficiency Standards, May 21, 2010, as cited in 76 FR 74862. [EP A-HQ-OAR-2010-0799-9548-
Al,p.2]
Cognizant of this opportunity, EPA and NHTSA throughout the Light Duty Rule emphasize the
importance of the economic impact of these regulations, noting, e.g., that they will "achieve
important reductions in GHG emissions and fuel consumption from the light duty vehicle part of
the transportation sector, based on technologies that either are commercially available or that the
agencies project will be commercially available in the rulemaking timeframe and that can be
incorporated at a reasonable cost." 76 FR 74858. See also id. at 74859-60 (same); id. at 74962
("This proposal provides important benefits to society and consumers in the form of reduced
emissions of greenhouse gases (GHGs), reduced consumption of oil, and fuel savings for
consumers, all at reasonable costs.") Indeed, the agencies estimate that the benefits of this
program outweigh the costs by hundreds of billions of dollars. Id. at 74890. [EPA-HQ-OAR-
2010-0799-9548-A1, p. 2]
By requesting comment on incentives for natural gas vehicles ("NGVs") (discussed more fully in
Section II, below), the agencies seem to acknowledge that NGVs can meet the goals of reducing
both GHG emissions and increasing use of alternatives, in addition to reduced emissions of
criteria pollutants, while also serving to "spur economic growth" and "create high-quality
domestic jobs" as the President called for. In fact, in his January 24, 2012 State of the Union
address, the President repeatedly invoked both the environmental and economic advantages of
domestic natural gas, e.g., "The development of natural gas will create jobs and power trucks and
factories that are cleaner and cheaper, proving that we don't have to choose between our
environment and our economy." [Section II can be found on p. 6 of Docket number EPA-HQ-
OAR-2010-0799-9548-A1] [EPA-HQ-OAR-2010-0799-9548-A1, p. 2]
What the agencies may not have recognized is that NGVs are, in fact, both the single most cost-
effective means of achieving these goals in the transportation sector and, if encouraged, will
create more jobs and economic growth than any other proposed solution. [EP A-HQ-OAR-2010-
0799-9548-A1, p. 2]
A. Natural Gas Vehicles Will Strengthen the U.S. Economy by Utilizing More Domestically
Produced Resources and Creating Domestic Jobs
Increasing use of domestically produced natural gas is essential to help reduce U.S. dependence
on foreign sources of energy from geopolitically unstable regions of the world. Despite 35 years
6-6
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
of rising imports and the agencies' admission that "the need to reduce energy consumption is
more crucial today than it was when the Energy Policy and Conservation Act was enacted in the
mid-1970s" (Interim Joint Technical Assessment Report, "JTAR", p. 1-1), the Light Duty Rule
continues to emphasize a policy of incremental improvements in fuel economy. Ignoring a
domestically-produced transportation fuel in favor of marginal gains in petroleum fuel economy
is a shortsighted energy security policy. As the U.S. Energy Information Agency points out, in
2035 the U.S. is still expected to import 16.71 QBtus of oil, down only 17% from the 20.14
QBtus imported in 2010. EIA, AEO 2012 Early Release Summary, Table AI, attached as Exhibit
1. Reducing imports by less than 1% a year is too little, too late. [EPA-HQ-OAR-2010-0799-
9548-A1, p. 3]
These are the facts, and that means that fuel switching is the only realistic pathway to energy
security. Each NGV totally displaces a gasoline vehicle's lifetime need for petroleum, and as the
agencies acknowledge, "each gallon of fuel saved as a consequence of the GHG and fuel
efficiency standards is anticipated to reduce total U.S. imports of petroleum by 0.95 gallon." 76
FR at 75135. And the most abundant, efficient and secure replacement fuel is natural gas. The
U.S. and Canada supply 99% of U.S. natural gas demand, and U.S. gas reserves are
growing. [EPA-HQ-OAR-2010-0799-9548-A1, p. 3]
U.S. Natural Gas Supplies
The U.S. has enormous natural gas supplies; as the President correctly pointed out in his State of
the Union Address, "We have a supply of natural gas that can last America nearly 100 years."
Indeed, multiple experts agree, the U.S. has enough natural gas to meet growing demand for
generations to come.1 [EPA-HQ-OAR-2010-0799-9548-A1, p. 3]
In its 2009 Report addressing the supply of technically recoverable natural gas in the United
States, the Potential Gas Committee reported that the currently available total supply of natural
gas was 1,836 trillion cubic feet ("Tcf"), which represented an increase of 39% (516 Tcf) over
the Committee's year end estimate for 2006. Potential Gas Committee, Potential Supply of
Natural Gas in the United States (December 31, 2008) (June, 2009). [EPA-HQ-OAR-2010-0799-
9548-A1, p. 3]
The Potential Gas Committee is not alone in its estimates. MIT's Future of Natural Gas (Interim
Report) also reviewed U.S. gas resource estimates from several sources, including the Potential
Gas Committee, and assumed a mean remaining resource base of approximately 2,100 Tcf. Id.,
p. 9. This means that at current levels of consumption the U.S. has more than enough domestic
natural gas to fuel the light-duty fleet. [EPA-HQ-OAR-2010-0799-9548-A1, p. 4]
The Economic Advantages of Natural Gas as a Transportation Fuel
Increasing our reliance on domestically produced sources of energy such as natural gas helps
increase more than US energy security - it benefits our economy as well. According to the
Department of Commerce, the U.S. trade deficit for 2011 was $558 billion, during which time
the U.S. imported $432 billion of foreign petroleum. U.S International Trade Statistics, attached
as Exhibit 2. [EPA-HQ-OAR-2010-0799-9548-A1, p. 4]
6-7
-------
EPA Response to Comments
In contrast, producing and distributing natural gas as a transportation fuel means keeping this
money at home and creating American jobs. In 2008, U.S. production of 20 Tcf of natural gas
created more than 1.3 million jobs, and even a modest increase in demand for natural gas as a
transportation fuel could create tens of thousands of additional jobs. "The Contributions of The
Natural Gas Industry to the U.S. National and State Economies", fflS Global Insight, 2009, p.l,
attached as Exhibit 3. The rapid growth in shale gas alone supported 600,000 jobs in 2010, a
number expected to grow to nearly 870,000 in 2015. IHS Global Insight 2011, p. 1, attached as
Exhibit 4. A significant push to increase NGVs in the U.S. also would create thousands of
additional jobs related to manufacturing natural gas vehicles and building the relevant
infrastructure. [EPA-HQ-OAR-2010-0799-9548-A1, p. 4]
Finally, we note that natural gas vehicles are just as available as natural gas itself. There are
more than 12 million NGVs on the road worldwide, and a recent report forecast 28 million
NGVs by 2015 (Global Industry Analysts, Inc.). Outside the U.S., NGVs are made by, among
others, Ford, GM, Toyota, Honda, Nissan, Hyundai, Fiat, Volkswagen and Mercedes. Demand
for U.S. NGVs would thus give domestic manufacturers a base upon which to build an export
market. And another economic opportunity exists in converting existing petroleum vehicles to
run on natural gas, yet another well-established technology that can further job creation here at
home. [EPA-HQ-OAR-2010-0799-9548-A1, p. 4]
In sum, the only way to fulfill the statutory mandate of reducing U.S. dependence on foreign
sources of energy is by beginning to move the U.S. light-duty vehicle fleet to natural gas as a
complement to other advanced technology and alternative fuel vehicles, a policy which will also
significantly assist the U.S. economy. [EPA-HQ-OAR-2010-0799-9548-A1, p. 4]
B. NGVs are the Most Cost-Effective Means of Reducing Light-Duty GHG Emissions [EPA-
HQ-OAR-2010-0799-9548-A1, p. 4]
Each NGV not only utilizes a domestic alternative fuel source, but also has inherently lower
GHG emissions. On a lifecycle basis (accounting for upstream emissions), NGVs have 30%
lower GHG emissions than their gasoline-powered counterparts. California Energy Commission,
Full Fuel Cycle Assessment, p. 30, attached as Exhibit 5. Apropos of lifecycle emissions, AGA
and ANGA agree with EPA's position that full lifecycle accounting is necessary for determining
both actual emissions reductions and vehicle compliance. 76 FR 75011. [EPA-HQ-OAR-2010-
0799-9548-A1, pp. 4-5]
Moreover, natural gas is getting even cleaner, as renewable natural gas (biomethane from
landfills and other sources) comes on line. Biomethane achieves nearly a 90 percent reduction in
GHGs compared to gasoline, and U.S. biomethane production is increasing, with DOE's
National Renewable Energy Laboratory estimating future production of up to 16 billion gasoline
gallons equivalent. 74 FR 24982. [EPA-HQ-OAR-2010-0799-9548-A1, p. 5]
Not only will natural gas continue to reduce its GHG emissions, but the efficiency of natural gas
vehicles will also continue to improve as the result of technological advances. In fact, NGVs will
benefit equally from the very same technological advances the agencies say are available for
gasoline vehicles to meet the proposed standards. The vast majority of these improvements,
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
whether "vehicle technology", "transmission technology", "engine technology" or "vehicle
electrification" can be used on NGVs to further lower their GHG emissions. Mass and drag
reduction, low-friction lubricants, cylinder deactivation, variable valve timing, continuous
variable transmissions, hybridization, etc., will have the exact same effect of reducing fuel
consumption for NGVs as they do for petroleum ones. [EPA-HQ-OAR-2010-0799-9548-A1, p.
5]
Moreover, NGVs are not subject to the trade-off between greater fuel economy and lower safety
considerations imposed by light-weighting or down-sizing vehicles. Of note, the JTAR presents
mass reduction as the single largest component for increasing petroleum fuel economy and
reducing GHG emissions (J-TAR Chapter 6, passim.) but at the same time admits that "the
agencies believe that the effects of vehicle mass reduction on safety should be evaluated from a
societal perspective (including an analysis of fatalities and casualties.)" JTAR 3-8. NGVs weigh
somewhat more than comparable gasoline vehicles due to the weight of the CNG tanks, yet even
with this weight penalty NGVs continue to reduce GHG emissions while utilizing an alternative
fuel source. (Compare Honda CNG curb weight of 2,848 Ibs with Honda Civic LX curb weight
of 2721 Ibs.) [EPA-HQ-OAR-2010-0799-9548-A1, p. 5]
II. INCENTIVES FOR NGVS
EPA has proposed not only extending the current incentives for electric vehicles ("EVs"), under
which the agency deems them to have zero GHG emissions, but to add a second category of
incentives for MY 2017-2021 under which each EV (and fuel cell vehicle) sold would be
deemed to be equal to between 2.0 such vehicles (MY 2017- 2019) 1.75 vehicles (MY 2020),
and 1.5 vehicles (MY 2021). Plug-in hybrid electric vehicles ("PHEVs") would get similar, but
smaller, multipliers: 1.6 for MY 2017-2019, 1.6 for MY 2020, and 1.3 for MY 2021. 76 FR
75013. EPA's rationale for these incentives is that "it is appropriate to encourage the initial
commercialization of EV/PHEV/FCVs as well, in order to retain the potential for game-changing
GHG emissions and oil savings in the long term." Id. at 75011. [EPA-HQ-OAR-2010-0799-
9548-A1, p. 6]
EPA then asks for "comments on the merits of providing similar multiplier incentives to
dedicated and/or dual fuel compressed natural gas vehicles". Id. at 75013. While EPA proposes
generous incentives for EVs and PHEVs because they represent "potential for game-changing
GHG emissions and oil savings in the long term", both dedicated and dual-fuel NGVs represent
actual "game changing GHG emissions and oil savings" right now that justify comparable
incentives. Moreover, considering NGVs superior cost-benefit performance in reducing GHGs
compared to EVs, EPA should consider an even larger multiplier incentive, perhaps equal to the
incentive Congress mandated for NGVs based on their oil-displacement performance. [EPA-HQ-
OAR-2010-0799-9548-A1, p. 6]
According to EPA, the 2012 Nissan Leaf EV has upstream GHG emissions of 161 grams per
mile. Id. at 75011. If the Leaf were gasoline-powered, the proposed 2017 GHG standard for it
would be 210 g/mi.2 Assuming, as EPA does (id. at 75011), a 20% upstream GHG value for
gasoline vehicles (42 g/mi), this "gasoline Leaf would have total GHG emissions of 252 g/mi.
Thus the actual GHG emissions difference between the EV Leaf and the gasoline Leaf is 252-
6-9
-------
EPA Response to Comments
161, or 91 g/mi. Using EPA's figures, simple math shows that the cost of this 91 g/mi advantage
is a staggering $304 for each g/mi improvement over the comparable gasoline vehicle. [EPA-
HQ-OAR-2010-0799-9548-A1, p. 6]
EPA expects that in 2016, the marginal cost of EV technology for a small size car (such as the
Leaf) to be $27,628. Draft Joint Technical Support Document, Proposed Rulemaking to
Establish Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel
Economy Standards, September 2009, p. 3-91. Conservatively assuming that the cost of EV
technology in the 2012 Leaf is no more than EPA's estimate for 2016, $27,628 divided by 91
equals a cost of approximately $304 per g/mi of GHG reductions. [EPA-HQ-OAR-2010-0799-
9548-A1, pp. 6-7]
In contrast, a 2011 Honda Civic NGV vehicle has tailpipe CC>2 emissions of 252 g/mi, and the
comparable 2011 Honda Civic gasoline vehicle has tailpipe emissions of 306 g/mi.
www.fueleconomy.gov. Even without including the NGV's smaller upstream GHG emissions,
the NGV has 54 g/mi less GHG emissions than its gasoline counterpart, and costs $6,935 more.
Thus the cost of achieving GHG reductions via an NGV is only $128 per g/mi. In other words,
compared to electric vehicles, NGVs are close to three times more cost efficient in reducing
GHG emissions. [EPA-HQ-OAR-2010-0799-9548-A1, p. 7]
Given this, AGA and ANGA believe that it would be reasonable for EPA to not only include
incentives for NGVs, but to make them significantly larger than the ones proposed for EVs.
Because the Light Duty Rule is a joint regulatory program designed to reduce both GHGs and oil
dependency, the most logical basis for an incentive is the one Congress has already mandated for
NGVs based on their displacement of oil imports. [EPA-HQ-OAR-2010-0799-9548-A1, p. 7]
In the Alternative Motor Fuels Act of 1988 ("AMFA"), Congress wrote a specific compliance
metric favoring natural gas and other alternative fuels into the light-duty fuel economy statute.
The Conference Report for AMFA could not have been clearer: "[t]he objective of both the
House and Senate bills is to facilitate the development and use of alternative fuels in the United
States for purposes of energy security" (House Report 100-929, 134 Cong Rec H 7732,
September 16, 1988, p. 7736), and the first two legislative findings in the statute itself were "the
achievement of long-term energy security for the United States is essential to the health of the
national economy, the well-being of our citizens, and the maintenance of national security" and
"the displacement of energy derived from imported oil with alternative fuels will help to achieve
energy security and improve air quality." P.L. 100-494, Section 2. [EPA-HQ-OAR-2010-0799-
9548-A1, p. 7]
Recognizing that every NGV increases utilization of a domestically produced alternative fuel, in
AMFA Congress encouraged the production of natural gas vehicles by multiplying the fuel
economy of an NGV relative to that of an equivalent gasoline-powered one. (AMFA Section
6(a), codified at 49 U.S.C. 32905(c), providing that in fuel-consumption calculations, "[a] gallon
equivalent of gaseous fuel is deemed to have a fuel content of .15 gallon of fuel"; by multiplying
natural gas volume by . 15, the effect of this is to discount NGV fuel consumption by 85%.)
6-10
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
Based on the fact that NGVs are more cost-efficient than EVs in delivering GHG reductions, and
that Congress mandated an incentive multiplier for NGVs of approximately 7 for their fuel-
economy benefits, AGA and ANGA believe that an incentive multiplier that provides parity with
electric and plug-in hybrid vehicles is justified for NGVs. [EPA-HQ-OAR-2010-0799-9548-A1,
p. 7]
Using the equivalent multiplier for GHGs allows for full recognition of NGV fuel-economy
benefits. However, any GHG multiplier that is less than the fuel economy one essentially negates
the Congressional mandate in AMFA to the extent of that difference, a result at odds with the
very purpose of this joint rulemaking. We strongly encourage EPA to take into account the fuel
economy goals of this joint program in crafting their GHG standards, and the fact that NGVs are
more cost-effective than EVs in reducing GHGs should allow for EPA to establish a GHG
multiplier incentive equivalent to the Congressionally-mandated fuel economy incentive. [EPA-
HQ-OAR-2010-0799-9548-A1, p. 8]
Dual-Fuel NGVs
As described in detail below, AGA and ANGA support EPA's proposal to "directly extend" to
dual fuel CNG vehicles the PHEV utility factor methodology described in SAE J2841 "Utility
Factor Definitions for Plug-In Hybrid Electric Vehicles Using Travel Survey Data," September
2010. AGA and ANGA also support extending application of this utility factor methodology
back to MY 2012-2016. [EPA-HQ-OAR-2010-0799-9548-A1, p. 9]
We agree with EPA's conclusion that "owners of dual fuel CNG vehicles will preferentially seek
to refuel and operate on CNG fuel as much as possible" because, in part, "CNG fuel is
considerably cheaper than gasoline on a per mile basis". 76 FR 75018. In fact, on a per-mile
basis, CNG retails for approximately one-third to one-half the cost of gasoline. However, we
note that another basis for EPA's conclusion ("because the owner paid a much higher price for
the dual fuel capability", id.) is somewhat of a conjecture, as no manufacturer has yet to produce
a duel fuel NGV. [EPA-HQ-OAR-2010-0799-9548-A1, p. 9]
AGA and ANGA also agree with EPA's observation, which further supports use of the SAE
utility factor, that "many dual fuel CNG vehicles will likely have smaller gasoline tanks given
the expectation that gasoline will be used only as an 'emergency' fuel". However, we believe
that this is precisely what the market will produce, and thus do not believe that there is need for
any of the agency's suggested "additional constraints on the designs of dual fuel CNG vehicles
to maximize the likelihood that consumers will routinely seek to use CNG fuel", such as "placing
a minimum value on CNG tank size or CNG range, a maximum value on gasoline tank size or
gasoline range, a minimum ratio of CNG-to-gasoline range, and requiring an onboard control
system so that a dual fuel CNG vehicle is only able to access the gasoline fuel tank if the CNG
tank is empty." Id. at 75019. [EPA-HQ-OAR-2010-0799-9548-A1, p. 10]
EPA notes that the same SAE utility factor it proposes to apply to dual fuel NGVs is the one first
developed for PHEVs, and that there are two potential differences which "might weaken the case
for using utility factors for dual fuel CNG vehicles." AGA and ANGA addressed the first
(relating to a dual fuel NGV running on gasoline when both fuels are available on board), above.
6-11
-------
EPA Response to Comments
The second that "it may be much more inconvenient for some private dual fuel CNG vehicle
owners to fuel every day relative to PHEVs, and there are many fewer CNG refueling stations
than electrical charging facilities" is not the relevant consideration. Unlike PHEVs, CNG
vehicles are exactly like gasoline vehicles insofar as they do not need to refuel every day. Based
on NHTSA's combined cityhighway fuel economy figure (31 mpg) and vehicle tank size, the
driving range for the 2012 Honda CNG is 248 miles, which means that, like gasoline vehicles, it
would only have to be refueled once every few days. [EPA-HQ-OAR-2010-0799-9548-A1, p.
10]
1 Sources:
ICF: As reported in MIT Energy Initiative, 2010, The Future of Natural Gas, interim report;
Table 2.1
EIA: See http://www.eia.gov/analysis/studies/worldshalegas/
PGC: Potential Gas Committee's Advance Summary and press release of its biennial assessment;
see www.potentialgas.org
CERA: IHS CERA, 2010, Fueling North America's Energy Future: The Unconventional Natural
Gas Revolution and the Carbon Agenda
MIT: MIT Energy Initiative, 2010, The Future of Natural Gas, interim report
NPC: Realizing the Potential of North America's Abundant Natural Gas and Oil Resources
Johns Hopkins University ; Prudent Development Study 2011
2 The GHG standard applicable to a vehicle is determined by its "footprint", which is "the
vehicle's wheelbase multiplied by its track width". 76 FR 74870. Multiplying the Leafs
wheelbase of 106.3 inches by its track width of 60.6 inches (http://www.vehix.com/carreviews/
2011/nissan/leaf/vehicle-specification) equals 6441.78 sq in, or 44.73 sq ft, and thus a GHG
footprint of 210g/mi. Id. at 74873.
Organization: American Clean Skies Foundation (ACSF)
ACSF strongly supports the energy security and environmental goals underlying the Proposed
Rule. However, the Foundation believes that these goals can best be met by adopting technology
neutral incentives that enable natural gas vehicles (NGVs), as well as electric vehicles (EVs), to
play a larger role. Both technologies can deliver similar well-to-wheel greenhouse gas (GHG)
emission reductions. See Appendix 1. Accordingly, these comments propose several simple rule
changes that EPA and NHTSA can make to establish a level regulatory playing field for
advancing cleaner and more fuel-efficient vehicles, rather than arbitrarily providing incentives
for selected vehicle powertrains, as the Proposed Rule now does. Consumers and the
environment will benefit from competition across vehicle technologies. [Appendix 1 can be
6-12
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
found on pp. 16-20 of Docket number EPA-HQ-OAR-2010-0799-9464-Al] [EPA-HQ-OAR-
2010-0799-9464-A1, p. 1]
Given the Administration's recognition of the major energy security and emission benefits that
NGVs can provide (See Appendix 2), we believe it is essential that any new vehicle standards
adopted by EPA and NHTSA are consistent with that vision and, at a minimum, do not
discriminate against NGVs or dual-fuel (natural gas/gasoline) vehicles. [Appendix 2 can be
found on pp. 21-23 of Docket number EPA-HQ-OAR-2010-0799-9464-A1] [EPA-HQ-OAR-
2010-0799-9464-A1, pp. 1-2]
I. Executive summary
The Proposed Rule has two overarching goals: to reduce GHG emissions and improve our
nation's security. Encouraging the manufacture and use of more NGVs is one of the very best
ways to achieve these goals because each new NGV will emit roughly 30% less GHG pollution
than a gasoline vehicle and displace its lifetime consumption of imported petroleum. [EPA-HQ-
OAR-2010-0799-9464-A1, p. 2]
The new rule will apply to vehicles manufactured in model years 2017 through 2025. This is a
critical period for deploying alternative fuel vehicles, as it represents a key window of
opportunity to make progress on environmental and security goals. Any new regulations that
impact vehicle fuel choices and related infrastructure investments will also have far-reaching
impacts on the country's transportation mix well before 2017 and after 2025. That is why it is so
important that the proposed rule not handicap one category of oil-saving or lower carbon vehicle
technologies versus another. [EPA-HQ-OAR-2010-0799-9464-Al, p. 2]
Unfortunately, however, in providing incentives for alternative fuel vehicles, the draft rule
unduly favors EVs to the detriment of NGVs. This shortcoming can and must be addressed to
create effective competition among alternative fuel vehicles and provide technology-neutral
incentives. [EPA-HQ-OAR-2010-0799-9464-A1, p. 2]
To that purpose, ACSF recommends the following rule changes:
1. A technology-neutral pool of alternative fuel vehicle incentives should be created. All
qualified alternative fuel vehicles, including EVs and NGVs, should qualify for these incentives
which would use a multiplier to give extra credit for the emission reduction benefits of such
vehicles in calculating each manufacturer's fleet averages. The incentive would be phased out
when the annual sales of all qualified alternate fuel vehicles exceeds 10% of total vehicle sales,
or roughly 1.5 million vehicles in 2017. [EPA-HQ-OAR-2010-0799-9464-Al, p. 2]
2. Because production volumes can be rapidly scaled-up, EPA should augment the near-term
incentives for natural gas dual-fuel vehicles. As with hybrid electric vehicles, the increased
production of NGVs that can run on both gasoline and CNG as 'dual-fuel vehicles' will
significantly advance the objectives of the Proposed Rule. [EPA-HQ-OAR-2010-0799-9464-A1,
p. 2]
6-13
-------
EPA Response to Comments
3. Manufacturers producing NGVs and alternative fuel vehicles that use fuels having superior
energy security benefits should be explicitly rewarded. Promoting the goal of energy security
requires explicit targeted incentives. This might be done by using a common metric (e.g.,
imported oil reduced) to rank vehicles and/or fleets and provide a proportionate compliance
benefit. [EPA-HQ-OAR-2010-0799-9464-A1, p. 2]
The rationale for these recommendations is discussed below. To provide context, we first
provide an NGV 'technology overview' and review certain risks regarding EV deployment. We
also briefly summarize the Proposed Rule's regulatory structure as it applies to alternative fuel
vehicles. [EPA-HQ-OAR-2010-0799-9464-A1, p. 3]
II. Technology overview
A. The benefits and worldwide market acceptance of NGVs.
Only last month, President Obama used his 2012 State of the Union speech to call attention to
America's 'nearly 100 year' supply of natural gas and the major role gas can play in enhancing
our energy security and reducing GHG emissions. Later he challenged a Nevada audience
to: [EPA-HQ-OAR-2010-0799-9464-A1, p. 3]
'Think about an America where more cars and trucks are running on domestic natural gas than on
foreign oil. Think about an America where our companies are leading the world in developing
natural gas technology and creating a generation of new energy jobs. . .. [L]et's get more of these
natural gas vehicles on the road." [EPA-HQ-OAR-2010-0799-9464-A1, p. 3]
We agree. That is why it is so important that the Proposed Rule promote the President's policy
and be technology neutral so that the rules encourage manufacturers to produce more NGVs and
dual-fueled vehicles (as well as EVs) capable of delivering similar environmental and security
benefits. [EPA-HQ-OAR-2010-0799-9464-Al, p. 3]
NGVs provide a means to achieve the Proposed Rule's emission reduction and energy security
goals with proven, cost-effective technology 5 that has been widely deployed around the globe.
More than 12 million NGVs were in use worldwide as of 2010,6 far greater than EV
deployment.7 In fact, a recent study by Harvard University noted that 'highway-capable BEVs
[Battery-Electric Vehicles] are not yet in widespread use anywhere in the world."8 [EPA-HQ-
OAR-2010-0799-9464-A1, pp. 3-4]
In the United States, NGVs are widely recognized as providing 'game changing' opportunities
today for vehicle fleets, reducing both costs and emissions and the use of foreign petroleum.
There are now over 70,000 CNG vans, light duty trucks and cars in service, including more than
3,000 NGVs in AT&T's fleet alone.9 Moreover, states and local governments around the country
are committed to expanded NGV roll outs. For instance, the governors of Colorado, Oklahoma,
Pennsylvania, and Wyoming recently signed a memorandum of understanding to convert state
fleets to CNG. 10 [EPA-HQ-OAR-2010-0799-9464-A1, p. 4]
6-14
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
Of particular relevance to this docket, which targets incentives for the 2017-2025 time period, is
the prospective build-out of a national NGV infrastructure and the availability of low cost home
refueling appliances for NGVs. Last year, for example, several companies announced new
financing commitments totaling $450 million to establish a coast-to-coast highway refueling
network that, by 2014, could be capable of supporting tens of thousands of LNG-fueled trucks
and CNG-fueled vehicles. 11 By 2017, new 'brand name' home refueling appliances are expected
to come to market, providing an affordable garage-based CNG option for over 65 million homes
already connected to natural gas pipelines. 12 [EPA-HQ-OAR-2010-0799-9464-A1, p. 4]
Beyond that, NGVs do not require the risky 'technological leaps' remaining for EVs and various
alternative fuel technologies. In fact, most existing vehicles can be modified to utilize natural
gas, as use of this fuel involves similar internal combustion components. In addition, the
technological advancements (and associated fuel efficiency gains) that EPA and NHTSA predict
for petroleum and diesel fueled engines are likely also to benefit NGVs. 13 [EPA-HQ-OAR-
2010-0799-9464-A1, pp. 4-5]
NGVs offer significant energy security benefits. As the President has noted, natural gas is an
abundant domestic energy resource. The United States currently produces almost all of the
natural gas that it uses and may actually be a net exporter of natural gas by 2021.15 Over 65
million homes are already connected to the local natural gas distribution network and expanding
the delivery infrastructure may be more economical than developing similar infrastructure for
electricity. For instance, a joint study by the Bonneville Power Administration and the Northwest
Gas Association found that 'natural gas pipelines average between 50 and 60 percent of the cost
of electric power transmission per unit of energy (or capacity) delivered." 16 Additionally, adding
new interstate natural gas pipeline capacity averages just three years from announcement date to
commercial start of operations. 17 [EPA-HQ-OAR-2010-0799-9464-A1, p. 5]
Finally, NGVs offer substantial GHG emission reduction benefits over conventional vehicles
(those that use gasoline and diesel). Again, see Appendix 1. The natural gas-powered Honda
Civic has regularly been recognized as among the 'greenest cars' on the road. 18 While NGVs
emit small amounts of methane, these emissions are more than offset by substantially reduced
CO2 emissions versus other vehicles. 19 And in the future, larger amounts of bio-methane (a
renewable fuel with a very low GHG footprint) may become available, further enhancing the
emission benefits of NGVs.20 [Appendix 1 can be found on pp. 16-20 of Docket number EPA-
HQ-OAR-2010-0799-9464-A1] [EPA-HQ-OAR-2010-0799-9464-A1, p. 5]
B. The Administration should not pick technology 'winners' and 'losers'.
In a market economy, it is an axiom of regulatory design that the government should avoid trying
to favor competing technologies (or companies) by picking winners. Such decisions are best left
to the private sector.21 This is especially true when the technology that may be favored faces
large uncertainties in research or development for key components, materials supply risks in
scaling-up production, billion dollar infrastructure hurdles and unproven consumer take
up. [EPA-HQ-OAR-2010-0799-9464-A1, p. 6]
6-15
-------
EPA Response to Comments
Qualified alternative fuel vehicles should all be given similar incentives so that they can compete
on a level playing field in delivering the public benefits the Proposed Rule seeks. EVs may well
have a very bright future. However, it is also possible that EVs may never be a widely-deployed
technology. Unlike NGVs, EVs require technology advances in batteries and other components
and have yet to be produced and deployed at scale.22 By comparison, NGVs utilize existing
engine technology but merely burn a different fuel. Similarly, auto mechanics accustomed to
working on typical internal combustion engines face a learning curve when asked to repair
electric engines, which use a substantially different motor technology. [EPA-HQ-OAR-2010-
0799-9464-A1, p. 6]
In short, the Administration should not create inefficient regulatory structures that pick
technology winners and losers. That would be unlawfully arbitrary and capricious.23 Rather the
Proposed Rule should be revised to establish a level playing field for alternative fuel vehicles.
That is by far the most cost-effective and non-discriminatory way to achieve the rule's desired
environmental and national security goals. [EPA-HQ-OAR-2010-0799-9464-A1, p. 6]
III. Regulatory structure of the Proposed Rule [EPA-HQ-OAR-2010-0799-9464-A1, p. 6]
The Proposed Rule consists of parallel standards issued by EPA and the NHTSA, which seek to
accomplish similar goals through different regulatory mechanisms. In particular, EPA would
impose a limit on vehicle GHG emissions pursuant to the Clean Air Act. More specifically,
EPA's proposed standards require, on an average industry fleet-wide basis, an emissions standard
of 163 grams/mile of CO2e, which equates to 54.5 mpg, by 2025. Pursuant to CAA § 202, EPA
has broad discretion to set emissions levels that are 'technology-based' and can be 'technology
forcing.' Thus, EPA can use its standards to incentivize the deployment of advanced technologies
such as EVs and NGVs. EPA proposes to include specific limits on three GHGs (CO2, CH/i,
N2O), which can be met individually or through a combined CCVequivalent standard. [EPA-HQ-
OAR-2010-0799-9464-A1, p. 7]
The NHTSA would increase the stringency of traditional mile-per-gallon (mpg) Corporate
Average Fuel Economy Standards (CAFE). NHTSA proposes to tighten these CAFE standards
pursuant to the Energy Independence and Security Act of 2007 (EISA), which amended the
Energy Policy and Conservation Act of 1975 (EPCA). NHTSA considers four statutory factors in
setting CAFE standards: technological feasibility, economic practicability, the effect of other
Government standards on fuel economy, and the nation's need to conserve energy. NHTSA's
proposal would require, on an average fleet wide basis, 49.6 mpg by 2025.24 [EPA-HQ-OAR-
2010-0799-9464-A1, p. 7]
Because EPA and NHTSA both 'address the closely intertwined challenges of energy security
and climate change,' they closely coordinated their GHG and CAFE standards development.
Accordingly, both these EPA GHG and NHTSA CAFE standards are issued pursuant to this joint
Proposed Rule, similar to the joint proposed standards that these agencies previously issued for
light-duty vehicles for model years 2012-2016. [EPA-HQ-OAR-2010-0799-9464-A1, p. 7]
A. NHTSA alternative vehicle incentives. [EPA-HQ-OAR-2010-0799-9464-Al, p. 7]
6-16
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
Regarding EVs, NHTSA currently uses a statutorily-mandated petroleum equivalence factor
(PEF) to convert the use of electricity into an equivalent 'miles per gallon." The PEF for
electricity includes an adjustment - that is, a discount - so that the mileage for EVs is calculated
based on only 15% of the actual energy consumed. That adjustment provides a large benefit to
EVs in calculating the average mileage for a manufacturer's fleet. Because Congress established
this PEF incentive, NHTSA believes that it may not create additional incentives for EVs. EPA
does not feel so bound, however, and proposes to create additional incentives for EVs in the
Proposed Rule (as further described below). [EPA-HQ-OAR-2010-0799-9464-Al, pp. 7-8]
Under the current CAFE standards set by NHTSA, NGVs also receive similar benefits because
the miles per CNG gallon equivalent are discounted by applying a 0.15 'divisor.' This incentive
was created under the EISA, and the incentive is not scheduled for expiration. Under this
incentive scheme, a 15 mpg dedicated alternative fuel vehicle is multiplied by 100/15 so that it
would be rated as 100 mpg. The 'divisor' consequently has an impact equivalent to the PEF
mentioned above for EVs. [EPA-HQ-OAR-2010-0799-9464-A1, p. 8]
B. EPA alternative vehicle incentives.
We come now to the nub of the discrimination and market inefficiencies that these comments are
designed to rectify: Unlike the NHTSA rules, the EPA's new GHG standards contain additional
EV-only incentives. These supplemental incentives arbitrarily and capriciously favor EVs over
NGVS.31 For instance, EPA would continue the practice of considering EVs to be zero-emitting
(up to certain production caps), even though EPA recognizes that generating electricity upstream
creates substantial GHG emissions (particularly due to the emissions from coal-fired power
plants). [EPA-HQ-OAR-2010-0799-9464-A1, p. 8]
EPA's proposal also includes a new incentive multiplier for EVs. Through this multiplier, EPA
would allow a vehicle manufacturer to reduce its average fleet emissions by initially counting the
lower emissions of each EV produced as two vehicles (i.e., using a 2 times multiplier). In
addition, in the Model Year 2012-2016 rule, EPA utilized the same 0.15 'divisor' available in the
CAFE rules (discussed above) in calculating GHG emissions compliance for NGVs. But, under
the Proposed Rule, this incentive would expire. As a result, EPA's new rules would abolish the
benefits NGVs gain under the NHTSA standards from the 0.15 'divisor' incentive. [EPA-HQ-
OAR-2010-0799-9464-A1, p. 8]
C. Dual-fuel vehicle incentives. [EPA-HQ-OAR-2010-0799-9464-Al, p. 8]
The Proposed Rule also contains additional provisions that specifically address dual-fuel
vehicles, including hybrid-electric vehicles and those that run on both CNG and gasoline. The
Proposed Rule would change the assumption in both CAFE and GHG emissions regulations that
alternative fuels are used 50% of the time in dual-fueled vehicles. Instead, the agencies would
sensibly replace this 50/50 assumed fuel split with a 'utility factor'-Le., an approach that takes
into account the actual percentage of alternative fuel use by the average driver. Thus, the
Proposed Rule recognizes that 'CNG fuel is considerably cheaper than gasoline on a per mile
basis,' and that CNG is likely to be used in a dual-fueled vehicle significantly more than 50% of
the time. [EPA-HQ-OAR-2010-0799-9464-Al, pp. 8-9]
6-17
-------
EPA Response to Comments
Dual-fuel vehicles also face discrimination related to the proposed use of the 0.15 'divisor.'
Congress eliminated the 0.15 divisor incentive for non-electric, dual-fuel vehicles after 2019.
The Proposed CAFE standards would continue the incentives for those dual-fueled vehicles after
2019. Again, however, EPA and NHTSA send a mixed message regarding CNG vehicles. Under
EPA's proposal, dual-fuel CNG vehicles would see the 0.15 'divisor' eliminated from the
alternative-fuel portion of a vehicle's emissions. By not utilizing the same incentive under its
emissions standards, EPA limits the usefulness of NHTSA's incentives. [EP A-HQ-OAR-2010-
0799-9464-A1, p. 9]
Finally, the Proposed Rule includes a significant focus on energy security concerns. We discuss
these concerns-and how they might be better translated with a more effective set of vehicle
incentives-at greater length below. [EPA-HQ-OAR-2010-0799-9464-Al, p. 9]
IV. Suggested Revisions to the Proposed Rule to Promote Technology-Neutral Benefits
A. A technology-neutral pool of alternative fuel incentives should be created. Vehicles in this
pool, including NGVs, should qualify for the same incentives that are now only available to EVs,
in particular the incentive 'multiplier.'
Rather than provide incentives to specific vehicle types, EPA should strive to be technology
neutral in its efforts to reduce GHG emissions. In particular, the Proposed Rule offers two main
incentives that currently favor EVs: the ability of manufacturers to count EV emissions at 0
grams/mile in calculating fleet averages; and an 'incentive multiplier' which begins by double-
counting EVs in the overall fleet. This current incentive structure should be revised so that it is
technology-neutral, and reflects life-cycle impacts, allowing NGVs-which provide comparable
emission reductions and energy security benefits to EVs-to qualify for the same incentive
available to EVs. [EPA-HQ-OAR-2010-0799-9464-A1, p. 9]
1. The incentive 'multiplier' should apply to NGVs and EVs. [EP A-HQ-OAR-2010-0799-9464-
Al,p.9]
The Proposed Rule provides a new incentive 'multiplier,' but as drafted would only allow this
incentive for EVs. More specifically, this 'multiplier' allows manufacturers to multiply, by a
determined factor, the number of EVs when calculating its fleet emissions profile. EVs would
start with a multiplier value of 2.0 in Model Year 2017, phasing down to a value of 1.5 in
2021. [EPA-HQ-OAR-2010-0799-9464-A1, pp. 9-10]
By providing this incentive to EVs, while failing to provide a similar incentive to NGVs, the
EPA has inappropriately picked EVs as 'the future' clean-car technology, thereby decreasing
competition and incurring unnecessary program risks. This is unlawfully arbitrary and
capricious. The GHG emission benefits on a life-cycle (well-to-wheel) basis are similar for EVs
and NGVs. See Appendix 1. The EPA's current approach also harms consumers and cuts against
the goals of the Proposed Rule because, as noted earlier, an NGV buyer likely can reduce her
GHG vehicle emissions at a lower cost per unit than an EV buyer. [Appendix 1 can be found on
pp. 16-20 of Docket number EPA-HQ-OAR-2010-0799-9464-A1] [EPA-HQ-OAR-2010-0799-
9464-A1, p. 10]
6-18
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
The GHG emissions of NGVs are approximately 20-30% lower than for vehicles using gasoline.
Furthermore, current technology can capture and utilize natural gas from renewable sources (e.g.,
landfills, farm animals). Natural gas from these sources (i.e., biomethane) has a carbon intensity
approximately 85% less than gasoline.37 [EPA-HQ-OAR-2010-0799-9464-A1, p. 10]
All 'qualified' alternative fuel vehicles with a similar potential to reduce GHG emissions (on a
well-to-wheel basis) should be eligible for a multiplier that encourages the production of these
vehicles until annual vehicle sales reach 10% of total sales for all fleets combined.3 8 On this
basis, the incentive would apply to approximately 1.5 million vehicles in 2017. The incentive
could then be phased down by 2% annually so that it applies to a smaller number of qualified
vehicles each year but affords a sufficient lead time for manufacturers to plan and begin
deployment of these qualified vehicles. [EPA-HQ-OAR-2010-0799-9464-Al, p. 10]
Significantly, two other major federal programs for reducing the nation's GHG emissions treat
the potential benefits of using NGVs and EVs in a similar way. The first provides for federal
procurement for all qualified alternative fuel vehicles.39 The second, under Executive Order
13514, requires each federal agency to measure and report reduction targets for direct (Scope 1)
and indirect (Scope 2) greenhouse gas emissions.40 Because the tailpipe emissions of the
agency's vehicles are counted in Scope 1 and emissions from electricity used by the agency
(including recharging EVs) are counted in Scope 2, both NGVs and EVs have emissions
reflected in the relevant accounts. In addition, both types of alternative fuel vehicles contribute,
on a technology-neutral basis, to achieving the two-percent annual reduction in petroleum
consumption required in Section 2(a)(iii) of this Executive Order, and both types of vehicles are
covered by Section 12's guidance to develop strategies on alternative fuel vehicles.41 [EPA-HQ-
OAR-2010-0799-9464-A1, pp. 10-11]
Indeed, EPA acknowledges that the upstream GHG emissions of EVs are a significant negative
factor and may be worse than gasoline vehicles. EPA states that EVs in the 2017-2025 period
'will decrease the overall GHG emissions reductions associated with the program as the upstream
emissions associated with the generation and distribution of electricity are higher than the
upstream emissions associated with production and distribution of gasoline." [EPA-HQ-OAR-
2010-0799-9464-A1, pp. 11-12]
On the other hand, the superior emissions benefits of NGVs over gasoline vehicles are
thoroughly documented. 'The conclusion of recent studies such as those conducted by CARB and
others is that, when used as transportation fuel, natural gas can reduce greenhouse gas emissions
by 20 - 29 percent compared with diesel and gasoline fueled vehicles, respectively."46 When
compared to EVs, NGVs provide comparable emissions benefits (and NGVs can even provide
superior emission reduction benefits to EVs depending on the extent to which coal-fired power is
used to generate electricity for EVs). In addition, while EPA is counting on technological
advancements to improve EVs, technology for NGVs will also advance if given the same
opportunities. [EPA-HQ-OAR-2010-0799-9464-Al, p. 12]
The most effective and lawful incentive structure to promote vehicle emission reductions is a
'multiplier' incentive for all alternative fuel vehicles. Such a program would more strongly
encourage manufacturers to develop cleaner vehicles through competition between EV and NGV
6-19
-------
EPA Response to Comments
technologies, and would allow the market to decide the extent of each technology's
success. [EPA-HQ-OAR-2010-0799-9464-A1, p. 12]
3. The 0.15 divisor should continue for NGVs.
As noted above in the regulatory overview, in EPA's MY 2012-2016 GHG rule for light-duty
vehicles, EPA utilized the same 0.15 'divisor' available in the CAFE rules in calculating GHG
emissions compliance for NGVs. However, EPA has currently scheduled this incentive to expire
in model year 2016, and the Proposed Rule does not renew this incentive. By not recognizing the
0.15 'divisor' incentive under its GHG regulations, EPA appears to be undercutting a statutorily-
mandated incentive (for the CAFE rules) through its proposed GHG rules. By proposing GHG
rules that work against the CAFE regulatory scheme, EPA is acting in a counterproductive way
and hindering the development of cleaner technologies. [EPA-HQ-OAR-2010-0799-9464-A1, p.
12]
For the joint NHTSA and EPA rulemaking process to be effective, the agencies must work
together so that the incentives provided by one agency are not limited by the regulations
proposed by the other.47 Accordingly the 0.15 divisor for NGVs that exists under the CAFE
rules should also be continued under EPA's GHG rules for light-duty vehicles. [EPA-HQ-OAR-
2010-0799-9464-A1, p. 12]
B. Because of their potential for rapid scale-up, EPA should incentivize the deployment of CNG
dual-fuel vehicles to the maximum extent possible. [EPA-HQ-OAR-2010-0799-9464-Al, p. 12]
Many CNG vehicles worldwide are equipped to run as dual-fuel vehicles. These vehicles can
facilitate consumer acceptance of alternative fuel vehicles through the use of a small gasoline
tank, thus reducing the 'range anxiety' that some consumers may have when choosing a vehicle
that, as yet, has a limited fueling infrastructure.48 Dual-fuel CNG vehicles have the potential to
be a 'game-changer' through rapid deployment. They also have a superior combination of
reliability and the ability to use a domestic, clean-burning fuel, while reducing concerns about
'range anxiety.' Because CNG is 'considerably cheaper than gasoline on a per mile basis,' for
dual-fueled vehicles the Proposed Rule includes a 'utility factor' approach that would 'result in a
compliance assumption of about 95% operation on CNG and about 5 percent operation on
gasoline' for CNG/gasoline dual-fueled vehicles.49 [EPA-HQ-OAR-2010-0799-9464-A1, p. 13]
The deployment of dual-fuel CNG vehicles should be encouraged by the agencies through the
maximum use of incentives. Specifically, EPA should use a standard 'utility factor' that assumes
these vehicles will run on CNG 95% of the time, as this reflects EPA's 'real-world' projection of
these vehicles. This 95% figure should be a default value and not require a case-by-case review
that might otherwise be required to determine the utility factor. [EPA-HQ-OAR-2010-0799-
9464-A1, p. 13]
Furthermore, the incentive multiplier outlined above should apply to dual-fuel CNG vehicles as
well. A multiplier is already allowed for PHEVs, which are operationally similar to CNG dual-
fuel vehicles (in the sense that two sources of energy may operate the vehicle, in the case of
PHEVs this being either electricity or gasoline). If PHEVs qualify for a multiplier, then so too
6-20
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
should CNG dual-fuel vehicles. Finally, the 0.15 divisor should be available under both the
CAFE standards and EPA's GHG rules for the portion of the vehicle's operation on natural
gas. [EPA-HQ-OAR-2010-0799-9464-Al,p. 13]
C. The Proposed Rule should provide incentives for manufacturers producing NGVs and other
vehicles that use fuels having superior energy security benefits.
'Energy security' is a central focus of the Proposed Rule. However, The Proposed Rule does not
provide explicit incentives for manufacturing vehicles on the basis of energy security benefits.
Nothing in either the EPA or NHTSA calculations explicitly considers energy security. By
providing incentives for vehicles that enhance our energy independence, the agencies could
ensure that manufacturers consider this factor. These incentives would also spur development
and advance technology in the area of alternative fuel vehicles. [EPA-HQ-OAR-2010-0799-
9464-A1, p. 13]
Because the comparative energy security benefits of different fuels can be readily ascertained an
objective basis can be established for providing incentives. For example, a 'baseline' against
which to assess energy security benefits could be tied to the current ratio of imported-to-
domestic oil (which is used to make gasoline and diesel, the dominant fuels in light-duty
vehicles). Thus, if the current ratio of imported-to-domestic gasoline/diesel used in fleets covered
by the proposed rules is approximately 50-50, then covered vehicles that use a fuel with a higher
percentage that is sourced domestically would be assigned a factor between 1 and 2. 51 A
vehicle's multiplier could then be increased by this factor for the purpose of doing a fleet-wide
compliance calculation. [EPA-HQ-OAR-2010-0799-9464-A1, pp. 13-14]
Alternatively, each manufacturer could have a fleet wide 'energy security' rating against which to
measure the benefits/incentives it should receive. A manufacturer's ability to take advantage of
its 'energy security' incentives could be dependent on its fleetwide GHG emission average:
should a manufacturer's fleet meet the requirements for an 'energy security' benefit but not meet
the applicable GHG standards, that manufacturer would be unable to utilize that
benefit.52 [EPA-HQ-OAR-2010-0799-9464-A1, p. 14]
Various forms of'revenue recycling' also could reward manufacturers who produce vehicles that
enhance energy security. For instance, the revenue from fines collected under various motor
vehicle regulations could be dedicated to enhance the use of fuels with energy security benefits.
Since the implementation of CAFE standards, a total of nearly $795 million has been collected.
In Model Year 2009, the last year data is available, the collected fines totaled approximately $9
million.53 In 2007, the total of collected fines was more than $37 million.54 [EPA-HQ-OAR-
2010-0799-9464-A1, p. 14]
As noted above, NGVs offer significant energy security benefits. Utilizing natural gas as a fuel
source is economical and wholly secure, as natural gas is an abundant domestic energy
resource.55 Although the electricity used to repower EVs is domestic, the batteries on which
EVs rely may be dependent on lithium and other scarce metals which must be imported from a
limited range of nations.56 [EPA-HQ-OAR-2010-0799-9464-A1, pp. 14-15]
6-21
-------
EPA Response to Comments
While EPA and NHTSA may take a variety of approaches in recognizing energy security
benefits, what does seem clear is that these energy security benefits should be explicitly
rewarded in order to further the stated energy security goals of the Proposed Rule. [EPA-HQ-
OAR-2010-0799-9464-A1, p. 15]
V. Conclusion
Natural gas is an abundant domestic fuel that produces lower GHG emissions than gasoline and
diesel on a lifecycle basis, and its use in vehicles involves widely-used, reliable engine
technology. Encouraging the increased use of natural gas in vehicles will help to achieve EPA's
goal of reducing GHG emissions from the nation's vehicle fleet. NGVs and dual-fuel CNG
vehicles can also substantially improve our nation's energy security. Worldwide, millions of
vehicles run on natural gas and the technology for NGVs is already available. Yet, despite the
considerable benefits of NGVs, the Proposed Rule offers multiple incentives to EVs while
overlooking the often superior benefits of NGVs. [EPA-HQ-OAR-2010-0799-9464-A1, p. 15]
The Proposed Rule must be revised so that its incentive structure for alternative fuel vehicles is
technologically neutral and not anti-competitive. Failure of EPA and NHTS A to do so would be
arbitrary and capricious. A technologically-neutral incentive scheme will unlock the full
potential of our nation to utilize alternative fuels to meet both GHG reduction and energy
security goals. [EPA-HQ-OAR-2010-0799-9464-A1, p. 15]
5 Based on the EPA's own data, from the consumer's standpoint, it is likely to be far cheaper-as
measured in vehicle dollars spent to reduce a given amount of greenhouse gas per mile-for a
driver to acquire a new NGV rather than an EV, given the substantially lower purchase cost of a
CNG vehicle and the comparable full fuel cycle GHG reductions in emissions versus a gasoline
powered vehicle. Small-sized EV sedans are expected to cost over $27,000 more in 2016; the
additional cost for a CNG vehicle is likely to be under $2,500. See Draft Joint Technical Support
Document, Proposed Rulemaking: Mode/ Year 2012-2016 Light-Duty Vehicle Greenhouse Gas
Emissions Standards and Corporate Average Fuel Economy Standards, p. 3-91, available at
www.epa.gov/otag/climate/regulations/420d09901.pdf
6 International Natural Gas Vehicle Association, http://www.iangv.org/tools-
resources/statistics.html. Companies that currently offer NGVs worldwide include Fiat, Chrysler,
GM, Ford, Honda, and Mercedes.
7 A report from Pike Research notes that the 2011 sales of plug-in EVs and battery EVs totaled
'just under 114,000' worldwide. See http://www.pikeresearch.com/newsroom/cum ulative-plug-
in-electric-vehicle-sales-to-reach-5-2million- worldwide-by-2017. By way of comparison,
worldwide sales of NGVs in 2009 (the most recent worldwide data) were over 1.3 million
vehicles. See http://www.iangv.org/tools-resources/statistics.html. See a/so, 76 Fed. Reg. 75,011
(noting that sales of the Nissan Leaf have been only approximately 8,000, and sales of the Tesla
Roadster have been only approximately 1,500).
6-22
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
8 Henry Lee & Grant Lovellette, 'Will Electric Cars Transform the U.S. Vehicle Market? An
Analysis of the Key Determinants,' Discussion Paper 2011-08, Belfer Center for Science and
International Affairs, July 2011, available at http://belfercenter.ksg.harvard.edu/files/Lee
Lovellette Electric Vehicles DP 2011 web. pdf
9 See Energy Information Administration, Alternatives to Traditional Transportation Fuels 2008
(2010), http://www.eia.gov/cneaF/alternative/page/atftables/afv_atF2008.pdF; Department of
Energy, Alternative Fuels and Advanced Fuels Data Center, press release,
http://www.afdc.energy.gov/afdc/progs/fleet exp cat.php/LDV.
10 See e.g., http://www.cleanvehiclesolutions.com/blog/2011/12/29/governors-sign-
memorandum-understandingconvert-state-fleets-natural-gas/.
11 See e.g., http://www.cleanenergyfuels.com/2011/7-11-11.html.
12 These next-generation appliances will build upon existing home refueling stations
manufactured by companies such as BRC Fuel Maker (see
http://www.brcfuelmaker.it/eng/casa/chi siamo.asp) and Gas Fill Limited (see
http ://www.gasfill. com).
13 See IEA-ETSAP Technology Brief, April 2010, available at http://www.iea-
etsap.org/web/ETechDS/ PDF/T03 LPG-CH4 eng-GS-gct-AD.pdf
15 EIA Annual Energy Outlook 2012, available at
http ://www. eia.gov/forecasts/aeo/er/pdf/03 83 er(2012).pdf.
16 Bonneville Power Administration & Northwest Gas Association, Comparing Pipes and Wires,
March 2004. http://www.chpcenternw.org/NwChpDocs/Transmission and N Gas Comparing
Pipes and Wires 032304.pdf. Furthermore, EVs are expected to 'have a significant impact on
electrical grid strain.' See e.g., Nicholas DeForest, et al, 'Impact of Widespread Electric Vehicle
Adoption on the Electrical Utility Business - Threats and Opportunities,' Technical Brief,
University of California, Berkeley Center for Entrepreneurship & Technology.
17 Implications of Greater Reliance on Natural Gas for Electricity Generation, American Public
Power Ass'n, https://appanet.cms-
plus.com/files/PDFs/lmplicationsOfGreaterRelianceOnNGforElectricityGeneration.pdf
18 See the annual ratings issued by the American Council for an Energy Efficient Economy
(ACEEE) at http://www.greenercars.org/highlights greenest.htm and
http://www.honda.com/newsandviews/article.aspx?id=5904-enl noting that the CNG-powered
Honda Civic GX was rated the 'greenest car in America' for eight years in a row (from 2003 to
2011).
19 The California Air Resources Board (CARB) has extensively analyzed this issue and found
that CNG produces approximately 68 grams of CO2 equivalent emissions per mega joule (MJ)
burned. By comparison, gasoline and diesel produce approximately 94-95 grams of CO26/MJ.
6-23
-------
EPA Response to Comments
These comparisons are based on well-documented, well-to-wheel analyses. Thus, natural gas can
reduce GHG emissions by 28-29% compared with diesel and gasoline-fueled vehicles. See
CARS Look Up Table, http://www.arb.ca.gov/fuels/lcfs/121409Icfs lutables.pdf
20 As detailed in Appendix 1, an NGV using even a 15% bio-methane blend would significantly
reduce total GHG emissions. DOE's National Renewable Energy Lab has estimated future
production of bio-methane will reach up to 16 billion gasoline gallons equivalent (GGEs). 74
Fed. Reg. 24,982. Bio-methane achieves approximately an 85 percent reduction in GHGs as
compared to gasoline.
21 The federal government's track record in selecting clean energy winners has been
questionable, at best. Over the last year, in addition to the well-publicized bankruptcy of the solar
manufacturer Solyndra (which received a DOE loan guarantee of more than $500 million), a
manufacturer of lithium-ion batteries for EVs, EnerDel, also filed for bankruptcy after receiving
a $118 million grant from DOE. In 1971, significant federal funding was authorized for the
Clinch River Breeder Reactor Project, which was considered to be 'revolutionary' at the time.
Twelve years and $8 billion later, Congress pulled funding for the project, which was never
finished. See e.g., http://www.nader.org/template.php7/archives/926-That-Clinches-lt-The-
Breeder-Reactor-i s-Dead .html.
22 See Lee & Lovellette, Discussion Paper, note 8, supra (noting that 'Batteries may become
cheaper and lighter, and charging equipment can become more versatile; but these improvements
are still developing').
23 See North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008) (holding that EPA's NOX
emissions trading program unduly favored coal-fired generation over natural-gas generation).
24 NHTSA is expressly prohibited from considering the availability of statutorily-established
credits (such as for alternative-fueled vehicles) in determining its standards. Thus, NHTSA may
not raise CAFE standards because manufacturers have enough of those credits to meet higher
standards. By comparison, EPA's CAA authority does not have such a restriction, which allows
EPA to set higher standards. 76 Fed. Reg. 75,341.
31 The Proposed Rule separately identifies electric vehicles (EVs) and plug-in hybrid electric
vehicles (PHEVs). However, the regulatory benefits for both of these electric vehicle types are
generally the same under the Proposed Rule. Therefore, 'EVs' in these comments should be
understood to include both electric vehicles as well is plug-in hybrid electric vehicles, unless the
context requires otherwise. Fuel cell vehicles also often share in comparable benefits, though
because of the limited market deployment of these vehicles, they are not separately discussed
herein.
37 Again examining CARB's look up table provides an approximate value of 94-95 gCO2e/MJ
for gasoline and diesel, while renewable natural gas has an approximate value of 11-13
gCO2e/MJ. See CARB Look Up Table, note 19, supra.
6-24
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
38 'Qualified alternative fuel vehicles' should include only those vehicles that use an alternative
fuel a minimum of 50% of the time (i.e., those vehicles that have a 'utility factor' equal to or
greater than 50%). ACSF believes this qualification criteria is necessary to encourage the
development of technologies that are truly 'alternative' with the potential to be 'game changing.'
Thus, if forecast use of an alternative fuel is less than 50% (such as is the case with ethanol flex-
fuel vehicles), then the vehicle class would not qualify for this incentive.
39 See EPA, 'Guidance for Implementing Section 141 of the Energy Independence and Security
Act of 2007: Federal Vehicle Fleets and Low Greenhouse Gas-Emitting Vehicles' at 5 (Feb. 22,
2010).
40 Executive Order 13514, 'Federal Leadership in Environmental, Energy, and Economic
Performance' Section 2(a) (Oct. 5, 2009), available at
http:(/www.whitehouse.gov/assets/documents/2009fedleader eo rel,pdf
41 See Federal Energy Management Program, 'Executive Order 13514: Federal Leadership in
Environmental, Energy, and Economic Performance; Guidance for Federal Agencies on E.O.
13514 Section 12, Federal Fleet Management,' at 2 (Apr. 2010), available at
http://www.gsa.gov/graphics/fas/ExecutiveOrder 13 514. pdf.
46 NGVAmerica, 'NGVs and the Environment,' available at
http://www.ngvc.org/aboutngv/ngvenviron.html. Blending renewable sources of natural gas with
traditional natural gas can further lower NGV GHG emissions.
47 Notably, the 'PEF' for EVs, which provides an equivalent benefit to the 0.15 divisor for EVs
under the CAFE rules, continues to be in effect and is not impacted by the Proposed Rule.
51 With 1 being the baseline and 2 being equivalent to fuel that is 100% domestically sourced.
52 Another possible means of rewarding energy security is to make energy security benefits one
of the 'gating' criteria for the existing vehicle multiplier, discussed above in section IVA For
instance, to qualify for this multiplier EPA would need to determine that a certain minimum
percentage of a vehicle's fuel is domestically sourced (say 75%), and that the vehicle drive-train
technology does not require foreign-sourced materials that constitute more than a certain
percentage of the drive-train's costs. 53 See Summary of CAFE Fines Collected, available at
www.nhtsa.gov/staticfiles/rulemaking/pdf/cafe/CAFE fines collected summary.pdf.
54 As an example of statutory authority for revenue recycling, under 49 U.S.C. § 32912(e)(2),
the Secretary of Transportation must use 50% of the fines collected 'to carry out a program to
make grants to manufacturers for retooling, reequipping, or expanding existing manufacturing
facilities in the United States to produce advanced technology vehicles and components.' Using
the above 'energy security' factor, the agency could provide funds to manufacturers based upon
the highest fleet wide 'energy security' factor to encourage development of vehicles that provide
for a more secure energy future.
6-25
-------
EPA Response to Comments
55 See EIA, 2012 Energy Outlook Early Release, Table A13, which finds that the 2012 supply of
natural gas is in excess of 25 trillion cubic feet. Available at
http://www.eia.gov/oiaf/aeo/tablebrowser/#release=EARLY2012 &subject:O-
EARLY2012&tabIe: 13EARLY2012& region=0-0&cases=fuI1201 l-d02091 Ia,early2012-
d!2101 Ib. See also Mass. Inst. of Tech., The Future of Natural Gas (noting that in the U.S.,
natural gas resources continue to grow, and the development of low-cost and abundant
unconventional natural gas resources, particularly shale gas, has a material impact on future
availability and price.), available at, www.cleanskies.org.
56 See http://www.minerals.usgs.gov/mineraI5/pub5/commodity/lithium/mcs-2011-lithi.pdf
Organization: American Honda Motor Co., Inc.
Additionally, EPA requested comments about the inclusion of compressed natural gas vehicles
(NGVs) in these incentives. NGVs have similar environmental and energy security benefits
compared to EVs and PHEVs, and their marketing challenges (infrastructure and consumer
acceptance) are similar, as well. Honda supports the addition of dedicated NGVs to the group of
dedicated vehicle multipliers (EV and FCVs) and bi-fuel NGVs to the bi-fuel vehicle multipliers
(PHEVs). A differential in the multiplier for dedicated and bifuel natural gas vehicles is fully
justified because there is no guarantee that the latter will operate on natural gas all of the time.
[EPA-HQ-OAR-2010-0799-9489-A1, p. 3]
Honda recommends revising Table III-15 as follows: [Table III-15 can be found on p. 3 of
Docket number EPA-HQ-OAR-2010-0799-9489-A1] [EPA-HQ-OAR-2010-0799-9489-A1, p.
3]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17,2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 118-119.]
However, EPA intends to use the SAE utility factor in calculating the contribution of each fuel in
climate change in the future bi-fuel vehicle, which Honda believes will virtually eliminate any
regulatory differentiation between a dedicated and the bi-fuel natural gas vehicle to detrimental
effect. Therefore, Honda suggests that EPA instead add dedicated natural gas vehicles to the EV
and fuel cell electric vehicle group of technologies and add bi-fuel natural gas vehicles to the
PHEV group of technologies with respect to the multiplier.
Organization: American Petroleum Institute (API)
Comments on the Proposed Approach to Measure Compliance with Fuel Economy and GHG
Standards for Dual-Fuel CNG vehicles
EPA and NHTSA note that the statutory incentive for dual-fueled vehicles in 49 U.S.C 32906
and the measurement methodology specified in 49 U.S.C 32905 (b) and (d) expire in MY 2019
and request comment on proposed options going forward. The agencies are proposing to directly
extend the PHEV utility factor methodology to dual-fuel CNG vehicles, using the same
assumptions about daily refueling. Under the utility factor approach, the vehicle range on the
6-26
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
alternative fuel would be used to estimate the fraction of average daily travel that the range
represents based on SAE Standard J2841. For example, a plug-in hybrid electric vehicle (PHEV)
with an all-electric range of 40 miles would be assigned a utility factor of 0.617, while a dual-
fuel natural gas vehicle (NGV) with a range on natural gas of 150 miles would be assigned a
utility factor of 0.925. [EPA-HQ-OAR-2010-0799-9469-A1, p. 7]
We have several concerns with this proposed approach. First, it relies on the implicit assumption
that the driving behavior of owners/operators of PHEVs is identical to that of owners/operators
of dual-fuel CNG vehicles; an assumption which we do not believe is (or has been) demonstrably
supported by any underlying data, yet should be. (A related question is whether the driving
behavior and vehicle use characteristics of that element of the population sometimes termed
"early technology adopters" is similar to, or different than, the "national average" database of
travel characteristics from which the Utility Factors were created.)13 Second, although the use of
the utility factor is an improvement over the simple 50/50 split used previously, this approach
inherently assumes that the vehicle begins each day with a full state of charge (PHEVs) or a full
natural gas tank (NGVs). It is unclear that this will occur in practice, and it may significantly
overestimate the calculated benefits of the alternative fuel. Additionally, the vehicle range on the
alternative fuel is established based on 2-cycle testing (i.e., the FTP and the highway fuel
economy test) that is used to determine compliance with the CAFE and GHG standards. This
clearly overestimates the range on the alternative fuel, and the proposed rule should be revised to
reflect real-world vehicle range based on 5-cycle test results or other data that better represent
real-world performance. This is not at all inconsistent with the use of 2-cycle tests for CAFE and
GHG emissions compliance, as the real-world range would only be used to establish the
appropriate utility factor, which, in turn, was based on real-world driving statistics. [EPA-HQ-
OAR-2010-0799-9469-A1, pp. 6-7]
EPA and NHTSA Should Not Contravene the Will of Congress by Allowing an Unlimited Fleet
Fuel Economy Credit for MY 2020 and Later Dual-Fueled Vehicles
EPA and NHTSA also are requesting comment on whether to continue to use the 0.15 divisor for
CNG and ethanol, and the petroleum equivalency factor for electricity, both of which the statute
requires to be used through MY 2019, for model years 2020 and later dual-fueled vehicles. The
use of these factors in conjunction with the utility factor approach discussed above artificially
and substantially inflates the fuel economy of dual-fueled vehicles and thus provides an incentive
to the automakers to produce these for CAFE compliance purposes regardless of other
consequences. In essence, the agencies are proposing that automakers may ".. .increase their
calculated fleet fuel economy for dual-fueled vehicles by an unlimited amount using these
flexibilities." 16 However, Section 32906 of the Energy Independence and Security Act of 2007
(EISA 2007) phased-out the maximum fuel economy credit attributable to dual-fuel vehicles
(except electric vehicles) that could be taken by manufacturers of those vehicles such that the
credit was reduced from 1.2 mpg in model year 2014 (and previous model years) to 0.2 mpg in
model year 2019 to "0 miles per gallon for model years after 2019" (Section 32906(a)(7)).
Clearly, the EPA and NHTSA proposed treatment of model year 2020 and later dual-fueled
natural gas vehicles is overly generous and inconsistent with the intent and will of Congress. It
should be set aside. [EPA-HQ-OAR-2010-0799-9469-A1, p. 7]
6-27
-------
EPA Response to Comments
It is also useful to note that for the many years that this CAFE credit incentive has been in place,
dual-fueled vehicles (particularly those using natural gas) have continued to remain a negligible
fraction of the fleet. In other words, the presence of the incentive has not contributed to the
influx of dual-fueled CNG vehicles. (In fact, there are no OEM dual-fuel CNG vehicles offered
today; only a few after-market conversion models.) [EPA-HQ-OAR-2010-0799-9469-A1, p. 7]
13 Bradley, T.H and Quinn, C.W., Analysis of Plug-In Hybrid Electric Vehicle Utility Factors,
Journal of Power Resources, 195 (2010) 5399-5408 [EPA-HQ-OAR-2010-0799-9469-A1, p. 6]
16 Note that E85 FFVs would need to demonstrate actual use of the alternative fuel to receive
credit, via national average E85 and gasoline usage or manufacturer-specific data. [EPA-HQ-
OAR-2010-0799-9469-A1, p. 7]
Organization: American Public Gas Association (APGA)
APGA also sincerely appreciates both agencies' efforts to make changes to the Greenhouse
Gas/Corporate Average Fuel Economy Standards to further advance the development and
deployment of alternative fueled vehicles (AFVs). However, APGA respectfully submits that
both agencies consider changes to the NOPR (detailed below) to ensure that natural gas vehicles
(NGVs) and infrastructure receive equal treatment to other AFV technologies. [EPA-HQ-OAR-
2010-0799-9448-A1, p. 1]
Natural gas vehicles (NGVs) can play a critical role in reducing America's energy dependence
on foreign oil, as well as reducing greenhouse gas emissions. The combination of a secure,
domestic, affordable fuel source that can be used by existing technology makes NGVs the logical
choice for replacing our transportation fleet.
In order to ensure that NGVs can make these critical contributions to U.S. energy and national
security, APGA respectfully submits the following comments on: Current Law, the
EPA/NHTSA Proposal for 2012-2015, and the Proposal for the 2016-2019 period. [EPA-HQ-
OAR-2010-0799-9448-A1, p. 2]
2012-2015 Current Law: APGA believes that as structured under current law, dedicated and bi-
fuel NGVs appear to receive significant NGV Fuel Economy (FE) and Greenhouse Gas
Emissions (GHG) credits due to the .15 multiplier. However, because of the fact that E85 Flex
Fuel Vehicles (FFVs) are eligible to receive these credits and because Original Equipment
Manufacturers (OEMs) will likely not be required to have additional FE and GHG credits, they
will be of little value to NGVs. [EPA-HQ-OAR-2010-0799-9448-A1, p. 2]
Additionally, APGA respectfully requests clarification on the following issues:
• Can GHG credits for dedicated and bi-fuel NGVs be carried forward?
• Can the bi-fuel FE credits be carried forward?
6-28
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
• Can the FE credits for dedicated vehicles be carried forward? [EPA-HQ-OAR-2010-
0799-9448-A1, p. 2]
APGA respectfully requests that clarification be provided for each of these issues. [EPA-HQ-
OAR-2010-0799-9448-A1, p. 2]
EPA/NHTSA Proposal 2012-2015:
Given the issues with current law, APGA respectfully requests that EPA and NHTSA to extend
the incentives provided in 2012 - 2015 specifically for dedicated and bi-fuel NGVs until NGV
sales hit a level demonstrating market acceptance or commercialization. APGA is open as to how
to properly define this metric but suggests that perhaps a sales threshold of 250,000 dedicated
NGVs per year is practicable. [EPA-HQ-OAR-2010-0799-9448-A1, p. 2]
Moreover, APGA also suggests that EPA and NHTSA establish a separate track for bi-fuel
vehicles so that the credits for these vehicles are not overwhelmed by the FFV credits and subject
to the caps of bi-fuel vehicles. APGA believes that the legal justification for this change is the
same that they are offering for 2020 and beyond - i.e., the Utility Factor (UF) bases performance
on real-world expectations not the seemingly arbitrary 50/50 allocation established in Energy
Policy and Conservation Act (EPCA). [EPA-HQ-OAR-2010-0799-9448-A1, p. 2]
APGA also urges EPA to provide an incentive for OEMs like Ford and GM and others who are
facilitating the development of the aftermarket industry by offering Natural Gas-ready engines
and setting up Qualified Vehicle Manufacturer (QVM) programs. The aftermarket vehicles
largely are not covered by GHG and FE rules so the OEMs should receive some credit for
facilitating increased availability of aftermarket vehicles. [EPA-HQ-OAR-2010-0799-9448-A1,
p. 2]
2016-2020 [EPA-HQ-OAR-2010-0799-9448-A1, p. 3]
APGA appreciates the changes the proposed rules make to current law. However, APGA does
have two brief suggestions for improvement on two elements under EPA jurisdiction: the
production multiplier and pickup truck rules. [EPA-HQ-OAR-2010-0799-9448-A1, p. 3]
EPA specifically solicited comments on whether it should provide a production multiplier for
dedicated and bi-fuel NGVs for 2017 - 2021 - which would be a GHG credit. APGA strongly
believes that this credit would be beneficial for NGVs if they are treated similarly under the rule
asPHEVs. [EPA-HQ-OAR-2010-0799-9448-A1, p. 3]
Organization: Association of Global Automakers, Inc. (Global Automakers)
EPA invited comments on providing a multiplier incentive for dedicated and/or dual fuel
compressed natural gas vehicles. Global Automakers supports such an approach, which would
address the near term price and fueling infrastructure obstacles faced by these vehicles in a
manner consistent with the approach taken for electric and fuel cell vehicles. Furthermore,
Global Automakers supports the extension of multiplier incentives to other alternative fuels as
6-29
-------
EPA Response to Comments
well, such as liquid petroleum gas (LPG) or biodiesel. With regard to dual fueled vehicles in
general, we urge the agencies to reconsider the treatment of these vehicles as part of the planned
mid-term review of the standards, at which point the need for particular incentives would be
clearer. Whatever approach is adopted, we urge that EPA and NHTSA agree on a single,
harmonized set of incentives. [EPA-HQ-OAR-2010-0799-9466-A1, p. 7]
Organization: Boyden Gray & Associates PLLC
First, the joint proposal prioritizes CO2 control at the expense of petroleum import reduction,
which should be the paramount goal of these regulations. But the joint proposal fails to expressly
acknowledge its preference; because of that lack of transparency, we fear that it will receive
insufficient comment. [EPA-HQ-OAR-2010-0799-9506-A1, p. 1]
CO2 VERSUS OIL IMPORT REDUCTION
In this joint rulemaking, both EPA and DOT go to considerable lengths to assert that although
each agency is governed by different legislative authority, their proposals are for all relevant
purposes similar in their requirements. Unfortunately this is not the case—the two agencies
propose to impose fundamentally incompatible requirements. [EPA-HQ-OAR-2010-0799-9506-
Al,p.2]
Of course, similarity is not what one would expect from just a cursory familiarity with the
underlying statutes—the Clean Air Act (CAA) and the Energy Independence and Security Act of
2007 (EISA)—and similarity is not in fact what results. The agencies acknowledge (fleetingly)
the tradeoffs between climate control and oil import reduction, yet they fail to acknowledge the
major contradictions that could easily develop under these joint proposed rules. [EPA-HQ-OAR-
2010-0799-9506-A1, p. 2]
The easiest starting point for explanation is DOT's own description of the central intent of the
authorizing 2007 energy legislation: "the overarching purpose of the statute is energy
conservation and reducing petroleum usage." To that end, the statute provides for an alternative
fuel "multiplier" that the 2007 Energy bill requires for model years to 2019 and which the
agencies propose to continue well beyond. The multiplier—actually a 0.15 divisor—is a very
powerful regulatory boost for domestically produced alternative fuels such as alcohols, natural
gas or hydrogen. The mechanism works by dividing the miles per gallon (equivalent of gasoline)
of the alternative fuel by 0.15, so that a car getting 15 miles per gallon on alternative fuel goes
into the car company's fleet average as a 100-mpg vehicle. As the preamble to the proposed rules
also explains, a typical compressed natural gas (CNG) vehicle that gets 25 miles per 100 cubic
feet of gas goes into the average as a car getting 203 mpg. [EPA-HQ-OAR-2010-0799-9506-A1,
p. 2]
These are big numbers with a potentially significant impact for lowering an automaker's
fleetwide average fuel economy if the company sells more than a few alternatively fueled
vehicles. Assume, for example, that a car company sells 30% of its vehicles to fleet operators
(limousines, delivery vehicles, taxi cabs, etc.), and that the company decides to convert, by 2025,
half of those cars (i.e., 15% of total sales) to natural gas.6 If 15% of the company's sales are
6-30
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
CNG-fueled, with a fuel economy of 203 mpg, the company could still achieve NHTSA's 2025
fuel economy requirement (49.6 mpg) so long as the remaining 85% of its sales were at least
43.77 mpg. Similarly, a car company could convert 15% of its total sales in 2025 to vehicles that
run on E30—a blend of 30% ethanol and 70% gasoline that allows for some increased engine
efficiency because of its high octane. Given growing awareness of the benefits of E30 as a
sustainable and cleaner fuel choice, the administrator could grant a multiplier to E30 that
functions in the same way as the current 0.15 multiplier for alternative fuels.8 A multiplier of 0.7
for E30, based on the 70% fuel content of E30, would allow the car company to meet NHTSA's
2025 requirement of 49.6 mpg with a fleet of cars that achieve only 47.4 mpg, so long as 15% of
those vehicles were run on E30. These margins—6 mpg in the CNG example and 2.2 mpg in the
E30 example—would provide car companies with flexibility to experiment with technological
advances to satisfy consumer demand and reduce traditional pollution without fear of fines. That
opportunity is precisely the type of incentive that the EISA, amending the Energy Policy and
Conservation Act, was enacted to create: as NHTSA recognizes in its "portion" of the joint
rulemaking proposal, EISA was enacted to promote fuel economy and displace foreign oil. It is
irrelevant that companies may have made downsizing commitments in anticipation of continued
high oil prices and may therefore never need the maximum leeway theoretically provided. The
key is at the margins, and the need for car companies to steer clear of problems that cannot be
anticipated, such as a changing consumer preferences and fluctuating oil prices. [EPA-HQ-OAR-
2010-0799-9506-A1, pp. 2-3]
In practice, NHTSA's incentive structure is a mirage, because it is nullified in substance by
EPA's greenhouse gas emissions regulations. Under the EPA's proposed rules, a car company
could not fully utilize the 0.15 multiplier, as hypothesized above, to convert 15% of its sales to
CNG, because the total emissions for all cars sold, including gasoline-fueled cars making up
85% of total sales, would far exceed EPA's maximum emissions limits. The company's total
vehicle stock—15% CNG-fueled vehicles, with a statutory fuel economy of 203 mpg; and 85%
gasoline-fueled vehicles, with a fuel economy of 43.77 mpg—would produce emissions
averaging approximately 203 g/mi, 25% more than the EPA's proposed 2025 limit of 163
g/mi.10 Perhaps more to the point, today's CNG vehicles could not satisfy EPA's 2025 CC>2
requirements, despite the multiplier, even though CNG vehicles produce almost 30% less CC>2
emissions than gasoline vehicles do, because the EPA rules require a CO2 reduction by 2025
larger than 30% (i.e., 163 g/mi verses 203 g/mi). Put another way, CNG vehicles alone would
produce more CC>2 than a gasoline car that has been downsized and otherwise redesigned to meet
a!63 g/mi CO2 rating. 11 [EPA-HQ-OAR-2010-0799-9506-A1, p. 3]
In other words, the EPA's rules eliminate the flexibility that EISA, as implemented by NHTSA,
is supposed to create for automakers. EPA's proposal caps car companies' ability to utilize
NHTSA's 0.15 multiplier. EPA's proposal effectively repeals much of DOT's import-reduction
efforts, and the 2007 statute on which DOT's efforts are based. [EPA-HQ-OAR-2010-0799-
9506-Al,p. 4]
As noted above, the agencies cannot avoid this conflict by asserting that car companies are
unlikely to want to utilize the 0.15 multiplier to an extent that would violate EPA's greenhouse
gas limits. In fact, this scenario is much more likely than the agencies might admit, because the
agencies own efforts to promote electric cars may be unrealistic. While the agencies presume
6-31
-------
EPA Response to Comments
that a significant segment of the market will move to hybrid and plug-in electric vehicles, actual
electric car sales have fallen far short of the agencies' hopes; even going forward, electric
vehicles' future is clouded by limited access to low priced rare metals essential to large scale
battery production. Moreover, the future of solar and wind renewable energy is much less robust
today than just a year ago, given the well publicized difficulties with solar investments and the
very low price of natural gas. This could mean a much higher CC>2 profile for electric vehicles
over the long haul (beyond the first 200,000 which are exempt from the life cycle analysis that
applies to other alternative fuels). [EPA-HQ-OAR-2010-0799-9506-A1, p. 4]
Indeed, while market forces are making electric vehicles less attractive, market forces are
making alternative-fueled vehicles more attractive. Natural gas vehicles will benefit from the low
price of natural gas, which stems largely but not exclusively from the gas shale revolution. At the
same time, biofuels will become more popular: ethanol produces less CO2 than gasoline, on a
life-cycle basis; but like natural gas, it still produces much more than a downsized gasoline car. It
is not hard to envision a combination of natural gas and biofuel growth encouraged by the 2007
legislation that quickly challenges the CO2 limits imposed by EPA. [EPA-HQ-OAR-2010-0799-
9506-A1, p. 4]
Which regime takes precedence, EPA's or DOT's? The former is based on the Clean Air Act
(CAA), the latter, on the 2007 EISA. The relevant CAA provisions were enacted as far back as
1970 and 1990, when climate change policy-making was in its infancy; there has been no
relevant CAA legislation since 1990. If there is an irreconcilable conflict between the statutes,
then the EISA will likely control the CAA, because the later enactment ordinarily displaces the
earlier. [EPA-HQ-OAR-2010-0799-9506-A1, p. 4]
And in this case, the legislative history makes the EISA's displacement of the CAA even clearer.
The Supreme Court ruled in Massachusetts v. EPA (2007) that CC>2 was a "pollutant" within the
meaning of the CAA and thus subject to regulation upon a finding by EPA that CC>2 endangers
the environment—a finding subsequently made by EPA that is now on appeal. In the
Massachusetts v. EPA litigation, the EPA had argued that they could not regulate greenhouse gas
emissions because doing so would be equivalent to regulating fuel economy, a subject committed
to DOT's jurisdiction by the Energy Policy Conservation Act. The Supreme Court observed,
without providing any details, that "there is no reason to think the two agencies cannot both
administer their obligations and yet avoid inconsistency." That hypothetical co-existence might
have been possible in 2006, but Congress's enactment of the EISA later that year ended any hope
for co-existence. The EISA reaffirmed the 0.15 "multiplier," and it stated Congress's position
that the country must "reduce the dependence of the United States on energy imported from
volatile regions of the world that are politically unstable," and that "increased energy production
from domestic renewable resources would attract substantial new investments in energy
infrastructure, create economic growth, develop new jobs for the citizens of the United States,
and increase the income for farm, ranch, and forestry jobs in the rural regions of the United
States." [EPA-HQ-OAR-2010-0799-9506-A1, pp. 4-5]
As is often the case in state preemption and federal displacement cases, Congress did not address
any possible conflict between the new CAFE statute and the much older CAA, which makes no
mention of climate change or CC>2 regulation. But coming after the Supreme Court decision,
6-32
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
there can be little question that if there is a conflict between the statutes, then the CAA must
defer to the highly detailed 2007 legislation. At the very least, it is difficult to argue that EPA's
CO2 limits can be allowed to negate the multiplier. [EPA-HQ-OAR-2010-0799-9506-A1, p. 5]
Without acknowledging this potential conflict, EPA does request comment on whether natural
gas vehicles should receive a CC>2 multiplier similar to that which EPA provides for electric
vehicles. But EPA does not explain the basis for calculating the EV multiplier; it is therefore
difficult to determine from the EV example how this should be done. An approach more clearly
rooted in the statute would be to provide a CO2 multiplier equivalent to the 0.15 multiplier EISA
provides for alternative fuels, and make it similarly available to fuels like ethanol and natural
gas. The result would be a CO2 averaging number that companies could assign to non-petroleum
cars in the same way that the 0.15 multiplier results in an mpg number for calculating a
manufacturer's fleetwide average fuel economy. The agencies could in this way keep the two
regulatory regimes from potentially troublesome legal conflict. [EPA-HQ-OAR-2010-0799-
9506-A1, p. 5]
Organization: Chrysler Group LLC
Chrysler supports EPA's proposals regarding natural gas vehicles and recommends that the
Agencies take steps to further harmonize the greenhouse gas and CAFE program treatment of the
vehicles. (Attachment 4)
Current statutes and regulations limit the regulatory support for natural gas vehicles ("NGV's).
Chrysler recommends that the agencies establish a category of "extended-range" dual fuel NGVs
which would be treated as dedicated NGVs. Chrysler supports EPA's proposal to weight dual
fuel NGV fuel use using a utility factor-based approach. This approach is consistent with the
expected real-world CNG utilization of this vehicle type. Given the additional expense of NGVs
and the state of infrastructure development, Chrysler also supports EPA's proposed incentive
multipliers for the production of these vehicles. [EPA-HQ-OAR-2010-0799-9495-A1, p. 6]
In his January 24, 2012 State of the Union Address, President Obama laid out a Blueprint for an
America Built to Last, underscoring his commitment to an all-of-the-above approach that
develops every available source of American energy. This commitment includes a plan to
promote the safe, responsible development of the near 100-year supply of natural gas, supporting
more than 600,000 jobs while ensuring public health and safety. Encouraging the development of
the CNG refueling infrastructure and CNG vehicles supports this commitment. [EPA-HQ-OAR-
2010-0799-9495-A1, p. 18]
Both dedicated and dual fuel compressed natural gas vehicles ("NGVs") represent a significant
opportunity to reduce greenhouse gas emissions and to improve energy independence. The
benefits of compressed natural gas include abundant domestic production, lower smog-forming
and greenhouse gas emissions when burned, and a price advantage over gasoline. However,
several roadblocks exist to the wide-spread adoption of NGVs. These include limited vehicle
availability and a lack of public fueling infrastructure. [EPA-HQ-OAR-2010-0799-9495-A1, p.
18]
6-33
-------
EPA Response to Comments
In the NPRM, the Agencies take positive steps towards enabling the successful deployment of
NGVs, including the establishment of a utility factor-based method for dual fuel CNG vehicles.
The Agencies can build on these positive first steps by developing a harmonized approach
between the greenhouse gas and CAFE rules, extending EPA utilization of the NHTSA 15% fuel
content factor under the greenhouse gas rules, and providing volume multipliers consistent with
those proposed for electric and plug-in hybrid electric vehicles. [EPA-HQ-OAR-2010-0799-
9495-Al,p. 18]
A special category of "extended-range" NGVs should be created
Chrysler believes that the creation of a special "extended-range" category for certain dual fuel
NGVs would be helpful in encouraging manufacturers to produce NGVs while providing
adequate reserve range where a re-fueling infrastructure is not readily available. This type of
vehicle could provide significant CNG range, with a reserve of conventional fuel to reduce
customer range anxiety. [EPA-HQ-OAR-2010-0799-9495-A1, p. 18]
Under current regulations, the incentives to undertake a dual fuel NGV are minimal for
manufacturers which already meet the maximum dual fuel credit values through the production
of dual fuel bio-fuel vehicles. If this special category of extended-range NGVs were treated, for
regulatory purposes, as dedicated alternative fuel vehicles, this barrier would be removed and
manufacturers would be incentivized to produce a greater number of NGVs, thereby also
promoting infrastructure development. [EPA-HQ-OAR-2010-0799-9495-A1, p. 18]
Chrysler supports the proposed utility factor-based methodology to weight greenhouse gas
emissions for dual fuel NGVs.
EPA proposes to apply a utility factor-based methodology to weighting greenhouse gas
emissions on CNG and conventional fuel for dual fuel NGVs. Chrysler agrees that this approach
is appropriate for this type of vehicle and will more accurately reflect the relative use of CNG
and conventional fuels. As noted above, once the proportion of CNG to conventional fuel driving
range exceeds a certain threshold, the Agencies should treat this type of vehicle as a dedicated
alternative fuel vehicle. [EPA-HQ-OAR-2010-0799-9495-A1, p. 18]
The utility factor-based calculation should be made available for greenhouse gas and CAFE
compliance purposes starting 2012MY.
Treatment of NGVs as Advanced Technology Vehicles
EPA requests comment on the merits of providing multipliers to NGVs similar to those for
electric and plug-in hybrid electric vehicles. Chrysler supports this approach to providing
regulatory incentives for this beneficial technology. Such an approach not only improves the
business case for NGVs, but also provides a more technology-neutral approach to reducing
greenhouse gas emissions and oil consumption. Chrysler recommends that dedicated and
"extended-range" natural gas vehicles receive at least the same multipliers as electric vehicles,
and that dual fuel NGVs receive at least the same multipliers as plug-in hybrid electric vehicles.
[EPA-HQ-OAR-2010-0799-9495-A1, p. 19]
6-34
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
EPA is proposing "to allow the option, at the manufacturer's discretion, to use the proposed
utility factor-based methodology" for model year 2012-2015 greenhouse gas compliance
calculations. Chrysler supports this proposal. [EPA-HQ-OAR-2010-0799-9495-A1, p. 19]
EPA further proposes to begin use of the utility factor-based approach for CAFE purposes
starting in model year 2020. The goal of harmonizing greenhouse gas and CAFE compliance
requirements would be best served if these vehicles were treated the same under both programs
by using the utility factor-based approach in CAFE compliance calculations. [EPA-HQ-OAR-
2010-0799-9495-A1, p. 19]
EPA should continue to apply the 15% fuel content factor to greenhouse gas emissions through
2025 model year.
Under current regulations, for model years 2012 through 2015, the greenhouse gas emissions for
dual fuel NGVs are multiplied by a 0.15 fuel content factor, similar to their treatment in the
CAFE program. In the 2016 and later model years, this fuel content factor is discontinued for
greenhouse gas emission purposes, resulting in reduced harmonization with the CAFE program.
To increase harmonization of the two programs, and to incentivize production of NGVs, EPA
should extend this 0.15 fuel content factor through the 2025 model year, consistent with the
CAFE program. [EPA-HQ-OAR-2010-0799-9495-A1, p. 19]
Organization: Clean Energy
PRESIDENT OBAMA'S COMMENTS ON NATURAL GAS VEHICLES ON JANUARY 26,
2012. [EPA-HQ-OAR-2010-0799-9511-A1, p.2]
On January 26, 2012, the President of our United States shared his views on the importance of
natural gas use in vehicles at a Clean Energy refueling station serving the United Parcel Service
in Las Vegas, Nevada. His remarks were so important, that we felt compelled to include them in
our comments. Below is an important excerpt of his speech that day (emphasis in 'bold' added).
[EPA-HQ-OAR-2010-0799-9511-A1, p.2]
Now, part of my blueprint and what I want to focus on a little bit today is for on economy built to
last with American energy. That's why we're here. For decades, Americans have been talking
about how do we decrease our dependence on foreign oil. Well, my administration has actually
begun to do something about it. [EPA-HQ-OAR-2010-0799-9511-A1, p.3]
Over the last three years, we negotiated the toughest new efficiency standards for cars and trucks
in history. We've opened millions of new acres for oil and gas exploration. Right now, American
oil production is the highest that it's been in eight years. Eight years. Last year, we relied less on
foreign oil than in any of lost 16 years. That hasn't gotten a lot of attention, but that's important.
(Applause.) We're moving in the right direction when it comes to oil and gas production. [EPA-
HQ-OAR-2010-0799-9511-A1, p.3]
6-35
-------
EPA Response to Comments
And today, I'm announcing that my administration will soon open up around 38 million acres in
the Gulf of Mexico for additional exploration and development, which could result in a lot more
production of domestic energy. (Applause.) [EPA-HQ-OAR-2010-0799-9511-A1, p.3]
But as I said on Tuesday, and as the folks here at UPS understand, even with all this oil
production, we only have about 2 percent of the world's oil reserves. So we got to have an all-
out, all-in, all-of-the-above strategy that develops every source of American energy - a strategy
that is cleaner and cheaper and full of new jobs. [EP A-HQ-OAR-2010-0799-9511-A1, p.3]
Now, a great place to start is with natural gas. Some of you may not have been following this,
but because of new technologies, because we can now access natural gas that we couldn't access
before in an economic way, we've got a supply of natural gas under our feet that can last
America nearly a hundred years. Nearly a hundred years. Now, when I say under our feet, I don't
know that there's actually gas right here. (Laughter.) I mean in all the United States. [EPA-HQ-
OAR-2010-0799-9511-Al, p.3]
And developing it could power our cars and our homes and our factories in a cleaner and cheaper
way. The experts believe it could support more than 600,000 jobs by the end of the decade. We,
it turns out, are the Saudi Arabia of natural gas. (Applause.) We've got a lot of it. We've got a lot
of it. [EPA-HQ-OAR-2010-0799-9511-A1, p.3]
Now, removing that natural gas obviously has to be done carefully. And I know that there are
families that are worried about the impact this could have on our environment and on the health
of our communities. And I share that concern. So that's why I'm requiring - for the first time ever
- that aft companies drilling for gas on public lands disclose the chemicals they use. We want to
make sure that this is done properly and safely. (Applause.) America will develop this resource
without putting the health and safety of our citizens at risk. [EPA-HQ-OAR-2010-0799-9511-
Al,p.3]
But we've got to keep at it. We've got to take advantage of this incredible natural resource. And
think about what could happen if we do. Think about an America where more cars and trucks are
running on domestic natural gas than on foreign oil. Think about an America where our
companies are leading the world in developing natural gas technology and creating a generation
of new energy jobs; where our natural gas resources are helping make our manufacturers more
competitive for decodes. We can do this. And by the way, natural gas bums cleaner than oil does,
so it's also potentially good for our environment as we make this shift. [EPA-HQ-OAR-2010-
0799-9511-A1, p.3]
So lost April, we issued II challenge to shipping companies /Ike UPS. We sold if you upgrade
your fleets to run on less oil or no oil at all, we're going to help you succeed. We wont to help
you with that experiment. So we started out with five companies that accepted the challenge.
And of course, UPS was one of the first. That's how they roll. (Laughter and applause.) [EPA-
HQ-OAR-2010-0799-9511-A1, p.3]
So less than a year later, we've got 14 companies an board, and together they represent 1 million
vehicles on the rood. That's a lot of trucks. [EPA-HQ-OAR-2010-0799-9511-A1, p.3]
6-36
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
We should do more, though. And that's why we're here today. First, let's get more of these
natural gas vehicles on the road. Let's get more of them on the road. (Applause.) The federal fleet
of cars is leading by example. Turns out the federal government has a lot of cars. (Laughter.) We
buy a lot of cars. So we've got to help not only the federal government but also local
governments upgrade their fleet. If more of these brown trucks are going green, mare city buses
should, too. There's no reason why buses can't go in the some direction. [EPA-HQ-OAR-2010-
0799-951 l-Al,p.3]
Second, let's offer new tax Incentives to help companies buy more clean trucks like these.
(Applause.) [EPA-HQ-OAR-2010-0799-9511-A1, p.4]
Third, let's make sure all these new trucks that are running on natural gas hove places to refuel.
That's one of the biggest impediments, is the technology. We know how to make these trucks,
but if they don't have a place to pull in and fill up, they got problems. [EPA-HQ-OAR-2010-
0799-9511-A1, p.4]
So we're going to keep working with the private sector to develop up to five natural gas corridors
along our highways. These are highways that have natural gas fueling stations between cities,
just like the one that folks at UPS, South Coast Air and Clean Energy Fuels are opening today
between Las Angeles and Salt Lake City. That's a great start. (Applause.) So now one of these
trucks can go from Long Beach all the way to Salt Lake City. And they're going to be able to
refuel along the way. [EPA-HQ-OAR-2010-0799-9511-A1, p.4]
And finally, to keep America on the cutting edge of clean energy technology, I want my Energy
secretary, Steven Chu, to launch a new competition that encourages our country's brightest
scientists and engineers and entrepreneurs to discover new breakthroughs for natural gas
vehicles. [EPA-HQ-OAR-2010-0799-9511-A1, p.4]
So we're going to keep moving on American energy. We're going to keep boosting American
manufacturing. We're going to keep training our workers for these new jobs. But an economy
that's built to last also means a renewal of the values that made us who we are: hard work, fair
play and shared responsibility. [EPA-HQ-OAR-2010-0799-9511-A1, p.4]
The Proposed Regulatory Incentives for NGVs Do Not Reflect the President's Vision [EPA-HQ-
OAR-2010-0799-9511-A1, p.4]
Clean Energy found that the incentives outlined in the proposed rule for NGVs are not adequate
or consistent, especially when compared to electric vehicle incentives, to support greater natural
gas vehicle adoption and advancement as the President urged his Administration to do last
month. For dedicated NGVs after 2016, the 0.15 divisor would no longer be available, so GHG
incentives for manufacturers would be negligible. For dual fuel vehicles, the use of the 0.15
divisor would end after 2015 - virtually eliminating the value of dual-fuel vehicle GHG benefits.
[EPA-HQ-OAR-2010-0799-9511-A1, pp.4-5]
If the purpose of these regulations is to encourage manufacturers to produce vehicles that
produce fewer greenhouse gases, this aspect of the proposed rules makes little sense. NGVs
6-37
-------
EPA Response to Comments
produce less GHGs than comparable gasoline vehicles - especially when the upstream emissions
are considered. Without continued use of the 0.15 divisor for dual-fuel GHG calculations, the
incentive for manufacturers to produce NGVs would be significantly reduced. [EPA-HQ-OAR-
2010-0799-9511-A1, p.5]
Clean Energy's Recommends the Following Changes [EPA-HQ-OAR-2010-0799-9511-A1, p.5]
1. Provide Dual-Fuel NGVs a separate Track from E85 Vehicles [EP A-HQ-OAR-2010-0799-
9511-Al,p.5]
The large number of E85 vehicles being manufactured, in effect, nullifies the value of other dual-
fuel vehicle FE credits. Clean Energy recommends that the agencies develop a separate track for
dual-fuel NGVs to make the incentives truly effective. Dual-fuel NGVs (and any other
alternative fuel vehicles) certified under this track should earn unlimited (uncapped) FE and
GHG credits. [EPA-HQ-OAR-2010-0799-9511-A1, p.5]
2. Apply the Utility Factor for Dual-Fuel NGVs for GHG and FE Credits In 2012 [EPA-HQ-
OAR-2010-0799-9511-Al, p.5]
The utility factor (UF) should apply to dual-fuel vehicles beginning with MY 2012 for GHG and
FE credits as the agencies have articulated sufficient legal justification for adopting the use of the
utility factors for fuel economy for MY 2020 forward, and EPA has already proposed making the
utility factors retroactive back to 2012 for GHG certification. This same rationale supports
extending the utility factor to the FE calculations prior to 2020. Providing one credit but not the
other is highly problematic and is not consistent with the intent of harmonization under one
single national fuel economy/greenhouse gas program. That is why some credit provisions in the
rules (e.g., FFVs, EVs, hybrid trucks) attempt to provide periods where both incentives overlap.
Combining the incentives and providing consistent treatment of FE and GHG credits for dual-
fuel NGVs is extremely important to ensure compliance with these extremely complex
regulations. [EPA-HQ-OAR-2010-0799-9511-A1, p.5]
3. Apply the 0.15 GHG Divisor Beyond 2015 [EPA-HQ-OAR-2010-0799-9511-A1, p.5]
The use of the 0.15 divisor for GHGs for both dual-fuel and dedicated NGVs currently
terminates after 2015 making them ineffective. These credits must be extended beyond 2015 so
that manufacturers have sufficient time to respond to them and they should remain in place until
a certain market penetration is achieved. Such a phase-out of incentives would be consistent with
the approach taken with respect to electric drive vehicles. We believe that providing these credits
until a manufacturer's sale of NGVs reaches several hundred thousand (300,000 in the case of
EVs) is warranted. [EPA-HQ-OAR-2010-0799-9511-A1, p.5]
Sales Multipliers [EPA-HQ-OAR-2010-0799-9511-A1, p.6]
In its notices, the agencies have asked for comment on whether to provide a production or sales
multiplier for dedicated and dual-fuel NGVs. The agencies have proposed adopting such
multipliers for other technologies (e.g., a multiplier of 1.3-2.0 is proposed for EVs, FCVs, and
6-38
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
PHEVs) for 2017 - 2021. In order to ensure equitable treatment, the agencies should provide
similar credits to NGVs. And since EVs and other electric-drive vehicles already receive
extremely generous treatment in the rules, we believe that the provision of a sales multiplier for
NGVs should be in addition to any other credits also provided for NGVs in order to further
encourage manufacturers to offer such vehicles. In terms of credit values, we support NGV
America's proposal that dedicated NGVs should be treated like EVs and that dual fuel NGVs
should be treated like PHEVs. The result of this more equitable treatment would be to provide a
level playing field to incentivize the manufacture of all alternative fuel vehicles and not favor
one technology over another. Therefore, we support NGV America's proposed multiplier credits
for NGVs: [EPA-HQ-OAR-2010-0799-9511-A1, p.6] [For the associated figure, please refer to
EPA-HQ-OAR-2010-0799-9511-Al,p.6]
Clean Energy once again would like to thank EPA and NHTSA for the opportunity to provide
comments on this important rule. While we certainly appreciate the inclusion of NGV incentives
in the current proposal, we strongly believe that they need to be enhanced in order to be
effective. Further, we believe it is in the agencies' best interest to do so as NGVs provide an
opportunity to significantly displace foreign oil, harness a domestic resource that can help create
American jobs and boost American businesses, while significantly reducing greenhouse gas
emissions generated on American roads. [EPA-HQ-OAR-2010-0799-9511-A1, p.7]
Organization: Edison Electric Institute (EEI)
C. If Offered, Incentives for Compressed Natural Gas Vehicles Should Not Be "Equivalent" to
Incentives for EVs. [EPA-HQ-OAR-2010-0799-9584-A2, p. 8]
EPA requests comment on the merits of providing similar incentives as proposed for EVs to
dedicated and/or dual fuel compressed natural gas (CNG) vehicles. See 76 Fed. Reg. at 75013.
EPA should not provide similar multiplier incentives for CNG vehicles. While CNG vehicles
reduce GHG emissions from LDVs, when compared to traditional fuel vehicles, they do not
reduce tailpipe emissions of all pollutants (GHGs and criteria air pollutants) to 0.0 g/mile.4
Accordingly, EPA should not allow manufacturers to count CNG emissions as 0.0 g/mile when
calculating compliance averages. [EPA-HQ-OAR-2010-0799-9584-A2, pp. 8-9]
CNG vehicles could play an important role to play in the diversification of transportation-sector
fuels, particularly in the fleet and medium-duty sectors. If EPA believes that some sort of
incentive for CNG vehicles is necessary, EPA must take into consideration the fact that CNG is
comprised primarily of methane, a GHG that has a 100-year global warming potential (GWP) 25
times greater than that of carbon dioxide. To the extent that EV incentives are discounted to
reflect the upstream emissions related to electricity generation and transmission, any incentives
for CNG vehicles also must be discounted to reflect not only methane's higher GWP, but also
the upstream emissions related to natural gas production and transportation.5 [EPA-HQ-OAR-
2010-0799-9584-A2, p. 9]
Organization: Encana Natural Gas Inc.
6-39
-------
EPA Response to Comments
Natural gas vehicles can play an important role in increasing fuel efficiency and reducing vehicle
emissions. Compared with traditional and available alternative fuels, natural gas can deliver
material emission reductions of greenhouse gases ('GHGs'), criteria pollutants and hazardous air
pollutants. America's affordable, abundant natural gas resources can help the u.s. achieve greater
energy independence in the transportation sector. [EPA-HQ-OAR-2010-0799-9585-A2, p. 1]
As one of the largest producers of natural gas in North America and a strong proponent of clean,
abundant, affordable, and domestic natural gas. Encana is an example of an early mover by
adopting natural gas vehicles ('NGVs') in our own fleet. At the end of 2011, Encana had 15% of
its vehicle fleet transitioned to dedicated or bi-fuel natural gas, along with 6 CNG and 1 LNG
fueling stations operating to service its own fleet, those of our contractors and the public. Encana
intends to continue transitioning its fleet vehicles to CNG, as well as opening new stations for
CNG and LNG. [EPA-HQ-OAR-2010-0799-9585-A2, p. 1]
Natural gas as a transportation fuel is not a new concept with growing utilization in U.S. fleet
vehicles and wide acceptance internationally. Unlike other alternative vehicle technologies,
natural gas vehicles are not in need of early stage technology support which has an inherently
uncertain future. In fact, proven technology makes natural gas the recognized leader in
affordable alternative fuels. To accelerate market acceptance, it is necessary to promote a clean
domestic energy supply through production incentives. Incentives for Original Equipment
Manufacturers ('OEMs') are critical to ensure market penetration of NGVs matches the pace of
natural gas fueling infrastructure build-out. [EPA-HQ-OAR-2010-0799-9585-A2, p. 2]
As outlined in detail below, Encana respectfully requests that the EPA and NHTSA avoid
picking technology winners and give all viable alternative fueled vehicles the opportunity for
accelerated market acceptance. All alternative fueled vehicles should be treated equally. [EPA-
HQ-OAR-2010-0799-9585-A2, p. 2]
GHG and Other Emission Benefits of Natural Gas Fuel
Clean burning natural gas offers many advantages over other fossil fuels such as gasoline and
diesel. Natural gas is composed of nearly 100% methane, which has a simple molecular structure
with one carbon atom per molecule. Due to this simple molecular structure, natural gas has the
lowest carbon content of any of the commonly used fuels in the United States. Natural gas
contains approximately 74% of the carbon content of gasoline per unit of energy produced (EPA
2010). As such, replacing traditional transportation fuels with natural gas can reduce GHG
emissions by about 25%. [EPA-HQ-OAR-2010-0799-9585-A2, p. 2]
Additionally, natural gas combustion produces lower emissions of several other pollutants
including sulfur dioxide, hazardous air pollutants, volatile organic compounds, and fine
paniculate matter. [EPA-HQ-OAR-2010-0799-9585-A2, p. 2]
Availability and Abundance of Natural Gas
As noted above, natural gas is an abundant resource in North America presenting over 100 years
of supply at current consumption levels. The U.S. Energy Information Agency ('EIA') recognizes
6-40
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
the significant new supplies of natural gas in the Annual Energy Outlook ('AEO') 2012 Early
Release Overview forecasting greater demand for natural gas and lower prices over the same
time period. Recent shale gas discoveries, technological innovation and the on-going expansion
of the natural gas pipeline network are combining to make natural gas available throughout the
continental United States. [EPA-HQ-OAR-2010-0799-9585-A2, p. 2]
According to the EIA AEO 2011, production from shale formations in the United States grew by
an average annual rate of 17% per year from 2000 to 2006. While 17% is impressive for those
years, in the years from 2006 to 2010, United States shale gas production grew by an average
annual growth rate of 48%\ The natural gas industry will continue to find new shale gas
resources and by using enhanced technologies such as horizontal drilling and hydraulic
fracturing, this success rate will continue to outpace demand. [EPA-HQ-OAR-2010-0799-9585-
A2, p. 2]
Affordability of Natural Gas [EPA-HQ-OAR-2010-0799-9585-A2, p. 2]
According to the AEO 2012 Early Release Overview, with increased domestic natural gas
production, average annual wellhead prices for natural gas remain below $5 per thousand cubic
feet (2010 dollars) through 2023 in the AE02012 Reference case. These projections are reflective
of natural gas decoupling from international crude oil market prices. US consumers can now take
advantage of the stable and low natural gas prices that will be realized through the life of this
proposed rule. [EPA-HQ-OAR-2010-0799-9585-A2, pp. 2-3]
Advantages of a Domestic Fuel Supply
The US is in dire need of job growth to enable an economic recovery and the natural gas industry
can provide a significant boost towards this end. In fact, during President Barak Obama's 2012
State of the Union Address, he highlighted a potential to grow 600,000 jobs producing domestic
oil and gas in this decade alone. [EPA-HQ-OAR-2010-0799-9585-A2, p. 3]
Regulatory Incentives for 2012 2015
Under existing regulations, the EPA and NHTSA attempt to provide incentives to encourage
manufacturers to produce dual-fuel NGVs in 2012 -2015 by providing favorable treatment of
greenhouse gas GHG emissions and fuel economy ('FE') credits. This is done, in part, by using a
multiplier (0.15) to compute GHG credits and a divisor (0.15) to compute FE levels. The use of
the 0.15 divisor was first authorized forFE calculations as part of the Alternative Motor Fuels
Act of 1988 (P. 1. No. 100-94). [EPA-HQ-OAR-2010-0799-9585-A2, p. 3]
As part of the current rulemaking, the EPA proposed modifying its regulations for MY 2012 and
later years to improve the GHG credits provided for dual-fuel NGVs. The proposed change
would include the use of a utility factor ('UP) to determine the percentage of time a vehicle is
deemed to operate on alternative fuel. [EPA-HQ-OAR-2010-0799-9585-A2, p. 3]
Encana supports the EPA and NHTSA's previous decision to use the 0.15 factor to compute
GHG and FE credits in MYs 2012 - 2015. We also support the proposal in this rulemaking to use
6-41
-------
EPA Response to Comments
UFs to compute GHG emissions (and eventually FE-see below) for dual-fuel vehicles. [EPA-
HQ-OAR-2010-0799-9585-A2, p. 3]
However, Encana wishes to point out several inconsistencies in the existing and proposed rules
that undermine or eliminate the intended benefits of those rules. [EPA-HQ-OAR-2010-0799-
9585-A2, p. 3]
First, the benefit of the FE credits is limited or non-existent since there currently are restrictions
on the total amount of fuel economy credits manufacturers can use for dual fuel and flex-fuel
vehicles. Federal law prescribes an upper bound on the maximum amount of fuel economy credit
a manufacturer may earn and phases-out the credits after 2019 (although they are reinstated
without a cap beginning 2020). Because of the significant number of E85 vehicles offered by
manufacturers, it is expected that manufacturers will reach their fuel economy credit limit
primarily via their E85 products. Any additional offerings of dual fuel NGVs will probably not
earn the automakers any usable FE credits in MYs 2012-2015. There needs to be another
avenue - not blocked by E85 vehicles - for manufacturers to take advantage of the FE credits
generated by dual fuel NGVs. [EPA-HQ-OAR-2010-0799-9585-A2, p. 3]
Second, it is true that manufacturers that offer dual-fuel NGVs will earn enhanced GHG credits
for MY 2012-2015 vehicles, and the value of these GHG credits will be further improved by the
use of the proposed utility factors. However, manufacturers are unlikely to find these GHG
credits sufficiently attractive to produce dual-fuel NGVs (even if the credits can be carried
forward for use in later years) unless they can simultaneously earn enhanced GHG and FE
credits. [EPA-HQ-OAR-2010-0799-9585-A2, p. 3]
It should be noted that, for 2012-2015, dedicated NGVs would continue to be of value to OEMs.
They qualify for FE credits and there is no cap that limits the amount of the credits that
manufacturers can use. The 0.15 factor also applies to dedicated vehicles' FE and GHG
calculations. While we certainly support the proposed incentives for dedicated vehicles, it is also
important to provide meaningful incentives for dual-fuel NGVs. Most consumers and even some
fleets are likely to prefer dual-fuel vehicles over dedicated vehicles while natural gas fueling
infrastructure continues to expand. [EPA-HQ-OAR-2010-0799-9585-A2, p. 4]
Regulatory Incentives for 2016 & Beyond
The incentives proposed for 2016 and beyond (as explained below) do not provide adequate or
consistent incentives for NGVs (especially as compared to electric vehicles (EVs1)) and,
therefore, are unlikely to be adequately effective. [EPA-HQ-OAR-2010-0799-9585-A2, p. 4]
For dedicated NGVs, the proposed rules would continue to use the existing 0.15 FE divisor in
2016 and beyond (as required by law). For GHG calculations, after 2016, the 0.15 divisor would
no longer be available, so GHG incentives for manufacturers are negated while EVs, hybrids
during electric operation and fuel cell vehicles continue to enjoy a 0 g/mi tailpipe emission
rate. [EPA-HQ-OAR-2010-0799-9585-A2, p. 4]
6-42
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
For dual fuel vehicles, the proposed rules would also continue to use the existing 0.15 divisor for
FE in 2016 and beyond (as required by law). For FE purposes during 2016-2019, dual-fuel
vehicles would be assumed to operate 50/50 on natural gas and petroleum. However, the need for
FE credits, already limited by the cap and the production of E85 vehicles, would be further
constrained by declining the cap. From 2020, the 50/50 rule would be replaced by the use of the
UF. [EPA-HQ-OAR-2010-0799-9585-A2, p. 4]
For GHG emissions for dual fuel vehicles, the use of the UF also would replace the use of the
50/50 rule from 2012 and thereafter. However, the use of the 0.15 multiplier would end after
2015 - virtually eliminating the value of dual fuel vehicle GHG benefits. This aspect of the
proposed rule fails to satisfy one of the primary drivers of the rule: to encourage manufacturers
to produce vehicles that produce fewer GHGs. [EPA-HQ-OAR-2010-0799-9585-A2, p. 4]
Encana's Recommended Changes
1. Provide a Separate Track for Dual-fuel NGVs
As discussed above, the large number of E85 vehicles, in effect, nullifies the value of dual-fuel
vehicle FE credits. Encana recommends that, in order to make the incentives for dual-fuel NGVs
truly effective, the agencies should develop a separate certification and FE calculation track for
these vehicles. Dual-fuel NGVs, and any other alternative fuel vehicles except E85 vehicles,
certified under this track would earn unlimited and uncapped FE and GHG credits. [EPA-HQ-
OAR-2010-0799-9585-A2, p. 4]
2. Apply the Utility Factor for Both GHG and FE Beginning in 2012 [EPA-HQ-OAR-2010-
0799-9585-A2, p. 4]
The utility factors should apply to dual-fuel vehicles beginning with MY 2012 for GHG and FE
credits. The agencies have articulated sufficient legal justification for adopting the use of the
utility factors for fuel economy for MY 2020 forward, and the EPA has already proposed making
the utility factors retroactive back to 2012 for GHG certification. This same rationale supports
extending the utility factor to the FE calculations leading up to 2020. The EPA and NHTSA
appear to understand that providing one credit but not the other is highly problematic. That is
why some credit provisions in the rules (e.g., FFVs, EVs, hybrid trucks) attempt to provide
periods where both incentives overlap. Combining the incentives and providing consistent
treatment of FE and GHG credits for NGVs is extremely important in ensuring compliance with
these extremely complex regulations and further promoting GHG reductions in the transportation
sector. [EPA-HQ-OAR-2010-0799-9585-A2, pp. 4-5]
3. Continue the Use of the 0.15 GHG Multiplier Beyond 2015
As discussed above, the use of the 0.15 multiplier for GHGs for both dual fuel and dedicated
NGVs currently terminates after 2015. But, these credits in order to be effective must be
extended beyond 2015. OEMs have already made preparations for MYs 2012-2015 and are
unlikely to have sufficient time to respond to these incentives in that short timeframe. Therefore,
to encourage more NGVs, the EPA and NHTSA should extend the credits provided for NGVs
6-43
-------
EPA Response to Comments
until a certain market penetration is achieved. The phase-out of such incentives should be
consistent with the approach taken with respect to electric drive vehicles. Enhanced credits for
NGVs would only expire after reaching a certain level of market penetration. We believe that
providing these credits until a manufacturer's sale of NGVs reaches several hundred thousand
(300,000 in the case of EVs) is warranted. [EPA-HQ-OAR-2010-0799-9585-A2, p. 5]
4. Other Credit Provisions
In addition to urging the agencies to adopt the incentive described above, we offer the following
comments with respect to several other incentives proposed as part of this rulemaking (i.e., the
use of sales multipliers, and advanced pickup truck credits). [EPA-HQ-OAR-2010-0799-9585-
A2, p. 5]
Sales Multipliers
In its notices, the agencies have asked for comment on whether to provide a production or sales
multiplier for dedicated and dual fuel NGVs. The agencies have proposed adopting such
multipliers for other technologies (e.g., a multiplier of 1.3 - 2.0 is proposed for EVs, FCVs, and
PHEVs) for 2017 - 2021. These credits appear to be limited to GHG credits. In order to ensure
equitable treatment, the agencies should provide similar credits to NGVs. We believe that a sales
multiplier for NGVs should be in addition to any other credits also provided for NGVs in order
to further encourage manufacturers to offer such vehicles. In terms of credit values, we believe
that dedicated NGVs should be treated like EVs and that dual-fuel NGVs should be treated like
PHEVs. Therefore, we propose the following multiplier credits for NGVs: [See table on p. 5 of
Docket number EPA-HQ-OAR-2010-0799-9585-A2] [EPA-HQ-OAR-2010-0799-9585-A2, p.
5]
• For dual fuel NGVs, provide a separate certification and FE calculation track and allow
unlimited and uncapped FE and GHG credits;
• Allow UF use for both GHG and FE calculations through 2019;
• Extend the 0.15 GHG multiplier beyond 2015 and provide a phase out that is similar to EVs;
• Provide Sales Multipliers for NGVs;
Encana appreciates the opportunity to provide public comment on this rulemaking. Encana
requests that the EPA and NHTSA incorporate the additional incentives described in this letter
for natural gas vehicles. The following summarizes the additional incentives Encana believes
will provide fair and equitable treatment of NGVs: [This comment can also be found in section 5
of this comment summary] [EPA-HQ-OAR-2010-0799-9585-A2, p. 7]
Natural gas vehicles can play an important role in increasing fuel efficiency and reducing vehicle
emissions. Accelerating NGV market acceptance by providing NGV incentives for the OEMs
will aid our country's goal of energy independence in the transportation sector. Compared with
traditional and available alternative fuels, natural gas can also deliver material emission
6-44
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
reductions of GHGs, criteria pollutants and hazardous air pollutants. [EPA-HQ-OAR-2010-
0799-9585-A2, p. 7]
1 The Annual Energy Outlook 2011 is used since the AEO 2012 Early Release does not provide
this level of granularity.
Organization: Ford Motor Company
EPA further requested comment on the merits of providing similar multipliers for dedicated
and/or dual fuel compressed natural gas vehicles. Ford supports providing multipliers for natural
gas fueled vehicle, and further requests that the same multiplier be provided for dedicated and/or
dual fuel liquefied petroleum gas vehicles. Both gaseous fuels provide substantial reductions in
greenhouse gas emissions, as well as support the diversification of our energy supply, providing
greater energy security. However, the vehicle technologies required to allow operation on these
fuels is expensive, and the market availability of the fuel, similar to the availability of public
charging stations for electric vehicles, remains very limited. Therefore, we believe that the
multiplier is appropriate to encourage the investment in these technologies for broader new
vehicles applications, and drive the volumes that will encourage greater investment in the
necessary re-fueling infrastructure. We further recommend that the credit values for dedicated
and bi-fuel gaseous vehicles be aligned with those provided for dedicated and bi-fuel electricity
fueled vehicles. [EPA-HQ-OAR-2010-0799-9463-Al, p. 18]
Organization: Manufacturers of Emission Controls Association (MECA)
MECA also believes that EPA's proposed advanced technology vehicle credits should be
expanded to include other ultra-low GHG vehicle technologies beyond battery electric vehicles,
plug-in hybrids, and fuel cell electric hybrids. MECA believes that it is important for these
advanced technology vehicle credits to be technology neutral in order to provide a more level
playing field that encourages vehicle manufacturers to put into the market a range of
technologies that can offer significant reductions in GHG emissions. Examples of other types of
advanced vehicles that should also be considered for such credits are dedicated natural gas
vehicles or vehicles that employ carbon emission capture strategies. MECA believes that it is too
early in the development process for EPA to pick advanced technology vehicle "winners."
MECA urges EPA to expand the vision of advanced technology vehicle credits in its final rule
with a more technology neutral approach. [EPA-HQ-OAR-2010-0799-9452-A3, p.4]
Organization: Mercedes-Benz USA, LLC
DAG also suggests that EPA consider a multiplier for dedicated CNG vehicles. While electric
and fuel cell vehicles are likely to dominate in the advanced technology vehicle space during this
timeframe, both dual fueled and dedicated CNG vehicles take advantage of the United States'
abundant supply of natural gas to provide an alternative energy source. As with battery electric
and fuel cell vehicles, supporting CNG vehicles in the fleet will take substantial amounts of
infrastructure development. The potential for CNG vehicles to contribute to the future U.S.
6-45
-------
EPA Response to Comments
vehicle fleet should be supported along with battery electric vehicles. Incentives should not be
limited to dual-fueled vehicles using CNG. An incentive program should be applied to dedicated
CNG vehicles as well.12 In light of the infrastructure needs to support these vehicles, DAG
suggests that a multiplier of 3 be attached to dedicated CNG vehicles. [EPA-HQ-OAR-2010-
0799-9483-A1, p. A-6]
12 Factory built CNG vehicles in the United States include the Honda Civic GX, the Chevy
Express Van and the GMC Savanna Cargo Van. A number of vehicles are also supported by
EPA Certified Conversion Kits, including the Dodge Ram 1500, Dodge Dakota, Chevy Impala,
Chevy Silverado, Chevy Tahoe, Chevy Express, GMC Sierra, GMC Yukon, GMC Savanna,
Cadillac Escalade, Ford Focus, Ford Transit Connect, Ford Fusion, Ford Expedition and Ford F-
Series. These vehicles, and others, are candidates for factory built CNG support if provided with
a GHG compliance credit.
Organization: National Propane Gas Association (NPGA)
NPGA believes it is imperative that the proposed rulemaking clearly establish parity among the
various alternative vehicle fuels, including autogas, thereby removing any fuel bias or
disincentive toward the production or sale of autogas fueled vehicles. We further believe that any
manufacturing incentive such as a Gallon-Gasoline Equivalency (GGE) multiplying factor be
implemented immediately and when authorized by statute, extended through 2025. A GGE value
for autogas normalizes comparisons of fuel efficiencies5and reduced CO2 emissions on a per
mile basis for various alternative vehicle fuels. To this end, we believe the following discussion
provides adequate substantiation to specifically codify a section in the final rule for autogas and
its (GGE) value based upon energy density. [EPA-HQ-OAR-2010-0799-9482-A1, p. 3]
The need for a clearly codified GGE value and specific autogas provisions within the regulations
is demonstrated by misleading government statistics comparing autogas to other alternative
vehicle fuels. For example, the U.S. Energy Information Agency compares vehicle fuels in
native units per fuel type6. Using estimates for native units per fuel type, autogas consumption
for 2009 is found to be 175,177 thousand gallons and CNG is found to be 24,038 million cubic
feet. However, using EIA's thousand gasoline-gallon equivalent values7, autogas appears to have
lost considerable market share disproportional to other fuels that have a GGE value. [EPA-HQ-
OAR-2010-0799-9482-A1, p. 3]
The most dire consequence of omitting a GGE factor for calculating autogas CAFE credits
results from the compounding effect realized when the Congressional allowance afforded
alternative fuels to account for only 15% of fuel consumed is applied without the appropriate
GGE value compensating for AFV energy densities. The 15% rule effectively increases the miles
per gallon of autogas consumed by a factor of 6.67. And, applying the GGE factor to autogas
miles per gallon produces a total CAFE credit equal to "miles per 9.2 gallons of propane (1.38 x
6.667)." For illustrative purposes, this means that for every dedicated propane vehicle that an
OEM sells it would be able to claim a theoretical CAFE credit of 9.2 times the base vehicle's
actual mpg. For every 20 mpg base-gasoline vehicle that an OEM manufactures using autogas,
6-46
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
they receive a fleet credit of 6.67 miles per gallon of fuel consumed yielding an effective 133
mpg for their CAFE number. However, if the GGE factor of 1.38 is provided and applied for
dedicated autogas fueled vehicles, the combined credits produce an effective CAFE credit of 184
mpg per vehicle. [EPA-HQ-OAR-2010-0799-9482-A1, pp. 3-4]
The following derivation compares autogas to gasoline on an energy content basis. Based upon
the energy contents of autogas and gasoline, NPGA proposes that the CAFE standards
specifically incorporate a GGE factor of 1.38 for autogas. [The derivation and Table 1 can be
found on p. 4 of Docket number EPA-HQ-OAR-2010-0799-9482-A1] [EPA-HQ-OAR-2010-
0799-9482-A1, p. 4]
The need to promote a GGE for propane is further supported by the similar approach for
evaluating GHG emissions based upon energy density, i.e. "Carbon Equivalent Units" used by
the U.S. Department of Energy's Energy Information Administration9. [EPA-HQ-OAR-2010-
0799-9482-A1, p. 4]
Full-Fuel-Cycle Analysis
NPGA believes it is imperative that the EPA/NHTSA establish principles implementing full-
fuel- cycle (FFC) analysis consistent with accepted scientific findings and other government
agencies. Evaluating GHG emissions from the vehicle's tailpipe is consistent with current
evaluation methodologies, but does little to accurately measure consumption of primary energy
resources, emission of GHGs or smog forming pollutants attributable to the production of
gasoline or the generation of electricity. Full-fuel-cycle measurement (well-to-wheels) captures
the additional energy consumption and emissions derived from the extraction, processing,
transportation, conversion, and distribution of energy to the vehicle. For electric and plug-in
hybrid electric vehicles (EV and PHEV) that re-charge their batteries using power from the
utility grid, point-of-use measurement such as a vehicle's tailpipe misleads the consumer to
believe the tailpipe is the only source of emissions and engine efficiency is the only source of
energy consumption when, in fact, they are not. [EPA-HQ-OAR-2010-0799-9482-A1, p. 4]
NPGA commented on the EPA/NHTSA's previous proposed rulemaking10 on vehicle labeling
discussing the positive attributes associated with using full-fuel-cycle energy metrics. We believe
the EPA/NHTSA vehicle labels should provide consumers the more robust accounting of actual
GHG emissions and energy efficiencies found with FFC measurement. We strongly believe to
only present greenhouse gas performance values consistent with emissions measured at the
tailpipe erodes any desired transparency of evaluating true fuel efficiencies and GHG emissions.
In our opinion, to continue using point-of-use evaluations for vehicle emissions and fuel
efficiencies is inaccurate and conveys only a partial story further promoting fuel biases. [EPA-
HQ-OAR-2010-0799-9482-A1, pp. 4-5]
Scientific Findings
NPGA supports the use of the Source Energy and Emissions Analysis Tool11 (SEEAT)
developed by the Gas Technology Institute (GTI). This computer modeling tool calculates source
energy and GHG emissions attributable to point-of-use energy consumption by vehicle fuel type.
6-47
-------
EPA Response to Comments
SEEAT includes a source energy and carbon emission calculation methodology that accounts for
primary energy consumption and related emissions for the full-fuel-cycle of extraction,
processing, transportation, conversion, distribution, and consumption of energy. GTI researchers
have calculated source-based fuel economies for various vehicle options and found more rational
comparisons of vehicle efficiencies using 'Source Fuel Economies' than point-of-use fuel
economies. [EPA-HQ-OAR-2010-0799-9482-A1, p. 5]
Another scientifically accepted modeling tool is the Greenhouse Gas, Regulated Emissions and
Energy Use in Transportation (GREET) model developed by Argonne National Laboratory12.
The GREET model estimates the upstream portion of the life-cycle GHG emissions of various
vehicle fuels. This model calculates emissions in grams per million Btu, of multiple pollutants,
including CO2, CH4, and N2O to derive a total CO2 equivalent. [EPA-HQ-OAR-2010-0799-
9482-A1, p. 5]
NPGA supports the Department of Energy's intended use of the GREET model to perform the
national impact analyses and environmental assessments included in the review of proposed
energy conservation appliance standards. Further affirming our support of the GREET model, the
Propane Educational Research Council (PERC) conducted a study using the GREET model
(version 1.8c) comparing autogas to other fuel sources. The study, titled "Propane Reduces
Greenhouse Gas Emissions: A Comparative Analysis 2009" looked at thirteen (13) different
applications where autogas was used including a GM 6.0L engine, Ford 150, Ford 250, school
buses, forklifts, and commercial mowers. The comparisons looked at energy end-use and annual
life-cycle GHG emissions for a variety of fuel sources. [EPA-HQ-OAR-2010-0799-9482-A1, p.
5]
A comparison by GTI found that the GREET and SEEAT vehicle source energy factors indicate
excellent agreement between the two methodologies for both full-fuel-cycle efficiency factors
and GHG emission factors. Minor differences appear to be based on underlying data sources and
default values. Based on the national average fuel mix for electricity calculated using GTI's
SEEAT, the source energy conversion factor for electricity is 3.29 Btu/Btu. Conversion factors
for fossil fuels directly consumed at the point-of-use are as follows: Natural gas: 1.09 Btu/Btu;
Autogas: 1.12 Btu/Btu; Fuel oil: 1.13 Btu/Btu. [EPA-HQ-OAR-2010-0799-9482-A1, pp. 5-6]
It is NPGA's contention that establishing a Gallon-Gasoline Equivalency for autogas, a clean
burning alternative fuel, will provide automakers an incentive to manufacture autogas fueled
light-duty vehicles. However, due to the lower energy density of autogas compared to gasoline,
any legislation based upon "miles per gallon" obscures the positive benefits of using autogas.
The CAFE standards provide a GGE value for CNG comparing equivalent energy densities
instead of miles per equivalent volume of fuel and 49 U.S. Code 32905 provides gallon
equivalents for gaseous fuels. In order to achieve parity among other alternative fuels, we believe
that autogas should be treated comparably to CNG and other alternative fuels by providing its
own unique section of regulation including its own GGE value based upon energy
density. [EPA-HQ-OAR-2010-0799-9482-A1, p. 6]
6-48
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
NPGA respectfully requests the EPA/NHTS A codify by final rulemaking a Gallons of Gasoline
Equivalency value of 1.38 for propane autogas establishing unambiguous parity among
alternative light-duty vehicle fuels. [EPA-HQ-OAR-2010-0799-9482-A1, p. 6]
We also urge you to evaluate energy efficiency and GHG emission using FFC analysis thereby
providing a complete and robust energy consumption and GHG emissions profile for all light-
duty vehicles. Limiting emissions analysis to point-of-use metrics (tailgate emissions) ignores
the fact that most energy losses associated with non-gaseous fuels, e.g. electricity, occur
upstream and ignore greenhouse gas emissions. NPGA urges the EPA/NHTSA to account for
upstream production and distribution emissions by applying readily available and scientifically
accepted modeling technologies such as GREET and SEEAT. [EPA-HQ-OAR-2010-0799-9482-
Al, pp. 6-7]
In today's world, consumers are repeatedly faced with making choices that are environmentally
friendly and this observation is even more prevalent in the automotive industry. The shift by
various federal agencies to a full-fuel-cycle analysis facilitates the ability of consumers to make
informed decisions whom otherwise might not be aware of the environmental shortcomings of
point-of-use energy analysis and labeling. Accurate and unbiased accounting of motor vehicle
fuel efficiency and GHG emissions can be achieved today by using tools developed and accepted
by the scientific community and readily available to the public. We believe these computer
modeling tools should be harmonized across all federal agencies. And, to that end, we
recommend that the promulgation of future GHG emissions and CAFE standards be established
immediately recognizing FFC analysis and GGE energy values. [EPA-HQ-OAR-2010-0799-
9482-A1, p. 7]
5 49 U.S.C. 32905 § 538.8 Gallon Equivalents for Gaseous Fuels
6 U.S. Energy Information Administration - Independent Statistics & Analysis, Renewable &
Alternative Fuels, Estimated Consumption of Vehicle Fuels in Native Units, by Fuel Type, 2011
7 U.S. Energy Information Administration - Independent Statistics & Analysis, Renewable &
Alternative Fuels, Estimated Consumption of Vehicle Fuels in the United States, by Fuel Type,
2011
9 Energy Information Administration (EIA), 2007. Voluntary Reporting of Greenhouse Gases
Program.
10 NPGA 11/22/2010 Comments: (Docket ID Nos. EPA-HQ-OAR-2009-0865 and NHTSA
2010-0087 Revisions and Additions to Motor Vehicle Fuel Economy Label)
11 Source Energy and Emissions Analysis Tool, Carbon Management Information Center; Gas
Technology Institute, July 2011
6-49
-------
EPA Response to Comments
12 The Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET)
Model. Argonne National Laboratory, Center for Transportation Research. UChicago Argonne,
LLC.
Organization: Natural Resources Defense Council (NRDC)
3. Dual Fuel Natural Gas Vehicles Require Further Constraints on Eligibility to Demonstrate
Actual Natural Gas Use
NRDC believes that any emissions credits awarded to natural gas vehicles should be
commensurate with real-world GHG reductions. Dual fuel natural gas vehicles that can be
powered by onboard supplies of either natural gas or gasoline must have emission scores that
reflect the actual use of each fuel. The use of a utility factor to represent the use of each fuel is a
reasonable approach but further constraints on vehicle design on dual fuel natural gas vehicles
must be included in the program for them to be eligible for separate natural gas and petroleum
emissions accounting. If the design constraints are not met, the emissions ratings for dual fuel
natural gas vehicles should be for operation only on gasoline. [EPA-HQ-OAR-2010-0799-9472-
A2, p. 13]
The design constraints help ensure that the vehicle preferentially operates on natural gas. Dual
fuel natural gas vehicles are powered by a combustion engine that can switch between gasoline
and natural gas. If natural supplies are unavailable (or higher priced), then operation on gasoline
might dominate. EPA has suggested several constraints that should be considered for adoption
including "placing a minimum value on CNG tank size or CNG range, a maximum value on
gasoline tank size or gasoline range, a minimum ratio of CNG-to-gasoline range, and requiring
an onboard control system so that a dual fuel CNG vehicle is only able to access the gasoline fuel
tank if the CNG tank is empty."37 NRDC urges the agency to adopt some or all constraints
before making dual fuel natural gas vehicles eligible for natural gas emissions ratings. The
agencies should consider prioritizing a minimum requirement for natural gas-to-gasoline range
of at least 80 percent on natural gas. [EPA-HQ-OAR-2010-0799-9472-A2, p. 13]
Organization: NGV America
These comments primarily focus on the incentives proposed in the rules. We strongly support the
agencies' efforts to craft incentives that will encourage automakers to accelerate the introduction
of transformational technologies like natural gas vehicles (NGVs). In particular, we applaud the
agencies for the incentives that have been proposed with respect to dedicated and dual-fuel
NGVs. While much of the focus is on encouraging and facilitating the development of electric
vehicles, the proposed rules do include some important, comparable provisions regarding the
development of NGVs. We are encouraged by the inclusion of some incentives and the apparent
recognition that natural gas fueled cars and trucks can and should be a part of transforming the
U.S. automotive fleet. However, we believe that the incentives as proposed should be modified
in order to be effective beyond the time period set out in the proposed rules and also to provide
equitable treatment for NGVs. Given President's Obama's recent remarks concerning the
benefits of NGVs and his desire to accelerate their use, we are extremely hopeful that the
6-50
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
agencies will welcome the proposed changes we have offered here. [EPA-HQ-OAR-2010-0799-
9461-A1, pp. 1-2]
At the outset it is important to clarify what we mean about transformational technologies.
Transformational technologies in our view are those applications that have the potential to
greatly change the transportation sector as it exists today. Any technology that has the ability to
significantly reduce greenhouse gas and other emissions, lessen dependence on foreign oil,
position the U.S. as an exporter of vehicle technology, and improve the economic well-being of
our economy should be viewed as transformational. Natural gas and electric vehicles have these
attributes As such, we believe any effort to stimulate the market for new technologies must be
equitable in its treatment of natural gas and electric vehicles, and should not favor one over the
other. [EPA-HQ-OAR-2010-0799-9461-A1, p. 2]
A. Benefits of Encouraging NGVs
An Abundant and Economical Domestic Resource
Reliance on foreign oil exacts a high toll on the U.S. in terms of direct economic costs and
indirect energy security costs. During the three-year period from 2008 through 2010, the U.S.
spent nearly $700 billion on imported petroleum. More recently, the cost of imported oil has
been much higher as oil prices have once again exceeded $100 per barrel. In the coming decade,
the U.S. Energy Information Agency (EIA) forecasts total expenditures for petroleum imports to
top $3.3 trillion dollars. 1 America's reliance on oil not only affects our trade balance but makes
the U.S. vulnerable to price spikes and supply disruptions. And high oil prices results in a
windfall for regimes that may not be friendly to the America. [EPA-HQ-OAR-2010-0799-9461-
Al,p.2]
Fortunately, the U.S. has an unprecedented opportunity to displace petroleum with domestic
natural gas. As President Obama recently declared, the U.S. is "the Saudi Arabia of natural gas."
The EIA, the Potential Gas Committee and other expert bodies now estimate that the U.S. has up
to a 100 year supply of natural gas. The Potential Gas Committee's 2011 bi-annual report
indicates that the U.S. now has a total future supply of 2,170 trillion cubic feet of natural gas.
This is 89 Tcf more than estimated in the 2009 report. As was the case with the 2009 report, the
2011 report includes the highest resource estimate in the Committee's history. The availability of
this significant domestic resource provides an unprecedented opportunity to solve a number of
pressing national objectives like transforming the transportation sector. [EPA-HQ-OAR-2010-
0799-9461-A1, pp. 2-3]
Increasing the use for natural gas in transportation will keep our economy growing by supporting
newjobs and economic development. In 2008, U.S. production of 20 Tcf of natural gas
supported nearly 3 million jobs.2 In his State of the Union remarks before Congress, the
President indicated that new development of natural gas could result in 600,000 newjobs in this
decade alone. Thus, increasing demand for natural gas as a transportation fuel will help put more
people to work and ensure that we put this natural gas to good use. [EPA-HQ-OAR-2010-0799-
9461-Al,p. 3]
6-51
-------
EPA Response to Comments
Natural gas also benefits our economy because it is a low cost energy that helps businesses grow
while at the same time controlling costs. Natural gas is priced much lower than petroleum. The
two fuels no longer track one another - and haven't for many years. The current contract price
for natural gas (NYMEX) is trading at less than $3.00 per million Btu, and some analysts believe
it could go below $2 per MMBtu. At $3.00 per MMBtu, the price of natural gas equates to a per-
barrel of oil price of only $17.40 at a time when oil is trading near $100 a barrel. The low price
of natural gas translates into significant savings for fleets and consumers who use natural gas to
fuel their vehicles. In most areas of the country, natural gas sells at about a $1.50 discount
compared to gasoline and diesel fuel. EIA's long-term forecast projects that differential between
natural gas and petroleum fuels will remain as high as $2 per energy-equivalent unit. [EPA-HQ-
OAR-2010-0799-9461-A1, p. 3]
Environmental Benefits
The same clean burning properties that make natural gas an excellent fuel for traditional
applications like electricity generation, residential heating, and industrial applications, also make
it an excellent fuel for transportation. Natural gas burns cleaner than gasoline and diesel fuel and
most other transportation fuels as well. Not surprisingly, the first vehicles certified to the U.S.
Environmental Protection Agency's (EPA) ultra-low emission, super-ultra low-emission and Tier
2/Bin 2 standards were NGVs. The natural gas-powered Honda Civic GX has won numerous
awards for its outstanding environmental performance. In 2011, the Civic GX was rated the
"Greenest Car in America" by the American Council for an Energy-Efficient Economy - for an
amazing eight years in a row! It also was named the 2012 car of the year by the Green Car
Journal. Compared to the gasoline Civic, the natural gas-powered Civic produces 95 percent
fewer emissions of volatile organic compounds and 75 percent less emissions of nitrogen oxides
- pollutants that contribute to ozone formation. [EPA-HQ-OAR-2010-0799-9461-A1, pp. 3-4]
The environmental benefits of NGVs are expected to continue to improve as new automotive
technologies become available. EPA's own website describes natural gas as an inherently cleaner
transportation fuel. That means that given the same amount of emissions control and
technological advancement, natural gas should always produce lower emission than comparable
gasoline and diesel-fueled vehicles. As long as the internal combustion engine is with us and as
long as refinements to it are made, natural gas will be the cleanest transportation fuel to use in it.
A National Academy of Science (NAS) report3 that analyzed vehicle technologies as of 2005 and
expected by 2030, projected that, with further expected improvements in vehicle technology and
fuel efficiency, natural gas powered vehicles will provide superior benefits in terms of criteria
pollutant reductions compared to nearly all other types of vehicles, even electric and plug-in
hybrid electric vehicles. The reason, in part, is due to the fact that the internal combustion engine
will continue to get much more fuel-efficient and cleaner, and internal combustion engines can
always use natural gas. Electric vehicles sometimes use electricity produced from cleaner natural
gas but they will likely continue to use electricity produced from coal, offsetting the benefits that
otherwise would be provided by such vehicles. Electric vehicles also require more energy to
produce them. [EPA-HQ-OAR-2010-0799-9461-A1, p. 4]
Natural gas vehicles will play a key role in reducing greenhouse gas emissions. Per unit of
energy, natural gas contains less carbon than any other fossil fuel, and, therefore, produces lower
6-52
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
carbon dioxide (CO2) emissions per vehicle mile traveled. While NGVs do emit methane,
another principal greenhouse gas, the increase in methane emissions is more than offset by a
substantial reduction in CC>2 emissions compared to other fuels. The California Air Resources
Board (CARB) has conducted extensive analyses on this issue, and has concluded that burning
compressed natural gas produces about 22 percent less GHGs than burning diesel, and 29 percent
less than burning gasoline.4The comparisons are based on well-to-wheels analyses, and include
methane emissions. These reductions are equal to - or better than — some renewable liquid fuels.
Most of the available studies show that given similar fuel efficiency, NGVs fueled by domestic
natural gas will deliver about 20-30 percent improvement in GHG emissions. [EPA-HQ-OAR-
2010-0799-9461-A1, p. 4]
Another important benefit of NGVs is that, in addition to the tailpipe reductions, they also
provide upstream emission reductions of greenhouse gases. Therefore, any direct tailpipe
reductions provided by introduction of NGVs resulting from this rulemaking will be increased by
the additional emission offsets associated with upstream activities relative to petroleum upstream
emissions, which these rules do not take into account. The fact that NGVs deliver these upstream
emission reductions provides a rationale and quantifiable justification for providing additional
emission reduction credits for NGVs in this rulemaking. These are real benefits that are provided
not only by the NGVs incentivized by this rulemaking but also by NGVs sold after any
incentives have expired. [EPA-HQ-OAR-2010-0799-9461-A1, p. 5]
The Potential for Natural Gas Vehicles
The current market for NGVs here in the U.S. is relatively small. Today, NGVs (and electric
vehicles) are not yet economic for most owners of light-duty vehicles. The primary reason is that
these vehicles have higher initial purchase costs than conventionally fueled vehicles, but are not
driven enough miles or consume enough lower-cost fuel for the fuel cost savings that they offer
to offset this higher purchase cost in a reasonable number of years. In fleet applications,
however, where fuel consumption per vehicle is much greater, NGVs can be economically
attractive to an increasing percentage of businesses and government agencies. [EPA-HQ-OAR-
2010-0799-9461-A1, p. 5]
Outside the U.S., demand for NGVs is growing at a rapid pace, and much of this growth is in the
light-duty vehicle market. In the last seven years, the global market for NGVs has more than
tripled with a compound growth rate of over 17 percent per year. In fact, NGVs are the fastest
growing alternative to petroleum vehicles in the world. In 2003, there were only about 2.8
million NGVs globally. Today, there are over 14 million NGVs in operation worldwide. This
rapid growth points to the fact that rapid scaling up of NGVs is possible. The NGV Global (the
international NGV association) forecasts that, by 2020, there will be 65 million NGVs on the
world's roads. Unfortunately, the U.S. currently ranks fourteenth in the world in total number of
NGVs - despite having more vehicles on the road than all the other fourteen countries
combined. [EPA-HQ-OAR-2010-0799-9461-A1, p. 5]
As noted above, most of the new NGVs sold outside the U.S. are light-duty vehicles. Outside the
U.S., tax and other government policies make NGVs even more economically attractive to
consumers. As a result, in overseas markets, NGVs are now available from almost all major
6-53
-------
EPA Response to Comments
OEMs, including: Ford, GM, Toyota, Honda, Nissan, Hyundai, Fiat, Volkswagen and Mercedes.
In 2009, Fiat offered 14 separate NGV models, and more than 100,000 NGVs were sold in that
year in Italy alone, comprising some 7 percent of the new vehicle market. Most U.S.
manufacturers currently offer NGVs in Europe, South America and Asia, but only Honda
currently offers a light-duty OEM NGV product in the U.S. — the Honda Civic Natural
Gas. [EPA-HQ-OAR-2010-0799-9461-A1, p. 5]
General Motor currently offers the GMC medium-duty Savana and Chevrolet Express vans as
fully- backed, factory produced NGVs rated above 8,500 Ibs. GVWR. And later this year,
General Motors and Chrysler will begin offering factory built natural gas powered pickup trucks.
As these offerings show, U.S. automakers certainly have the capability to produce NGVs - IF the
proper incentives are in place. [EPA-HQ-OAR-2010-0799-9461-A1, p. 6]
Recent events are clearly pointing to a viable domestic market for light-duty NGVs. We are
particularly encouraged by the unprecedented Memorandum of Understanding (MOU)
concerning NGVs that has now been signed by ten state governors. The MOU urges U.S.
automakers to expand their offerings of NGVs and attempts to stimulate the market for such
vehicles by signaling the intent of these states to purchase NGVs. As noted above, in just the past
two years, GM and Chrysler have announced plans to produce NGVs for the U.S. market. Honda
also has expanded its production capacity for the Honda NGV offering, and is now marketing the
car to consumers as well as fleets. Another telling factor is the significant growth in the
aftermarket offerings here in the U.S., where nearly a dozen manufacturers offer systems to
retrofit light-duty vehicles to operate on natural gas. These offerings include systems for the
Fusion, Focus, Impala, Malibu, Milan, Transit Connect, in addition to a variety of popular pickup
truck offerings. Ford, while not offering a factory NGV, has been working closely with the
aftermarket industry to ensure that aftermarket systems offered for its vehicles meet its
demanding standards for quality. These activities clearly show that there is very strong interest in
bringing more NGV products to the U.S. passenger car and light-duty segment. [EPA-HQ-OAR-
2010-0799-9461-A1, p. 6]
NGV America believes that there could be a substantial market for NGVs in all applications,
including the light-duty passenger car market. The most immediate opportunity for displacing
petroleum and increasing the use of natural gas as transportation fuel lies with light-, medium-
and heavy-duty fleets - especially trucks, buses and other heavier vehicles. America currently
has a large selection of medium- and heavy-duty NGVs available in the U.S. and the market for
natural gas trucks is beginning to ramp up. As a result, natural gas fueling infrastructure
development is once again on the rise, recently exceeding 1,000 stations. More importantly,
major industry players are now laying the groundwork for a national fueling infrastructure
connecting major transportation routes across the country. Furthermore, President Obama's
Blueprint for Energy, announced on January 26th, now calls for development of additional
natural gas corridors. In that announcement, the President also called upon the Energy
Department and national laboratories to focus their energies on bringing about technological
breakthroughs in the use of natural gas as a transportation fuel. [EPA-HQ-OAR-2010-0799-
9461-A1, p. 6]
6-54
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
These efforts will directly benefit the light-duty NGV market since increased fueling
infrastructure is one of the key factors limiting the market for NGVs in the passenger car market.
The economic outlook appears to be excellent. Lower natural gas prices and lower first cost
premiums (brought about by mass production, economies of scale and more competition) mean
that, in the future, even passenger cars could become economic. Adopting policies that
encourage manufacturers to produce NGVs, just like policies that encourage manufacturers to
offer EVs, are critically important. Tax policy certainly helps, and many in Congress - as well as
the President — have indicated they support tax incentives for NGVs. But the Administration
could do even more by adopting incentives for NGVs as part of this rulemaking. Just as with
EVs, regulatory incentives combined with these other factors would help accelerate the
introduction of NGVs into the light-duty passenger car market. [EP A-HQ-OAR-2010-0799-
9461-A1, pp. 6-7]
Pathway to Hydrogen Fueled Vehicles
In addition to providing many near-term benefits, NGVs also likely will play an important role in
facilitating the market penetration of fuel cell electric vehicles (FCEVs). Since the first wave of
NGV adoption in the 1990s, the development of NGVs - and particularly natural gas refueling
infrastructure - has long been recognized as a key bridge technology on a "path to
hydrogen."5Natural gas is largely composed of hydrogen, with four hydrogen atoms for every
carbon atom in a molecule of methane. Due to the chemical and physical similarities of these two
gases, they share a number of technology synergies, so that the proliferation of NGVs and
natural gas fueling infrastructure will facilitate and accelerate deployment of FCEVs. Indeed, the
development of the NGV market serves to reduce or eliminate all four of the near-term market
barriers to FCEV adoption identified by the Agencies: [EPA-HQ-OAR-2010-0799-9461-A1, p.
7]
• Low-GHG Fuel Production and Distribution Infrastructure: NGV refueling infrastructure
utilizes most of the same hardware (compressors, storage tanks, dispensers) that will be
used to dispense hydrogen fuel, allowing natural gas refueling stations to be
straightforwardly adapted for hydrogen dispensing. In fact, virtually all the hydrogen
fueling component manufacturers are NGV fueling component manufacturers. Natural
gas can also be used as a feedstock for hydrogen fuel production via distributed steam
reforming at the refueling station, a fuel production pathway identified by the U.S.
Department of Energy's FreedomCAR & Fuel Partnership as the "most viable approach
to begin building [the] hydrogen market in near term." Distributed steam reforming of
natural gas for hydrogen production also yields just half of the lifecycle GHGs as
production of hydrogen via electrolysis using grid electricity, according to Argonne
National Laboratories' GREET model.7 [EPA-HQ-OAR-2010-0799-9461-A1, p. 7]
• Fuel Cost: Production of hydrogen from natural gas via distributed steam reformers also
represents the "lowest current cost" hydrogen pathway compared to electrolysis and other
methods, according to the FreedomCAR roadmap.8 [EPA-HQ-OAR-2010-0799-9461-
Al,p. 8]
• Vehicle Cost: NGV development will help reduce FCEV vehicle costs by advancing on-
board gaseous storage and fuel management technologies, allowing more fuel to be
stored safely with less weight and/or space. In a sense, the FCEV represents the ultimate
6-55
-------
EPA Response to Comments
union of NGVs and EVs, with EVs providing the electric drive-train and NGVs ensuring
the development of hydrogen storage technologies. [EPA-HQ-OAR-2010-0799-9461-A1,
p. 8]
• Consumer Acceptance: By increasing familiarity and comfort with gaseous fuel vehicles
and refueling, NGVs will help pave the way for consumer acceptance of FCEVs. NGV
deployment will also serve the role of developing experience with gaseous-fueled
vehicles for auto dealers, mechanics, and other important stakeholders that directly
interface with consumers. [EPA-HQ-OAR-2010-0799-9461-A1, p. 8]
Thus, the market penetration of NGVs helps ensure that the necessary fuel and technologies will
be in place for FCEVs, accelerating and lowering the costs of this transition. Much like the role
that plug-in hybrid electric vehicles are playing in facilitating adoption of EVs, NGVs - and
particularly dual-fuel NGVs (which mitigate "range anxiety" for early adopters) are essential for
facilitating the market penetration of FCEVs. [EPA-HQ-OAR-2010-0799-9461-A1, p. 8]
B. Adopting Effective Regulatory Incentives
Regulatory Incentives for 2012 - 2015
Under the existing regulations, EPA and NHTSA attempt to provide incentives to encourage
manufacturers to produce dual-fuel NGVs in 2012-2015 by providing favorable treatment of
greenhouse gas (GHG) emission and fuel economy (FE) credits. This is done, in part, by using a
divisor (0.15) to compute GHG and FE levels. The use of the 0.15 divisor was first authorized
for FE calculations as part of the Alternative Motor Fuels Act (AMFA) of 1988 (P. L. No. 100-
94). [EPA-HQ-OAR-2010-0799-9461-A1, p. 8]
As part of the current rulemaking, EPA also has proposed modifying its regulations for MY 2012
and later years to improve the GHG credits provided for dual-fuel NGVs, including the use of a
"utility factor" to determine the percentage of time a vehicle is deemed to operate on alternative
fuel. The current regulations calculate fuel economy and greenhouse gas emissions by assuming
that dual-fuel vehicles operate only (and always) 50 percent of the time on conventional fuel and
50 percent of the time on alternative fuel. Like the 0.15 divisor, the 50/50 fuel consumption
factor is prescribed in AMFA. The benefit of the proposed utility factor (UF)9 is that, for most
dual-fuel vehicles, the vehicles will be credited for operating more than 50 percent of the time on
the alternative fuel. The UF takes into account typical consumer range requirements and a
vehicles operational range on alternative fuel when calculating the percentage of time a vehicle is
likely to operate on alternative fuel. The effect is that most dual-fuel natural gas vehicles will
now be given credit for higher use of natural gas and lower GHG emissions. [EPA-HQ-OAR-
2010-0799-9461-A1, pp. 8-9]
NGV America supports EPA and NHTSA's previous decision to use the 0.15 divisor to compute
GHG and FE credits in MYs 2012 - 2015. We also support the proposal in this rulemaking to
use UFs to compute GHG emissions (and eventually FE—see below) for dual-fuel vehicles.
While the fuel economy program's use of the 0.15 divisor are prescribed by federal law, the
agencies apparently rely upon their general discretion to use the 0.15 factor to provide GHG
6-56
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
credits for dual-fuel vehicles - and NGV America supports that. [EPA-HQ-OAR-2010-0799-
9461-A1, p. 9]
However, NGV America wishes to point out several infirmities in the existing and proposed rules
that undermine or eliminate the intended benefits of those rules. [EPA-HQ-OAR-2010-0799-
9461-A1, p. 9]
First, in reality, the benefit of the FE credit is limited or non-existent since there currently are
restrictions on the total amount of fuel economy credits manufacturers can use for dual fuel and
flex-fuel vehicles. Federal law prescribes an upper bound on the maximum amount of fuel
economy credit a manufacturer may earn and phases-out the credits after 2019 (although they are
reinstated without a cap beginning 2020). Because of the significant number of E85 vehicles
offered by manufacturers, it is expected that manufacturers will reach their fuel economy credit
limit primarily via their E85 products. Any additional offerings of dual fuel NGVs will probably
not earn the automakers any usable FE credits in MYs 2012-2015. There needs to be another
avenue - not blocked by E85 vehicles - for manufacturers to take advantage of the FE credits
generated by dual-fuel NGVs. [EPA-HQ-OAR-2010-0799-9461-A1, p. 9]
Second, it is true that manufacturers that offer dual-fuel NGVs will earn enhanced greenhouse
gas emission credits for MY 2012—2015 vehicles, and the value of these GHG credits will be
further improved by the use of the proposed utility factors. However, manufacturers are unlikely
to find these GHG credits sufficiently attractive to produce dual-fuel NGVs (even if the credits
can be carried forward for use in later years) unless they can simultaneously earn enhanced GHG
andFE credits. [EPA-HQ-OAR-2010-0799-9461-A1, pp. 9-10]
It should be noted that, for 2012-2015, dedicated NGVs would continue to be of value to OEMs
since they qualify for FE credits and there is no cap that limits the amount of the credits that
manufacturers can use. (The 0.15 divisor also applies to dedicated vehicles' FE and GHG
calculations.) While we certainly support the proposed incentives for dedicated vehicles, it is
also important to provide useful and effective incentives for dual-fuel NGVs, too. Most
consumers and even some fleets are likely to prefer dual-fuel vehicles over dedicated vehicles
until the natural gas fueling infrastructure is significantly expanded. Dual-fuel vehicles will be a
critical enabler to alleviate consumer concerns with range anxiety and will serve as an important
vehicle option to help facilitate the transition to alternative fuel vehicles and spur consumer
willingness to buy the types of vehicles that will be needed to comply with the new
standards. [EPA-HQ-OAR-2010-0799-9461-A1, p. 10]
Regulatory Incentives for 2016 & Beyond
The incentives proposed for 2016 and beyond (as explained below) do not provide adequate or
consistent incentives for NGVs (especially as compared to electric vehicles) and, therefore, are
unlikely to be effective. [EPA-HQ-OAR-2010-0799-9461-A1, p. 10]
For dedicated NGVs, the proposed rules would continue to use the existing 0.15 FE divisor in
2016 and beyond (as required by law). However, for GHG calculations, after 2016, the 0.15
6-57
-------
EPA Response to Comments
divisor would no longer be available, so GHG incentives for manufacturers would be
negligible. [EPA-HQ-OAR-2010-0799-9461-A1, p. 10]
For dual fuel vehicles, the proposed rules would also continue to use the existing 0.15 divisor for
FE in 2016 and beyond (as required by law). For FE purposes during 2016-2019, dual-fuel
vehicles would be assumed to operate 50/50 on natural gas and petroleum. However, the need for
FE credits, already limited by the cap and the production of E85 vehicles, would be further
constrained by declining the cap. From 2020, the 50/50 rule would be replaced by the use of the
UF. [EPA-HQ-OAR-2010-0799-9461-A1, p. 10]
For GHG emissions for dual-fuel vehicles, the use of the UF also would replace the use of the
50/50 rule from 2012 and thereafter. NGV America supports this. However, the use of the 0.15
divisor would end after 2015 - virtually eliminating the value of dual-fuel vehicle GHG benefits.
If the purpose of these regulations is to encourage manufacturers to produce vehicles that
produce fewer greenhouse gases, this aspect of the proposed rules makes little sense. As
discussed above, NGVs produce less GHGs than comparable gasoline vehicles - especially when
the upstream emissions are considered. Without continued use of the 0.15 divisor for dual-fuel
GHG calculations, the incentive for manufacturers to produce NGVs would be significantly
reduced. [EPA-HQ-OAR-2010-0799-9461-A1, p. 10]
NGV America's Recommended Changes
1. Provide a Separate Track for Dual-Fuel NGVs
As discussed above, the large number of E85 vehicles being manufactured, in effect, nullifies the
value of other dual-fuel vehicle FE credits. NGV America recommends that, in order to make the
incentives for dual-fuel NGVs truly effective, the agencies should develop a separate track for
these vehicles. Dual-fuel NGVs (and any other alternative fuel vehicles) certified under this track
would earn unlimited (uncapped) FE and GHG credits. [EPA-HQ-OAR-2010-0799-9461-A1, p.
11]
2. Apply the Utility Factor for Dual-Fuel NGVs for Both GHG and FE Beginning in 2012
The utility factors should apply to dual-fuel vehicles beginning with MY 2012 for GHG and FE
credits. The agencies have articulated sufficient legal justification for adopting the use of the
utility factors for fuel economy for MY 2020 forward, and EPA has already proposed making the
utility factors retroactive back to 2012 for GHG certification. This same rationale supports
extending the utility factor to the FE calculations prior to 2020. EPA and NHTSA appear to
understand that providing one credit but not the other is highly problematic and is not consistent
with the intent of harmonization under one single national fuel economy/greenhouse gas
program. That is why some credit provisions in the rules (e.g., FFVs, EVs, hybrid trucks) attempt
to provide periods where both incentives overlap. Combining the incentives and providing
consistent treatment of FE and GHG credits for dual-fuel NGVs is extremely important in
ensuring compliance with these extremely complex regulations. [EPA-HQ-OAR-2010-0799-
9461-Al,p. 11]
6-58
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
3. Continue the Use of the 0.15 GHG Divisor Beyond 2015
As discussed above, the use of the 0.15 divisor for GHGs for both dual-fuel and dedicated NGVs
currently terminates after 2015. But these credits in order to be effective must be extended
beyond 2015. Manufactures have already made preparations for MYs 2012-2015 and are
unlikely to have sufficient time to respond to these incentives in that short timeframe. Therefore,
to encourage more NGVs, EPA and NHTSA should extend the credits provided for NGVs until a
certain market penetration is achieved. The phase-out of such incentives should be consistent
with the approach taken with respect to electric drive vehicles. EPA and NHTSA have
essentially proposed very generous treatment of such vehicles. Enhanced credits for such
vehicles would only expire after these technologies reach a certain level of market penetration.
We believe that providing these credits until a manufacturer's sale of NGVs reaches several
hundred thousand (300,000 in the case of EVs) is warranted. Alternatively, EPA and NHTSA
could establish one cap for all alternative fuel vehicles. [EPA-HQ-OAR-2010-0799-9461-A1, p.
11]
Other Credit Provisions
In addition to urging the agencies to adopt the incentive described above, we offer the following
comments with respect to several other incentives proposed as part of this rulemaking:.
Sales Multipliers
In its notices, the agencies have asked for comment on whether to provide a production or sales
multiplier for dedicated and dual-fuel NGVs. The agencies have proposed adopting such
multipliers for other technologies (e.g., a multiplier of 1.3-2.0 is proposed for EVs, FCVs, and
PHEVs) for 2017 - 2021. In order to ensure equitable treatment, the agencies should provide
similar credits to NGVs. And since EVs and other electric-drive vehicles already receive
extremely generous treatment in the rules, we believe that the provision of a sales multiplier for
NGVs should be in addition to any other credits also provided for NGVs in order to further
encourage manufacturers to offer such vehicles. In terms of credit values, we believe that
dedicated NGVs should be treated like EVs and that dual-fuel NGVs should be treated like
PHEVs. The result of this more equitable treatment would be to provide a level playing field to
incentivize the manufacture of all alternative fuel vehicles and not favor one technology over
another. Therefore, we propose the following multiplier credits for NGVs: [See table on p. 13 of
Docket number EP A-HQ-O AR-2010-0799-9461-A1] [EP A-HQ-O AR-2010-0799-9461-A1, p.
12]
NGV America appreciates the opportunity to provide these comments. We applaud the agencies
for the incentives that have been proposed for NGVs and other alternative fuel technologies. We
urge the agencies to incorporate the changes we have proposed in our comments. The changes
we have proposed will further stimulate the market for NGVs and other advanced technologies
and provide significant economic, energy security and environmental benefits. We realize that
this rulemaking is an enormously complicated and daunting undertaking and that EPA and
NHTSA have a significant job ahead of them in terms of reviewing and evaluating the comments
that have been submitted. We welcome the opportunity for additional dialogue and offer our
6-59
-------
EPA Response to Comments
assistance if necessary in understanding the proposals we have put forward in these comments.
[EPA-HQ-OAR-2010-0799-9461-A1, p. 14]
1 See EIA, 2011 Annual Energy Outlook, Table 11 (April 2011).
2 "The Contributions of the Natural Gas Industry to the U.S. National and State Economies,"
fflS Global Insight 2009, p.l.
3 National Research Council, "Hidden Costs of Energy: Unpriced Consequences of Energy
Production and Use." Washington, DC: The National Academies Press, 2010.
4 See California Low Carbon Fuel Standard;
http://www.arb.ca.gov/fuels/lcfs/1214091cfs_lutables.pdf
5 Cannon, James S. "Gearing Up for Hydrogen: America's Road to Sustainable Transportation."
Inform. 1998. http://www.informinc.org/gearinghydrogen.php
6 http://205.254.148.40/hydrogenandfuelcells/pdfs/h2_tech_roadmap.pdf
7 http://greet.es.anl.gov/results
8 http://205.254.148.40/hydrogenandfuelcells/pdfs/h2_tech_roadmap.pdf
9 Utility factors look at the driving range of vehicle on alternative fuel and assigns a utility factor
for alternative fuel use (e.g., 70 miles on NG = 0.785 factor, 100 miles = 0.865, 150 miles =
0.925).
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 73.]
The NESCAUM states support EPA's proposal to calculate fuel economy for dedicated
alternative fuel vehicles using only 15 percent of actual energy consumed as this provides a
strong incentive for increased deployment of compressed national gas and fuel cell vehicles.
In the initial years of the standards, these vehicles will account for a very small fraction of
overall sales and therefore own a small percentage of overall greenhouse gas emissions from the
light-duty vehicle fleet.
Organization: Pennsylvania Department of Environmental Protection
Motor vehicles fueled by liquid petroleum remain a significant source of air emissions in
Pennsylvania and this fact poses challenges to us in meeting and maintaining federal clean air
6-60
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
standards. We are, however, seeing some promise from the dramatic increase in supplies and
availability of domestic natural gas of swapping out our vehicle transportation fuel from
imported foreign oil to domestic natural gas either directly or via electricity generated from
domestic natural gas fuel. Indeed, this is the most significant opportunity we have had in our
lifetime to clean our air, especially in urban areas where the burning of imported liquid
transportation fuels is the most concentrated. This would dramatically improve the air quality of
Pennsylvania and would, at the same time, significantly enhance our national security and energy
independence to boot. We are encouraged by President Obama's statement made in January that
natural gas could power America's long haul trucking fleet. Light-duty fleets could also benefit
from the use of natural gas and we urge EPA to incorporate strategies in this regulation to
promote natural gas light-duty vehicle development. [EPA-HQ-OAR-2010-0799-7821-A1, p. 1]
The Agencies Should Provide Similar Incentives to All Alternatively Fueled Vehicles.
We are concerned about the implications for provisions discussed below for encouraging the use
of natural gas in light-duty vehicles. [EPA-HQ-OAR-2010-0799-7821-A1, p. 3]
Discard the Petroleum Equivalency Factor. The petroleum equivalency factor (PEF) should
eventually be discarded in order that a fair and accurate accounting of GHG emissions be
assessed among all vehicles so that the nation gets the most fuel efficient fleet possible. The
agencies should work with Congress toward eliminating this statutory requirement. We
recognize that the agencies are required by statute to count GHG emissions from electric vehicles
(EV) using the PEF, which allows for only a partial counting of the actual GHG emissions
produced by EVs. The PEF serves to incentivize manufacturers to produce more EVs.
Discarding the PEF would level the incentive playing field among vehicles using different fuels,
including natural gas, and allow for a more accurate accounting of GHG emissions. [EPA-HQ-
OAR-2010-0799-7821-A1, pp. 3-4]
Organization: Plant Oil Powered Diesel Fuel Systems, Inc.
The Proposed Regulations assign to vehicles equipped to run on compressed natural gas
("CNG") a GHG emissions credit based on the amount of time the vehicle has been estimated by
the Society of Automotive Engineers to run on CNG, as a function of the carbon emissions
equivalency of this fuel as compared to petroleum. Id. [EPA-HQ-OAR-2010-0799-103 3 7-A2, p.
6]
C. Natural Gas-Powered Vehicles
While natural gas produces less CO2 per Btu than does coal or petroleum fuel oil, it entails the
release into the atmosphere of fossilized carbon that constitutes a net addition to GHG's. EIA,
"Natural Gas & the Environment," (Web: Feb. 3, 2012)
(http://www.eia.gov/kids/energy.cfm?page=natural_gas_home-basics) (117 pounds versus 200
pounds versus 160 pounds, respectively). Proposed Regulations that encourage the use of a less-
intensive GHG producing fossil fuel do not reduce GHG emissions going into the atmosphere;
they only slow the pace of accumulation, still increasing Global Warming. Such incentives are,
6-61
-------
EPA Response to Comments
thus, contrary to the duty of EPA under the Clean Air Act to slow Global Warming. [EPA-HQ-
OAR-2010-0799-10337-A2, p. 9]
Organization: Toyota Motor North America
ATV Multipliers [EPA-HQ-OAR-2010-0799-9586-A1, p.20]
EPA requests comment on extending to CNG vehicles a sales multiplier similar to those
proposed for the advanced technology vehicles listed above. [EPA-HQ-OAR-2010-0799-9586-
Al, p.20]
Toyota believes the primary consideration for including any technology in this provision should
be its CC>2 reduction potential. The CAFE regulations already recognize the oil saving benefit of
CNG vehicles by structuring the fuel economy calculations to provide a significant boost in their
reported fuel economy. EPA's advanced technology provisions should be squarely focused on
CO2 benefits of a technology. [EPA-HQ-OAR-2010-0799-9586-A1, p.20]
Toyota opposes including CNG vehicles if it excludes other technologies that are more advanced
and provide greater CC>2 reductions. While CNG vehicles typically emit about 20 percent less
CO2 compared to a convention gasoline engine, 'strong' gasoline electric hybrids typically emit
30 percent less. [EPA-HQ-OAR-2010-0799-9586-A1, p.20]
Toyota believes hybrid electric vehicles are a critical stepping-stone for the grid-connected
technologies that are the focus of this proposed incentive. Hybrids share many of the same
components as electric and plug-in hybrid vehicles (batteries, motors, and power electronics).
Expanding hybrid vehicle penetration will help create economies of scale for these shared
components while building manufacturing and supplier capabilities, ultimately supporting
expansion of plug-in hybrid and electric vehicles. [EPA-HQ-OAR-2010-0799-9586-A1, p.20]
Therefore, if the agencies decide to grant CNG vehicles a multiplier under this proposed
incentive, then hybrid vehicles should also be included and should be assigned a larger multiplier
in recognition of their superior CC>2 reduction potential. Similarly, dual-fuel CNG systems
should receive a lower multiplier than dedicated CNG systems based on expected real world CO2
reductions. Finally, both the CNG and hybrid multipliers should be lower than those for plug-in
hybrid electric vehicles. [EPA-HQ-OAR-2010-0799-9586-A1, p.20]
We also request the EPA revisit whether this provision should be continued beyond the 2021
model year as part of the mid-term review. [EPA-HQ-OAR-2010-0799-9586-A1, p.20]
Organization: Vehicle Production Group LLC (VPG)
Harmonization of Treatment of CNG Carbon Dioxide Emissions
Section 136 of the Energy Independence and Security Act of 2007 creates a government-backed
loan program for the development of non-petroleum fuels for automotive applications. The
Department of Energy administers this loan program through private banks. VPG was awarded a
6-62
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
loan of approximately $50 million through this program for the development of our CNG
offering. Among the benefits to OEM's responsible for compliance with CAFE regulations, and
as a function of displacing the nation's dependence on foreign oil, there is a credit for the
determination of the fuel economy of a dedicated CNG vehicle. [EPA-HQ-OAR-2010-0799-
7985-A2, p. 3]
Congress has identified CNG for automotive fuel applications as strategically important to the
extent that the above mentioned CAFE computation credit is granted, and government backed
loans are offered for the development of CNG fueled vehicles; yet the carbon dioxide emissions
from CNG fueled vehicles are handled in the same manner as CC>2 emissions from petroleum
sources. Carbon dioxide emissions generated by VPG's gasoline and CNG vehicles as measured
by the federal city and highway tests are detailed in Table 1. [See Table 1 on page 3 of Docket
number EPA-HQ-OAR-2010-0799-7985-A2] [EPA-HQ-OAR-2010-0799-7985-A2, p. 3]
Since CO2 emissions are essentially equivalent to fuel economy, and fuel economy of dedicated
CNG fueled vehicles is adjusted to create a benefit for the CAFE calculation, VPG suggests the
application of the same beneficial treatment of CO2 generated from CNG as is given to fuel
economy. The proposal forwarded by VPG shown in table 1 is an adjustment factor, consistent
with the factor applied to fuel economy of dedicated CNG fueled vehicles in calculating CAFE.
The adjustment is the use of a 0.15 factor applied to natural gas generated carbon dioxide
emissions. [EPA-HQ-OAR-2010-0799-7985-A2, p. 3]
Organization: VNG Co (VNG)
Section 1: Appropriate. Fair, and Consistent Incentives Are Needed for NGVs. [EPA-HQ-OAR-
2010-0799-7941-A2, p. 1]
The success of VNG (and other fueling infrastructure providers) will thus be critical to achieving
the Agencies' long-term environmental and energy security goals. However, the massive capital
investments that will be required to build this infrastructure are dependent on automakers
bringing substantial quantities of NGVs to market - and these production decisions are strongly
influenced by the fuel economy and greenhouse gas ('GHG) regulations that are the subject of
the present NPRM. [EPA-HQ-OAR-2010-0799-7941-A2, p. 2]
The Notice of Proposed Rulemaking ('NPRM') acknowledges the emissions and energy security
benefits of NGVs and takes steps to support their production in ways that the Agencies do not in
the current rules. As explained in more detail below, the NPRM includes several proposals that
will benefit NGVs, including-
• Utility factors to determine natural gas fuel use for dual-fuel NGVs;
• Credits for deployment of 'game-changing' technologies for full-size pickups, potentially
including NGV capability;
• Option to use new EPA rules for dual-fuel NGVs beginning in 2012; and,
6-63
-------
EPA Response to Comments
• NHTSA's proposal for a strong regime for measuring fuel economy for dual-fuel NGVs after
the expiration of statutory credits in 2019. [EPA-HQ-OAR-2010-0799-7941-A2, p. 2]
Despite these positive proposals, and despite the Agencies' desire 'to remain scrupulously
neutral... to avoid picking technology 'winners',' electric vehicles ('EVs') receive far more
consideration and incentives than NGVs under the NPRM. In order for the Agencies to facilitate
the 'all out, all of the above' energy strategy advocated by the President in his recent State of the
Union address,4 NGVs must also be provided with appropriate regulatory incentives relative to
their unique benefits and contributions to near- and long-term emissions and energy security
goals. Additional steps are required to establish appropriate, fair, and consistent incentives for
NGVs:
• Multipliers for NGVs similar to those offered for PHEVs, EVs, and FCEVs;
• An extension of the current calculation of NGV GRG emissions as 0.15 times those of gasoline
emissions (equivalent to CAFE credits), for a similar duration as the 0 g/mile emissions incentive
for EVs; and,
• Appropriate fuel economy credits for dual-fuel NGVs between 2012 and 2019. [EPA-HQ-
OAR-2010-0799-7941-A2, p. 2]
The long-term energy security, environmental, and technology innovation goals of the Agencies
will have the greatest chance for success if the current NPRM establishes appropriate, fair, and
consistent incentives for all alternative fuel vehicles, including NGVs, and refrains from picking
'winners.' Development of the NGV market is particularly important to the achievement of these
goals because it serves two purposes: 1) NGVs are an essential technology to reduce emissions
and replace petroleum consumption from ICE vehicles in the near term; and, 2) NGVs create a
bridge to FCEV market development in the longer term. VNG urges the Agencies to consider
their proposed rules and the following VNG comments in the context of this broader
vision. [EPA-HQ-OAR-2010-0799-7941-A2, pp. 2-3]
Section 2: NGVs Will Benefit from New Economics of Natural Gas - But Require Appropriate
Regulations to Meet Their Potential
The adoption of NGVs in the US will be driven by two core factors: consumer demand due to the
new economics of natural gas in the US; and, regulations that recognize the ability of natural gas
to address national environmental and energy security goals in both the near and long
term. [EPA-HQ-OAR-2010-0799-7941-A2, p. 3]
The New Economics of US Gas: VNG - and increasingly, automakers - are optimistic about the
future of NGVs in the United States due to the shale gas 'revolution.' The combination of
established hydraulic fracturing techniques and new horizontal drilling technologies has been
termed 'the biggest energy innovation of the decade' by energy expert Daniel Yergin for allowing
drillers to economically access vast amounts of previously-untapped supplies of natural gas
stored in shale rock formations. 5 President Obama emphasized the importance of this new
natural gas production for achieving US energy independence and environmental goals in his
6-64
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
recent State of the Union, lauding a 'a supply of natural gas that can last America nearly 100
years."6 [EPA-HQ-OAR-2010-0799-7941-A2, p. 3]
This flood of new domestic natural gas has resulted in a surplus in the market and low prices,
which are expected to remain much lower and more stable than oil for decades to come.
Compressed natural gas (CNG) currently costs about $1.50 less per gasoline gallon equivalent
(GGE) compared to gasoline,7 and according to forecasts from the Energy Information
Administration (EIA), this pricing advantage is expected to grow to over $2 per GGE by 2020,
and $3 per GGE by 2035.8 [EPA-HQ-OAR-2010-0799-7941-A2, p. 3]
This durable price advantage has the potential to drive widespread consumer adoption of NGVs,
which automakers expect can be produced at an incremental cost of $3,000 or less.9 Presenting
consumers with this favorable price-value proposition will require automakers to move from
current small-volume, conversion kit production of NGVs to mass-produced, production line
vehicles - a move that has been key to gaining market success in Europe. Before making
necessary investments in mass-market NGV production, automakers will require assurance of
fueling infrastructure availability and a regulatory framework that provides appropriate, fair and
consistent incentives for NGVs. [EPA-HQ-OAR-2010-0799-7941-A2, p. 3]
Contributes to Energy Security and Environmental Goals: Natural gas is a 100 percent North
American fuel that can directly replace imported oil in the transportation sector, in line with the
energy security goals of the current rulemaking. Natural gas is also much cleaner burning than
gasoline, making it well-suited to meet the environmental goals of the NPRM as well. Argonne
National Laboratory's GREET model estimates that NGVs reduce GHG emissions by 24 percent
compared to gasoline when fueled on conventional natural gas, and GHG emissions can be close
to zero on a lifecycle basis when natural gas is sourced from landfills or other renewable,
biogenic sources. 10 [EPA-HQ-OAR-2010-0799-7941-A2, p. 4]
These benefits from natural gas operation will be in addition to the efficiency-related fuel
economy improvements and emissions reductions achieved in the conventional gasoline-fueled
vehicle fleet, since NGVs use the same ICEs. The added reductions in ICE petroleum use and
emissions offered by natural gas operation will be valuable to automakers as they seek to comply
with increasingly stringent future regulations. Although the US vehicle fleet may one day include
large numbers of EVs and FCEVs, the vast majority of sales will be ICE vehicles for the
foreseeable future, making it critical to ensure the viability of the natural gas compliance
pathway for automakers. [EPA-HQ-OAR-2010-0799-7941-A2, p. 4]
Contributes to Other Regulations: NGV production and the development of natural gas refueling
infrastructure can also facilitate compliance with other vehicle regulations. NGVs are well-suited
to meet the Tier 3 emission standards under development by EPA due to low emissions for all
criteria pollutants, and renewable biomethane can satisfy the advanced biofuels requirement of
the EPA-administered Renewable Fuel Standard due to deep lifecycle emission reductions and
use of non-food feedstocks. 14 In California, NGVs qualify as an Advanced Technology Partial
Zero Emission Vehicle under the Zero Emission Vehicle standard, 15 and CNG has one of the
lowest carbon intensities of any fuel under the proposed Low Carbon Fuel Standard. 16 [EPA-
HQ-OAR-2010-0799-7941-A2, pp. 4-5]
6-65
-------
EPA Response to Comments
Essential Bridge to Hydrogen: In the long term, NGVs will serve as an essential 'bridge'
technology to FCEVs, which the Agencies recognize as one of the key technology pathways for
achieving long-term energy and environmental goals. FCEVs and EVs can 'transform' the light-
duty vehicle sector, but they face major market barriers including 'vehicle cost, fuel cost, the
development oflow-GHG fuel production and distribution infrastructure, and/or consumer
acceptance.' [EPA-HQ-OAR-2010-0799-7941-A2, p. 5]
The production of NGVs and development of natural gas refueling infrastructure directly address
all ofthe 'major near-term market barriers' the Agencies identify for FCEVs. This critical context
for understanding the importance of NGVs in achieving the country's long-term energy and
environmental goals is summarized in Section 4, within a discussion ofthe advanced vehicle
technology multipliers proposed in this NPRM. The role of NGVs as a 'bridge to hydrogen' is
presented in much greater detail in the attached white paper entitled NATURAL GAS: An
Essential Bridge To Hydrogen Fuel Cell Vehicles by clean transportation expert James
Cannon. [The white paper can be found on pp. 19-35 of Docket number EPA-HQ-OAR-2010-
0799-7941-A2] [EPA-HQ-OAR-2010-0799-7941-A2, p. 5]
• New rules for estimating the natural gas fuel use of dual-fuel NGVs developed by the Society
of Automotive Engineers (SAE) - the 'utility factor' approach - will allow automakers to receive
credit for the greater potential for alternative fuel use of NGV vehicles compared to dual-fuel
ethanol (i.e., 'flex-fuel') vehicles; [EPA-HQ-OAR-2010-0799-7941-A2, p. 5]
• The option for automakers to use new EPA rules for dual-fuel NGVs beginning in 2012, which
will allow these vehicles to be eligible for uncapped credits based on the utility factor
methodology immediately instead of waiting until 2017; [EPA-HQ-OAR-2010-0799-7941-A2,
p. 5]
• NHTSA's proposal for a strong regime for measuring fuel economy for dual-fuel NGVs after
the expiration of statutory credits in 2019 - which represents an improvement over the current
rules, since the removal of statutory caps will allow these vehicles to actually receive
credits; [EPA-HQ-OAR-2010-0799-7941-A2, p. 6]
Utility Factors
In the same manner that PHEVs assuage EV owners' 'range anxiety' concerns, dual-fuel NGVs
ameliorate 'range anxiety' that might discourage consumers from purchasing dedicated NGVs
during the early years of natural gas refueling infrastructure build out. VNG therefore applauds
and fully supports the use ofthe SAE 'utility factor' methodology to determine expected fuel use
for both PHEV and dual-fuel NGVs. [EPA-HQ-OAR-2010-0799-7941-A2, p. 6]
The utility factors are a substantial improvement over the previous formula, which assumed that
dual-fuel vehicles would only use natural gas for half of vehicle miles traveled. Instead, utility
factors provide a more accurate calculation of usage because they compare the range of each
specific natural gas vehicle to the daily travel needs ofthe average driver, resulting in a higher
percentage of assumed natural gas fuel use for dual fuel vehicles with significant natural gas
range. [EPA-HQ-OAR-2010-0799-7941-A2, p. 6]
6-66
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
VNG strongly supports the use of utility factors for dual-fueled NGVs for four reasons:
• Given the higher purchase price of an NGV and much lower fuel costs for natural gas
compared to gasoline, drivers will fuel on natural gas as often as possible; [EPA-HQ-OAR-2010-
0799-7941-A2, p. 6]
• The new economics of natural gas will support the build-out of a national, public NGV
refueling infrastructure by VNG (and our competitors), giving dual-fuel NGV drivers widespread
access to natural gas fuel; [EPA-HQ-OAR-2010-0799-7941-A2, p. 6]
• There is significant potential for overnight home natural gas refueling for NGVs, although the
Agencies only acknowledge the potential for home charging for PHEVs in the NPRM. The
combination of overnight home refueling and fast 'on-the-go' fueling at public stations could
ensure that the vast majority of daily travel for dual-fuel NGVs is fueled by natural gas;
and, [EPA-HQ-OAR-2010-0799-7941-A2, p. 6]
• Adopting the utility factor approach is an important step towards correcting the current,
statutorily-imposed rules that unfairly treat dual-fuel NGVs in the same fashion as E85 flex-fuel
vehicles, despite the vastly greater potential for dual-fuel NGVs to make a significant impact on
real-world petroleum consumption and GHG emissions. Treating dual-fuel NGVs similarly to
PHEVs rather than FFVs is an important precedent that is also appropriate in the context of NGV
multipliers, as discussed below. [EPA-HQ-OAR-2010-0799-7941-A2, p. 7]
Finally, in the event that the utility factors prove to be unrepresentative of real-world natural gas
fuel use, the SAE and the Agencies will have an opportunity to adjust them appropriately during
the midterm review period. [EPA-HQ-OAR-2010-0799-7941-A2, p. 7]
While VNG's business interest is for dual-fuel NGVs to fuel on natural gas as often as possible,
we do not support the imposition of design requirements for dual-fuel vehicles based on tank size
or other factors, a possibility the Agencies requested comments on in the NPRM. The utility
factor approach itself incentivizes automakers to build vehicles with greater CNG range, since
fuel economy and emissions calculations improve with tank size. However, specific range or
design requirements would restrict the ability of automakers to design vehicles based on
consumer preference - a particularly important concern in the early years of developing market
acceptance of a new technology. [EPA-HQ-OAR-2010-0799-7941-A2, p. 7]
Consistent EPA Regime for Dual-Fuel Vehicles
EPA has proposed allowing automakers the option of moving immediately to the new regime for
dual-fuel NGVs beginning in 2012, with no cap on emission credits, no CNG range minimum,
and with utility factors to determine fuel use instead of the 50 percent natural gas fueling
assumption. VNG strongly supports this proposal, as it will end discrimination against dual-fuel
NGVs under the current rules, as discussed below. [EPA-HQ-OAR-2010-0799-7941-A2, p. 8]
In the prior rulemaking for light duty vehicles, EPA adopted the structure of dual-fuel vehicle
incentives prescribed for NHTSA in the Energy Policy and Conservation Act ('EPCA') and
6-67
-------
EPA Response to Comments
Energy Independence and Security Act ('EISA'), which assumed 50 percent alternative fuel use
for dual-fueled vehicles and capped the total benefits to a given automaker's overall fuel
economy calculation from all dual-fuel vehicles including dual-fuel NGVs and E85 'flex fuel'
vehicles - at 1.2 mpg, declining to 0 in 2019. Because virtually all automakers have opted to
produce a sufficient quantity of E85 flex-fuel vehicles to reach the maximum allowed credit,31
dual-fuel NGVs are effectively blocked from receiving their Congressionally authorized
incentives. [EPA-HQ-OAR-2010-0799-7941-A2, p. 8]
Moreover, the statutory definition of dual-fuel NGVs within EPCA is unnecessarily restrictive.
Dual-fuel NGVs are required to have a CNG-only range of at least 200 miles to qualify for the
CAFE credit - a requirement equivalent to a 95.4% natural gas usage rate according to the utility
factor methodology. This effectively results in vehicles expected to fuel on natural gas a large
majority of the time - a vehicle with a IDO-mile CNG range is expected to fuel on CNG for
86.5% of total miles, for example - being treated as dedicated gasoline vehicles. The Agencies
have implicitly acknowledged that this treatment of dual-fuel NGVs is unnecessary in this
NPRM, as both EPA and NHTSA have opted not to adopt minimum range criteria except when
required by EPCA. [EPA-HQ-OAR-2010-0799-7941-A2, pp. 8-9]
The Agencies' proposal to allow automakers to take advantage of the new EPA rules in 2012 is
an important first step towards accelerating the production of dual-fuel NGVs, since NGVs can
be added to automaker production plans with relatively short lead times and a low incremental
cost (if automakers move from small-volume conversions to high-volume production line
vehicles). As a result, NGVs can and should be encouraged to make a positive impact on energy
security and environmental goals as soon as possible, during the 2012-2016 period. In fact, dual-
fuel NGVs will have their greatest value during the early years of the build out of the natural gas
refueling infrastructure due to their ability to eliminate range anxiety. [EPA-HQ-OAR-2010-
0799-7941-A2, p. 9]
It should be noted, however, that this productive proposal by EPA is an incomplete solution to
the unfairness of the current rules for dual-fuel NGVs. Until NHTSA's rules are revised to
provide appropriate, fair, and consistent incentives for dual-fuel NGVs in 2012-2019 and
beyond, these vehicles will continue to underachieve their potential and underserve the Agencies'
objectives. In Section 4, below, VNG discusses ways in which NHTSA might make its rules
more consistent with EPA's proposal. [EPA-HQ-OAR-2010-0799-7941-A2, p. 9]
Strong Post-2019 NHTSA Regime for Dual-Fuel NGVs
VNG strongly supports NHTSA's proposal for the treatment of dual-fuel NGVs after 2019. As
the Agencies recognize, without credits for dual-fuel NGVs, automakers might only produce
dedicated NGVs due to their ongoing regulatory incentives. This in turn could limit development
of the market for NGVs, since many consumers may prefer a dual-fuel NGV as their first natural
gas vehicle to eliminate 'range anxiety,' just as many consumers today may prefer PHEVs to
dedicated EVs due to similar range and recharging concerns. NHTSA should thus continue using
the Petroleum Equivalency Factor to calculate the fuel economy of dual-fuel NGVs, as with
dedicated NGVs. [EPA-HQ-OAR-2010-0799-7941-A2, p. 9]
6-68
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
The use of utility factors to determine fuel usage and removing the previous statutory caps is also
appropriate in the post-2019 period, given expectations for maximum possible natural gas fuel
use by dual-fuel NGVs. Statutory minimums for CNG range for dual-fuel NGVs are also
appropriately removed, in light of higher expected natural gas fuel use under the utility factor
methodology as well as the structure of the utility factors, which give automakers greater
incentives for vehicles with greater CNG ranges. These proposals are also consistent with the
proposed treatment of dual-fuel NGVs under EPA rules, which will take effect beginning in
2012 under the NPRM. [EPA-HQ-OAR-2010-0799-7941-A2, pp. 9-10]
As discussed above, while the post-2020 regime for dual-fuel NGVs is excellent, the
effectiveness of this post-2020 regime is severely curtailed by the fact that these vehicles are
effectively blocked from receiving any incentives through 2019. [EPA-HQ-OAR-2010-0799-
7941-A2, p. 10]
Section 4: Additional Steps Are Needed for Appropriate. Fair and Consistent NGV Incentives
Although the proposed rules provide increased incentives for NGVs, the overall regulatory
regime for NGVs is substantially less favorable than the regime for PHEVs and EVs, particularly
with regard to the EPA rules. Under proposed EPA rules, EVs will receive a 'double incentive'
that includes both a 0 g/mi GHG incentive and multipliers that magnify the impact of each EV
on a manufacturer's GHG compliance scores. NGVs do not receive comparable incentives in the
NPRM, although notably the Agencies do request comments on NGV multipliers in the NPRM
preamble. [EPA-HQ-OAR-2010-0799-7941-A2, p. 10]
The regulatory regime for NGVs is also fraught with inconsistency under both EPA and NHTSA
rules. For example, EPA incentives are strong through 2015 but disappear in 2016, in contrast to
the consistent 0 g/mi GHG incentive for EVs, which is retained through 2025 (although phased
out for automakers producing large numbers of these vehicles starting in 2021). NHTSA
incentives for dual-fuel NGVs are rendered effectively useless by statutory limits until 2020,
after which time they become favorable. [EPA-HQ-OAR-2010-0799-7941-A2, pp. 10-11]
Without consistent incentives for NGVs, automakers will be less inclined to make investments in
these vehicles since they will find it difficult to fit the benefits of these vehicles into their long-
term compliance strategies. The Agencies' treatment of NGVs also stands in stark contrast to the
consistent, long-term, favorable treatment given to EVs as well as the Agencies' goal of not
'picking technology winners.'38 The importance of establishing appropriate and consistent rules
that allow all alternative fuels a fair chance to contribute to energy security and environmental
goals is magnified by the particularly long duration of this rulemaking period compared to
previous rulemakings. [EPA-HQ-OAR-2010-0799-7941-A2, p. 11]
VNG has several recommendations for providing more appropriate incentives for NGVs, which
will ensure that consumers have a wide selection of low-emission alternative fuel vehicles and
that the greatest number of such vehicles are produced and sold:
• Multipliers for dual-fuel NGVs on par with multipliers for PHEVs, and multipliers for
dedicated NGVs equal to those for EVs;
6-69
-------
EPA Response to Comments
• An extension of the current calculation of NGV GHG emissions as 0.15 times those of gasoline
emissions (equivalent to CAFE credits), for a similar duration as the 0 g/mile emissions incentive
for EVs. Measured emissions levels would similarly be phased in after 2022 on the same
schedule that EV emissions begin to be measured according to their upstream emissions; and,
• Appropriate fuel economy credits for dual-fuel NGVs between 2012 and 2019. Dual-fuel
NGVs expected to fuel predominantly on natural gas are effectively denied incentives under
current statutory rules and treated like gasoline vehicles, which the Agencies acknowledge is an
'absurd result.' We encourage the Agencies to explore whether it is possible to provide
appropriate fuel economy credits to these vehicles as soon as possible. [EPA-HQ-OAR-2010-
0799-7941-A2, p. 11]
Multipliers for NGVs
EPA requested comments on 'the merits of providing similar multiplier incentives to dedicated
and/or dual-fuel compressed natural §as vehicles' as those proposed for EVs, PHEVs, and
FCEVs under the GHG program.3 These multipliers allow automakers to count each low-or-zero
emission vehicle as more than one vehicle for the purposes of compliance calculations between
2017 and 2021, with the express purpose of facilitating market penetration of advanced
technology vehicles.40 While EVs and FCEVs are expected to play crucial roles in achieving
national energy and environmental goals in the long term, the multipliers are considered
necessary in the NPRM to help surmount significant near-term market barriers they face,
including: 'vehicle cost, fuel cost (in the case of fuel cell vehicles), the development of low-GHG
fuel production and distribution infrastructure, and/or consumer acceptance." [EPA-HQ-OAR-
2010-0799-7941-A2, pp. 11-12]
Both dedicated and dual-fuel NGVs should be eligible for similar multipliers as PFIEVs and
EVs. California already recognizes NGVs as an 'advanced technology' vehicle in its Zero
Emission Vehicle (ZEV) regulation, as noted earlier in these comments. NGVs also contribute
directly to the Agencies' own advanced technology goals, due to their essential role in facilitating
the market penetration of FCEVs. Since the first wave of NGV adoption in the 1990s, the
development of NGVs - and particularly natural gas refueling infrastructure - has long been
recognized as a key bridge to hydrogen FCEVS.42 [EPA-HQ-OAR-2010-0799-7941-A2, p. 12]
Natural gas is largely composed of hydrogen, with four hydrogen atoms for every carbon atom in
a molecule of methane. Due to the chemical and physical similarities of these two gases, they
share a number of technology synergies, so that the proliferation of NGVs and natural gas
fueling infrastructure will facilitate and accelerate deployment of FCEVs. Indeed, the
development of the NGV market serves to reduce or eliminate all four of the near-term market
barriers to FCEV adoption identified by the Agencies: [EPA-HQ-OAR-2010-0799-7941-A2, p.
12]
• Low-GHG Fuel Production and Distribution Infrastructure: NGV refueling infrastructure
utilizes most of the same hardware (compressors, storage tanks, dispensers) that will be used to
dispense hydrogen fuel, allowing natural gas refueling stations to be straightforwardly adapted
for hydrogen dispensing. Natural gas can also be used as a feedstock for hydrogen fuel
6-70
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
production via distributed steam reforming at the refueling station, a fuel production pathway
identified by the Department of Energy's FreedomCAR & Fuel Partnership as the 'most viable
approach to begin building [the] hydrogen market in near term.'43 Distributed steam reforming
of natural gas for hydrogen production also yields just half of the lifecycle GHGs as production
of hydrogen via electrolysis usinl grid electricity, according to Argonne National Laboratories'
GREET model.44 [EPA-HQ-OAR-2010-0799-7941-A2, p. 12]
• Fuel Cost: Production of hydrogen from natural gas via distributed steam reformers also
represents the 'lowest current cost' hydrogen pathway compared to electrolysis and other
methods, according to the FreedomCAR roadmap.45 [EPA-HQ-OAR-2010-0799-7941-A2, p.
12]
• Vehicle Cost: NGV development will help reduce FCEV vehicle costs by advancing on-board
gaseous storage and fuel management technologies, allowing more fuel to be stored safely with
less weight and/or space. In a sense the FCEV represents the ultimate union of NGVs and EVs,
with EVs providing the electric drivetrain and NGVs ensuring the development of hydrogen fuel
technologies. [EPA-HQ-OAR-2010-0799-7941-A2, p. 12]
• Consumer Acceptance: By increasing familiarity and comfort with gaseous fuel vehicles and
refueling, NGVs will help pave the way for consumer acceptance of FCEVs. NGV deployment
will also serve the role of developing experience with gaseous fuel vehicles for auto dealers,
mechanics, and other important stakeholders that directly interface with consumers. [EPA-HQ-
OAR-2010-0799-7941-A2, p. 13]
Attached to these Comments is a white paper NATURAL GAS: An Essential Bridge To
Hydrogen Fuel Cell Vehicles authored by clean vehicle technology expert James Cannon, which
provides detailed background on the synergies between NGVs and FCEVs in a number of key
areas, including hydrogen production, distribution, storage, and fuel management systems, fuel
dispensing, natural gas-hydrogen fuel blends, vehicle technologies, and safety standards and
training. [The white paper can be found on pp. 19-35 of Docket number EPA-HQ-OAR-2010-
0799-7941-A2] [EPA-HQ-OAR-2010-0799-7941-A2, p. 13]
In short, the market penetration of NGVs helps ensure that the necessary fuel and technologies
will be in place for FCEVs, accelerating and lowering the costs of this transition. Much like the
role that PHEVs play in facilitating adoption of EVs, NGVs and particularly dual-fuel NGVs,
which mitigate 'range anxiety' for early adopters - are essential for facilitating the market
penetration of FCEVs. [EPA-HQ-OAR-2010-0799-7941-A2, p. 13]
Thus, allowing dual-fuel NGVs to receive the same EPA multipliers as PHEVs - with every
NGV counting as 1.6 vehicles in 2017, then declining to 1.3 vehicles in 2021 would help build a
similar 'bridge' to the hydrogen future that PHEVs provide for EVs. Dedicated NGVs should be
eligible for a multiplier level equivalent to EVs and FCEVs, of 2.Ox in 2017, declining to 1.5x in
2021. [EPA-HQ-OAR-2010-0799-7941-A2, p. 13]
Our proposed multiplier values assume that the Agencies will also extend GHO incentives for
NGVs in parallel with their proposed extension of the 0 g/mi GHG incentive for EVs, as we
6-71
-------
EPA Response to Comments
propose below - in effect, duplicating the 'double incentive' structure given to EVs. However, if
the GHG incentive for NGVs is not extended, we would propose doubling all the proposed
multipliers for NGVs and FCEVs in order to balance the EV 'double incentive' (in effect, a
'doubled single incentive' for NGVs). [EPA-HQ-OAR-2010-0799-7941-A2, p. 13]
Extended GHG Incentive for NGVs
Under the current rules, EPA will begin to count the emissions of vehicles operating on natural
gas at their tailpipe value in 2016. While this value will recognize the real-world emission
reductions of approximately 24 percent that natural gas provides compared to gasoline, it ends an
emission incentive previously given to NGVs. Until 2016, EPA will count natural gas emissions
as just 0.15 times the level of gasoline emissions, equivalent to the 'CAFE credit' approach of
NHTSA's Petroleum Equivalency Factor. [EPA-HQ-OAR-2010-0799-7941-A2, p. 13]
Termination of the natural gas emissions incentive is premature - and disadvantages NGVs
relative to EVs. The Agencies allowed automakers to count EVs and the electric portion of
PHEVs as having emissions of 0 g/mi in the 2012-2016 rulemaking, and in this NPRM they
propose extending this treatment to 2025. This incentive is given despite the Agencies'
acknowledgement that the use of electric vehicles generates significant upstream emissions from
power generation: [EPA-HQ-OAR-2010-0799-7941-A2, pp. 13-14]
'Because [EV] upstream emissions values are generally higher than the upstream GHG emissions
values associated with gasoline vehicles, and because there is currently no national program in
place to reduce GHG emissions from electric powerplants, EPA believes it is appropriate to
consider the incremental upstream GHG emissions associated with electricity production and
distribution.' [EPA-HQ-OAR-2010-0799-7941-A2, p. 14]
While the Agencies intend to eventually calculate EV emissions according to a formula that
accounts for upstream GHGs, these values will not be phased in until the 2022-2025 period, and
even then only for automakers that produce more than a specified number of vehicles. VNG does
not object to this treatment of EVs: we recognize that incentives are needed to encourage
automakers to take on the risks required to introduce new vehicle technologies. We simply
believe that NGVs deserve similar treatment so that automakers will be given fair incentives and
rewards for all clean alternative fuel technologies, instead effacing a regulatory landscape tilted
towards one pathway. [EPA-HQ-OAR-2010-0799-7941-A2, p. 14]
Additionally, EPA's treatment of natural gas results in markedly inconsistent incentives between
the Agencies. Under NHTSA's program, the fuel economy of natural gas will continue to be
counted as 0.15 times the gasoline-equivalent fuel economy of the vehicle throughout the 2017-
2025 program (although, as discussed below, dual-fuel NGVs may be limited in their ability to
receive this incentive until 2020). The move away from the harmonized EPA/NHTSA incentive
to a much lower incentive under the EPA program starting in 2016 will complicate and
potentially limit the ability of automakers to incorporate NGVs into their compliance
strategies. [EPA-HQ-OAR-2010-0799-7941-A2, p. 14]
6-72
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
In order to provide appropriate and fair treatment for NGVs under the EPA program, as well as
maintain harmonized, consistent rules for automakers between the two Agencies for a longer
period of time, the Agencies should extend the current GHG incentive for natural gas through
2025 under the same rules as the GHG incentive for EVs. This would entail continuing to count
natural gas emissions as 0.15 times the level of gasoline emissions for all NGVs through 2021,
and then phasing in the tailpipe emission level (e.g., -24 percent below gasoline) between 2022
and 2025 solely for manufacturers producing over 200,000 vehicles cumulatively over this
period (or 600,000 vehicles for manufacturers producing over 300,000 vehicles cumulatively
from 2017-2021). This is in keeping with the principle of fair, qualitatively similar incentives for
both electric and gaseous-fueled vehicles while maintaining quantitatively differentiated
incentives based on the characteristics of the technologies. [EPA-HQ-OAR-2010-0799-7941-A2,
p. 14]
Appropriate NHTSA Credits for Dual-Fuel NGVs Between 2012 and 2019 [EPA-HQ-OAR-
2010-0799-7941-A2, p. 14]
Due to their ability to alleviate 'range anxiety' for drivers, dual-fuel NGVs are a key transition
technology for both dedicated NGVs as well as hydrogen FCEVs, in the same way that PHEVs
are a key transition technology for dedicated EVs. VNG strongly supports all of the steps
proposed by the Agencies to provide support for dual-fuel NGVs, and particularly the utility
factor methodology for calculating dual-fuel NGV fuel use noted in Section 3. [EPA-HQ-OAR-
2010-0799-7941-A2, p. 15]
However, there remains a major gap in the rules for dual-fuel NGVs due to the constraints of
EPCA and EISA, which effectively prevent dual-fuel NGVs from receiving fuel economy credits
for natural gas operation under the statutory program until 2020. The current NHTSA rules
restrict dual-fuel NGV access to credits in two ways: [EPA-HQ-OAR-2010-0799-7941-A2, p.
15]
• Shared Cap With Ethanol Dual-Fuel Vehicles: Dual-fuel NGVs are grouped with dual-fuel E85
vehicles (also known as 'flex-fuel' vehicles) and placed under a cap that limits their combined
statutory credits for automaker fuel economy calculations. Because dual-fuel E85 vehicles can be
produced with minimal incremental cost, virtually all automakers have opted to produce enough
of these vehicles to reach the maximum benefit allowed by statute, leaving no room under the
cap left for dual-fuel NGVs. [EPA-HQ-OAR-2010-0799-7941-A2, p. 15]
• Excessively High Minimum CNG Range: Under the statute (49 USC 32901), in order to
qualify as a 'dual fueled automobile' the vehicle must meet a prescribed minimum driving range
of200 miles when driving on alternative fuel. Consequently, dual-fuel NGVs are required to have
a CNG range of at least 200 miles to qualify for the statutory CAFE credit - a requirement
equivalent to a 95.4% natural gas usage rate according to the utility factor methodology. No
statutory credits are given for vehicles with less than a 200 mile CNG range, despite the fact that
many of these vehicles would be expected to fuel on CNG the large majority of the time under
the utility factor methodology. [EPA-HQ-OAR-2010-0799-7941-A2, p. 15]
6-73
-------
EPA Response to Comments
Taken together, these restrictions will result in dual-fuel NGVs predominantly fueled on natural
gas being treated as gasoline vehicles under NHTSA rules until the statutory credit program
expires in 2019. This is unfair and counterproductive. Indeed, the Agencies recognize that this is
an 'absurd result' in their rationale for providing dual-fuel NGVs with full access to the new
utility factor-based rules starting in 2020:
'NHTSA and EPA believe that the expiration of the dual-fueled vehicle measurement
methodology in the statute leaves a gap to be filled, to avoid the absurd result of dual-fueled
vehicles' fuel economy being measured like that of conventional gasoline vehicles. If the
overarching purpose of the statute is energy conservation and reducing petroleum usage, the
agencies believe that that goal is best met by continuing to reflect through CAFE calculations the
reduced petroleum usage that dual fueled vehicles achieve." [EP A-HQ-OAR-2010-0799-7941-
A2,p. 15]
Treating vehicles that will fuel predominantly on natural gas as gasoline vehicles is indeed an
'absurd' result that runs contrary to the purpose of the statute, and as noted in Section 3 we
strongly support the steps taken by EPA and NHTSA to bridge this 'gap' fairly for the 2020-2025
period. However, because of the significant potential of dual-fuel NGVs to make an impact on
petroleum reduction goals in the near term, it is also important and appropriate for the Agencies
to attempt to address the gap in the 20122019 period to the extent possible. [EPA-HQ-OAR-
2010-0799-7941-A2, p. 16]
For example, VNG believes that it may be possible for the Agencies to address the second
barrier within the context of this rulemaking. The Agencies have implicitly acknowledged that
this very high minimum range for dual-fuel NGVs is unnecessary in this NPRM, as EPA has not
adopted a range minimum in its rules, and NHTSA has proposed discarding the range minimum
beginning in 2020, after the expiration of the statutory dual-fuel regime. 5 While NHTSA has
previously determined that it lacked discretion to set a lower range for dual-fuel vehicles,52 the
Agencies should consider whether it is possible to establish a new category of vehicle with less
than a 200 mile range on an alternate fuel- not a 'dual-fueled' automobile as defined in the
statutes, but not a dedicated gasoline automobile either - which can earn appropriate fuel
economy credits throughout the period to be governed by the regulations.53 [EPA-HQ-OAR-
2010-0799-7941-A2, p. 16]
Alternatively, the Agencies could explore the extent to which it could allow automakers to 'bank'
credits that would otherwise be awarded to dual-fueled NGVs in the absence of the statutory
limitations during the 2012-2019 period for use in 2020 and beyond.
VNG is fully cognizant of the challenges presented by these or other approaches, but
nevertheless encourages the Agencies to explore all options for providing appropriate fuel
economy incentives for dual-fuel NGVs prior to 2020. Even a partial solution would be a
significant incentive for automakers to begin producing dual-fuel NGVs in the near term, and
would harmonize NHTSA's rules with EPA's to the greatest extent possible for the 2012-2019
period. [EPA-HQ-OAR-2010-0799-7941-A2, p. 16]
6-74
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
Section 5: Ensuring a Fair Chance for NGVs and FCEVs is Essential to Achieving National
Goals [EPA-HQ-OAR-2010-0799-7941-A2, p. 16]
The environmental and energy security risks posed by the transportation sector's dependence on
oil are urgent challenges for the United States, and it would be a mistake for the Agencies to
inadvertently and prematurely discourage the development of any promising technology that
could help address these threats -let alone two technologies with the enormous potential of
NGVs and FCEVs. In the near term, NGVs fueled by newly-abundant domestic natural gas
supplies offer a unique combination of vehicle choice and affordability for consumers, low
emissions, and replacement (not just reduction) of petroleum consumption. In the long term,
NGVs are an essential bridge to the commercialization of FCEVs, which can provide the near-
zero emission operation of EVs but with much greater range and much faster refueling. [EPA-
HQ-OAR-2010-0799-7941-A2, pp. 16-17]
Despite the promise of both NGVs and FCEVs, the Agencies have not forecasted substantial
adoption of either technology during the 2017-2025 period. 54 While we believe this is due in
part to flaws in the stakeholder consultation process,55 it also reflects the reality that the status
quo will not change unless a robust, nationwide gaseous refueling infrastructure is developed.
VNG believes that it and others can have this robust national natural gas refueling infrastructure
in place by 2025 if the government broadly and the Agencies specifically support the deployment
of NGVs with appropriate incentives, similar to EVs. Then, even if FCEVs are still a niche
technology by 2025, this natural gas infrastructure will provide a foundation to incrementally
provide hydrogen fuel going forward, ensuring that FCEVs do not encounter the extreme
'chicken and egg' dilemma that all alternative fuels currently face. [EP A-HQ-OAR-2010-0799-
7941-A2, p. 17]
It is critical for the Agencies to provide appropriate support for the natural gas-to-hydrogen path
so that both NGVs and FCEVs will be a viable option for consumers and automakers from 2017
to 2025, as well as during the post-2025 period as emission and fuel economy standards become
ever more stringent. Keeping this gaseous fuel pathway 'open' to automakers is particularly
important given the Agencies' acknowledged and well-founded concerns over the consumer
acceptance of EV technology due to cost as well as range and refueling issues.56 It is, simply,
too soon to put all of the Nation's eggs in the EV basket - and it would be a clear mistake to
overlook the gaseous fuel pathway just as the supplies and economics of natural gas in the US
are undergoing a historic transformation. Ultimately, both EVs and FCEVs will be necessary to
achieve long-term environmental and energy security goals, and NGVs will play an essential role
in reducing ICE vehicle emissions as well as enabling the transition to hydrogen. [EPA-HQ-
OAR-2010-0799-7941-A2, p. 17]
To summarize, for the reasons explained in these Comments, VNG urges the Agencies to adopt
the favorable NGV provisions proposed in the NPRM, including:
• Utility factors to determine natural gas fuel use for dual-fuel NGVs; [EP A-HQ-OAR-2010-
0799-7941-A2, p. 17]
6-75
-------
EPA Response to Comments
• Credits for deployment of 'game-changing' technologies for full-size pickups, potentially
including NGV capability; [EPA-HQ-OAR-2010-0799-7941-A2, p. 18]
• The option for automakers to use new EPA rules for dual-fuel NGVs beginning in 2012;
and, [EPA-HQ-OAR-2010-0799-7941-A2, p. 18]
• NHTSA's proposal for a strong regime for measuring fuel economy for dual-fuel NGVs after
the expiration of statutory credits in 2019 VNG also urges the Agencies to incorporate the
following provisions to provide more appropriate, fair, and consistent incentives for
NGVs: [EPA-HQ-OAR-2010-0799-7941-A2, p. 18]
• Multipliers for dual-fuel NGVs on par with multipliers for PHEVs, and multipliers for
dedicated NGVs equal to those for EVs; [EPA-HQ-OAR-2010-0799-7941-A2, p. 18]
• An extension of the current calculation of NGV GHG emissions as 0.15 times those of gasoline
emissions (equivalent to CAFE credits), for a similar duration as the 0 g/mile emissions incentive
for EVs. Measured emissions levels would similarly be phased in after 2022 on the same
schedule that EV emissions begin to be measured according to their upstream emissions;
and, [EPA-HQ-OAR-2010-0799-7941-A2, p. 18]
• Appropriate fuel economy credits for dual-fuel NGVs between 2012 and 2019.
We greatly appreciated having the time to meet last Thursday, and would like to provide more
extensive comments on our core arguments for improved incentives for natural gas vehicles
(NGVs) under the above-referenced rulemaking. As we discussed, natural gas can play an
essential and unique role in achieving EPA's mandate for long-term reductions in transportation
greenhouse gas (GHG) emissions, as well as the "All of the Above" energy strategy articulated
by the President. Because NGVs face market barriers similar to other advanced technologies,
particularly in terms of fuel distribution, we believe they merit a similarly structured set of
incentives. [EPA-HQ-OAR-2010-0799-11797-A1, p. 1]
Natural gas has truly unique "game-changing" potential as an alternative fuel, playing a dual role
by providing the lowest possible emissions for internal combustion engine (ICE) vehicles (and
light trucks in particular) in the long term while also directly reducing barriers to
commercialization for hydrogen fuel cell electric vehicles (FCEV): [EPA-HQ-OAR-2010-0799-
11797-Al,p. 1]
Long-Term ICE Pathway: Thanks to plentiful domestic supplies and a robust long-distance
pipeline distribution network, natural gas is the only alternative fuel capable of substantially
reducing GHG emissions from ICE vehicles on a mass-market, nationwide basis. ICE vehicles
will continue to dominate the market for the foreseeable future and will make major advances in
fuel efficiency in the years ahead, making it important to ensure that these vehicles will have the
opportunity to run on the cleanest fuel possible. In addition to 24% tailpipe reductions of GHGs
today, natural gas emissions can be reduced even further through blending with biogas and/or
hydrogen. In particular, NGV capability is very well suited to pickup trucks and other light
trucks, vehicle classes that are critical to maintaining consumer choice (and thus the economic
6-76
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
practicability of these regulations) and are unlikely to be a viable application for battery-based
electrification. [EPA-HQ-OAR-2010-0799-11797-A1, pp. 1-2]
Bridge to Hydrogen: The deployment of NGVs and CNG refueling structure will directly reduce
the market barriers to the commercialization of FCEVs. The gaseous fuel management and
storage technologies used by NGVs are analogous to those that will be used by FCEVs - and,
perhaps more importantly, the compressed natural gas (CNG) fueling infrastructure developed
for NGVs can be used as a platform for the production and dispensing of hydrogen fuel. Thus,
the investments made by companies like VNG for CNG fueling equipment today will directly
reduce the costs and build-out time of a future hydrogen dispensing network. A transition to
FCEVs can then proceed incrementally through the introduction of hydrogen-natural gas blends
and hydrogen-fueled ICE vehicles. [EPA-HQ-OAR-2010-0799-11797-Al, p. 2]
This unique combination of two "game-changing" pathways for NGVs merits a unique set of
incentives that recognize that, while NGVs are not the same as battery electric vehicles (BEVs)
or FCEVs, they merit a similarly-structured program of consistent, meaningful incentives over
the 2017-2025 period. As with BEVs and FCEVs, the NGV program should include: [EPA-HQ-
OAR-2010-0799-11797-A1, p. 2]
Emission Incentive: An extension of the current incentive (0.15x gasoline equivalent) for
measuring the GHG emissions of CNG through 2021, after which the incentive would be phased
out on the same production volume basis as the 0 g/mi emissions incentive for BEVs and
FCEVs. [EPA-HQ-OAR-2010-0799-11797-A1, p. 2]
While interest in NGVs is growing due to the increasingly compelling economics of U.S. natural
gas, they face the same barriers to the market as other advanced technologies - particularly with
regard to infrastructure costs. In referring to incentives for BEVs and FCEVs, the NPRM
states: [EPA-HQ-OAR-2010-0799-11797-A1, p. 2]
EPA believes that the relatively minor impact on GHG reductions in the near term is justified by
promoting technologies that have significant transportation GHG emissions and oil consumption
game-changing potential in the longer run, and that also face major market barriers in entering
a market that has been dominated by gasoline vehicle technology and infrastructure for over 100
years. [EPA-HQ-OAR-2010-0799-11797-Al, pp. 2-3]
Given the dual "game-changing" potential of natural gas, as well as the shared barriers posed by
the historic dominance of gasoline, this rationale also justifies a similarly-structured program of
incentives for NGVs. As with BEV and FCEV incentives, incentives for NGVs should be limited
in duration, and these limits combined with the small proportion of NGVs likely to be produced
compared to gasoline vehicles should ensure that the impact on GHG reductions from NGV
incentives will also remain low. And, as we noted in our meeting, the mid-term review of the
regulations in 2018 will also provide an opportunity for an "off-ramp" if unexpectedly rapid
uptake of NGVs leads to a risk of "catastrophic success" in terms of impacts on the rule's GHG
reductions. [EPA-HQ-OAR-2010-0799-11797-Al, p. 3]
6-77
-------
EPA Response to Comments
The following attachment will provide greater detail on these arguments. [EPA-HQ-OAR-2010-
0799-11797-A1, p. 3]
[See Docket Numbers EPA-HQ-OAR-2010-0799-11797-A2 and EPA-HQ-OAR-2010-0799-
11797-A3 for the above mentioned attachments.]
4 http://www.whitehouse.gov/the-press-office/20 12/01/24/remarks-president-state-union-
address
5 http://online.wsj.com/article/SB20001424052748703399204574507440795971268.html
6 http://www.whitehouse.gov/the-press-office/2012/01/24/remarks-president-state-union-address
7 http://www.afdc.energy.gov/afdc/pdfs/afurjul ll.pdf
8 http://tonto.eia.doe.gov/dnav/ng/hist/n9190us3a.htm
9 http://www.businessweek.com/news/20 12-01-13/chrvsler-to-begin-natural-gas-truck-sales-to-
flccts-in2012.html
10 http://greet.es.anl.gov/results
14 EISA 2007, Sec. 20J(l)(B)(ii)(V)
15 http://www.arb.ca.gov/msproglzevproglfactsheets/zev fs.pdf
16 http://www.arb.ca.gov/fuels/lcfs/J21409Icfs Jutables.pdf
31 The incremental cost of adding E85 'flex fuel' is much lower than the incremental cost of
adding a dual-fuel capability so automakers have maximized their production of "flex fuel'
vehicles and exhausted the incentives.
http://www.nhtsa.gov/staticfiles/rulemakinglpdf/Flexible_Fuel Credits 2003 2010.pdf
42 Cannon, James S. 'Gearing Up for Hydrogen: America's Road to Sustainable Transportation.'
Inform. 1998. httn://www.informinc.orglgearinghydrogen.php
43 http://205.254.148.40/hydrogenandfuelcells/pdfs/h2 tech roadmap.pdf
44 http://greet.es.anl.gov/results
45 http:/1205.254.148.40/hydrogenandfuelcells/pdfs/h2 tech roadmap.pdf
52 NHTSA may wish to reconsider this earlier decision in light of the changed circumstances
since 1996 and the need to avoid an absurd result that Congress could not have intended and that
6-78
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
is contrary to the goals of the regulation. National Highway Traffic Safety Administration.
Denial of Petition for Reconsideration in Docket 94-96, August 29, 1996, Federal Register
Volume 61 Number 173, September 5, 1996.
53 As a practical matter, credits for this new category of vehicles could be administered under
EPA's EPCA authority in the same fashion as NHTSA credits for improved air conditioner
efficiency, 'game-changing' technologies for full-size pickups, 'off-cycle' technologies, and the
post-2020 regime for NHTSA dual fuel NGV credits are proposed to be administered in this
NPRM.
55 The Agencies' analysis for the rulemaking was driven by automakers' current production
plans, which themselves are a reaction to previous rulemakings. While this focus is
understandable, it is important for the achievement of the Agencies' goals, as well as the
satisfaction of their responsibilities under the Administrative Procedure Act, that they give full
consideration to all realistically viable alternatives that could playa significant role through 2025
and beyond - and not just those that enjoyed the most attention from automakers and regulators
at the time of the rulemaking.
Response:
Arbitrary Distinction Between EVs/PHEVs and CNG Vehicles
A number of commenters argued that providing incentives for EV/PHEV/FCVs and not
for CNG vehicles was arbitrary and capricious. EPA disagrees. First, EVs perform markedly
better than CNG vehicles from a greenhouse gas emissions perspective, both on a tailpipe-only
measurement, and when considering upstream plus tailpipe GHG emissions (see preamble Table
III-16). For this reason, EPA does not consider CNG vehicles to be a long-term GHG emissions
game-changer. Second, EVs/PHEVs face greater market barriers, including lower vehicle range,
higher vehicle cost, and a much different refueling paradigm including a much longer refueling
time, relative to CNG vehicles. In any case, the final rule provides an incentive, in the form of a
multiplier, for CNG vehicles as explained immediately below.
Multiplier incentive for CNG vehicles for MYs 2017-2021
EPA did not propose, but did ask for comment on, incentives for dedicated and dual fuel
CNG vehicles. A large majority of public commenters supported incentives for all CNG
vehicles. EPA has finalized temporary incentive multipliers for all dedicated and dual fuel CNG
vehicles for MYs 2017-2021 equal to those for PHEVs: 1.6 in MYs 2017-2019, 1.45 in MY
2020, and 1.3 in MY 2021. While EPA does not consider CNG vehicle technology to be a long-
term GHG emissions game-changer, the Agency does believe that investments in CNG vehicle
technology and refueling infrastructure could be valuable in helping to facilitate future
commercialization of hydrogen fuel cell vehicles, which does have the potential to be a long-
term GHG emissions game-changer. See Preamble Section III.C.2.c.iv for a much more
extensive discussion of the GHG emissions benefits of current CNG vehicles relative to current
gasoline and electric vehicles (see Table III-16), and why we believe CNG vehicle technology
and refueling infrastructure can facilitate hydrogen fuel cell vehicle commercialization.
6-79
-------
EPA Response to Comments
Toyota commented that, if CNG vehicles were to receive an incentive multiplier, then
conventional hybrid electric vehicles should receive a multiplier as well. Although the Agency
agrees with Toyota that conventional hybrids share many of the same electric drive components
of EVs and PHEVs (e.g., batteries, motors, controllers), with respect to consumer acceptance and
barriers to utilization, the Agency believes that conventional hybrids are much more similar to
gasoline vehicles than they are to EVs, in that all of the propulsion energy comes from gasoline,
vehicle range is improved, and hybrids need no new refueling infrastructure. As such there is not
the same degree of market barriers inhibiting increased use of this technology. Accordingly,
EPA is not adopting incentive multipliers for conventional hybrid vehicles. This final rule does
provide a credit mechanism to encourage penetration of hybrid technology into the full-size
pickup truck class.
See Section 6.6 for a discussion of why EPA is not using the 0.15 factor for GHG
emissions compliance, but is adopting the 0.15 factor for the CAFE program beginning in MY
2020, for all nonpetroleum fuels.
Adoption of utility factors for dual fuel CNG vehicles
Commenters expressed widespread support for the EPA proposal to apply the PHEV-
based utility factor methodology for weighting operation of natural gas and gasoline for dual fuel
CNG vehicle compliance calculations. For a discussion of EPA's rationale for adopting utility
factors for dual fuel vehicles, as well as the eligibility requirements that dual fuel vehicles must
meet in order to use the utility factor approach, see Preamble Section III.CAa.ii.
6.3. Ethanol Flexible Fuel Vehicles
Organizations Included in this Section
25x'25 Alliance
Alliance of Automobile Manufacturers
American Council on Renewable Energy (ACORE) and Biomass Coordinating Council
(BCC)
American Forest and Paper Association & American Wood Council
American Honda Motor Co., Inc.
American Petroleum Institute (API)
Clean Fuels Development Coalition (CDFC)
El00 Ethanol Group
Ford Motor Company
General Motors Company Growth Energy
Minnesota Department of Commerce
National Alliance of Forest Owners (NAFO)
National Association of Convenience Stores (NACS)
National Corn Growers Association et al.
Plant Oil Powered Diesel Fuel Systems, Inc.
Renewable Fuels Association (RFA)
6-80
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
Volkswagen Group of America
Organization: 25x'25 Alliance
Introduction and Request for Consideration
The 25x'25 Alliance, American Council on Renewable Energy, American Seed Trade
Association, Association of Equipment Manufacturers, American Farm Bureau Federation,
Biotechnology Industry Organization, National Association of Wheat Growers, National Farmers
Union and National Sorghum Producers (hereinafter referred to as "25x'25 partners") seek leave
to file late comments in the above-referenced dockets and respectfully submit such comments.
These comments respond to the original notice of the proposed rule, 2017 and Later Model Year
Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy
Standards, published in the Federal Register on December 1, 2011 (76 FR 74854). 25x'25
partners submit that the Environmental Protection Agency ("EPA") and the National Highway
Traffic Safety Administration ("NHTSA") should accept and consider these comments, despite
their late filing, for the following reasons:
• Additional comments are, as of this date, still being solicited and accepted electronically on the
EPA website for this proceeding at http://www.nhtsa.gov/fuel-economy.
• In an earlier extension of the comment period in this proceeding issued on January 6, 2012, EPA
and NHTSA stated that "NHTSA and EPA will consider all comments received before the close of
business on the comment closing date, and will also consider comments received after that date
to the extent practicable."
• 25x'25 partners submit that it is only in light of recent analyses of market trends and events that
they could reasonably have understood the implications of the proposed rule as reflected in the
comments submitted herein.
• 25x'25 partners have not submitted prior comments.
• 25x'25 partners accept the record as it is and do not seek any delay in the issuance of a final rule
in this proceeding.
• 25x'25 partners have reviewed such submitted comments only insofar as necessary to discern
whether other commenters have raised the substantive issues 25x'25 partners seek to have EPA
and NHTSA consider.
• Consideration of these late-filed comments, to the extent practicable given the timing and the
otherwise relatively complete state of the record, is therefore in the public interest.
25x'25 partners, representing a coalition of farm and related public policy organizations,
understand the importance of flexible fuel vehicles and the greenhouse gas reduction potential of
biofuels and offer the following comments on the following issues:
Background Information
The continued production of flexible fuel vehicles (FFVs) and the advancement of biofuels into
the market are critical to expanding renewable fuel use, reducing greenhouse gas (GHG)
emissions, and enhancing air quality. Today, nearly 12 million FFVs operate on American
roadways. The use of midlevel ethanol blends and E85 in FFVs is a cost-effective and efficient
6-81
-------
EPA Response to Comments
way to help meet the agencies' ambitious standards for improving tailpipe emissions through
biofuels utilization. Ethanol and other advanced biofuels such as biobutanol facilitate CCh
emission reductions both within the vehicle, and, more importantly, throughout its production
and combustion life cycle. Furthermore, increased biofuel use contributes to public health:
Higher ethanol blends reduce emissions of hazardous air pollutants such as particulate matter
(PM 2.5 and ultrafme particles) that result from the burning of aromatic hydrocarbons such as
benzene, toluene, and xylene found in conventional fuels.
Despite the many benefits of biofuels, the proposed rule effectively eliminates statutory
incentives intended to promote their use. Moreover, it appears to pick favorites by providing
much more generous credits to other "advanced vehicle technologies," such as electric and plug-
in hybrid vehicles. After a careful review of the proposed new rule in light of recent
developments, we believe that the rule:
1. Does not sufficiently incentivize the production of FFVs; and
2. Does not adequately value the GHG reduction potential of biofuels.
Together, these oversights place the rule in conflict with other established national priorities,
policies, and legislation (such as the federal Renewable Fuel Standard (RFS) and the Energy
Independence and Security Act (EISA)) while ignoring the economic, public health, and
environmental benefits that can be achieved through increased biofuel usage.
Rationale for Modification to the Rule
The automotive industry is a business characterized by high capital and development costs, and
long vehicle development and life cycles. The proposed GHG standards are very stringent and
will drive long-term change in the industry, requiring careful allocation of limited development
and capital funds to produce the greatest reduction in GHGs. The proposed rule puts forward a
common-sense approach to establishing the adoption of two selected technologies by making
their future compliance value clear throughout the life of the rule, which states:
"EPA is proposing that CCh compliance values for plug-in hybrid electric vehicles (PHEVs) and
bi-fuel compressed natural gas (CNG) vehicles will be based on estimated use of the alternative
fuels, recognizing 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. Accordingly, for CCh emissions compliance, 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 gasoline and percentage of operation on the alternative fuel for both
PHEVs and bi-fuel CNG vehicles, along with the CCh emissions test values on the alternative
fuel and gasoline." (76 FR 74880)
This approach of forecasting a high usage rate for the selected fuels and fixing the rate for the
duration of the rules provides certainty as to the future CCh compliance value of these
technologies. This certainty is needed by auto manufacturers to enable informed long-term
investment trade-offs to be developed regarding these technologies.
6-82
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
However, EPA does not provide a similar level of certainty with regard to ethanol FFVs. Rather,
it makes a backward-looking argument to estimate future E85 use. "Actual use," presumably
after the fuel has been used, has been proposed as a way to calculate E85 CCh compliance values.
EPA cites patterns of historical usage of E85 in FFVs, ignoring the rapidly increasing production
of renewable fuels needed to comply with the RFS contained in the 2007 Energy Independence
and Security Act (EISA). Most forecasts of the implementation of this act foresee significant
increases in the usage of higher ethanol blends in flex-fuel vehicles, as opposed to past ethanol
usage being constrained by the availability of higher blends than E10.
While the "actual use" approach that EPA proposes offers the hope that FFVs would be able to
use the E85 CCh compliance values once these vehicles are designed, developed, and sold, this
hope is a poor substitute for the certainty offered for PHEV and bi-fuel CNG vehicles. It is
unlikely that automakers would invest in FFVs based on the uncertain prospect of a CCh
compliance benefit when other technologies are certain to yield a CCh compliance benefit. The
resulting shortage of FFVs will make EPA's implementation of the EISA more challenging.
Unlike natural gas and electricity, ethanol and other potential drop-in biofuels used in FFVs have
inherent "lifecycle" CCh reduction benefits. As outlined in the EISA, ethanol must meet one of
several GHG reduction targets. Taking only the currently predominant fuel, corn-based ethanol,
EPA itself has found that, on average, corn-based ethanol meets the 20 percent reduction in GHG
emissions required in the EISA.
Yet the proposed rule ensures that even if manufacturers could prove that their FFVs ran solely
on ethanol, they would have no regulatory incentive to include such cars in their fleet. This is
because the "0.15 divisor," a statutorily-mandated incentive that boosts the effective fuel
economy of FFVs under the CAFE program, is omitted by EPA under the proposed CCh
standards. Since fuel economy and CCh are directly correlated, the absence of an incentive in the
EPA portion of the rule eliminates any benefit a manufacturer might gain from utilizing the
incentive under the CAFE standards. In other words, the proposed rule not only fails to provide
additional incentives for alternative fuel vehicles, it effectively eliminates existing incentives,
thereby benefiting petroleum at the expense of cleaner alternatives. In the long run, the removal
of a statutory incentive for alternative fuel vehicles will harm air quality, increase GHG
emissions, and slow the development of clean alternatives to petroleum-based fuel.
Given the considerable influence the final CAFE-GHG rule will have on the synergistic
relationship between fuels and vehicles between 2017 and 2025, and likely beyond, it is
imperative the agencies give thoughtful consideration to how future fuels and vehicles can
seamlessly and cost-effectively comply with the objectives of this rulemaking. With respect to
biofuels, the use of E10 and El 5 in legacy and newer vehicles between 2017 and 2025 will prove
to be an inadequate substitute for the role FFVs can and should play. If FFVs are adequately
incentivized in the final rule, use of E85 and other blends of ethanol in these vehicles will ensure
compliance with the 2017-2025 rulemaking and fulfillment of the RFS by 2022 in a way that
avoids the infrastructure costs, implementation hang-ups, and legal challenges that have
surrounded the El5 waiver.
6-83
-------
EPA Response to Comments
Recommended Changes to the Rule
The remedy for addressing the lack of parity for FFVs and biofuels is clear: The agencies can
and should provide a level playing field for each vehicle technology. Further, the life-cycle CCh
reductions that ethanol provides must be recognized, and the CAFE incentive for biofuels must
be preserved in the combined EPA/NHTSA rule. To these ends, EPA should:
1. Either:
a. 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 gasoline and percentage of operation on the alternative fuel. This will
provide equity in treatment of alternative fuels and create a sensible incentive for continued
production of FFVs.
Or:
b. Adopt the recommendation offered by the Alliance of Automobile Manufacturers to
maintain meaningful FFV credits in the final rule. By using this alternative methodology based
on E85 usage in FFVs to calculate GHG emission reductions, a sensible incentive for continued
production of FFVs is created.
2. Add the life-cycle CCh reduction benefits of ethanol to the CCh compliance standards
by providing a multiplier showing life-cycle CCh reduction, rather than simply measuring tailpipe
CCh emissions, for all blends containing biofuels. This calculus must take into account at least
the recognized minimum life-cycle CCh reduction of 20% for the biofuel portion of any fuel
blend. This would be a conservative recognition of ethanol's GHG benefits in light of the fact
that future ethanol must meet the requirement of advanced biofuels and achieve a 50 percent
GHG reduction.
3. At blends of E85 or higher, a 0.15 multiplier must be used for CCh calculations, in
order to preserve existing statutory incentives for alternative fuels. The inclusion of this
multiplier in CCh standards would align with EPA's mandate to reduce emissions of GHG and
other pollutants, because it will promote investment into alternative engines and fuels that reduce
CCh on a life-cycle basis, while at the same time reducing a variety of other dangerous criteria
pollutants.
These three changes would provide greater certainty in the manufacturing of FFVs and
additional credit for biofuel usage based on sound science.
Conclusion
As written, the rule could have devastating economic consequences. Failure to meet the biofuel
volume targets of the RFS due to an absence of vehicles, because of the lack of meaningful
incentives for manufacturers to produce FFVs, would adversely impact America's agricultural
and rural economies and our national energy security. EPA's Regulatory Impact Analysis of the
RFS2, released in February of 2010, concluded that the implementation of the Renewable Fuel
Program would, in the year 2022 (relative to 2007), increase farm income by $13 billion or 36
6-84
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
percent, improve energy security by $2.6 billion, and reduce our nation's expenditures on foreign
oil by $41.5 billion. It would also reduce the cost of corn ethanol production by 13 cents per
gallon and cut fuel costs by 2.4 cents per gallon for gasoline and 12.1 cents for diesel fuel. In
addition, the monetized health benefits were estimated to be as high as $2.2 billion. This
potential, as well as the many gains already made in moving toward the RFS goals, would be
jeopardized by the proposed rule.
As noted earlier, the production of FFVs using ethanol and advanced biofuels is a cost-effective
means for auto manufacturers to achieve GHG reductions. It is important to note that FFV
incentives represent no cost to taxpayers or the government and no additional costs to
consumers. Other vehicle technologies, such as natural gas, will require far more resources to
establish the infrastructure necessary to enable them to have a meaningful impact on the market.
In summary, the proposed rule will become a self-fulfilling prophecy, one that will create
negative outcomes both for consumers and for the environment. The rule presupposes that FFV
owners will not elect to use biofuels on the assumption that ethanol fuel blends will remain as
expensive as standard gasoline, without the same driving range. Drivers are therefore assumed
not to take actual advantage of the potential GHG savings their vehicles make possible. There is
also assumed to be no incremental push toward biofuel blends based on their ability to provide
the higher octane required for better mileage with lower PM emissions than conventional
gasoline despite accumulating evidence for major health problems from such PM emissions.
These assumptions drive the proposed rule to deny the credit for GHG savings that FFVs would
deserve if they were used with biofuels. The problem is then compounded by the absence of any
incentive for alternative fuels under EPA's CCh standards, even for dedicated vehicles, thus
eliminating the benefit purportedly offered under the CAFE rules. This loss of credit ensures that
vehicle manufacturers have no real world incentive to manufacture such vehicles, despite the
modest incremental cost of making an FFV compared to a standard motor vehicle. The net effect
will result in dramatic declines in FFV manufacture. The dramatic decline in FFV production
will then ensure that customers will not be able to purchase FFVs even if biofuel blends are
available in widespread locations or are available at costs considerably less than standard
gasoline as a function of the major biofuels production scale-up the RFS calls for. Seeing the
prospective loss of their major new market and the potential for very poor investment recovery,
biofuel producers will simply not make the investments required to produce biofuels at scale.
As a result, the nation will fail to achieve the Renewable Fuel Standard, the rural American
economy will lose its biggest opportunity for sustained economic health in generations, and the
high-compression engines required to produce fuel economy will not have a high-octane fuel
free of the toxic emissions that already comprise a major unaddressed health problem today.
Only biofuel blends can provide the critical octane while decreasing PM emissions, but this rule
will ensure it is not available for that purpose. And biofuels offer a better alternative for GHG
reduction, both in use and in manufacture, than natural gas vehicles or electric vehicles powered
by electricity generated - as 70 percent currently is - by fossil fuels, with the inherent GHG
emissions and 33% average energy conversion efficiency of the electric grid.
In short, the proposed rule sets up a cascade of negative effects that will deprive biofuels of their
opportunity to make a critical contribution to national policy only they can make, and it does so
6-85
-------
EPA Response to Comments
simply by embodying an implicit assumption that biofuels will not make that contribution
because they have not already done so. 25x'25 partners appreciate the opportunity to submit late-
filed comments on the proposed rule and urge their consideration to the extent practicable by
EPA and NHTSA in adopting a final rule. Please feel free to contact us with any questions
related to information contained within these comments. [EPA-HQ-OAR-2010-0799-11818]
Organization: Alliance of Automobile Manufacturers
In the final rulemaking for MY 2012-2016, EPA created regulations for MY 2016 ethanol flex-
fuel vehicles (FFVs) that differed significantly from those provided for by EPCA. EPA ended the
GHG emissions compliance incentives and adopted a methodology based on demonstrated
vehicle emissions performance. [EPA-HQ-OAR-2010-0799-9487-A1, p.66]
For MY 2016, EPA proposed awarding CO2 credits upon demonstration of actual usage of E85.
EPA now proposes extending MY 2016 approach to MYs 2017-2025. In the MY 2012-2016
rulemaking, EPA offered two options for automobile manufacturers to consider:
(1) a default system based on 100% gasoline operation and (2) fuel economy weightings on
national E85 use, or on manufacturer-specific data showing the percentage of miles that are
driven on E85 versus gasoline for that manufacturer's ethanol FFVs. The Alliance supports the
determination of CO2 credits based on national E85 usage. The idea of actual national usage
would be in conjunction with an early issuance of guidance to manufacturers indicating the value
of the F-factor so that manufacturers can develop their vehicle portfolios and GHG compliance
plans. [EPA-HQ-OAR-2010-0799-9487-A1, p.66]
The "F factor" is used in the calculation of Carbon Related Exhaust Emissions (CREE) of flex-
fuel vehicle and represents the relative usage of gasoline and E85. The calculation of "F" needs
to take into account the following: [EPA-HQ-OAR-2010-0799-9487-A1, p.66]
The volume of ethanol used in motor vehicles. [EPA-HQ-OAR-2010-0799-9487-A1, p.66]
The volume of ethanol available to the flex-fuel fleet. [EPA-HQ-OAR-2010-0799-9487-A1,
p.66]
The volume of E85 available to the flex-fuel fleet. [EPA-HQ-OAR-2010-0799-9487-A1, p.66]
The fleet of active flex-fuel cars and trucks by model year. [EPA-HQ-OAR-2010-0799-9487-A1,
p.66]
The miles traveled by the fleet of active flex-fuel cars and trucks. [EPA-HQ-OAR-2010-0799-
9487-A1, p.66]
The total grams of CO2 emitted by the fleet of active flex-fuel cars and trucks. [EPA-HQ-OAR-
2010-0799-9487-A1, p.66]
The CO2 emissions of the flex-fuel fleet on E85. [EPA-HQ-OAR-2010-0799-9487-A1, p.66]
6-86
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
The proportion of the fuel used by the flex-fuel vehicle fleet that is E85. [EPA-HQ-OAR-2010-
0799-9487-A1, p.66]
Volume of Ethanol Used in Motor Vehicles [EPA-HQ-OAR-2010-0799-9487-A1, p.66]
EISA makes clear the volumes of renewable fuels that are to be used in the United States through
2022 and then maintains this proportion in 2023 and beyond. For example, the total renewable
fuel requirement for 2016 is 22.25 billion ethanol equivalent gallons. EISA does not give
guidance as to whether the fuels marketed or imported to meet these requirements will be
ethanol, biodiesel or some other renewable fuel. Our recommendation is to use the Energy
Information Agency Annual Energy Outlook Liquid Fuels Supply and Disposition forecasts
volumes for ethanol, biodiesel and "other biomass-derived liquids." The ratios between the three
fuels can be used to determine the amount of ethanol to be used in any given year. For example,
in 2016, the 2011 reference case forecast is 16.108 million gallons of ethanol, 1.381 million
gallons of biodiesel and 307 million gallons of other biomass-derived liquids. This gives a ratio
of 9.54 gallons of ethanol per gallon of other fuels. Assuming that both the biodiesel and other
biomass-derived liquids have a RIN value of 1.5 and the ethanol has a RIN value of 1.0. The
volume of ethanol required = 9.54 gallons of ethanol per 11.04 RINs (9.54+1.5) multiplied by
22.25 billion RINs or 19.23 billion gallons of ethanol. The corresponding volume of biodiesel
plus other biomass-derived liquids would be 2.01 billion gallons. [EPA-HQ-OAR-2010-0799-
9487-A1, pp.66-67]
Volume of Ethanol Available to the Flex-Fuel Fleet [EPA-HQ-OAR-2010-0799-9487-A1, p.67]
This is determined by subtracting the ethanol volumes used for gasoline blending from the total
volume of ethanol. This is done by determining the total volume of hydrocarbons used in motor
gasoline (this can be determined using the EIA AEO Liquid Fuels Supply and Disposition
forecasts volumes) and dividing by 9 to determine the ethanol used for blending E10. For 2016,
this is 14.30 billion gallons of ethanol used in gasoline blending. When this is subtracted from
the 19.23 billion gallons of ethanol to be used, the resulting volume of ethanol to be used in the
flex-fuel fleet is 4.97 billion gallons. [EPA-HQ-OAR-2010-0799-9487-A1, p.67]
Volume of E85 Available to the Flex-Fuel Fleet [EPA-HQ-OAR-2010-0799-9487-A1, p.67]
The volume of E85 available to the flex-fuel fleet is determined by dividing the volume of
ethanol to be used by the flex-fuel fleet by the fractional ethanol content of the E85 certification
fuel for the model year being evaluated (currently 0.85). [EPA-HQ-OAR-2010-0799-9487-A1,
p.67]
Fleet of Active Flex-fuel Cars and Trucks by Model Year [EPA-HQ-OAR-2010-0799-9487-A1,
p.67]
This can be done by obtaining vehicle registration data from a commercial company such as R.
L. Polk and screening for flex-fuel vehicles. Alternatively, reported manufacturer FFV
production by model year can be used, with the volumes reduced using vehicle survival rates
from Table 4-3, "Survival Rates and Unadjusted Annual Miles Traveled (VMT) by Age for
6-87
-------
EPA Response to Comments
Passenger Cars" and Table 4-4 "Survival Rates and Unadjusted Annual Vehicle-Miles Traveled
(VMT) by Age for Light Trucks" from "Final Rulemaking to Establish Light-Duty Vehicle
Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards Joint
Technical Support Document," April 2010 (2010 TSD). [EPA-HQ-OAR-2010-0799-9487-A1,
p.67]
Miles Traveled by the Fleet of Active Flex-fuel Cars and Trucks [EPA-HQ-OAR-2010-0799-
9487-A1, p.67]
Multiply the number of flex-fuel cars and trucks of each model year by the appropriate miles
traveled per year for each model years' age obtained from Table 4-3, "Survival Rates and
Unadjusted Annual Miles Traveled (VMT) by Age for Passenger Cars" and Table 4-4 "Survival
Rates and Unadjusted Annual Vehicle-Miles Traveled (VMT) by Age for Light Trucks" from the
2010 TSD. [EPA-HQ-OAR-2010-0799-9487-A1, p.67]
Total Grams of CO2 Emitted by the Fleet of Active Flex-fuel Cars and Trucks [EPA-HQ-OAR-
2010-0799-9487-A1, p.68]
Convert the average fuel efficiencies of U.S. light-duty vehicles (available from the Research
and Innovative Technology Administration, Bureau of Transportation Statistics, table 4-23) to
grams of CC>2 per mile using the conversion factor of 8,887 grams CC>2 per gallon of gasoline.
For any model year too recent to be included in the Bureau of Transportation Statistics table, use
the projected fleet-wide emissions compliance levels under the MY 2012-2016 or MY 2017-
2025 final rules, as appropriate. Multiply the vehicle miles traveled for the cars and trucks of
each model year by the CO2 emissions per mile of the cars and trucks of each model year. Sum
the CC>2 emissions for each model year of cars and trucks on the road. [EPA-HQ-OAR-2010-
0799-9487-A1, p.68]
CO2 Emissions of the Flex-Fuel Fleet on E85 [EPA-HQ-OAR-2010-0799-9487-A1, p.68]
Multiply the E85 volume available by the grams of CO2 per gallon of E85 certification fuel for
the model year being evaluated (currently 6,295). [EPA-HQ-OAR-2010-0799-9487-A1, p.68]
Proportion of the Fuel Used by the Flex-fuel Vehicle Fleet That is E85 [EPA-HQ-OAR-2010-
0799-9487-A1, p.68]
Divide the CO2 emissions of the flex-fuel fleet on E85 by the total CO2 emissions of the flex-fuel
fleet. This fraction is the value, F, used in the CREE calculation. [EPA-HQ-OAR-2010-0799-
9487-A1, p.68]
Organization: American Council on Renewable Energy (ACORE) and Biomass Coordinating
Council (BCC)
The proposed rules, NHTSA-2010-0131 and EPA-HQ-OAR-2010-0162, focus almost
exclusively on automobile efficiency and largely neglect the crucial role of fuels. Considering
the ambitious fuel efficiency targets proposed under the new GHG and CAFE rules (average US
6-88
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
fleet fuel economy of 54.5 mpg by 2025), fuels are especially important and deserve inclusion in
this legislation. If the automobile manufacturers are required to make all the changes necessary
to meet these targets without any improvement in fuel quality, there is a serious risk that
technologies will be implemented increasing fuel efficiency by sacrificing air quality, cost
effectiveness, and consumer choices in terms of size, weight and power of the engine. [EPA-HQ-
OAR-2010-0799-9593-A2, p. 1]
Octane enhancement is necessary for gasoline (refined from petroleum feedstock) to be used as a
transportation fuel. Octane enhancement can be obtained from a variety of sources, including a
wide range of domestically produced biofuels. Octane enhancing substances can also be
produced from petroleum, through a further refining process. [EPA-HQ-OAR-2010-0799-9593-
A2, p. 1]
The principle message of my letter is to submit that there appears to be little substantial rationale
in continuing with high levels of fossil-based aromatic hydrocarbons (BTX-benzene, toluene and
xylene) to meet octane needs of gasoline when renewable ethanol, less toxic and damaging to
human health, is readily available at comparable prices, is domestic and renewable, and already
used to boost gasoline octane - and can do more at higher blend levels. [EPA-HQ-OAR-2010-
0799-9593-A2, p. 1]
A brief examination of the history of transportation fuels in America reveals that the petroleum
and petroleum refining industries have exerted considerable effort to ensure that petroleum-based
products are used to enhance the octane of gasoline. In the process, the domestic biofuels
industry has been essentially sidelined and the US economy could become increasingly
dependent on costly imported oil if the ethanol industry is further discounted. [EPA-HQ-OAR-
2010-0799-9593-A2, pp. 1-2]
THE RECORD
• In 1864, there was a 9~million gal/yr ethanol industry providing fuel for the "Spirit
Lamps" that replaced whale oil in oil lamps because of diminishing supplies and rising
prices. [EPA-HQ-OAR-2010-0799-9593-A2, p. 2]
• In 1865, oil was discovered in Titusville PA. There was no market for oil, so it was
refined into kerosene to compete with ethanol in lamps. A $2.00 tax per gallon was levied
on ethanol to help finance the Civil War. A $0.20 a gallon tax was imposed on Kerosene.
The ethanol industry faded, over night, back into the cornfields. [EPA-HQ-OAR-2010-
0799-9593-A2, p. 2]
• In the 1920s, cars had advanced to the point where they needed more powerful engines
with higher compression ratios. Henry Ford was promoting ethanol (113 octane) as the
renewable fuel of the future. However, tetra ethyl lead (a known poison) was more
profitable. For decades, lead was used and ethanol again faded. [EPA-HQ-OAR-2010-
0799-9593-A2, p. 2]
• In the 1970s, the huge human health impact of lead in gasoline became sufficiently clear
to the public, and the environmental and public health communities. This, coupled with
the advent of the catalytic converter (the key to cleaner air that is poisoned by lead)
6-89
-------
EPA Response to Comments
finally, after nearly a half century of damaging public health, spelled the end of lead in
gasoline. [EPA-HQ-OAR-2010-0799-9593-A2, p. 2]
• Adding clean burning ethanol to meet octane needs in newer engines was the logical next
step from environmental, human health and national security perspectives. However,
profitability and market share prevailed; and methyl tertiary butyl ether (MTBE) was
used to meet the required octane and oxygen needs. Ethanol was assigned a secondary
role as an oxygenate to boost octane. [EPA-HQ-OAR-2010-0799-9593-A2, p. 2]
• When MTBE turned out to be unacceptable in the U.S. market due to leaking
underground storage tanks leading to ground water contamination, the oil industry turned
to higher levels of aromatics to meet octane needs. Ethanol was again relegated to a
secondary role in the octane market - a pattern that has been a part of America's
transportation fuels history. [EPA-HQ-OAR-2010-0799-9593-A2, p. 2]
• Controlled markets and profit driven forces in the transportation fuel sector have
overpowered public health, environmental considerations and, too often, national/energy
security issues - let alone the best interest of the nation. Without public involvement,
history will likely repeat itself. [EPA-HQ-OAR-2010-0799-9593-A2, p. 2]
The Biomass Coordinating Council (BCC, of which I am the President) believes that
domestically produced biofuels are a superior alternative to petroleum-based octane enhancers.
Not only would the use of biofuels in place of BTX reduce air pollution and save billions of
dollars each year in health care costs, they would take some of the burden of meeting the EPA's
new fuel efficiency goals off the shoulders of automakers. Because the carbon footprint of
biofuels is much lower than BTX, their use would effectively increase the fuel efficiency and
decrease the carbon footprint of the cars and light trucks that run on them. Crucially, biofuels are
now cost-competitive with BTX, and as the price of oil (from which BTX is refined) rises, so
will the price of BTX. [EPA-HQ-OAR-2010-0799-9593-A2, p. 3]
Biofuels are superior to petroleum-based compounds for a host of reasons:
1. Use of biofuels enhances our energy security by insulating the economy from geopolitical
shocks that have and will continue to adversely affect global oil markets. The oil crisis caused by
the Yom Kippur War in the 1970s is a case in point, but more recent instances include last year's
civil war in Libya and the current crisis in the Persian Gulf with Iran.
2. The production of biofuels here in the US creates jobs at a time when unemployment remains
stubbornly high.
3. Every year, importing oil causes hundreds of billions of dollars to flow out of the US
economy. Biofuel production would keep some of that money here at home.
4. In a global economy where research and innovation increasingly determine economic
competitiveness, America must strive to remain at the forefront of renewable energy
technologies. Investment in the domestic biofuels industry that has made steady progress in
recent years would ensure a leading role for the US in this crucial 21st century industry.
5. In addition to producing biofuels, the growth of biomass acts as a carbon sink.
6-90
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
6. Biofuels burn more cleanly than petroleum-based octane enhancers, and do not produce
harmful particulate matter that can cause serious health damage
7. Biofuels are cost-competitive with BTX. [EPA-HQ-OAR-2010-0799-9593-A2, p. 3]
It is imperative that the numerous advantages of clean, renewable, domestic octane enhancement
be considered during the agencies' deliberations. [EPA-HQ-OAR-2010-0799-9593-A2, p. 3]
Over the course often successful years in advancing renewable energy, the American Council
On Renewable Energy (ACORE) and the BCC have passionately advocated for all renewable
energy but have taken no stance against any other form of energy. In addressing the issue of
fuels, the BCC is for: [EPA-HQ-OAR-2010-0799-9593-A2, p. 3]
• Improvements to national and energy security and a reduction in the nation's dependence
on oil through increased domestic biofuels production. [EPA-HQ-OAR-2010-0799-9593-
A2, p. 4]
• First and second generation biofuels, ethanol and biodiesel, which have been steadily
improving in terms of advanced farming practices to reach full sustainability; have
increased feedstock yields and production volumes from these yields; have increased
byproducts and the market value of these byproducts; have yielded less water and fossil
fuel use; contributed to job creation; and have shown profitability without subsidies. All
of these successes obviate the food versus fuel issue while internationally reducing the
need for grain support programs to the advantage of farmers in developing countries. In
short, grain, sugar and starch-based ethanol can compete in the transportation fuels
marketplace, particularly with a "level playing field" and consideration given to their
reduced carbon footprint. [EPA-HQ-OAR-2010-0799-9593-A2, p. 4]
• Biofuels from biowaste, cellulosic biomass, algae, and other forms of biomass that are
now reaching the threshold of commercialization. These gains, coupled with continued
advances in grain, sugar and starch-based ethanol, will meet the targets of RFS2 as now
established. [EPA-HQ-OAR-2010-0799-9593-A2, p. 4]
• Discovering alternate markets for BTX displaced from the gasoline pool (such as high
value petrochemical markets). [EPA-HQ-OAR-2010-0799-9593-A2, p. 4]
• Passage of the Open Fuels Standard, which will provide Americans more choice at the
pump, and accelerated authority for the use of E-15 in later model automobiles to
increase the number of jobs in domestic biofuel production. [EPA-HQ-OAR-2010-0799-
9593-A2, p. 4]
• Increased Corporate Average Fuel Economy Standards, made possible by advanced
engine designs with higher compression ratio engines and other breakthroughs in flexible
fuel engines with improved efficiencies and greater variability of clean burning fuels.
These advances will provide the public with greater choices in terms of bigger, safer,
more powerful vehicles while still meeting high-mileage and environmental
standards. [EPA-HQ-OAR-2010-0799-9593-A2, p. 4]
The BCC is particularly in favor of a systems approach in dealing with all of these opportunities
that can be advanced in ways that improve our economy, create jobs, enhance our environment,
6-91
-------
EPA Response to Comments
and doing so cost effectively with open and unsubsidized market forces. [EPA-HQ-OAR-2010-
0799-9593-A2, p. 4]
That systems approach involves four factors:
1. An expanding market for biofuels starting immediately to help steady the price of oil, maintain
momentum in the biofuels market, and stimulate the production of cellulosic biomass and algae-
based ethanol while encouraging the advance and use of other biofuels, methanol, electricity and
hydrogen.
2. Rapidly speeding the production of flex fuel vehicles and refueling stations as called for by the
Open Fuels Standard. [EPA-HQ-OAR-2010-0799-9593-A2, p. 4]
3. Reducing the level of aromatics (BTX) in gasoline to limit emissions of highly health-
damaging paniculate matter, especially ultrafme particulates. [EPA-HQ-OAR-2010-0799-9593-
A2, p. 5]
4. Forming a working coalition of stakeholders representing the oil, refining and marketing
industries; the auto manufacturers; the biofuels producers and other alternative fuel producers,
including advanced biofuels, algae, methanol, natural gas, and hydrogen. This collaborative
effort would serve the nation, the public, the environment, and the industries involved. The EPA
and the NHTSA should also participate in this collaborative effort. [EPA-HQ-OAR-2010-0799-
9593-A2, p. 5]
While the BCC appreciates the agencies' efforts to improve the fuel economy of the US car and
light truck fleet, we regret that the current proposed rules focus almost exclusively on car
manufacturers, neglecting fuel quality as an important part of the solution. We believe that
automobiles and the fuels they consume must be regulated in tandem to allow gains in fuel
efficiency to go hand in hand with improvements in air quality and public health. Replacing a
portion of the BTX group compounds (aromatics) in gasoline with ethanol or other alcohols is in
the interests of the public health, national energy security and the domestic economy. [EPA-HQ-
OAR-2010-0799-9593-A2, p. 5]
Congress prudently allowed the Volumetric Ethanol Excise Tax Credit (VEETC) and the tariff
on imported ethanol to expire at the end of 2011. The BCC supports unsubsidized transportation
fuels markets (including subsidies for fossil fuels as well as biofuels) and therefore also supports
the Open Fuel Standard. [EPA-HQ-OAR-2010-0799-9593-A2, p. 5]
Organization: American Forest and Paper Association & American Wood Council
Introduction [EPA-HQ-OAR-2010-0799-9537-A1, p.2]
EPA is proposing tailpipe emission standards that fail to distinguish between CO2 emissions
from cars using fuels derived from biomass ("biofuels") and CO2 emissions from use of fossil
fuels. Treating those two types of emissions the same is inconsistent with both international
policies as well as existing EPA regulatory programs. EPA should consider modifying the
6-92
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
proposed regulations so that the motor vehicle emissions from biofuels are not counted the same
as emissions from fossil fuels in calculating grams of CC>2 emissions per mile, to reflect the role
of the carbon cycle in biofuel production and combustion and to further encourage use of
renewable fuels. This would (1) make the GHG tailpipe emission standards consistent with the
endangerment that the standards are supposed to be mitigating and (2) encourage the substitution
of renewable fuels for fossil fuels, which EPA already is seeking to accomplish through other
provisions in the proposed GHG tailpipe standards. [EPA-HQ-OAR-2010-0799-9537-A1, p.2]
The Carbon-neutrality of CC>2 Emissions from Biofuel Combustion Is Widely Recognized [EPA-
HQ-OAR-2010-0799-9537-A1, p.2]
Biomass CC>2 "neutrality" is an inherent property of biomass based on the natural carbon cycle.
The carbon dioxide (CC^) removed from the atmosphere during photosynthesis is converted into
organic carbon and stored in biomass such as trees and crops. When harvested and combusted or
left to die and decay, the carbon in the biomass is released as CC>2 to be reabsorbed by replanted
trees and crops, thus completing the carbon cycle.1 [EPA-HQ-OAR-2010-0799-9537-A1, p.2]
The neutrality of CC>2 emissions from biomass combustion has been repeatedly recognized for
many years by an abundance of studies and is widely accepted by agencies, institutions,
regulations and legislation. This is true not only of the IPCC Guidelines and Guidance for the
UNFCCC reporting protocols, but of innumerable other agencies and institutions as well. [EPA-
HQ-OAR-2010-0799-9537-A1, p.3]
The globally accepted accounting practice for sovereigns of the UN Framework Convention on
Climate Change Treaty, of which the United States is a signatory, is developed in the IPCC
Guidelines of 1996 and 2006 and the Guidance of 2003 for Land Use/Land Use Change and
Forestry (LULUCF). Unequivocally, in the 2006 IPCC Guidelines, Volume 1, Section 1.2, IPCC
states that "CO2 from the combustion or decay of short-lived biogenic material removed from
where it is grown, is reported as zero in the Energy, Industrial Processes Product Use (TPPU) and
Waste Sectors." EPA, in preparation and submission of the United States annual inventory of
GHG emissions and sinks adheres to these guidelines and does not report CO2 from biomass
combustion based on the same neutrality principle and accounting best practices in order to avoid
double counting. [EPA-HQ-OAR-2010-0799-9537-A1, p.3]
Similarly, other countries and regional entities follow the same best practices. For example, the
European Union Climate Change Trade Scheme in its directive on carbon trading, the European
Union Emissions Trading Scheme (EU ETS), the EU Commission 2004 regulation in Section
4.2.2.1.6, Emission Factors, states, "Biomass is considered as CCVneutral. An emission factor of
0 [t CO2/TJ or t or m3] shall be applied to biomass." [EPA-HQ-OAR-2010-0799-9537-A1, p.3]
EPA confirmed its position that the combustion of biomass should be considered as CCVneutral,
regardless of the source of the biomass, in its final rule to implement the Energy Independence
and Security Act of 2007 through a new Renewable Fuel Standard, RFS2 (75 Fed. Reg. 14,669
(March 26, 2010)). The preamble of the final rule includes that "[f]or renewable fuels, tailpipe
emissions only include non- CC>2 gases, because the carbon emitted as a result of fuel
6-93
-------
EPA Response to Comments
combustion is offset by the uptake of biogenic carbon during feedstock production". 75 Fed.
Reg. at 14,787. [EPA-HQ-OAR-2010-0799-9537-A1, p.3]
Further, because CC>2 emissions from combustion of biofuels are widely considered neutral, they
are either not reported or reported separately for information purposes only in many protocols
such as U.S. Department of Energy's 1605(b), World Resources Institute/World Business
Council for Sustainable Development, International Standards Organization 14064, IPCC,
Environment Canada, U.S. EPA Climate Leaders, Midwest Greenhouse Gas Reduction Accord
Advisory Board recommendations, and the final EPA Mandatory GHG Reporting Rule. In its
Mandatory Reporting of GHGs Rule, U.S. EPA makes clear the exclusion of biomass CC>2
emissions quantities for the calculation of thresholds for determining regulated facilities. [EPA-
HQ-OAR-2010-0799-9537-A1, p.3]
Distinguishing Between CC>2 Emissions from Vehicles Burning Biofuels and Those Burning
Fossil Fuels Would Be Consistent with EPA's Motor Vehicle Endangerment Finding [EPA-HQ-
OAR-2010-0799-9537-A1, p.4]
As noted above, a statutory prerequisite for EPA to impose emission limitations on motor
vehicles is a finding that emissions of the pollutant from domestic motor vehicles cause or
contribute to air pollution which may reasonably be anticipated to endanger public health or
welfare. See CAA section 202(a). EPA proposed those findings on April 24, 2009 (74 Fed. Reg.
18,886), and AF&PA filed extensive comments on that proposal on June 23, 2009. As we stated
in our comments, the proposed findings failed to distinguish explicitly between CCVneutral
emissions from cars using biofuels and emissions from cars using fossil fuels, even though the
emissions inventories that EPA relied on were for CC>2 emissions from fossil fuels. The fact is,
however, that the effects that EPA projected in its findings of endangerment and causation are all
based on increases in the concentration of the GHGs, and primarily in the concentration of CC>2,
in the global atmosphere that EPA described and predicted based on combustion of fossil fuels.
[EPA-HQ-OAR-2010-0799-9537-Al,p.4]
To the extent that a motor vehicle's CO2 emissions merely return CC>2 to the global atmosphere
that was removed when the organic compounds used to power the vehicle were produced
through plant growth, that motor vehicle would not contribute to an increase in the concentration
of CC>2 in the global atmosphere and could not be said to cause or contribute to the effects EPA
described in its endangerment finding. Distinguishing between motor vehicle tailpipe emissions
of CC>2 generated by combustion of biofuels would recognize that those emissions do not
contribute to the harm EPA is attempting to mitigate. It also would further EPA's stated goals of
increasing the use of renewable fuels and reducing our nation's dependence on foreign oil by
creating an appropriate incentive for car manufacturers to accommodate and encourage the use
of biofuels. [EPA-HQ-OAR-2010-0799-9537-A1, p.4]
The Proposed GHG Tailpipe Standards Could Be Modified To Differentiate Biofuel CC>2
Emissions [EPA-HQ-OAR-2010-0799-9537-A1, p.4]
Recognition of the fundamentally different nature, with respect to climate change, of combustion
of biofuels in motor vehicles could be accomplished within the general regulatory framework
6-94
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
EPA has already proposed. AF&PA and AWC are not experts in EPA regulation of motor
vehicle emissions, and we must defer to others as to the feasibility and appropriateness of the
detailed requirements EPA has proposed. We can say, however, that recognition of the
fundamental difference between CC>2 emissions from biofuels and those from fossil fuels would
be consistent with provisions that EPA has included in previous GHG tailpipe standards and in
the Proposed Fuel Economy and Tailpipe Standards. [EPA-HQ-OAR-2010-0799-9537-A1, p.4]
For example, for alternative-fuel vehicles up through MY2015, EPA proposed as an incentive, a
method of calculating vehicle CO2 emissions that in effect exempts 85% of the CO2 emissions
from use of alternative fuels such as biofuels or natural gas. See 74 Fed. Reg. at 49,531-32. This
has the effect of understating the actual CO2 emissions, in order to encourage use of alternative
fuels. While we still maintain 100% of the CC>2 emissions from biofuels should be credited, it is
illustrative of the mechanisms that can be adopted. There are various other incentives and credits,
in the MY 2012-2016 light-duty vehicle GHG program and in the proposed MY 2017-2025
program, that are intended to encourage manufacturers to use technology, or implement it early,
that will reduce CC>2 emissions by reducing the amount of [fossil] fuel used. Without necessarily
endorsing any particular approach, we note that EPA could adapt one or more of those
mechanisms to recognize the distinction, in potential effect on global climate, of CC>2 emissions
from motor vehicles burning biofuels.2 [EPA-HQ-OAR-2010-0799-9537-A1, p.5]
In summary, the Proposed Fuel Economy and Tailpipe Standards as written fail to distinguish
between CO2 emissions from the combustion of biofuels in light-duty motor vehicles and
emissions from such vehicles burning fossil fuels, despite EPA's recognition of that distinction
in other contexts, and the approaches followed by many international bodies. EPA should
consider how to acknowledge the fundamentally different character of CC>2 emissions from use
of biofuels when setting standards for emissions of CO2 from motor vehicles. [EPA-HQ-OAR-
2010-0799-9537-A1, p.5]
1 - From a technical or scientific perspective, biomass CC>2 neutrality is independent of any
consideration of material sustainability of the sources of biomass - the CC>2 released back to the
atmosphere is the same CO2 that was just recently removed or "sequestered" from it. The carbon
in biomass will return to the atmosphere regardless of whether it is burned for energy or allowed
to biodegrade. When we burn biomass for energy we are simply inserting a step in the cycle that
allows us to recover usable energy that can displace fossil fuels. [EPA-HQ-OAR-2010-0799-
9537-A1, p.2]
2 - Some have suggested that burning biofuels may indirectly increase atmospheric
concentrations of CC>2 because of loss of forests that may accompany increased demand for
biomass for fuel or because of other indirect effects. As explained in footnote 1 above, such
concerns, even if they have some basis, do not contradict the scientific fact that combustion of
biomass fuel merely completes the carbon cycle and returns to the atmosphere CO2 that was
removed from the atmosphere by the plant. And in any event, EPA decided not to attempt to
address a similar, but more directly related, issue in order to further its goal of reducing fossil-
fuel consumption, by choosing to treat electric vehicles in most cases as having zero CC>2
6-95
-------
EPA Response to Comments
emissions, disregarding that CC>2 may be emitted where the electricity is generated. See 75 Fed.
Reg. at 25,341. [EPA-HQ-OAR-2010-0799-9537-A1, p.5]
Organization: American Honda Motor Co., Inc.
6. Testing Fuel - EO:
Current fuel economy and GHG testing are conducted with EO fuels. We understand that it is
EPA's intention in future rulemaking to adopt El 5 as its test fuel. If and when EPA changes the
certification fuel to El5, Honda believes it is essential that an adjustment factor be added to the
GHG and CO2 calculations so that it does not become a de facto fuel economy and GHG
stringency increase. [EPA-HQ-OAR-2010-0799-9489-A1, p. 5]
[Organization: American Petroleum Institute (API)
Comment on the Impacts of Changing Fuel Composition on Costs, Benefits, and Emissions
The EPA and NHTSA point to an unintended consequence relating to the overlay of a regulation
setting future light-duty vehicle Corporate Average Fuel Economy (CAFE) standards overlay on
top of the separately imposed Renewable Fuel Standards (RFS) program: The cross-
subsidization of costly renewable fuels could eventually result in a reduction of total fuel
consumption. A CAFE- induced reduction in total fuel consumption will result in more costly
cross subsidy per gallon of fuel. A reduction in total fuel consumption will lead to increased
biofuel content (percent volume) which could change the timing and impact the severity of blend
wall constraints. EPA should recognize that the CAFE standards potentially run counter to
meeting RFS mandates. [EPA-HQ-OAR-2010-0799-9469-A1, p. 13]
Organization: Clean Fuels Development Coalition (CDFC)
RECOMMENDED ACTIONS. The Agencies have proposed a rule with multiple, and
potentially competing, objectives. Increasing fuel efficiency and reducing transportation sector
petroleum use and carbon emissions, without compromising urban air quality, requires a
balanced approach to both fuels and vehicles. In order to enable the most cost effective
compliance with these important objectives, we respectfully recommend the following changes
to the rule as it now stands: [EPA-HQ-OAR-2010-0799-9574-A3, p. 1]
1. Provide automakers with sufficient incentives to commit to aggressive flex fuel vehicle (FFV)
production schedules post-MY2016, with robust credit trading mechanisms among vehicle
classes and among the manufacturers themselves. FFV incentives should be on par with those
provided by the Agencies to other fuel options incented by this rule, such as electric, CNG, and
fuel cell-powered vehicles. [EPA-HQ-OAR-2010-0799-9574-A3, p. 1]
2. Properly credit ultra-low emissions, high octane, low sulfur ethanol blends' (E30+ blends)
higher octane; power density; reduced carbon; and RVP control benefits in calculating both
6-96
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
Petroleum Equivalency Factor (PEF) and carbon reduction credits. [EPA-HQ-OAR-2010-0799-
9574-A3, p. 1]
3. Acknowledge the importance of octane in achieving both fuel efficiency and carbon/criteria
pollutant reduction, and E30+ blends' unique ability to transform an 84 sub-octane gasoline
blend-stock into a high-quality, clean-burning 94 octane (AKI) finished fuel. [EPA-HQ-OAR-
2010-0799-9574-A3, p. 1]
4. Give full weight to E30+ blends' ability to substantially reduce both PM and PM2.5 emissions,
including the associated toxic PAHQ emissions, and thus fairly credit their ability to protect
against unintended urban air quality impacts. [EPA-HQ-OAR-2010-0799-9574-A3, p. 1]
6. Recognize ethanol's cost advantages compared to gasoline Aromatic Group Compounds, and
the sufficiency of E30+ ethanol supplies over the term of this rulemaking to both reduce
Aromatics Group Compounds, and increase U.S. gasoline octane levels, while helping to reduce
automakers' costs of compliance (see Attachment J). [This attachment can be found in Docket
number EPA-HQ-OAR-2010-0799-9574-A14] [EPA-HQ-OAR-2010-0799-9574-A3, p. 2]
7. Develop commercially practicable methods to measure actual usage of E30+ blends post-MY
2019, whether it be on-board diagnostic reporting, or other predictable, and transparent, macro-
accounting procedures. [EPA-HQ-OAR-2010-0799-9574-A3, p. 2]
BACKGROUND. Since the enactment of the 1990 Clean Air Act Amendments (1990 CAAA),
U.S. policymakers have recognized that U.S. transportation fuels policy should strive to preserve
a careful balance between vehicles and the fuels that power them, as they are synergistic pieces
of an integrated system. Requiring automakers (original equipment manufacturers, or OEMs) to
improve vehicle hardware and engine technologies without at the same time requiring fuel
providers to improve fuel quality would be bad policy, and could result in adverse unintended
consequences that will ultimately undermine the important objectives of this rule. In particular,
failure to upgrade fuel standards to replace Aromatic Group Compounds with Clean Octane
alternatives will compromise the nation's petroleum use and carbon reduction goals, potentially
resulting in increased ambient particulate matter (PM2.5, a currently regulated pollutant whose
constituents include ultrafme particulates, or UFPs). We believe it is of paramount importance
for the Agencies to ensure that the final rule properly recognizes intermediate ethanol blends'
ability to enhance gasoline octane levels, and significantly reduce emissions of carbon and
criteria pollutants. In order to take advantage of ethanol's unique qualities, the Agencies must
revise their proposed rule to incent the manufacture of FFVs after MY2016 and require fuel
quality improvements as Congress intended. This will be the best way to maximize cost effective
compliance with both fuel efficiency and carbon reduction goals, enable the introduction of
higher octane in-use fuels, prevent adverse urban air quality impacts, and protect the public
health and welfare as new engine technologies come to market. [EPA-HQ-OAR-2010-0799-
9574-A3, p. 2]
THE AGENCIES HAVE REQUESTED COMMENT ON A NUMBER OF IMPORTANT
ISSUES. We commend the Agencies for requesting comment on a number of key issues that
deserve careful consideration for shaping the final rule. Since we note that the Agencies project a
6-97
-------
EPA Response to Comments
fleet-wide penetration rate of only 1% for plug-in and electric vehicles (PHEVs and EVs) by
2021, and 7% for hybrid electric vehicles (HEVs), we believe that liquid fuel- propelled spark-
ignition vehicles will continue to dominate the U.S. transportation fuels sector for many years,
perhaps decades. A 2010 National Research Council (NRC) study was cited in a GM/Coskata
paper as concluding that "PHEVs will have little impact on oil consumption before 2030 because
there will not be enough of them in the fleet. More substantial reductions could be achieved by
2050 but will reduce oil consumption only slightly more than can be achieved by just the hybrid
vehicles (HEVs)."12 Therefore, we will focus our comments on the important role we believe
E30+ blends can play in down-sized GDI vehicles with bundled advanced technology packages.
(The page numbers below identify where in the rulemaking the captioned issue is raised by the
Agencies.) [EPA-HQ-OAR-2010-0799-9574-A3, p. 5]
• P. 75335, IMPORTANCE OF OCTANE. As mentioned previously, we believe that
octane should play an extremely important role in meeting the nation's transportation
fuels sector goals between now and 2025 and beyond. There are critical differences
between the Aromatic Group Compounds (Dirty Octane) and Clean Octane alternatives,
involving a range of considerations including legal/statutory authority,
technical/performance, and environmental/health criteria. In the process of finalizing this
rule, we strongly recommend that the agencies avail themselves of the extensive body of
third party scientific literature, including recent Society of Automotive Engineers (SAE)
and other credible work that has been done on performance and emissions effects of
E30+ blends compared to the different types of in-use gasoline. [See Attachment C in
Docket number EPA-HQ-OAR-2010-0799-9574-A6.] Well respected experts such as
Honda Motors, Delphi Powertrain, Oak Ridge National Laboratories, and Southwest
Research Institute have published findings that contradict many of the conventionally
accepted assumptions about higher ethanol blends' performance based on testing that has
historically been conducted primarily by petroleum interests or affiliated entities. In
particular, E30+ blends can help the OEMs more cost effectively comply with the new
fuel efficiency rules, reduce transportation fuel carbon intensity and CO2eq tailpipe
emissions, improve advanced engine design performance, and achieve significant
reductions in harmful pollutants. [EPA-HQ-OAR-2010-0799-9574-A3, p. 5]
• P. 74878, PETROLEUM EQUIVALENCY FACTOR FOR E30+ BLENDS. The
Agencies state in footnote #56 that EPA is required to calculate fuel economy using
DOE's Petroleum Equivalency Factor (PEF). We are concerned that DOE's simplistic
approach to ethanol's PEF based only on energy density comparisons (e.g., dividing
gasoline's 115,000 BTUs into ethanol's 76,000 BTUs) significantly and incorrectly
penalizes ethanol when it comes to both petroleum displacement and, by extension,
carbon reduction credit calculations. It is important that the Agencies recognize at least
three distinct facts about ethanol's unique octane enhancement properties: 1) it has an
octane rating as high, or higher, than Aromatic Group Compounds, which means that
ethanol can reduce the catalytic reformer's significant gasoline and other product yield
losses sufficiently to entirely offset its lower energy density (confirmed by the 2008
NREL/McKinsey linear program study cited below);32 2) its power density, chemical
octane, superior octane sensitivity, and charge cooling effects help to further compensate
for its energy density (BTU) shortcomings; [See Attachment C in Docket number EPA-
HQ-OAR-2010-0799-9574-A6] and 3) as ethanol volumes increase in the future in
6-98
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
response to market-based signals, OEMs can optimize advanced engine designs for
higher compression ratios and other modifications to take even greater advantage of
ethanol's unique performance benefits. Taken together, these benefits result in a greater
than 1:1 displacement effect from E30+ blend substitution for Aromatic Group
Compounds. Another important factor that must be considered in any recalculation of
ethanol's PEF is for the Agencies to recognize that as ethanol concentration increases,
e.g., E30+ blends, depending upon base gasoline properties, ethanol's naturally lower
Reid Vapor Pressure (RVP)34 begins to take over, which allows refiners and blenders to
more easily control for RVP (one of EPA's targets in the anticipated Tier 3 rulemaking).
In any case, E30+ blends significantly reduce a wide range of tailpipe emissions,
including NOX, CO, VOCs, weighted average MSATs, and PM/PN that far outweigh any
evaporative emission increases. [See Attachment C in Docket number EPA-HQ-OAR-
2010-0799-9574-A6] [EPA-HQ-OAR-2010-0799-9574-A3, p. 9]
• ENSURE FULL-SCOPE COST-BENEFIT ACCOUNTING FOR REPLACING DIRTY
OCTANE WITH CLEAN OCTANE. To our knowledge, the last time EPA did a cost-
benefit analysis of reducing Aromatic Group Compounds was in the 2007 MS AT
rulemaking. At that time, EPA's model used crude oil price assumptions of
approximately $20 a barrel, which is of course 80% lower than current prices, making the
analysis of little value. (Aromatics prices are tied directly to crude oil costs. As crude oil
costs have soared in recent years, Aromatics Group Compound costs have also escalated
rapidly.) Another major assumption that skewed the 2007 analysis against the potential of
E30+ blends to replace Aromatic Group Compounds was EPA's adherence to
conventional wisdom as far as penalizing ethanol for its energy density and RVP
properties. This resulted in EPA assuming that it took approximately 1.6 barrels of
ethanol to replace 1.0 barrels of aromatics. In fact, E30+ blends' superior octane
enhancement effects, and the RVP control tendencies of higher blends—coupled with the
offsets that should be credited to them for their substantial tailpipe emissions
reductions—should result in E30+ blends being credited for at least a one for one
displacement of Aromatic Group Compounds.36 In addition to the enormous health cost
savings, there are at least two other costs-benefit considerations worth mentioning. The
first is to recognize that commercial technologies exist to upgrade Aromatic Group
Compounds and divert them from the gasoline pool to the value-added petrochemical
market. [See Attachment H in Docket number EPA-HQ-OAR-2010-0799-9574-A12] The
second consideration anticipates a predictable defense from refiners as to why the
gasoline Aromatic Group Compounds cannot be reduced, whatever their costs or health
risks: the catalytic reformer is not only the source of aromatics, but also provides off-gas
hydrogen used for other operations, such as diesel fuel desulfurization. We believe that
the best response to this specious argument can be found in the previously mentioned
2008 NREL/McKinsey linear program study of U.S. refiners, which specifically
addressed the issue: "The [Linear Programming] model also calculated the input costs for
each scenario to account for changes in inputs (e.g., as the reformer and isomerization
unit throughputs are reduced, additional hydrogen will have to be purchased).. .We also
verified that increases in the inputs required, specifically hydrogen, could be met without
driving up the prices of the inputs." (Emphasis added.)38 [EPA-HQ-OAR-2010-0799-
9574-A3, pp. 9-10]
6-99
-------
EPA Response to Comments
P. 75103, GHG - CAFE RULEMAKING CAN/SHOULD COMPLEMENT TIER 3
RULEMAKING. We note EPA's statement that for this analysis, they assume ".. .no
effect on volumes of ethanol and other renewable fuels because they are mandated under
the Renewable Fuels Standard (RFS2).. .However, as a consequence of the fixed volume
of renewable fuels mandated in the RFS2 rulemaking and the decreasing petroleum
consumption predicted here, we anticipate that this proposal would in fact increase the
fraction of U.S. fuel supply that is made up by renewable fuels. Although we are not
modeling this effect in our analysis of this proposal, the Tier 3 rulemaking will make
more refined assumptions about future fuel properties, including (in a final Tier 3 rule)
accounting for the impacts of the LD GHG rule." Inasmuch as EPA wants to reduce
gasoline sulfur content, achieve RVP control, and establish a pathway to reducing PM
emissions from gasoline-powered vehicles, it makes sense for EPA to also strive for
"increasing the fraction of U.S. fuel supply that is made up by renewable fuels."39
However, we would point out that moving U.S. ethanol production and use to the next
level faces many challenges, most of which will not be solved by simple reliance on
RFS2 (the volume targets of certain categories of which can be, and often are,
significantly reduced by EPA edict due to supply shortfalls). Private sector capital
investment has dried up due to uncertainty driven largely by Blend Wall constraints and
elimination of longstanding public sector support for new entrants. Now that the ethanol
industry's tax incentives and other support has ended, what is most needed is regulatory
policy that sends market-based, technology-neutral signals to investors that Clean Octane
alternatives can compete on a level playing field with the entrenched, higher cost, higher
carbon intensity, and highly toxic Aromatic Group Compounds. This is what the
Congress intended in the 1990 CAAA, and it is what would be best for the nation's
economy, energy security, environment, and public health and welfare. We strongly
recommend that EPA fully consider the substantial benefits E30+ blends would bring in
terms of: 1) reducing gasoline sulfur levels (a combination of refinery adjustments and
the sheer dilution benefits of replacing Aromatic Group Compounds with 30+% low
sulfur ethanol; 2) helping to control RVP, while achieving major reductions in a host of
tailpipe emissions; and 3) substantially reducing PM, and especially PM2.s, and their
associated PAHQ toxic emissions, even as the use of GDI engine technologies increases
in the future. For the OEMs, and the entire nation, to extract full benefit from the use of
these high-performance, low carbon intensity E30+ blends, it is imperative that the OEMs
are properly incented to manufacture FFVs after MY2016. While FFV cost differentials
will be considerably lower than CNG alternative vehicles and/or EVs/PHEVs, the OEMs
must receive fair and balanced treatment if they are to make the level of commitment
needed to ensure that American motorists are able to exercise "consumer choice" at the
pump. This means that, over time, all vehicles should be capable of running on no less
than E30+ blends, i.e., all FFVS. In the future, as more volumes of ethanol enter the
marketplace—from a diverse range of sources, feedstocks, and technologies—the OEMs
will be able to achieve even greater mileage efficiencies, performance enhancements, and
carbon, PM, toxics, etc. reductions by committing to higher compression engines and
other forms of optimization. They will not be able to make such a transition, however,
unless FFVs are replacing older legacy vehicles as the fleet turns over. [EPA-HQ-OAR-
2010-0799-9574-A3, pp. 10-11]
6-100
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
P. 74878, FAILURE TO EXTEND PARITY TREATMENT TO FFVs. Regrettably, we
note that the Agencies fail to treat ethanol's many Clean Octane benefits equitably
compared to other alternatives, and to offer the OEMs parity treatment as it relates to
incentives to manufacture FFVs compared to other types of vehicles. The Agencies state:
"To facilitate market penetration of the most advanced vehicle technologies as rapidly as
possible, EPA is proposing an incentive multiplier for compliance purposes of all electric
vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles (FCVs)
sold in MYs 2017 through 2021." (The Agencies are relying on at least one questionable
assumption to justify the EV incentives, in that they have elected to assume no upstream
carbon emissions from electricity generating units.)40 CNG vehicles are also being
incented in this manner. However, in stark contrast, EPA proposes no such incentive
multiplier for FFVs, even as it also proposes to eliminate the Usage Factor for all FFVs
after MY2016. Consequently, the OEMs have no incentive to manufacture FFVs in the
future, which will effectively cap the ethanol industry at its current levels, and thus
unnecessarily, and unwisely, prevent the realization of the enormous economic,
environmental/health, and energy security benefits that would accrue from an aggressive
E30+ Clean Octane program. [EPA-HQ-OAR-2010-0799-9574-A3, p. 11]
P. 75126, CO2 REDUCTION BENEFITS AND THE SOCIAL COST OF CARBON.
The expanded use of E30+ blends between now and 2025 would achieve substantial
reductions in mobile source carbon emissions. EPA has confirmed that Aromatic Group
Compounds are 20% more carbon intensive than gasoline itself, and that based on their
molecular formulas, ethanol's carbon share (% mass) is approximately 40% less than
Aromatic Group Compounds.41 In addition, an accurate assessment of the carbon
reduction impacts of a Clean Octane fuel reformulation program would have to recognize
that the combustion of Aromatic Group Compounds emit orders of magnitude more
carbon (see Southern California Particle Center chart, Attachment I). In its December 7,
2011 Technical Support document on PM, CARB provided reinforcement for this
assertion: "...[BJased upon the SPN-EC correlation observed in this study, it is likely that
the inclusion of a strict SPN standard would lead to reductions in EC (i.e., BC)
emissions."42 In a recent paper on BC properties, Sierra Nevada Research Institute noted
that PAH isomers are a major source of urban BC (EPA's draft 2011 Report to Congress
on Black Carbon stated that mobile sources are the source of approximately 60% of BC
emissions in the U.S.), and that automobiles are a major source of PAH isomers.43 As
noted above, the Agencies are proposing to generously incent manufacturers to build
FCVs, even though their commercialization is still many years away, because they can
utilize hydrogen, which is a fuel that contains no carbon, and therefore would
theoretically have no CO2eq emissions. Using the same logic, the Agencies should be
eager to incent the manufacture of FFVs, which can be mass produced today, and which
are required to enable increased use of a fuel which contains at least 40% less carbon than
the compounds it replaces, and which is available in large quantities today.44 By
facilitating the widespread availability of FFVs, the Agencies can remove one of the most
formidable barriers to E30+ blends' commercialization. Increased use of such blends
would help the OEMs by reducing compliance costs in meeting the rulemaking's 2025
goal of 163 g/mile of CO2eq emissions, due to a combination of their lower carbon
molecular composition, as well as their ability to substantially reduce high carbon
intensity combustion byproducts . We believe that this rulemaking fails to properly
6-101
-------
EPA Response to Comments
identify, and credit, E30+ blends' cumulative carbon effect. The leading alternatives to
the Aromatic Group Compounds all have a much lower carbon intensity index than the
high carbon content they would displace, as suggested by the estimates in the table
below. [See table on p. 12 of Docket number EPA-HQ-OAR-2010-0799-9574-A3] [EPA-
HQ-OAR-2010-0799-9574-A3, pp. 11-12]
• P. 75070, TECHNOLOGY PENETRATION AND ADOPTION RATES. We have
already noted that a range of experts—the NRC, the Agencies, and the OEMs
themselves—predict that technology adoption challenges will limit the penetration of
EVs, PHEVs, HEVs, and FCVs well into the future. Meeting this rule's important
objectives will require primary reliance on liquid fuels to power mostly SI engines,
equipped with advanced engine technologies. Many of the SI engine technology
advancements are expected to be adopted rapidly. For instance, the Agencies project that
GDI advances will be incorporated into 85% of new vehicles by 2016, and 100% by 2020
and beyond. Properly incentivized, the OEMs could make most of their light duty fleet
flex-fuel capable within a comparable time frame, as the technology is readily available,
and the costs are relatively low. There are at least two separate considerations involved
here. The first consideration: whether or not the final rule properly recognizes the value
of E30+ blends in meeting the petroleum and carbon reduction goals, and therefore
sufficiently incents the OEMs by way of Incentive Multipliers and/or Utility Factors to
produce the FFVs needed to use the fuel. The second consideration: whether the OEMs
realistically expect that sufficient volumes of ethanol will be made available in the
coming years to make it worth their while to produce such vehicles, especially since by
MY2019 they must demonstrate that the ethanol is actually being used for their credits to
be earned? Recognizing that current U.S. ethanol production capacity already stands at
one million barrels per day (bpd), we believe that this second question can be answered
affirmatively. Using U.S. Energy Information Administration (EIA) numbers, we can
paint the following picture of U.S. transportation fuel demand by 2025: [EPA-HQ-OAR-
2010-0799-9574-A3, pp. 12-13]
1. 2009, 245 million LDVs on U.S. roads
2. Based upon VMTs, each vehicle averages approximately 12,000 miles/year, and 22.5 mpg
3. Prior to the Great Recession, fleet turnover averaged 7%/yr. (e.g., entire fleet turns over every
14 years)
4. Assume only 5.5% replacement rate going forward, with fleet growth only 1%/year, effective
2013
5. Implies average new vehicles sales of 16.4 million vehicles/year
6. Assume new vehicles hit the 49.6 mpg target by 2025
7. Means that total U.S. LDV fleet would be 276 million vehicles, with an average fuel economy
of 3 6 mpg
6-102
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
8. Equals 2.6 million bpd reduction in U.S. motor fuel consumption [EPA-HQ-OAR-2010-0799-
9574-A3, p. 13]
If the EIA assumptions are anywhere near correct, the U.S. transportation fleet crude oil demand
picture is in for a major transformation over the next 10-15 years. EIA numbers for 2010 show
U.S. gasoline consumption at just short of 9 million bpd, which includes ethanol's 900,000 bpd.
Adjusting the 2.6 mmbpd figure downward to net out diesel use yields a net reduction in mogas
(motor gasoline) usage of approximately 2 mmbpd. That would make 2025 U.S. gasoline
demand only 7 mmbpd, of which 1 mmbpd would be comprised of U.S. corn ethanol (capacity
already in place), leaving a net total of approximately 6 million bpd of U.S. gasoline demand in
2025. [EPA-HQ-OAR-2010-0799-9574-A3, p. 13]
That means if the goal is to have a flex-fuel transportation system in place by 2025 that would
accommodate a national average of E30+ blends, the U.S. would require only 2.1 million bpd of
ethanol. This translates into an increase in ethanol supplies of only slightly more than double
2012's 1 million bpd of ethanol production capacity over a period of 13 years. To put this into
perspective, the U.S. ethanol industry tripled its production capacity between 2005—the year
RFS1 was signed into law—and 2011, or in only six years. Even with the recent elimination of
ethanol tax incentives and import duty protections, the market-based signals of a properly drawn
rule would unleash the private sector energies of scientists, investors, and feedstock producers to
tap into a wide range of sources, technologies, and feedstocks. [See Attachment J in Docket
number EPA-HQ-OAR-2010-0799-9574-A14] [EPA-HQ-OAR-2010-0799-9574-A3, p. 13]
The table in Attachment J provides a snapshot of how market-based regulatory signals could
successfully balance a gradual reduction in gasoline Aromatic Group Compounds levels with a
gradual ramp-up in ethanol levels, until the U.S. has reached a sustainable "equilibrium" of
nationwide E30+ blends in 2025. [See Attachment J in Docket number EPA-HQ-OAR-2010-
0799-9574-A14] [EPA-HQ-OAR-2010-0799-9574-A3, p. 13]
The graph attached to the table shows how U.S. fuel providers can actually REDUCE (Aromatic
Group Compounds), REPLACE (with E30+ blends), and INCREASE (the U.S. transportation
sector octane pool in the process). Such an outcome is achievable, so long as the Agencies
adequately incent FFV manufacture in this rulemaking, and require higher quality fuel standards
here and in the upcoming Tier 3 rule. [EPA-HQ-OAR-2010-0799-9574-A3, p. 14]
The primary assumptions are set out in the Key Market Driver Criteria column. They include the
following:
• The fuel efficiency rules will reduce U.S. mogas consumption to 7 mmbpd by 2025
• This means that by 2025, U.S. ethanol use must reach approximately 2.1 mmpbd, or
slightly more than double current production capacity of 1 mmbpd over the next 13 years
• That 84 sub-octane blend-stocks average approximately 10 volume % Aromatic Group
Compounds
• That E30+ blends, when added to 84 sub-octane gasoline, result in a high quality finished
gasoline of approximately 100 RON (for GDI engines)
6-103
-------
EPA Response to Comments
• That ethanol will displace Aromatic Group Compounds on a one to one, gallon for
gallon, basis, based upon its ability to reduce gasoline yield loss at the refinery; the RVP
control benefits of higher levels of ethanol in E30+; the de minimus mileage penalty that
could occur with E30+ blends (vs. E85), even before the OEMs are able to employ
optimization techniques, such as increased compression; and the additional miscellaneous
benefits of ethanol's increased power density, chemical octane response, and charge
cooling effects. [EPA-HQ-OAR-2010-0799-9574-A3, p. 14]
Finally, we are also confident that the nation's fuel distribution infrastructure can keep pace with
the FFV manufacturing schedule and the expansion of next-generation ethanol production. Based
upon typical turnover rates for the nation's gasoline dispensers, if flex fuel dispensers were as a
matter of course substituted as the obsolescent dispensers are phased out (such as has been
proposed by Senate Energy and Natural Resources Committee Chairman Bingaman), the entire
U.S. fleet and fuel dispenser system could be flex-fuel compatible by 2025. Consumers would be
empowered to save billions of dollars on their fuel purchases by having the freedom to select
which blend of gasoline and ethanol best suited their preferences, depending upon cost
considerations, environmental impacts, and energy security concerns. Especially when compared
to the formidable infrastructure and logistical challenges of some of the other alternatives, such
as electric and CNG vehicles, transitioning to an ethanol flex fuel system can be done smoothly,
cost effectively, and well within the time frame envisioned by the rule. [EPA-HQ-OAR-2010-
0799-9574-A3, p. 14]
CONCLUSION. We respectfully urge the Agencies to make every effort to ensure that the final
GHG - CAFE rule does not—in its pursuit of important petroleum and carbon reduction goals—
inadvertently create air quality impacts that compromise the public health and welfare, especially
that of our most vulnerable citizens living in our largest cities. Congressional intent in the 1990
CAAA is unmistakably clear: the U.S. transportation fuels sector must be managed as a
synergistic whole, with vehicles and fuels carefully balanced and periodically aligned as the
science advances and technological opportunities present themselves. This rule will shape the
U.S. transportation fuels sector for decades to come and has the potential to make dramatic
contributions to the nation's economic, energy security, environmental, and health and welfare
goals. Failure to act now to match improved fuel standards with improved vehicle technologies
will unnecessarily expose an entire generation of Americans to increased emissions, especially
particle-bound toxics, substantially increase the nation's health care costs, and represent a missed
opportunity of enormous proportions. In order to open the door to take full advantage of the
many benefits of E30+ Clean Octane blends, it is imperative that the Agencies extend equal
treatment to FFVs compared to electric, fuel cell, and CNG vehicles. The OEMs must be
adequately incented to manufacture FFVs in the future. If they do not, ethanol use will be
effectively capped at current levels, and the enormous benefits of a nationwide Clean Octane
program will never be realized. [EPA-HQ-OAR-2010-0799-9574-A3, p. 14]
12 "Ethanol - the primary renewable liquid fuel," Datta et al., J Chem Technol Biotechnol 2011;
86: 473-480.
6-104
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
32 http://www.nrel.gov/analysis/pdfs/44517.pdf, pp. 17 - 19. Specifically, as shown by the
McKinsey linear program models, E30+ blends would provide sufficient octane clout to reduce
refinery gasoline yield loss by approximately 9.9%, which effectively negates the mileage
penalty predicted for E30+ blends. (The Agencies assume that E85 blends will result in 27%
lower mileage, based on BTU calculations, although real-world mileage losses have been shown
to be considerably lower. E30+ blends' mileage performance (assuming no engine optimization)
should thus be approximately one-third of that, or 9 - 10% lower. See also Footnote #30.)
34 When not blended with gasoline, ethanol has an RVP of slightly more than two pounds.
36 For the reasons set forth in Footnote #25 above, we would respectfully suggest that now
might be an excellent time for EPA to re-run the 2007 MSAT cost-benefit model using more
current EIA oil price projections, and recognizing the 1:1 displacement factor for ethanol and
Aromatic Group Compounds.
38 "2.4.2 Findings: As the percentage ethanol with which the CBOB will be blended increases,
the share of naphtha in the CBOB increases, while the share of isomerate and reformate
decreases.. .Overall, we found that refiners producing fossil gasoline for.. .E20 blending, the
fossil gasoline yield goes up by.. .6.7 percent.. .we found that gasoline prices at the pump could
fall to.. .2 to 5 cents... (Footnote 27: The increased gasoline yield is the result of reduced
throughput in the reformer. A secondary effect of backing down the reformer is reduced
production of hydrogen, which is required for desulfurization of diesel. For most refineries, this
will not be a problem as they typically have access to hydrogen produced from natural gas.)" pp.
18-19. http://www.nrel.gov/analysis/pdfs/44517.pdf
40 A stark example of this unbalanced treatment is the EPA's provision of an advanced
technology vehicle incentive in the form of a 0 g/mile compliance value for MYs 2017 and later
electric operation. This 0 g/mile assumption was retained despite opposition from some quarters
during the run-up to the proposed rule. In the September 2010 Interim Joint Technical
Assessment Report for this rulemaking, the Agencies noted that "[s]ome environmental and
public interest groups expressed concern that the 0 g/mi value does not adequately capture
upstream emissions from the charging of electric vehicles, and believe an upstream emissions
factor should be included." Pp.5-6. In contrast, the ethanol industry has been subjected to
rigorous upstream and downstream lifecycle analyses, including applying international Indirect
Land Use penalties, while other fuels, such as tar sands and oil shale, have been exempted from
such considerations.
41 See "Final Rule for Mandatory Reporting of Greenhouse Gases," Technical Support
Document, Climate Change Division, U.S. EPA, September 15, 2009, pp. 15, 32.
http://www.epa.gov/climatechange/emissions/downloads09/documents/SubpartMMPr
42 http://www.arb.ca.gov/regact/2012/leviiighg2012/levappp.pdf, p. 126
43 "Black Carbon's Properties and Role in the Environment: A Comprehensive Review",
Shrestha et al., Sustainability 2010, 2, 204-320;doi:10.330-/su2010294, p. 5.
6-105
-------
EPA Response to Comments
44 Some experts have argued that next-generation cellulosic ethanol's reduced carbon footprints
closely resemble the net carbon reduction benefits that have been attributed to the use of
hydrogen in fuel cell-powered vehicles.
Organization: El00 Ethanol Group
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p.202; pp. 204-206
and 226-227.]
In conclusion, our proposal: These standards for 2017-2025 are very strong and they are
exceptionally well-written. We want to compliment the people who wrote the standards. So let's
keep them in place exactly as written but apply them to only 50 percent of new light-duty
vehicles.
For the other 50 percent, mandate El00 flex-fuel vehicles with strict mileage requirements.
Taking these two steps will assure complete independence of imported crude oil for the United
States and lower greenhouse gas emissions far below the 2017 to 2025 standards.
What would be a viable strategy to make the U.S. independent of imported oil? E100 flex-fuel
vehicles optimized to run on ethanol, not gasoline, are the most straightforward ways to do this.
Brazil did something similar to this several years ago and is now a net crude oil exporter, not an
importer. The picture in front of you is of a pump at a Shell gas station in Sao Paulo, Brazil I
took last April. Two grades of gasoline, regular and premium, and one grade of straight ethanol,
no gasoline.
75 percent of the millions of light-duty vehicles in Brazil can burn this gasoline-free ethanol.
We use 140 billion gallons of gasoline per year. Roughly half, 66 billion gallons, come from
imported crude oil. So to make the United States independent of imported oil, we need to replace
66 billion gallons of gasoline.
The fastest, lowest cost way to do this is to make ethanol a primary motor fuel in the United
States, not a blend with gasoline, but a primary motor fuel for just half of all new vehicle
inventory, 50 percent. El 00 vehicles could still burn gasoline, but since ethanol would cost less
than gasoline at the pump and since mileage would be better, consumers would flock to these
vehicles.
El 00 engines are applicable to all size vehicles, not just small ones. Cost may be $100 more per
vehicle. The industry could easily be making 6.5 million such vehicles per year by January 1st,
2017. 10 years of doing this and now we have 65 million vehicles not burning gasoline, that
makes a tremendous dent in the problem.
6-106
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
This ethanol will come from waste cellulose or municipal solid waste, not corn. The Department
of Energy published a report that incontrovertibly proves that there is a billion tons of waste
cellulose accessible every year in the Unites States.
Yield is 100 gallons per ton so we could make 100 billion gallons of ethanol without interfering
with food production or agricultural exports. This is more than enough to provide crude oil
independence. So for this and carbon already above ground to make this ethanol, not bringing up
new carbon from underground, the net addition of CC>2 in the atmosphere with E100 is zero.
Basically what we're saying is at least mandate 50 percent of the vehicles run on straight ethanol;
the other 50 percent continue with electric cars, fuel cells and everything.
We shouldn't just settle on gasoline and electric. It's too dangerous to put all our eggs in one
basket.
Organization: Ford Motor Company
Flexible Fueled Vehicles: Consistent with the goals of helping America reduce its dependence on
oil and reducing harmful pollution, incentives need to be continued for flexible fuel vehicles that
can operate on alternative and renewable fuels. The federal 2007 Energy Independence and
Security Act requires increasing use of renewable fuels through the Renewable Fuel Standard
(RFS). While currently the volume requirements can be absorbed by blending up to 10% ethanol
in the base gasoline available to conventional vehicles, very soon the mandated volume
requirements will exceed that level as we proceed into next year. By 2022, the increasing RFS
requirement will rely heavily on the ability of flexible fueled vehicles, capable of operating on
gasoline blends containing up to 85% ethanol (E85), or other capable vehicles. These vehicles
will be required in order to consume the mandated renewable fuel volumes that exceed what can
be absorbed in the 10% ethanol blended gasoline, and which could be in excess of 20 billion
gallons of ethanol, as demonstrated on the chart, below: [The chart can be found on p. 20 of
Docket number EPA-HQ-OAR-2010-0799-9463-Al] [EPA-HQ-OAR-2010-0799-9463-Al, pp.
19-20]
The benefits of ethanol are well known. Argonne National Laboratory and EPA both
show/confirm that on a Life Cycle Analysis basis, ethanol produces less GHG than gasoline (M.
Wang, December 2010). Furthermore, cellulosic ethanol promises much larger CC>2 reductions.
Based on these benefits, we strongly believe that the vehicles designed to operate on ethanol
blends up to 85% should continue to receive an incentive to help offset the costs associated with
the technology and calibration development. Therefore, we support the determination of credits
based on national E85 usage. We look forward to working with the agencies to determine the
most appropriate pathway forward to acknowledge the synergistic benefits of these technologies.
[EPA-HQ-OAR-2010-0799-9463-A1, p. 20]
Organization: General Motors Company
GM supports the continuation of the quantification of CC>2 emissions reduction related to ethanol
usage based on national E85 actual usage. We further urge the agencies to publish F-factor
6-107
-------
EPA Response to Comments
guidance, as suggested in the Alliance comments, as soon as possible to provide the basis for
continued and further development of E85- capable vehicles. [EPA-HQ-OAR-2010-0799-9465-
Al,p.3]
Organization: Growth Energy
In the RFS 2 regulation, and consistent with EISA, EPA chiefly relies on the production and sale
of domestically-produced ethanol and flexible fuel vehicles ("FFVs") to meet the volumetric
renewable fuels requirements now codified in section 21 l(o)(2)(B) of the Clean Air Act. The
volumetric requirements were fully considered by Congress, were adopted by strong bipartisan
majorities, and have been and remain provisions of the statute that representatives of the fossil
fuel industry do their best to undercut. See, e.g., Nat'l Petrochemical & Refiners Ass'n v. EPA,
630 F.3d 145 (D.C. Cir. 2010) (denying petitions for review). EPA has a duty to carry out
EISA's mandates, and other federal agencies have provided strong financial support with public
funds authorized by Congress to promote the development of biofuels. Growth Energy's
members have invested heavily in the production of renewable fuels, including cellulosic
biofuels, and Growth Energy has been a staunch defender of the RFS requirements in EISA.
[EPA-HQ-OAR-2010-0799-9505-A1, p. 3]
The GHG and fuel economy standards that the Agencies are now proposing will define, far more
than any other step that the Agencies can take under federal law, the types of vehicles that the
automobile industry will produce for many years into the future. EPA, however, has not
reconciled the options presented for vehicle manufacturers under the regulations proposed in the
Joint NPRM with the requirements of Title II of EISA and the strategy for achieving the
volumetric requirements of Title II in the RFS 2 regulations. If the GHG reductions that FFVs
can be expected to achieve when operated on renewable fuels are not translated into practical
incentives for vehicle manufacturers to continue and expand production of FFVs, then the
volumetric requirements in Title U of EISA will not be achieved. The Joint NPRM does not
propose any program that provides vehicle manufacturers with the necessary incentives, and
indeed seems to disfavor the use of ethanol as a vehicle GHG reduction strategy in comparison
with a fossil fuel (natural gas) and electricity. This important issue is examined in Attachment 2
[pp. 16-21 of Docket number EP A-HQ-OAR-2010-0799-9505-A1] to this letter, which also
introduces concepts that could bring EPA's vehicle-based GHG reduction goals back into line
with EISA and the RFS 2 regulation. [EPA-HQ-OAR-2010-0799-9505-A1, p. 3]
The problem is not simply that EPA has neglected biofuels in the Joint NPRM. EPA and
NHTSA are instead embarking on a course that will make the volumetric biofuels requirements
of Title II in EISA unachievable. Vehicle manufacturers operate in a highly competitive
environment, face a complex set of regulatory expectations from EPA, NHTSA, and the State of
California, must plan their compliance strategies many years before the start of a given model
year, and have no resources to waste on programs that will not help ensure regulatory
compliance. The Joint NPRM is rooted in the policy preference of one State (California) for
electric vehicles, and EPA has bifurcated this rulemaking from other emissions and fuels
rulemakings. The Joint NPRM leaves no room for vehicle manufacturers to rely on biofuels and
the mandates in Title II of EISA as part of an overall compliance strategy. [EP A-HQ-OAR-2010-
0799-9505-A1, p. 3]
6-108
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
Notably, EPA does not try to explain in the Joint NPRM or in its regulatory support document
why and how it thinks the program outlined in the Joint NPRM will ensure compliance with Title
II of the 2007 Energy Act. Nor does the Agency claim, nor could it claim in light of the scope
and duration of the standards outlined in the Joint NPRM, that any steps that EPA might take in
future regulations under the Clean Air Act could address the conflict between its currently
proposed prescriptions to the automobile the Joint NPRM, the guiding strategy appears to have
been brokered with California, and not to have been based on the requirements of federal law. 1
If EPA does not correct the direction it is now setting for the automobile industry with respect to
FFVs, there will be few FFVs produced after MY 2016. And, in the absence of a large and
growing fleet of FFVs, the volumetric mandates in Title II of EISA cannot be met. [EPA-HQ-
OAR-2010-0799-9505-A1, pp. 3-4]
Given the neglect of the RFS 2 program in the current rulemaking, EPA appears to be setting the
RFS 2 program on a course that is quite contrary to what Congress expected in EISA. That is
completely unnecessary, because all EPA has to do in this rulemaking is to give vehicle
manufacturers practical incentives for continued and expanded production and sale of FFVs that
would be based on the volumes of biofuel required by Congress. EISA includes provisions
allowing EPA to make adjustments in the RFS 2 program, if there are proper determinations of
unforeseen, "severe" economic harm, "severe" unintended environmental impacts, or an
"inadequate domestic supply" of biofuels. See 42 U.S.C. § 7545(o)(7)(A),(F). But those
provisions merely provide narrowly-drawn "off-ramps" for the renewable fuels program to
address paramount economic or environmental interests. They are hardly a license for EPA to set
the RFS 2 program up for failure. It would be ironic in the extreme, and contrary to law, if
regulations adopted by EPA in the exercise of administrative discretion, like the regulations in
the Joint NPRM, were to deprive the nation of an adequate supply of biofuels, and thus to
provide a pretext to abandon or curtail the requirements of Title II in EISA. [EPA-HQ-OAR-
2010-0799-9505-A1, p. 4]
When it enacted EISA, Congress had lengthy experience with the efforts of the fossil fuel
industry to retard the use of non-fossil fuels, and with the fossil fuel industry's history of
resistance to regulation under the mobile-source provisions of the Clean Air Act. Congress
therefore spoke with clarity about its expectations for the volumetric requirements for biofuels in
Title U of EISA. EPA was directed in mandatory terms to adopt regulations to "ensure" the sale
of gasoline with the specified volumes of biofuels. See 42 U.S.C. § 7545(o)(2)(A) (the
Administrator "shall" adopt regulations "to ensure" the use of specified volumes of biofuels).
The only federal court that has needed to construe this provision has stated that the term "ensure"
as used in EISA means "to make sure, [or] certain." Nat'l Petrochemical & Refiners Ass'n, supra,
630 F.3d at 153 (internal quotation marks and citations omitted); see also Nat'l Treasury
Employees Union v. Chertoff, 452 F.3d 839, 863 (D.C. Cir. 2006) (construing "ensure" under
other statute as mandatory). Congress has left EPA no room to effect a de facto reduction in the
domestic supply of biofuels when EPA adopts other regulations. EPA must "obey the Clean Air
Act as written by Congress." Natural Resources Defense Council v. EPA, 643 F.3d 311, 314
(D.C. Cir. 2011) (internal quotation marks and citation omitted). [EPA-HQ-OAR-2010-0799-
9505-A1, p. 4]
6-109
-------
EPA Response to Comments
As noted above, Attachment 2 to this letter provides further analysis of the treatment of FFVs in
the current rulemaking. If EPA decides not to reform the program outlined in the Joint NPRM to
conform with and to support the RFS 2 program, EPA must at a minimum address fully and in
detail each of the following questions, in order to explain why it has not done so: [EPA-HQ-
OAR-2010-0799-9505-A1, p. 4]
• EPA should explain how it expects the automobile industry and fuels providers to meet
the RFS 2 requirements within the framework of the regulations contained in the Joint
NPRM or in the Final Rule it adopts in this rulemaking;
• If EPA disagrees with Growth Energy's view that it is unrealistic to expect continued
significant production of FFVs after model year 2016 if the Joint NPRM's provisions are
adopted, the Agency should explain why;
• EPA should explain how it interprets the requirement to "ensure" the use of biofuels
under the statutory text of EISA (see 42 U.S.C. § 7545(o)(2);
• EPA should explain how the vehicle production plans and strategies assumed in the
regulatory analysis for the Joint NPRM will "ensure" that the country can meet the
volumetric mandates for biofuels in Title II of the 2007 Energy Act;
• If EPA believes that it is not obligated in the current rulemaking to take account of and
comply with its duty to ensure compliance with the biofuels mandate in EISA, EPA
should explain why it is not required to do so.; and
• EPA should explain whether the absence of an adequate domestic supply of biofuels
arising from reductions in the production and sale of FFVs could provide, in whole or in
part, a basis of a waiver of any part of the biofuels mandate in EISA. [EPA-HQ-OAR-
2010-0799-9505-A1, p. 5]
Because such an increase in octane cannot be accomplished by increases in gasoline aromatic
content without compromising the control of emissions other than GHG emissions, EPA should
evaluate increases in octane that rely on increases in ethanol content. Increased ethanol content
for gasoline to obtain higher octane levels, implemented in a manner consistent with the product
planning and validation cadences of the automobile industry and without disruption to existing
liquid transportation fuels delivery systems, would have a number of benefits for the public. By
enabling a greater mix of engine technologies to meet GHG reduction requirements on a fleet-
wide basis, the automobile industry might be able to reduce the costs of GHG reductions.
Carefully managed increases in ethanol content can also help reduce engine particulate
emissions. [EPA-HQ-OAR-2010-0799-9505-A1, pp. 5-6]
EPA's proposed greenhouse gas (GHG) emissions standard in the Joint Notice of Proposed
Rulemaking provides incentives for electric vehicles (EVs), plug-in hybrid electric vehicles
(PHEVs) and fuel cell vehicles (FCVs), but essentially eliminates incentives for flexible fuel
vehicles (FFVs). The incentives have no clear foundation in a relative comparison of the overall
GHG emissions or costs of each of these vehicles. EPA should undertake a thorough study of the
lifecycle emissions and total costs, including the cost of the refueling infrastructure of these
vehicles, in determining incentives. [EPA-HQ-OAR-2010-0799-9505-A1, p. 7]
The fact that vehicles operating on ethanol-blends can deliver significant GHG benefits can be
seen in the results of numerous studies. One straightforward study is a summary of "well to
6-110
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
wheels" analysis results published by the U.S. Department of Energy. Selected results from this
publication are summarized in Table 1. [Table 1 can be found on p. 10 of Docket number EPA-
HQ-OAR-2010-0799-9505-A1] [EPA-HQ-OAR-2010-0799-9505-A1, pp. 8-9]
There are several conclusions that can be drawn from the data shown in Table 1. The first of
these is that the use of E85 derived from corn6 or from cellulosic materials will reduce GHG
emissions by about 11% and 60%, respectively, relative to gasoline without the need for any
substantial change in a given vehicle technology. The second is that the use of E85 in hybrid
vehicles in the near term will result in substantially larger reductions relative to gasoline than
will EVs, PHEVs, and FCVs. The third is that the use of E85 derived from cellulosic feedstocks
in any FFV will yield larger reductions in GHG emissions than will be achieved with EVs,
PHEVs, or FCVs. [EPA-HQ-OAR-2010-0799-9505-A1, p. 9]
These data and similar data from other related studies, clearly indicate the potential for ethanol-
blends to provide "game-changing" reductions in GHG emissions without the need for the
fundamental changes in vehicle technology associated with EVs, PHEVs, and FCVs or the
fundamental changes in the technology used to generate electricity and hydrogen that would be
necessary in order for these vehicles to provide meaningful GHG reductions. [EPA-HQ-OAR-
2010-0799-9505-A1, p. 9]
Further evidence of the inappropriateness of providing incentives for EVs, PHEVs, and FCVs
while failing to do so for vehicles capable of operation on ethanol blends can be seen through
even a cursory examination of the costs associated with these vehicles, their fuels, and the
infrastructure required to supply those fuels. [EPA-HQ-OAR-2010-0799-9505-A1, p. 10]
Beginning with vehicle costs, as noted in the EPA proposal, "owners of ethanol FFVs do not pay
any more for the E85 fueling capability" that affords the potential for "game-changing"
reductions in GHG emissions. In contrast, although misguided subsidies and incentives may
affect the prices consumers pay, the actual incremental costs at a retail cost level for EVs,
PHEVs, and FVCs during the 2017 to 2025 time frame are expected to be thousands to tens of
thousands of dollars. That this will be the case can be easily seen in Table 2 presented below
which is taken (along with original footnotes) from a recently released California Air Resources
Board (CARB) rulemaking document. As shown, incremental costs for even subcompact
vehicles in 2025 are forecast by CARB to remain at levels from around $7,500 to $11,000. This
means that unlike the case with vehicles capable of operation on ethanol-blends, substantial costs
will have to be incurred before EVs, PHEVs, and FCVs can even be hoped to be capable of
providing "game-changing" reductions in GHG emissions. [Table 2 can be found on p. 11 of
Docket number EPA-HQ-OAR-2010-0799-9505-A1] [EPA-HQ-OAR-2010-0799-9505-A1, pp.
10-11]
Turning to the costs of fuel, the production costs of ethanol are well known for corn derived
ethanol and production costs for much lower carbon intensity ethanol produced from cellulosic
sources are ultimately expected to be similar or lower than those associated with production from
corn. The price of E85 and gasoline is expected to be similar to or lower than those associated
with petroleum based fuels over the 2017 to 2025 period based on the latest fuel price forecasts
from U.S. Energy Information Administration (EIA). Therefore, it does not appear that there will
6-111
-------
EPA Response to Comments
be a significant fuel price related disincentive to operate FFVs on fuels other than E85.
Moreover, as RFS volumes are ramped-up, as discussed in the next section, the additional
ethanol beyond E10 will need to go into the available on-road FFVs. Therefore, ethanol vehicles
do not have to overcome either vehicle price or fuel price barriers in order to provide "game-
changing" reductions in GHG emissions. [EPA-HQ-OAR-2010-0799-9505-A1, p. 12]
Turning finally to the cost of refueling infrastructure, there will be costs associated with the
development of a widespread distribution infrastructure for higher ethanol blends. However, that
infrastructure will be integrated into the existing transportation fuel infrastructure in the U.S. and
not require revolutionary changes to that infrastructure. Further, as ethanol blends will displace
petroleum fuels, the capacity of the existing infrastructure will remain relatively constant. [EPA-
HQ-OAR-2010-0799-9505-A1, p. 13]
In contrast, EPA has elected not to provide to incentives for vehicles capable of operating on
ethanol blends despite the fact that they can provide "game changing" reductions in GHG
emissions by being used in what are essentially conventional vehicles with little incremental cost
for either the vehicles or the fuels using an existing refueling infrastructure that needs only to be
modified to a fairly limited degree. [EPA-HQ-OAR-2010-0799-9505-A1, p. 15]
Given the above, it is clear that EPA's policy on providing incentives under the GHG regulation
makes little sense and must be modified to provide incentives for the use of ethanol blends that
are at least commensurate with those provided with much less certain and much more expensive
technologies. [EPA-HQ-OAR-2010-0799-9505-A1, p. 15]
EPA's current GHG proposal would have the effect of eliminating any meaningful incentives for
vehicle manufacturers to produce flexible fuel vehicles (FFVs) capable of operation on both
gasoline and ethanol for the 2016 and later model years. FFVs are the backbone of the federal
Renewable Fuel Standard (RFS), as they are expected to consume most of the ethanol that is
produced to meet the RFS after the onroad fleet is all operating on E10, a blend of 90% gasoline
and 10% ethanol by volume. One important goal of the RFS program is to help the United States
do its part to control GHG emissions. If vehicle manufacturers stop selling FFVs after 2016, the
GHG benefits of the RFS program will be lower than currently anticipated. To address this
potential problem, Growth Energy recommends that EPA/NHTSA develop and permit the use of
E85 "usage factors" for FFVs utilizing volumes of ethanol projected by the U.S. Energy
Information Agency, so that vehicle manufacturers can decide when developing their product
plans whether to provide FFVs, and to create incentives for the manufacturers to do so. In these
comments, we lay out a reasonable method of projecting these usage factors. [EPA-HQ-OAR-
2010-0799-9505-A1, p. 16]
FFVs typically have GHG emissions on E85 that are approximately 5% below the GHG
emissions on EO, but this can vary between 3-6%. [EPA-HQ-OAR-2010-0799-9505-A1, p. 16]
Automakers currently sell FFVs because they receive fuel economy and GHG credits for these
vehicles under EPA/NHTSA credit provisions, at least through model year 2015. Automakers
can receive up to 1.2 miles per gallon in fuel economy credit against the applicable NHTS A
6-112
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
CAFE standards through 2014. After 2014, this credit declines by 0.2 mpg per year until it is
fully phased out in 2020. [EPA-HQ-OAR-2010-0799-9505-A1, p. 16]
EPA's GHG emission standards between 2012 and 2015 are consistent with the NHTSA fuel
economy credit. EPA's current rules for GHG emissions for 2016 model year FFVs, and its
proposal for 2017 and later FFVs are found in the following discussion: [EPA-HQ-OAR-2010-
0799-9505-A1, p. 16]
Beginning in MY 2016, EPA ended the GHG emissions compliance incentives and adopted a
methodology based on demonstrated vehicle emissions performance. This methodology
established a default value assumption where ethanol FFVs are operated 100 percent of the time
on gasoline, but allows manufacturers to use a relative E85 and gasoline vehicle emissions
performance weighting based on either national average E85 and gasoline sales data, or
manufacturer-specific data showing the percentage of miles that are driven on E85 vis-a-vis
gasoline for that manufacturers' ethanol FFVs. EPA is not proposing any changes to this
methodology for MYs 2017-2025. [EPA-HQ-OAR-2010-0799-9505-A1, p. 17]
Regarding current national average E85 use by FFVs, EPA states:
The data confirm that, on a national average basis for 2008, less than one percent of the ethanol
FFVs used E85. [EPA-HQ-OAR-2010-0799-9505-A1, p. 17]
The reason for the low adoption rate of E85 is that the E10 market was the first to consume all
the available ethanol. Only now do we have more ethanol supply than is needed for E10 demand,
so adoption rates should increase. [EPA-HQ-OAR-2010-0799-9505-A1, p. 17]
The vast majority of FFVs are sold to the general public (and not fleets that may have more
control over fuel type), and it would be very difficult for manufacturers to determine the fraction
of use on E85 for these vehicles. Under either current EPA requirements for 2016 vehicles or the
proposed EPA requirements for 2017 and later vehicles, manufacturers would have to certify
FFVs on 100% gasoline, or under the EPA proposal, use some national average E85 use, which
as EPA indicates is still quite low. Since FFVs have a non-zero cost, but are assumed to have
zero or very near zero benefit under either California or EPA requirements, the chances of
automakers providing FFVs after 2016 is also zero, or near zero. [EPA-HQ-OAR-2010-0799-
9505-A1, p. 17]
EPA expected that when they required model year 2016 FFVs to demonstrate use on E85, that
this would provide incentive for automakers to optimize their FFVs on E85: However, if a
manufacturer can demonstrate that a portion of its FFVs are using an alternative fuel in use, then
the FFV emissions compliance value can be calculated based on the vehicle's tested value using
the alternative fuel, prorated based on the percentage of the fleet using the alternative fuel in the
field... .EPA believes this approach will provide an actual incentive to ensure that such fuels are
used. The incentive arises since actual use of the flexible fuel typically results in lower tailpipe
GHG emissions than use of gasoline and hence improves the vehicles' performance, making it
more likely that its performance will improve a manufacturers' average fleetwide performance.
Based on existing certification data, E85 FFV CO2 emissions are typically about 5 percent lower
6-113
-------
EPA Response to Comments
on E85 than CC>2 emissions on 100 percent gasoline. Moreover, currently there is little incentive
to optimize CC>2 performance for vehicles when running E85. EPA believes the above approach
would provide such an incentive to manufacturers and that E85 vehicles could be optimized
through engine redesign and calibration to provide additional CC>2 reductions. [EPA-HQ-OAR-
2010-0799-9505-A1, pp. 17-18]
Manufacturers typically utilize at least a four-year lead-time in designing vehicles, therefore, in
2012 most manufacturers are working with the 2016 model year. While such an approach as
outlined by the EPA above could provide incentive for manufacturers to optimize 2016 model
year FFVs on E85, if they have no idea or guidance from the EPA what E85 use could be in
2016, and current use is close to zero, then it does not matter how much they optimize FFVs on
E85, a larger GHG benefit times a current zero usage factor is still zero. [EPA-HQ-OAR-2010-
0799-9505-A1, p. 18]
While current E85 refueling frequencies are quite low, EPA is counting on FFVs to use a
significant amount of E85 due to the Renewable Fuel Standard requirements, which expand
biofuel use in the U.S. to 36 billion ethanol equivalent gallons per year by calendar year 2022.
EPA projected a range of ethanol volumes in the RFS, a "low", "mid" and "high". Figure 1.7-11
from the RFS Regulatory Impact Analysis shows necessary FFV E85 refueling rates in the future
with the RFS. In 2016, FFV E85 refueling rates are between 38% and 55%, and increase to 40%
to 70% by 2020. [EPA-HQ-OAR-2010-0799-9505-A1, p. 18]
The E85 refueling rates shown in Figure 1 were estimated by EPA with the 2012-2016 GHG
emission standards, but without the 2017-2025 GHG emission standards. If the 2017-2025 GHG
emission standards were included, the E85 refueling rates would be higher than shown in Figure
1. For model year 2016, Figure 1 implies E85 usage factors of between 40-50%. The usage
factors between for model years 2017-2020 would be higher because the fuel economy of the
2017-2020 model year vehicles would be higher than was used by EPA to produce Figure
1. [Figure 1 can be found on p. 19 of Docket number EPA-HQ-OAR-2010-0799-9505-
Al] [EPA-HQ-OAR-2010-0799-9505-A1, p. 18]
Figure 2 shows the Energy Information Agency's projection of ethanol volume in the AEO2011
forecast. We also show the ethanol volume predicted in the latest AEO2012 Early Release
forecast. EIA's 201 Iforecast is very close to EPA's mid level case through 2023, and then goes
much higher than the EPA mid case. The early release 2012 forecast is between the low case and
the mid case prior to 2028, and higher than EPA's mid case after then. [Figure 2 can be found on
p. 20 of Docket number EPA-HQ-OAR-2010-0799-9505-A1] [EPA-HQ-OAR-2010-0799-9505-
Al,p. 19]
Figure 3 shows FFV fractions of the national on-road car + LDT fleet from 2010 through 2030
with two assumptions - that FFV sales would continue at about 23% from 2012 on, and that FFV
sales stop in 2016. In 2020, if FFV sales continue, then 25% of the on-road fleet would be FFVs.
Alternatively, if FFV sales stop in 2016, then only 12% of the fleet would be FFVs in 2020.
Clearly, if FFV sales stop in 2016, it may be difficult for the FFV fleet to absorb RFS ethanol
volumes. [Figure 3 can be found on p. 21 of Docket number EPA-HQ-OAR-2010-0799-9505-
Al] [EPA-HQ-OAR-2010-0799-9505-A1, p. 20]
6-114
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
EPA's RFS benefits analysis depends on E85 being consumed to claim GHG benefits under
these rules. And yet, EPA is not rolling these use projections into its guidance on FFVs to the
manufacturers so they can continue to build FFVs to support the RFS. Thus, EPA should either
provide guidance to the manufacturers on likely E85 use in the 2016-2025 timeframe, or EPA
should downgrade the GHG benefits of the RFS due to lack of availability of FFVs, and charge
these benefit downgrades against their current GHG proposal. [EP A-HQ-OAR-2010-0799-9505-
Al,p.21]
Growth Energy therefore recommends that EPA develop new default projections of E85 use
based on EPA's projections of overall ethanol volumes that will be required under EISA. These
projections should also incorporate the Agencies' new fuel economy levels for 2017-2025. The
projections should be provided to the auto industry as usage factors so that they can make a clear
determination of whether to optimize FFVs on E85 and whether to continue building FFVs after
model year 2015. A further projection to calendar year 2025 can be made around calendar year
2016. [EPA-HQ-OAR-2010-0799-9505-A1, p. 21]
Growth Energy's proposal would provide for a certification and in-use fuel for 2017 and later
vehicles with an octane value of 94, accomplished with E30 instead of E10. This fuel would only
be intended for the 2017+ vehicles, and not the legacy fleet (2016 and earlier), although legacy
FFVs could also use it if doing so was consistent with the vehicle manufacturers' instructions or
recommendations to owners and approved by the Agencies on that basis. The non-FFV legacy
fleet (i.e., Tier 1, Tier 2, and LEVs in Section 177 states) would continue to operate on
E10. [EPA-HQ-OAR-2010-0799-9505-A1, p. 22]
It is important that the increase in octane be accomplished with ethanol and not other gasoline
blending components because of ethanol's many advantages relative to the other high octane
blending components as explained below. Ethanol has a very high octane number relative to
other gasoline hydrocarbons, has a lower carbon content than the gasoline components it
generally replaces, and has many other benefits that assist in combustion to increase engine
efficiency and reduce both tailpipe GHG and criteria pollutant emissions. The use of a 94 octane
E30 blend for 2017+ vehicles would also provide additional GHG and PM emission reductions
in the U.S., greater than could be achieved by the current Agencies' proposal. We note that some
vehicle manufacturers have also requested that EPA study higher octane fuels as a part of the
GHG program, and have also recommended continued control of multi-substituted alkyl
aromatics, since they can lead to increased HC and PM emissions. [EPA-HQ-OAR-2010-0799-
9505-A1, pp. 22-23]
C. Increased ethanol use can decrease PM emissions
There is substantial evidence that increased ethanol use will reduce PM mass and number
emissions from the vehicle fleet. Szybist et al., 2011 also summarize recent literature for ethanol
effects in production engines:
A number of investigations have examined the effect of ethanol content on particle emissions in
vehicles. Storey et al. found that blends of 10 and 20% ethanol in gasoline (E10 and E20)
decreased particle number emissions during vehicle drive cycles, with the 20% blend decreasing
6-115
-------
EPA Response to Comments
particles by about 40% during the high-load US06 vehicle drive cycle. In comparison to
gasoline, He et al. found a 20% reduction in particle emissions with E20 but no change with
E10. Khalek and Bougher showed that E10 increased particle emissions compared to two
different gasoline formulations, both with higher volatility than the E10. This work showed the
importance of the hydrocarbon fraction of the E10 blend and suggests that the heavier
hydrocarbons used to control vapor pressure of E10 may also increase particulate emissions.
Aakko and Nylund found that the particle mass emissions from 85% ethanol (E85) were
comparable to those with gasoline in a PFI vehicle but that DI (direct injection) fueling with
gasoline produced particle emissions that were an order of magnitude higher, (reference
numbers omitted) [EPA-HQ-OAR-2010-0799-9505-A1, p. 26]
The Szybist et al. study investigated the effects of fuel type, fueling strategy, and engine
breathing strategy on particle emissions in a flexible spark ignited engine that was designed for
optimization with ethanol. They report:
When DI fueling is used for gasoline and E20, the particle number emissions are increased by 1
to 2 orders of magnitude compared to PFI fueling, depending upon the fuel injection timing. In
contrast, when DI fueling is used with E85, the particle number emissions remain low and
comparable to PFI fueling. Thus, by using E85, the efficiency and power advantages of DI
fueling can be gained without generating the increase in particle emissions observed with
gasoline and E20. The main finding of the study is that use of E85 results in 1 to 2 orders of
magnitude reduction in particle emissions relative to sDI (spray-guided DI) fueling with gasoline
and E20. Furthermore, sDI particle emissions with E85 are similar to that for PFI fueling with
gasoline. Thus, an increase in particle emissions beyond that of PFI engines can be prevented
while gaining the efficiency of DI engines using E85. [EPA-HQ-OAR-2010-0799-9505-A1, p.
27]
Storey et al., 2010 characterized the emissions, including PM and aldehydes, from a U.S. legal
stoichiometric direct injected spark ignited (DISI) vehicle operating on EO, E10, and E20. The
PM emissions were characterized for mass, size, number concentration and OC-EC (organic
carbon-elemental carbon) content. The DISI particle number-size distribution curves were
similar in shape to light-duty diesel vehicles without Diesel Particle Filters, but had lower overall
particle number and mass emissions. The aggressive US06 transient cycle had much higher PM
mass emissions in comparison to the PM mass emission observed for the FTP. With respect to
added ethanol, Storey et al. concluded: [EPA-HQ-OAR-2010-0799-9505-A1, p. 27]
Ethanol blends reduced the PM mass and number concentration emissions for both transient and
steady-state cycles. By increasing the ethanol blend level from EO to E20, the average mass
emissions declined 30% and 42% over the FTP and US06, respectively. Measurements during
hot cycle transient operation demonstrated that E20 also lowered particle number concentrations.
The adoption of small displacement, turbocharged DISI engines into the U.S. fleet is likely to
continue in the future, and the results of this study suggest that increasing ethanol blend levels in
gasoline will lower DISI PM emissions. In addition, increasing ethanol content significantly
reduced the number concentration of 50 and 100 nm particles during gradual and wide open
throttle (WOT) accelerations. [EPA-HQ-OAR-2010-0799-9505-A1, p. 27]
6-116
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
Maricq et al., 2012 tested a light-duty truck equipped with a 3.5-L V6 gasoline turbocharged
direct injection engine that is representative of current GDI products, but contained prototype
elements that allowed changes in engine calibrations. Because PM formation in GDI engines is
sensitive to a number of operating parameters, two engine calibrations were examined to gauge
the robustness of the results. The study used four fuels: certification test gasoline (EO), a
commercial E10 fuel similar to that expected for future certification, a commercial pump grade
E10, and a commercial E100 fuel used for blending. E100 and EO were splash-blended to
produce E17, E32, and E45 fuels. Maricq et al. report: [EPA-HQ-OAR-2010-0799-9505-A1, pp.
27-28]
As the ethanol level in gasoline increases from 0% to 20%, there is possibly a small (<20%)
benefit in PM mass and particle number emissions, but this is within test variability. When the
ethanol content increases to >30%, there is a statistically significant 30%-45% reduction in PM
mass and number emissions observed for both engine calibrations. [EPA-HQ-OAR-2010-0799-
9505-A1, p. 28]
The results reported by Zhang are also particularly informative. The key results are shown in
Figure 1 below. In this testing, a 2008 FFV was tested on a hot Unified Cycle on E6, E35, E65,
and E85. Ethanol appears to have caused a large reduction in PM emissions (an particularly PN)
from E6 to E35, with further PM reductions as ethanol concentration increased. However, the
most significant PM and PN reductions are between E6 and E35. [Figure 1 can be found on p. 29
of Docket number EPA-HQ-OAR-2010-0799-9505-A1] [EPA-HQ-OAR-2010-0799-9505-A1,
p. 28]
Thus, there are now a substantial number of studies showing that ethanol blends of 20% and
higher reduce PM mass and number emissions in a variety of engines and vehicles. [EPA-HQ-
OAR-2010-0799-9505-A1, p. 29]
In addition to the evidence that increased ethanol use will reduce PM mass and number, the
Agencies acknowledge that the proposal will increase the fraction of the U.S. fuel supply that is
made up of renewable fuels. The proposal indicates:
For the purposes of this emission analysis, we assume that all gasoline in the timeframe of the
analysis is blended with 10 percent ethanol (E10). However, as a consequence of the fixed
volume of renewable fuels mandated in the RFS2 rulemaking and the decreasing petroleum
consumption predicted here, we anticipate that this proposal would in fact increase the fraction
of the U.S. fuel supply that is made up by renewable fuels. [EPA-HQ-OAR-2010-0799-9505-A1,
p. 29]
C. The Ramp-up of Low CI Ethanol and Additional GHG Reductions
For the RFS, EPA estimates that ethanol from cornstarch peaks at 15 bgy in 2014. Additional
increases in ethanol volumes are projected to come from advanced ethanol and cellulosic
ethanol. Advanced ethanol is required to have a 50% reduction in lifecycle GHG emissions from
gasoline, and cellulosic ethanol is required to have a 60% reduction in lifecycle emissions from
6-117
-------
EPA Response to Comments
gasoline. These additional volumes currently are projected to go into FFVs. [EPA-HQ-OAR-
2010-0799-9505-A1, p. 35]
The ethanol volumes produced above E10 level could go into the 2017 and later vehicle fleet as
E30, and additional ethanol volumes (as E85 or E3), would go into FFVs. The amount of ethanol
needed for the 2017 and later model year vehicles would slowly build as these vehicles are
introduced. These advanced and cellulosic volumes would increase steadily until the on-road
fleet is fully turned over to 2017 and later vehicles. [EPA-HQ-OAR-2010-0799-9505-A1, p. 35]
Figure 2 shows the allocation of ethanol into different fleet sectors, assuming the AEO2011
volumes. This figure was developed using a fuel consumption model for the passenger car and
LDT fleet, which was adjusted to include the effects of the 2012-2016 regulations and the 2017-
2025 proposed rule. The decision priority for the use of ethanol was: [Figure 2 can be found on
p. 36 of Docket number EPA-HQ-OAR-2010-0799-9505-A1]
• E30 in 2017+ vehicles first
• E10 in legacy fleet, including FFVs
• E85 in FFVs (if E30 were used, refueling frequency with E30 would be higher) [EPA-
HQ-OAR-2010-0799-9505-A1, p. 35]
During the 2005 to 2010 period, E10 is ramping up in the fleet. Between 2010 and 2015, E85 use
starts to increase. In the 2015-2020 period, E30 use starts in the 2017 and later fleet. This directly
affects the frequency of E85 use in the FFVs. E10 volumes start to decline because the fleet is
more fuel efficient, and vehicles using E10 (2016 and earlier) are declining in population.
Between 2020 and 2025, E30 use is expanding rapidly, and E10 and E85 use continues to decline
(although E30 could be used in FFVs as well). In 2030, E30 use is still increasing, and E10 use
and E85 use are low by comparison. [EPA-HQ-OAR-2010-0799-9505-A1, p. 36]
We performed the same analysis for the AEO2012 Early Release values, and the E30 fleet did
not utilize all of the ethanol from the FFVs, indicating expected available supplies of
ethanol. [EPA-HQ-OAR-2010-0799-9505-A1, p. 36]
The addition of 20% more ethanol into E10 to boost octane value is expected to reduce the price
of the blend relative to regular E10, not increase it. Table 4 shows average octane values for
three octane blending components (alkylate, toluene, and ethanol) averaged over the period from
January 2007 through February 2012. These values are determined by the bulk market price
(Gulf Coast) of each component divided the blending octane of each component. For example, if
ethanol is priced at 26 cents over unleaded gasoline and ethanol has a 113 blending octane, then
the octane value of ethanol would be 26 cents divided by 26 (113 ethanol octane less 87
unleaded gasoline octane) or 1 cent per ethanol octane number. [EPA-HQ-OAR-2010-0799-
9505-A1, p. 36]
The results show that ethanol is the cheapest octane blending component, and that the addition of
ethanol reduces the price of the blend, and does not increase it like the other blending
components. [See chart on p. 37 of Docket number EPA-HQ-OAR-2010-0799-9505-A1] [EPA-
HQ-OAR-2010-0799-9505-A1, p. 37]
6-118
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
In Figure 3 we evaluated Ethanol, Alkylate and Toluene as components in a gasoline blend. We
focused on formula octane as the sole value of each component, similar to a refiner evaluation of
a commercially available stream. The solid black line represents the commercial gasoline value
of octane as represented in the market by the relative cost of premium 93 FON conventional
gasoline versus regular 87 FON conventional gasoline in the Gulf Coast spot bulk market. This is
a good benchmark of octane value to a refiner as they optimize the mix of premium versus
regular gasoline they make relative to the properties of the blending components they produce or
purchase. The remaining lines represent Alkylate, Ethanol and Toluene. Over the entire period,
ethanol is the least expensive octane blending component. [Figure 3 can be found on p. 37 of
Docket number EPA-HQ-OAR-2010-0799-9505-A1] [EPA-HQ-OAR-2010-0799-9505-A1, p.
37]
Ethanol has several properties that make it very desirable blendstock with gasoline. These were
discussed in a paper referred to earlier. [EPA-HQ-OAR-2010-0799-9505-A1, p. 38]
The high octane of ethanol allows the use of higher compression ratios, particularly in dedicated
ethanol vehicles. The high heat of vaporization produces a charge cooling effect, which is
particularly effective with direct injection engines that can again allow higher compression
ratios. This effect is enhanced by the increased volume of fuel that is required to compensate for
the lower energy content of ethanol. Even when a vehicle is not optimized to take advantage of
some of ethanol's attributes, the higher octane and faster flame propagation speeds for ethanol
result in increased efficiency (miles per BTU of energy present in the fuel used) for high ethanol
blends relative to gasoline. [EPA-HQ-OAR-2010-0799-9505-A1, p. 38]
The paper goes on to show that there is an approximate 2% efficiency gain for E85 in 2010 FFVs
on E85, which are not optimized on E85 but on EO, and some companies are able to do better
than this across their portfolio. [EPA-HQ-OAR-2010-0799-9505-A1, p. 38]
A second study by Delphi examined changes in performance and efficiency on an engine
equipped with gasoline direct injection and other control technologies at different
gasoline/ethanol blend levels. The study investigated methods of improving fuel consumption
when fueled with E85. [EPA-HQ-OAR-2010-0799-9505-A1, p. 38]
The benefit of the improved strategies for reducing the disparity between fuel consumption with
gasoline and E85 is almost entirely offset on the FTP city cycle but is less effective as the
demands of the driving conditions increase. At highway cruise speeds the shift schedule has no
effect since the vehicles is in overdrive in all cases, only the benefits of the lower final driver
ratio and the engine modifications are evident. [EPA-HQ-OAR-2010-0799-9505-A1, p. 38]
The paper then goes on to discuss the potential benefits of lower ethanol blends: [EPA-HQ-
OAR-2010-0799-9505-A1, p. 38]
It is also important to consider that many of the techniques used to improve performance on E85
would also improve fuel consumption with gasoline or lower ethanol blends. Differences will
show up more in performance and may need a shift schedule dependent on the ethanol blends
torque capability. Ethanol blends from near E20 provide a good compromise, enabling most of
6-119
-------
EPA Response to Comments
the performance of an E85 blend with a significantly reduced energy penalty. Blends in this
range would likely be able to offset the fuel density penalties with improved efficiency while
providing superior performance to gasoline. [EPA-HQ-OAR-2010-0799-9505-A1, pp. 38-39]
The above discussions highlight the need to focus more on the power density of ethanol (power
per unit volume) rather than the energy density (heat content per unit volume). When automakers
can optimize on a particular ethanol blend, they are able to take increased advantage of ethanol's
power density as opposed to its energy density, thereby improving vehicle fuel economy and
extending vehicle range between refills. Much additional research is taking place in this area
which will be released in the coming months. [EPA-HQ-OAR-2010-0799-9505-A1, p. 39]
1 California's own version of a biofuels strategy, its "low-carbon fuel standards" regulation, will
be infeasible unless the California new-vehicle market can somehow absorb large numbers of
pure electric and grid-connected hybrid electric vehicles.
6 The DOE values provided for corn ethanol did not include indirect land use effects. Growth
Energy does not believe current analytical models and data permit reliable estimation of indirect
land use effects for Midwest corn ethanol, particularly in regulatory settings. For purposes of this
analysis, however, the values shown in Table 1 use the latest version of GREET (GREET2011)
was used to estimate a lifecycle GHG emission rate for corn ethanol that included indirect land
use effects, which was then used to adjust the DOE corn ethanol values relative to those for
gasoline.
7 The 11% reduction using GREET is conservative. EPA, in its RFS RIA, estimated a 20%
reduction for the average corn ethanol dry mill in calendar year 2022.
Organization: Minnesota Department of Commerce
However, I have serious concerns regarding unintended, yet detrimental consequences for the
energy diversity and economic opportunity needed to most effectively accomplish stated goals.
The proposed rule is inconsistent with the 2007 Energy Independence and Security Act (EISA)
which requires the use 36 billion gallons of renewable fuels by 2022 and the national Renewable
Fuel Standard (RFS2). [EPA-HQ-OAR-2010-0799-7363-A1, p. 1]
The proposed rule, in effect, selects one technology pathway - vehicles powered by electric
motors - as the national powertrain. 1) Due to difficulty anticipated for certifying use of
renewable fuels in vehicles under anticipated new Tier III vehicle emission regulations; and 2)
the elimination of vehicle use credits until renewable fuel use is increased by RFS2; 3) the
opportunity to use renewable fuels as a means to reduce greenhouse gas emissions and reduce
consumption of oil may be effectively eliminated. [EPA-HQ-OAR-2010-0799-7363-A1, p. 1]
6-120
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
In keeping with goal to and further reduce greenhouse gas emissions and reduce oil
consumption, include the role of EISA and RFS2 in the proposed rule. [EPA-HQ-OAR-2010-
0799-7363-A1, p. 1]
Organization: National Alliance of Forest Owners (NAFO)
While NAFO does not take issue with or seek to challenge the stringency of the actual fuel
economy standards that the Agencies propose to impose on light-duty vehicles, NAFO does seek
to ensure that government rulemakings reflect the role that woody biomass can play in achieving
our nation's climate goals and appropriately encourage the use of this climate beneficial fossil
fuel alternative. As described below, the climate benefits of woody biomass, which derive from
the natural carbon cycle, are well-established and have already been recognized in a number of
EPA policies. Moreover, woody biomass-based alternative fuels - and all biofuels - is an
important part of this administration's "all-out, all-of-the-above strategy" to achieving energy
security and energy independence. [EPA-HQ-OAR-2010-0799-9481-A1, p.2]
As the Agencies complete and ultimately implement this rulemaking, we urge them to seize
opportunities to encourage the use of climate-beneficial woody biomass-based alternative fuels.
Specifically, we urge the Agencies to 1) develop a science-based method for quantifying the
climate benefits of woody biomass-based alternative fuels as compared to fossil fuels; and 2)
apply the method immediately in model year 2017 or, alternatively, state in the preamble to the
final rule that the Agencies will use the method in the mid-term evaluation following the
completion of other ongoing assessments of the carbon benefits of biomass and biofuels. This
will provide a credible approach for incorporating the carbon benefits of woody biomass-based
alternative fuels into the Corporate Average Fuel Economy ("CAFE") Standard that does not
presently appear to exist. [EPA-HQ-OAR-2010-0799-9481-A1, p.2]
I. Forest biomass is an important renewable fuel source leading to lower GHG lifecycle
emissions than conventional fuels [EPA-HQ-OAR-2010-0799-9481-A1, p.2]
Wood from sustainably managed forests provides a renewable, low-carbon alternative to fossil
fuels. According to U.S. Energy Information Administration ("EIA") data, biomass already
supplies more than 50% of the nation's renewable energy.1 Forests can provide ample
sustainable, domestic supplies of biomass to produce liquid transportation fuels, electricity,
thermal energy (heat and power for manufacturing and other industrial uses), and synthetic
natural gas.2 [EPA-HQ-OAR-2010-0799-9481-A1, p.2]
When evaluating the GHG emissions associated with fuels, a lifecycle analysis incorporates all
steps in a "product system" to evaluate broader environmental impacts of products and
processes. Using forest biomass as a renewable fuel source has significant carbon benefits
because its lifecycle analysis GHG emissions are more favorable than those of petroleum and
other fossil fuels. For example, the Department of Energy ("DOE") estimates that "[c]ellulosic
ethanol use could reduce GHGs by as much as 86%."3 In addition, EPA has determined, in
conjunction with its Renewable Fuel Standard Program, that the lifecycle GHG emissions
reductions associated with cellulosic ethanol may be as much as 92.7 percent.4 Lifecycle
analyses of biomass feedstocks used for electricity generation have produced similar results.5
6-121
-------
EPA Response to Comments
Thus the prevailing science - in both the public and private sectors - acknowledges the
significant carbon benefits of energy produced using renewable biomass from managed forests.
[EPA-HQ-OAR-2010-0799-9481-Al,p.3]
II. The combustion of forest biomass is part of the ongoing carbon cycle [EPA-HQ-OAR-2010-
0799-9481-Al,p.3]
The prevailing view in the science community is that, when forests are managed sustainably,
CC>2 emissions from forest biomass are part of the natural carbon cycle and are balanced by
carbon sequestration as forests grow. In other words the carbon that enters the atmosphere when
forest biomass is combusted was previously absorbed from the atmosphere by the forest biomass
and will be reabsorbed when new biomass is growth. [EPA-HQ-OAR-2010-0799-9481-A1, p.3]
As EPA has concluded, there is "[scientific consensus . . . that the CO2 emitted from burning
biomass will not increase total atmospheric CC>2 if this consumption is done on a sustainable
basis."6 Recognizing that CC>2 emissions from biomass combustion are inextricably tied to the
forests where biomass is grown, EPA follows international convention and does not include
emissions from biomass combustion in its national emissions totals.7 Instead, EPA accounts for
CC>2 emissions from biomass combustion by measuring changes in forest carbon stocks over
time, recognizing that there is no net climate impact as long as forest carbon stocks are stable or
increasing.8 Similarly, DOE's Voluntary Reporting of Greenhouse Gases Program, authorized by
Section 1605(b) of the Energy Policy Act of 1992, provides for exclusion emissions from the
combustion of biomass fuels.9 [EPA-HQ-OAR-2010-0799-9481-A1, pp.3-4]
More recently, EPA has affirmed the climate benefits of biomass energy combustion when
compared fossil fuels by reconsidering its treatment of biogenic CC>2 emissions under the
Prevention of Significant Deterioration ("PSD") and Title V Programs.10 Recognizing that
imposing regulatory burdens on the biomass energy sector would discourage development of this
important renewable fuel supply, EPA has deferred regulation of CO2 emissions from stationary
sources for three years while it seeks to identify a method to quantify the climate benefits offered
by biomass energy.11 EPA has also convened a Biogenic Carbon Emissions Panel under the
auspices of the Science Advisory Board to provide advice and recommendations as EPA
completes the reconsideration process.12 That process is ongoing, and NAFO is encouraged that
the SAB will offer recommendations and conclusions that continue to affirm the strong climate
benefits of biomass as a carbon neutral renewable energy source. [EPA-HQ-OAR-2010-0799-
9481-Al,p.4]
EPA has consistently recognized the climate benefits of biomass energy and should remain
committed to a regulatory approach that recognizes the climate benefits that bioenergy and
biofuel producers provide in relation to fossil fuels. Similarly, EPA must ensure that the
treatment of biofuels under this proposed rule is consistent with its overarching regulatory
approach. [EPA-HQ-OAR-2010-0799-9481-A1, pp.4-5]
III. The promotion of renewable energy is a national policy that the Agencies must follow [EPA-
HQ-OAR-2010-0799-9481-A1, p.5]
6-122
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
As described above, forests and forest products can play an important role in reducing and
managing GHG emissions. Expanding the sources of renewable energy is a central feature of
both national and international policy to reduce reliance on fossil fuels. [EPA-HQ-OAR-2010-
0799-9481-Al,p.5]
EPA, in considering approaches toward addressing climate change, has long recognized that
responsibly managed forests are considered one of five key "groups of strategies that could
substantially reduce emissions between now and 2030."13 Similarly, the United Nation's
Intergovernmental Panel on Climate Change ("IPCC") report on mitigation technologies
highlights forest management as a primary tool to reduce GHG emissions.14 In fact EIA projects
that biomass energy will account for 30% of the growth in electricity produced by renewable
fuels between now and 2035.15 [EPA-HQ-OAR-2010-0799-9481-A1, p.5]
President Obama has repeatedly emphasized that renewable energy derived from feedstocks such
as forest biomass hold the key to transitioning the nation to a "sustainable, low carbon energy
future."16 Recognizing the benefits of all types of biomass, he recently stated that "another
substitute for oil that hold tremendous promise is renewable biomass - not just ethanol, but
biofuels made from things like switchgrass and wood chips and biomass."17 And in last month's
State of the Union Address the President advocated an "all-out, all-of-the-above strategy that
develops every available source of American energy," specifically referencing a "clean energy
standard" that would encourage the development of clean renewable energy including biomass
fuels.18 [EPA-HQ-OAR-2010-0799-9481-A1, pp.5-6]
With Presidential endorsement, if not direction, of national renewable energy policy and the role
of biomass in that policy, the Agencies must conduct their programs in a manner consistent with
that policy. In light of this policy, the Agencies must ensure that their regulations appropriately
encourage the use of woody biomass-based fuels as clean, renewable alternatives to fossil fuels
by distinguishing between GHG emissions from each source. While the proposed rule does
provide preferential treatment to ethanol as an alternative fuel, the regulations would further
benefit from the development of a science-based method that quantifies the climate benefits of
woody biomass-based alternative fuels. [EPA-HQ-OAR-2010-0799-9481-A1, p.6]
IV. The Agencies should develop and implement a science-based method to account for the
climate benefits of woody biomass-based alternative fuels [EPA-HQ-OAR-2010-0799-9481-A1,
p.6]
Although the proposed fuel economy standards apply to manufacturer vehicle fleets and do not
apply directly to consumers' fuel purchases, they can still reflect the climate-benefits of woody
biomass-based alternative fuels, whether used in dedicated biofuel vehicles or in flexfuel
vehicles. For example, as recognized in the proposed rule, the CAFE Standards calculations for
flex fuel vehicles are currently governed by 49 U.S.C. § 32905, which assumes that alternative
fuels are used 50 percent of the time in flex-fuel vehicles and treats each gallon of alternative
liquid fuel as the equivalent of 0.15 gallons of gasoline. Thus, flex fuel vehicles - and ethanol -
based fuels - are currently encouraged by discounting biogenic CO2 emissions in comparison to
fossil fuel CO2 emissions. However, the 0.15 divisor applies equally to all alternative liquid fuels
and is not directly related to the carbon benefits of the alternative fuel. Indeed, it may even
6-123
-------
EPA Response to Comments
underestimate the climate benefits of some alternative fuels such as cellulosic ethanol. [EPA-
HQ-OAR-2010-0799-9481-A1, p.6]
As noted in the proposed rule, these special calculation procedures in 49 U.S.C. § 32905 are
being phased out and will expire entirely for model year 2020 vehicles. We agree with the
Agencies that the light-duty vehicle rule should continue to encourage the use of clean,
renewable, alternative fuels such as cellulosic ethanol even after the statutory mandate expires in
2020. It should not treat woody biomass-based and fossil fuels equally. Thus we support the
Agencies' proposal to continue to discount CC>2 emissions from alternative fuels as compared to
fossil fuel CC>2 emissions. But rather than uniformly applying a 0.15 divisor to all alternative
liquid fuels, the Agencies should develop a science-based method that quantifies the climate
benefits of each alternative fuel and provide proper incentives for each alternative liquid fuel in
comparison to traditional fossil fuels and each other. [EPA-HQ-OAR-2010-0799-9481-A1, pp.6-
7]
To the extent that either Agency has the opportunity to deviate from the statutory requirements
of 49 U.S.C. § 32905, now or in the future, it should adopt an approach that is grounded in
science. Since the 0.15 divisor was enacted in 1994, there have been numerous studies of the
climate benefits of biomass and EPA has engaged in efforts to quantity the climate benefits
associated with biomass energy. Two recent examples include a life cycle analysis of cellulosic
ethanol completed in conjunction with the RFS2 program and EPA's ongoing reconsideration of
biogenic CC>2 emissions from stationary sources which is currently under review by the Science
Advisory Board Biogenic Carbon Emissions Panel. Each of these programs offer a means to
quantify the climate benefits of biomass energy as compared to fossil fuels. In order to aid the
regulated community and provide consistency among regulatory program, the Agencies should
adopt a harmonized approach to accounting for the climate benefits of biomass energy. We urge
the Agencies to use the light-duty vehicle rule as a means to harmonize the findings of existing
regulatory programs. [EPA-HQ-OAR-2010-0799-9481-A1, p.7]
Given the ongoing nature of EPA's reconsideration of biogenic CC>2 emissions from stationary
sources and the continued applicability of 49 U.S.C. § 32905(a) to NHTSA's CAFE Standard
calculations through model year 2019, the mid-term evaluation process already included in the
proposed rule provides a means for EPA to harmonize is regulatory approaches to woody
biomass-based fuels after having the opportunity to complete its scientific review of both mobile
and stationary sources while allowing EPA and NHTSA to maintain uniform fuel economy
standards for mobile sources. While a continuation of the 0.15 divisor may be appropriate today
given NHTSA's statutory mandate and EPA's ongoing scientific reviews, EPA should use the
intervening time before the mid-term review to synthesize its existing approaches to accounting
for biogenic CC>2 emissions and develop a science-based method to account for the climate
benefits of woody biomass-based alternative fuels as compared to fossil fuels. The EPA should
then, at the earliest opportunity, apply the method in place of the generic 0.15 divisor and
provide an exclusion, if appropriate, for vehicles that rely entirely on the combustion of woody
biomass-based alternative biofuels. We thus urge the Agencies in the preamble to the final rule to
recognize the opportunities that woody biomass-based alternative fuels can provide to reduce
CC>2 emissions by committing to develop and apply a science-based method to quantify the
6-124
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
climate benefits of woody biomass-based alternative fuels as part of their mid-cycle review.
[EPA-HQ-OAR-2010-0799-9481-A1, pp.7-8]
1 - See, EIA, Annual Energy Review (Oct. 19, 2011), available at
http://www.eia.gov/totalenergy/data/annual/showtext.cfm?t=ptb 1001. [EPA-HQ-OAR-2010-
0799-9481-Al,p.2]
2 - See NAFO, Carbon Neutrality of Energy from Forest Biomass, available at
http://nafoalliance.org/carbon-neutrality-of-energy-from-forest-biomass/. [EPA-HQ-O AR-2010-
0799-9481-Al,p.2]
3 - Department of Energy, Ethanol Benefits, available at
http://www.afdc.energy.gov/afdc/ethanol/benefits.html (last visited Jan. 30, 2012). [EPA-HQ-
OAR-2010-0799-9481-A1, p.3]
4 - See EPA, DPA420-D-06-008, Renewable Fuel Standard Program: Draft Regulatory Impact
Analysis at 191 (Sept. 2006). [EPA-HQ-OAR-2010-0799-9481-A1, p.3]
5 - Cherubini, et al., Energy- and greenhouse gas-based LCA of biofuel and bioenergy systems:
Key issues, ranges and recommendations, Resources, Conservation and Recycling 535: 434-447
(2009) (90-95% emissions reductions relative to fossil fuel systems); Zhang, et al., Life cycle
emissions and cost of producing electricity from coal, natural gas, and wood pellets in Ontario,
Canada, Environmental Science and Technology 44(1): 538-544 (2010) (91% and 78%
emissions reductions relative to coal and natural gas systems); Raymer, A.K.P., A comparison of
avoided greenhouse gas emissions when using different kinds of wood energy, Biomass and
Bioenergy 30: 605-617 (2006) (81-89% emissions reductions relative to fossil fuel alternatives).
[EPA-HQ-OAR-2010-0799-9481-Al,p.3]
6 - Environmental Protection Agency Combined Heat and Power Partnership, Biomass
Combined Heat and Power Catalog of Technologies, 96 (Sept. 2007), available at
http://www.epa.gov/chp/documents/biomass_chp_catalog.pdf. [EPA-HQ-OAR-2010-0799-
9481-Al,p.3]
7 - EPA, Inentory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2009 3-59 (April 15,
2011). [EPA-HQ-OAR-2010-0799-9481-A1, p.4]
8 - Id. Chapter 7. [EPA-HQ-OAR-2010-0799-9481-A1, p.4]
9 - See DOE, Technical Guidelines: Voluntary Reporting of Greenhouse Gases (1605(b))
Program (January 2007) at 77 ("Reporters that operate vehicles using pure biofuels within their
entity should not add the carbon dioxide emissions from those fuels to their inventory of mobile
source emissions because such emissions are considered biogenic and the recycling of carbon is
not credited elsewhere."). [EPA-HQ-OAR-2010-0799-9481-A1, p.4]
6-125
-------
EPA Response to Comments
10 - Letter from Gina McCarthy to Roger Martella (Jan. 12, 2011) granting NATO's Petition for
Reconsideration, available at http://www.epa.gov/nsr/ghgdocs/McCarthytoMartella.pdf. [EPA-
HQ-OAR-2010-0799-9481-A1, p.4]
11 - Deferral for CC>2 Emissions From Bioenergy and Other Biogenic Sources Under the
Prevention of Significant Deterioration (PSD) and Title V Programs, 76 Fed. Reg. 43,490 (July
20, 2011). [EPA-HQ-OAR-2010-0799-9481-A1, p.4]
12 - See generally EPA, Carbon Dioxide Accounting for Emissions from Biogenic Sources,
http://yosemite.epa.gov/sab/SABPRODUCT.NSF/81e39f4c09954fcb85256ead006be86e/2f9b57
2c712ac52e8525783100704886!OpenDocument (last visited Jan. 31, 2012). [EPA-HQ-OAR-
2010-0799-9481-Al,p.4]
13 - Regulating Greenhouse Gas Emissions Under the CAA, 73 Fed. Reg. 44,354, 44,405 (July
30, 2008). [EPA-HQ-OAR-2010-0799-9481-A1, p.5]
14 - Id. at 44,405-06; see also, NAFO, Carbon Mitigation Benefits of Working Forests
(identifying trading platforms and registries that recognize forest management), available at
http://nafoalliance.org/mitigationbenefits-working-forests/. [EPA-HQ-OAR-2010-0799-9481-
Al,p.5]
15 - EIA, Annual Energy Outlook 2012 Early Relese Overview 7, available at
http://www.eia.gov/forecasts/aeo/er/pdf/0383er(2012).pdf. [EPA-HQ-OAR-2010-0799-9481-A1,
p.5]
16 - Letter from President Barack Obama to Governors John Hoeven and Chet Culver (May 27,
2009), available at
http://www.governorsbiofuelscoalition.org/assets/files/President%20Obama's@20Response5-
27-09.pdf; see also President Barack Obama, Memorandum for the Secretary of Agriculture, the
Secretary of Energy, and the Administrator of the Environmental Protection Agency, 74 Fed.
Reg. 21,531-32 (May 5, 2009). [EPA-HQ-OAR-2010-0799-9481-A1, p.5]
17 - President Barack Obama, Remarks by the President on America's Energy Security, March
30, 2011, available at http://www.whitehouse.gov/the-press-office/2011/03/30/remarks-
president-americas-energysecurity. [EPA-HQ-OAR-2010-0799-9481-A1, p.5]
18 - President Barack Obama, Remarks by the President in State of the Union Address, January
24, 2012, available at http://www.whitehouse.gov/the-press-office/2012/01/24/remarks-
president-state-unionaddress. [EPA-HQ-OAR-2010-0799-9481-A1, p.6]
Organization: National Association of Convenience Stores (NACS)
CAFE and RFS Compatibility [EPA-HQ-OAR-2010-0799-9543-A1, p. 1]
In the Energy Independence and Security Act of 2007 (EISA), Congress revised the RFS to
require that a minimum of 36 billion gallons of qualified renewable fuels be integrated into the
6-126
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
motor fuels supply by 2022. This objective was expected to represent approximately 21% - 25%
of the overall gasoline market (based upon 2007 gasoline consumption and assuming an annual
increase in demand of up to 1%). However, the proposed CAFE revisions could dramatically
reduce the amount of motor fuel consumed in 2022 and beyond, creating a situation in which
renewable fuels will be required to represent a significantly greater share of the market than
originally anticipated. [EPA-HQ-OAR-2010-0799-9543-A1, pp. 1-2]
To illustrate the challenge the two regulations present to the market, NACS has analyzed the
Energy Information Administration's (EIA) 2011 Annual Energy Outlook. In this report, EIA
evaluated two different CAFE scenarios - one factoring for an annual average fuel economy
improvement of 3% and one factoring for an improvement of 6%. The current proposed rule
calls for an annual improvement of 4.1% to 4.3%. Therefore, it is most sensible to use the more
conservative model and evaluate market conditions under a 3% scenario. Please note that this
analysis forecasts a market condition that is less extreme than what is likely to materialize under
the proposed rule. [EPA-HQ-OAR-2010-0799-9543-A1, p. 2]
In creating this comparison, NACS has assumed that the RFS will be satisfied by blending
renewable fuels with gasoline. The RFS requires a specific volume of bio-mass based diesel, but
this is not a significant component of the program. Whether the renewable fuel brought to market
is ethanol, butanol, or some other type of additive, it is likely to be optimized by blending with
gasoline. [EPA-HQ-OAR-2010-0799-9543-A1, p. 2]
Therefore, NACS has compared EIA's projected finished gasoline volumes under a CAFE3
model with the mandated volumes of the RFS (less the biodiesel component). The following
chart demonstrates the applicable blend rate required in this market scenario: [See chart on p. 2
of Docket number EPA-HQ-OAR-2010-0799-9543-A1] [EPA-HQ-OAR-2010-0799-9543-A1,
p. 2]
Under a 3% annual improvement in fuel economy, compliance with the RFS will require a blend
rate of 37.51% in 2022. This level of renewable fuels penetration in the market will impose
significant economic burdens on the retail fuels market and consumers. [EPA-HQ-OAR-2010-
0799-9543-A1, p. 2]
Organization: National Corn Growers Association et al.
The Energy Independence and Security Act (EISA) of 2007 called for the reduction of petroleum
fuel use and greenhouse gas emissions (GHG), and it specified the use of 36 billion gallons of
renewable fuels by 2022. In response, EPA promulgated the revised Renewable Fuel Standard
(RFS2) that required increasing volumes of renewable fuels over a 10 year period from 2012 to
2022 to reach the 36 billion gallon statutory requirement. The renewable fuels specified in RFS2
were broken down into categories of conventional renewable biofuel (15 billion gallons), and
advanced biofuels (21 billion gallons). Advanced biofuels were further divided into biodiesel,
cellulosic biofuels and other advanced biofuels such as sugar cane ethanol. Each category or
subcategory had its own requirement for GHG reductions; conventional renewable biofuels,
primarily corn ethanol were required to reduce GHG by 20%, advanced biofuels by 50% and
cellulosic biofuels by 60%. [EPA-HQ-OAR-2010-0799-9565-A1, p.2]
6-127
-------
EPA Response to Comments
Due to substantial advances in crop production and energy efficiency improvements in ethanol
production, corn starch ethanol significantly exceeds the 20% requirement on average. Indeed,
the feasibility of meeting the 50% advanced biofuel requirement with corn ethanol has been
demonstrated. EPA must fully account for these GHG reductions in RFS2 since January 1, 2008
and ensure that future GHG reductions for corn ethanol are fully credited as well. We further
encourage EPA to perform a complete GHG inventory assessment of the RFS2 program through
2022. [EPA-HQ-OAR-2010-0799-9565-A1, p.2]
In its dual goals of reductions in petroleum fuel use and greenhouse gas emissions, EISA was
concerned with addressing national energy security as well as greenhouse gas emissions
concerns. Its requirement to displace about 25% of our national gasoline use with renewable
fuels was a reasonable and effective means of addressing energy security by providing a diverse
supply base. This diversity of supply is an important way to make the US economy more
resilient to oil supply and price shocks since a vehicle population composed of sufficient
numbers of Flexible Fuel Vehicles (FFVs) can easily and quickly switch to petroleum based fuel
substitutes such as ethanol blends. In fact, vehicle fuel economy standards without petroleum
fuel substitutes such as those required by EISA can do little to enhance oil security. [EPA-HQ-
OAR-2010-0799-9565-A1, p.2]
We are concerned that the proposed CAFE/GHG rule is inconsistent with the RFS2 regulation
and the EISA requirement to use 36 billion gallons of renewable fuel in 2022 in several areas. In
other regulatory actions, EPA continues to express support for achieving the requirements of
RFS21, yet there is no mention in the CAFE/GHG rule concerning the role of renewable
alternative fuels in achieving the required GHG reductions. Many credits are provided in the rule
that can be applied by vehicle manufacturers toward achieving the fuel economy and greenhouse
gas emission requirements. [EPA-HQ-OAR-2010-0799-9565-A1, p.2]
Nearly all of these credits either directly or indirectly provide incentives for the production of
electric vehicles including hybrid electric (HEV), plug-in hybrid electric (PHEV), fuel cell
electric (FCEV) or battery electric (BEV) vehicles. For example, multiplier factors are provided
for BEVs, PHEVs and FCEVs only, and electric propulsion for light duty trucks is favored over
diesel or renewable alternative fuels. These credits which arbitrarily favor electric vehicle
technology may interfere with RFS2 compliance strategies, and may send conflicting signals to
the marketplace with unknown and potentially adverse economic impacts. [EPA-HQ-OAR-2010-
0799-9565-A1, pp.2-3]
In the RFS2 regulation, EPA projects "Low", "Mid" and "High" volume scenarios for ethanol
use, and examines FFV fuel usage rates to consume these volumes6. The scenarios are built on
the assumption that 15B gallons of ethanol would be consumed as E10. Under EPA's Mid
Volume scenario, 22.2 billion gallons of ethanol would be consumed by 2022 to comply with
RFS2 requirements, FFV production by the Detroit 37 vehicle manufacturers would continue at a
rate of at least 50% of annual production, 60% of FFVs would require "reasonable" access to
E85 (24,000 refueling stations) and these FFVs would refuel with E85 at every opportunity. By
EPA's analysis, FFV production at a rate of at least 50% of vehicles produced would have to
continue through 2022 in order to consume RFS2 volumes. A recent analysis by Air
Improvement Resource examines EPA's ethanol volume and FFV use scenario projections in
6-128
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
o
detail . It concluded that even if the EPA waiver for El 5 were extended to all light duty vehicles,
continued production of FFVs and higher level ethanol blends would be required in order to
consume RFS2 volumes. [EPA-HQ-OAR-2010-0799-9565-A1, p.3]
A major inconsistency between the proposed CAFE/GHG rule and the RFS2 regulation is that
the production of FFVs is discouraged by the proposed rule which would likely result in
discontinuing FFV production after 2015. EISA extended fuel economy incentives for FFVs
until 2020 because Congress wanted to encourage the continued production of vehicles that
could use higher volume blends of ethanol up to E85. However, beyond 2015, EPA would
require that the incentive be pro-rated based on use of the alternative fuel (E85 or ethanol blend
greater than El 5). Since E85 is dispensed at less than 2% of US fueling stations, it is not
surprising that E85 use may still be less than 100 million gallons per year9. The result is that FFV
production incentives would cease to exist as a practical matter after 2015. Congress expressed
concern at a hearing in May 2011 that EPA chose to effectively eliminate FFV incentives after
2015 in the Supplemental Notice of Intent for the 2017 to 2025 CAFE/GHG rule.10 [EPA-HQ-
OAR-2010-0799-9565-A1, pp.3-4]
The purpose of the FFV incentives, sometimes referred to as CAFE credits created by the
Alternative Motor Fuels Act of 1988 was to insure that an adequate number of FFVs were
available in the fleet that could use E85 when it became available. Although E85 has not become
widely available, the RFS2 regulation requires volumes of renewable fuels including ethanol that
would require more FFVs than are currently available in the fleet. It is counter to the intent of
EISA and the purpose of FFV credits to effectively phase them out just when FFVs are needed to
consume RFS2 renewable fuel volumes. [EPA-HQ-OAR-2010-0799-9565-A1, p.4]
Although the proposed CAFE/GHG rule provides many credits for electric vehicles, it disallows
credits for FFV technology on the basis of fuel cost. The concern for high relative cost of mid or
high level ethanol blends does not seem to be justified in the term of the CAFE/GHG and RFS2
rules since at some point in the renewable fuel volume ramp-up of RFS2, market forces would
result in competitive prices for ethanol and gasoline in order for the required volumes to be sold.
As a result, the continuation of FFV incentives can be justified in order to consume the required
RFS2 volumes of renewable fuels, and to be consistent with EISA's intent. [EPA-HQ-OAR-
2010-0799-9565-A1, p.4]
We recommend modifications to the proposed rule in the following three areas to achieve a more
balanced, technology neutral approach to the control of fuel economy and GHG. [EPA-HQ-
OAR-2010-0799-9565-A1, p.4]
Allow vehicle and fuel technologies to compete on a level playing field to meet fuel economy
and GHG standards, rather than constructing credits to favor electric vehicle technology over
renewable fuels. [EPA-HQ-OAR-2010-0799-9565-A1, p.4]
Provide flexibility within the rule and integrate RFS2 requirements such that renewable fuels can
contribute to the greenhouse gas emission reduction requirements in the rule. [EPA-HQ-OAR-
2010-0799-9565-A1, p.5]
6-129
-------
EPA Response to Comments
Provide incentives for the production of FFVs that are needed to consume RFS2 renewable fuel
volumes. [EPA-HQ-OAR-2010-0799-9565-A1, p.5]
We further believe that modifications in these areas would be more cost-effective and more
consistent with EISA in addressing energy security, renewable fuel use and greenhouse gas
emissions. We stand ready to convene a dialog with the agencies in this regard. [EPA-HQ-OAR-
2010-0799-9565-A1, p.5]
1 - EPA News Brief, "EPA Finalizes 2012 Renewable Fuel Standards", December 27, 2011,
"EPA continues to support greater use of renewable fuels within the transportation sector every
year through the RFS2 program, which encourages innovation, strengthens American energy
security, and decreases greenhouse gas pollution." [EPA-HQ-OAR-2010-0799-9565-A1, p.2]
6 - Renewable Fuel Standard, Regulatory Impact Analysis, EPA-420-R-10-006, February 2010.
[EPA-HQ-OAR-2010-0799-9565-Al,p.3]
7 - General Motors, Ford, Chrysler [EPA-HQ-OAR-2010-0799-9565-A1, p.3]
8 - "Flexible-Fuel Vehicle and Refueling Infrastructure Requirements Associated with
Renewable Fuel Standard (RFS2) Implementation", Air improvement Resource, March 2011.
[EPA-HQ-OAR-2010-0799-9565-Al,p.3]
9 - http://www.eia.gov/renewable/alternative_transport_vehicles/pdf/attf_cl.pdf [EPA-HQ-
OAR-2010-0799-9565-A1, p.4]
10 - Congress did not add a fuel use requirement as a condition of extending FFV credits in
EISA, and such a requirement appears to be inconsistent with Congress' intent. The following
quotes are taken from comments by Congressman John Shimkus at a U.S. House of
Representatives, Subcommittee on Energy and Power hearing on May 11, 2011 entitled, "The
American Energy Initiative". Congressman Shimkus' comments are documented in an EPA
response letter to Congress dated June 22, 2011. Congressman Shimkus: "Please provide this
Subcommittee with a list of areas in the EPAINHTSA joint rulemaking of May 7, 2010 where
EPA's rules are contrary to the program designed by Congress in EPCA as amended by EISA,
and why EPA chose to substitute its judgment over the clear, specific policy preferences passed
by Congress." "How can this rule be characterized as 'harmonized and consistent' if the way
EPA treats FFV vehicles is markedly different than the way Congress mandated FFV credits be
treated under CAFE?" [EPA-HQ-OAR-2010-0799-9565-A1, p.4]
Organization: Plant Oil Powered Diesel Fuel Systems, Inc.
Flex-Fuel Vehicles ("FFVs") equipped to run on 85 percent ethanol count as emitting only 15
percent of the GHG's that the same vehicle would emit without the FFV capability, even though
the Agencies admit that, "[Historically consumers have only fueled these vehicles with E85 a
6-130
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
very small percentage of the time." 76 Fed. Reg. at 74880. [EPA-HQ-OAR-2010-0799-10337-
A2, pp. 5-6]
D. Ethanol
At present, the United States produces around 1.5 billion gallons of ethanol per year,
approximately one-tenth of the 2022 goal for renewable fuels set by the Renewable Fuels
Standard. U.S. Department of Energy ("DOE"), Office of Energy Efficiency and Renewable
Energy, Freedom CAR & Vehicle Technologies Program, "Just the Basics: Ethanol" (Feb. 7,
2012) (wwwl.eere.energy.gov/vehiclesandfuels/pdfs/basics/jtb_ethanol.pdf). [EPA-HQ-OAR-
2010-0799-10337-A2, p. 9]
Ethanol engenders agricultural practices, such as intensive use of fertilizer, that makes its
increased use unsustainable for the environment. With Americans now farming more corn than
in the past sixty years because of rising demand for ethanol derived from corn, nitrogen leaching
from fertilized corn fields is a primary cause of hypoxia and fish kills in the Gulf of Mexico.
S.D. Donner and CJ. Kucharik, "Corn-Based Ethanol Production Compromises Goal of
Reducing Nitrogen Export by The Mississippi River," Proceedings of the National Academy of
Sciences (March 18, 2008), at 1 and Abstract
(http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2393748/). Expanding corn-based ethanol
production would make controlling export of nitrogen to the Gulf practically impossible without
large changes in food production and agricultural management. Id., Abstract. [EPA-HQ-OAR-
2010-0799-10337-A2, pp. 9-10]
Organization: Renewable Fuels Association (RFA)
The proposal significantly discourages production of flexible fuel vehicles (FFVs) beyond 2016
by treating FFVs differently than other dual-fueled vehicles. The creation of incentives for
certain dedicated alternative fuel vehicles also disadvantages FFVs. [EP A-HQ-OAR-2010-0799-
9490-Al,p.l]
If implemented as proposed, the CAFE/GHG rule would frustrate the goals of the Energy
Independence and Security Act of 2007 and significantly complicate compliance with the
Renewable Fuel Standard (RFS). [EPA-HQ-OAR-2010-0799-9490-A1, p.l]
THE PROPOSAL SIGNIFICANTLY DISCOURAGES PRODUCTION OF FFVs BEYOND
2016 BY TREATING FFVs DIFFERENTLY THAN OTHER DUAL-FUELED VEHICLES.
THE CREATION OF INCENTIVES FOR CERTAIN DEDICATED ALTERNATIVE FUEL
VEHICLES ALSO DISADVANTAGES FFVs. [EPA-HQ-OAR-2010-0799-9490-A1, p.3]
In its final rule regarding MY2012-2016 CAFE/GHG standards, EPA promulgated provisions
that, beginning in 2016, require automakers to demonstrate alternative fuel (i.e. E85) use in FFVs
in order to generate fuel economy credits and determine emissions compliance values for those
vehicles. The methodology established by these provisions assumes FFVs operate on gasoline
100% of the time, but allows a manufacturer to generate CAFE/GHG credits for its FFVs if it
can document the percentage of miles driven on E85 versus gasoline for those vehicles. As
6-131
-------
EPA Response to Comments
discussed in comments from the stakeholders to EPA in response to the MY2012-2016 proposal,
it is highly unlikely automakers have the resources or information necessary to provide proof of
alternative fuel usage in the FFVs they manufacture. Thus, for all practical intents and purposes,
fuel economy and emissions credits for FFVs cease to become relevant in MY2016 and
automakers have no clear incentive to continue producing FFVs. In its current proposal for
MY2017-2025, EPA/NHTSA state they do not intend to change the methodology for FFVs fuel
economy calculations and emissions compliance values established in the rule for MY2012-
2016. [EPA-HQ-OAR-2010-0799-9490-A1, pp.3-4]
One possible approach to determining utility factors for FFVs would be to base alternative fuel
use on the levels of ethanol that FFVs will need to consume to comply with future RFS volume
requirements. Notwithstanding the proposal's imbalanced application of utility factors, we do
support EPA/NHTSA's proposal to continue the use of the 0.15 divisor for ethanol for MY2020
and later when calculating fuel economy. [EPA-HQ-OAR-2010-0799-9490-A1, p.4]
The Energy Independence and Security Act of 2007 substantially expanded the Renewable Fuel
Standard originally enacted by Congress in the Energy Policy Act of 2005. The expanded RFS
(known as RFS2) requires the consumption of 36 billion gallons of renewable fuels by 2022, and
it is widely expected that the requirements will be met predominantly with ethanol. Indeed, in its
Final Regulatory Impact Analysis for the RFS2, EPA analyzed a case where ethanol accounts for
33.2 billion gallons (92%) of the 36 billion gallon requirement in 2022. This amount of ethanol
correlates to roughly 24% of expected gasoline demand in the 2022 timeframe.7 [EPA-HQ-OAR-
2010-0799-9490-A1, pp.5-6]
However, the amount of ethanol that can be used in the United States today is practically limited
to 10% of the gasoline pool. This is because the Clean Air Act generally limits the amount of
ethanol that can be consumed by conventional light-duty cars and trucks to 10%vol. (E10). EPA
approved a waiver request allowing the use of E15 (15%vol. ethanol) for conventional light duty
vehicles MY2007 or newer in November 2010. In January 2011, EPA extended the E15 waiver
to MY2001. However, several additional regulatory and marketplace obstacles must be
negotiated before significant volumes of El 5 can realistically penetrate the marketplace. Thus, a
maximum of roughly only 13-14 billion gallons of ethanol can currently be consumed by the
conventional light-duty car and truck fleet at the E10 level, based on expected gasoline demand
in the near term. Once El 5 is broadly available in the marketplace, the conventional automotive
fleet may be capable of consuming 18-20 billion gallons of ethanol, still far below the 2022
requirements of the RFS2. [EPA-HQ-OAR-2010-0799-9490-Al, p.6]
Based on the AIR study findings, we are confused as to how EPA/NHTSA reached the
conclusion that the proposed CAFE/GHG emissions rule would have "no effect on volumes of
ethanol and other renewable fuels," and we encourage the agency to revisit that portion of its
analysis. [EPA-HQ-OAR-2010-0799-9490-Al, p.6]
Only FFVs may currently consume ethanol blends greater than El 5. Thus, accelerated growth of
FFVs will be necessary to consume the increasing ethanol volumes expected under the RFS2.
The "Big 3" domestic automakers have committed to a goal of 50% of their new vehicles being
FFV-capable in 2012 and thereafter. A 2011 study conducted for RFA by Air Improvement
6-132
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
Resource, Inc. (AIR) demonstrated that this commitment by the domestic automakers would
technically enable the U.S. automotive fleet to consume 33.2 bg of ethanol by 2022 (Attachment
A). The study also showed that a failure to ensure at least 50% of new vehicles are FFV-capable
in 2012 and thereafter would result in falling short of long-term RFS2 volume requirements.
[EPA-HQ-OAR-2010-0799-9490-A1, p.6] [For attachment A please refer to EPA-HQ-OAR-
2010-0799-9490-A1, pp.9-54]
We are greatly concerned that by discouraging the continued production of FFVs beyond
MY2016, the renewable fuel volumes required under the RFS2 likely cannot be consumed by the
future U.S. automotive fleet. Thus, we encourage EPA to consider actions that place FFVs on a
level playing field with other dual-fueled and dedicated alternative fuel vehicles for the purposes
of complying with the proposed MY2017-2025 standards. [EPA-HQ-OAR-2010-0799-9490-A1,
p.6]
Meanwhile, in regard to emissions compliance values and fuel economy calculations for plug-in
hybrid electric vehicles (PHEVs) and dual-fueled compressed natural gas vehicles (CNGVs),
EPA/NHTSA are proposing to allow the use of theoretical "utility factors" that assume PHEVs
and CNGVs operate on gasoline only half of the time. EPA/NHTSA's rationale for allowing the
use of these utility factors for some dual-fueled vehicles but not for others is highly questionable.
EPA/NHTSA state that PHEV and CNGV owners paid a premium for their vehicles and thus
will seek out and predominantly use alternative fuels more frequently than they will use gasoline.
EPA/NHTSA also assume the alternative fuels used by PHEVs and CNGVs will be cheaper than
gasoline on a per mile basis. These assumptions do not take into account that refueling access for
these vehicles may be limited or unavailable (EPA/NHTSA also assume, without basis, that
PHEV drivers will always recharge once per day). Further, the cost per mile for these fuels may
actually prove to be higher than gasoline, and prices may fluctuate as demand increases. If
theoretical utility factors are to be applied to PHEVs and CNGVs, they should also apply to
FFVs and any other dual-fueled vehicles. [EPA-HQ-OAR-2010-0799-9490-A1, p.4]
7 - The Energy Information Administration's 2011 Annual Energy Outlook projects 2022 motor
gasoline demand at 139.96 billion gallons.
Organization: Volkswagen Group of America
d. Credit mechanisms should be included to encourage greater use of biofuels in both spark
ignited and compression ignition engines
Volkswagen explained that a bio-fuel credit mechanism would support the RFS II regulation and
other complementary government policies regarding the reduced use of imported oil. [EPA-HQ-
OAR-2010-0799-9569-A1, p. 5]
Response:
Basing the weighting of ethanol and gasoline use in an ethanol FFV on actual fuel use
6-133
-------
EPA Response to Comments
Many of the above comments addressed this issue. Some commenters advocated for
EPA to extend the utility factor methodology, adopted for PHEVs and dual fuel CNG vehicles,
to ethanol FFVs. The agency disagrees with the objections raised by the Renewable Fuels
Association and other commenters with respect to the selective use of utility factors for various
dual fuel vehicles. EPA continues to believe that it is appropriate to assume that owners of some
types of dual fuel vehicles, such as PHEVs and CNG vehicles, will preferentially seek to use the
alternative fuel when the vehicle is much more expensive to purchase and much less expensive
to operate on the alternative fuel—why else would the consumer pay more for the vehicle if (s)he
did not intend to use the cheaper fuel? Similarly, EPA believes it is not appropriate to assume
that ethanol FFVs will primarily use E85, as there is no extra vehicle cost to purchase an FFV
(typically a consumer does not choose between an FFV and a non-FFV of the same vehicle
model), E85 fuel is no cheaper and in fact usually more expensive per mile, and use of E85
reduces overall vehicle range since there is only one fuel tank (as opposed to PFLEVs and dual
fuel CNG vehicles which have two fuel storage devices and therefore the use of the alternative
fuel raises overall vehicle range). Further, even with approximately 10 million ethanol FFVs in
the US car and light truck fleet, fuel use data demonstrate that ethanol FFVs only use E85 less
than one percent of the time. EPA considers the comment from the Renewable Fuels
Association about relative fuel prices to be without merit. While it is true that prices of all motor
fuels can be volatile, CNG prices are approximately one-half those of gasoline15 (and electricity
prices, per mile, are even lower), and expected to remain low for the foreseeable future (and, if
CNG prices do rise, it would likely lead to lower dual fuel CNG vehicle sales since the primary
reason for interest in dual fuel CNG vehicles is to take advantage of lower fuel prices).
Several automakers and the Alliance of Automobile Manufacturers asked for prospective
guidance from EPA with respect to the relative weighting of gasoline and E85 emissions
performance for future FFVs, and specifically recommended that EPA base the relative
weighting of gasoline and E85 emissions performance on the projected national average use of
E85 in ethanol FFVs that will be necessary to support compliance with the Renewable Fuel
Standard in future model years. EPA plans to issue guidance, well in advance of each model
year, but this guidance will be based on demonstrated E85 sales data from previous years, rather
than projections of future E85 volumes. EPA believes that there is too much uncertainty
associated with projections of future ethanol market share (vis-a-vis the market share for non-
ethanol renewable fuels) in order to be able to base future FFV gasoline and E85 weightings on
projections of how the Renewable Fuel Standard market will evolve. Our approach is responsive
to comments from automakers, the 25x'25 Alliance, and the National Corn Growers Association,
in that if actual use of E85 and other higher-ethanol blends increases, for example in response to
future RFS requirements and/or due to more competitive pricing, then the regulations and
guidance will allow automakers to apply a higher E85 weighting consistent with the greater use
of the fuel.
No incentive multiplier for ethanol FFVs
A few commenters suggested that ethanol FFVs be provided the same incentives as
EV/PFIEV/FCV/CNG vehicles, such as the incentive multipliers. EPA believes it is not
15 http ://www. afdc .energy. gov/afdc/pdfs/afpr_apr_ 12 .pdf
6-134
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
appropriate to adopt incentive multipliers in this rule for manufacturers of ethanol-capable
vehicles. One, ethanol is not a vehicle GHG emissions game-changer—the tailpipe GHG
emissions of ethanol FFVs when operated on ethanol are typically only slightly lower than GHG
emissions from conventional vehicles (and those GHG emissions performance-based reductions
would be accounted for in EPA compliance calculations based on actual ethanol use). Two,
ethanol FFVs do not face the same consumer barriers as EV/PHEV/FCV/CNG vehicles—they
are typically no more expensive than conventional vehicles, and they can, and most often are,
operated on conventional gasoline-based fuels. Furthermore, there are approximately 10 million
ethanol FFVs on the road in the U.S. today (far more than any other incentivized vehicle
technology), and automakers produced approximately 2 million ethanol FFVs in MY 2011 alone.
Although, as explained in the preceding response, the great majority of ethanol FFVs currently
use gasoline, there is little reason to believe that automakers are not going to continue to produce
ethanol FFVs, particularly if more ethanol FFVs begin to use E85 fuel to meet the RFS
standards. Given the long history of federal incentives for ethanol FFVs, and the fact that
ethanol FFVs can achieve GHG emissions credits after the GHG emissions incentives expire, the
Agency believes that there is no need to provide additional incentives for ethanol FFVs in this
rulemaking, beyond those already provided. Providing an additional incentive in the MYs 2017-
2025 GHG program thus would not achieve any greater use of renewable fuels than is already
required under the RFS program, and thus would not achieve any greater emissions reductions
from the use of such fuel. Providing incentives would therefore only dilute the benefits of the
GHG emissions program. Given that renewable fuel use is already required by and accounted
for under the RFS program, it therefore would be inappropriate to provide additional incentives
in the MYs 2017-2025 program.
Nevertheless, with future ethanol FFV credits tied to the actual use of ethanol fuel, there
will be, for the first time, a motivation for automakers to encourage their customers to use
ethanol in their FFVs. See Section 6.6 for a discussion of why EPA is not using the 0.15 divisor
for GHG emissions compliance, but is adopting the 0.15 divisor for the CAFE program
beginning in MY 2020, for all nonpetroleum fuels.
No accounting of potential upstream GHG emissions benefits due to ethanol/biofuels
Several commenters pointed out that cellulose-based ethanol and other renewable fuels
have the potential to yield large lifecycle GHG emissions benefits due to the CO2 uptake during
plant growth, and recommended that such fuels be given credits, or have compliance measured,
to reflect the upstream GHG emissions benefits. The use of biofuels with lower lifecycle GHG
emissions is already required under the Renewable Fuel Standard (RFS) program, which is
designed to achieve GHG emissions benefits through the required use of renewable
transportation fuels that have better lifecycle GHG emissions performance than the gasoline or
diesel fuel that they displace. EPA has already quantified the GHG emissions benefits associated
with the RFS program. Therefore, as noted above, providing an additional incentive in the MYs
2017-2025 GHG program, which is focused on emissions from the vehicle and not lifecycle
emissions, would not achieve any greater use of renewable fuels than is already required under
the RFS program, and thus would not achieve any greater emissions reductions from the use of
such fuel. Thus, providing an additional incentive, or using lifecycle emissions for compliance,
would reduce the need to take other actions and thereby reduce the emissions benefits of the
6-135
-------
EPA Response to Comments
MYs 2017-2025 light-duty vehicle GHG emissions program given that renewable fuel use is
already required by and accounted for under the RFS program.16
Interaction between this rule and the Renewable Fuels Standard
Many commenters alluded to a potential conflict between the proposed CAFE/GHG
standards and the RFS program
EPA sees no such conflict. The MYs 2017-2025 GHG program is designed to achieve
GHG emission reductions from vehicle operation as measured at the tailpipe. It does this by
reducing the amount of fuel that the vehicle consumes during operation. For conventional
gasoline powered vehicles, the standard is based on a test procedure that uses gasoline without
any ethanol as the test fuel. The GHG standards will require the manufacturers to produce
vehicles that consume less fuel when operated on gasoline. These same vehicles will also be
more efficient when operated on blends of gasoline and ethanol. The standards achieve greater
efficiency in the consumption of the fuel, without affecting one way or the other how much
renewable fuel is used by the operator. The RFS program is a separate, complementary program
designed to increase the use of renewable fuels by operators and to achieve GHG emission
reductions primarily through upstream emission reductions. It affects what fuels are produced
and sold, but does not affect how efficient the vehicle is in consuming the fuel. The GHG
standards affect the vehicles and improve their efficiency, while the RFS program achieves the
goals of increased use of renewable fuels independent of the vehicle GHG standards. They are
separate but complementary programs.
In addition, the RFS provisions themselves were drafted by Congress to include lifecycle
GHG performance standards that were neutral to the type of fuel used to meet them. Other than
subcategories for cellulosic biofuel and biomass-based diesel, EISA does not specify what types
of renewable fuel must be used. Rather, it is structured to allow the free market to stimulate the
development of a broad range of renewable fuels from an even broader range of feedstocks. We
have already seen rapid growth in corn ethanol and soy biodiesel production, and by leveraging
DOE and USDA programs we are now seeing billions of dollars spent in research, development,
and now commercialization of "drop-in fuels" such as renewable diesel, biomass-to-liquids
gasoline and diesel, and biobutanol, as well as biogas and bioelectricity. These fuels are and will
be coming from an ever broader array of feedstocks, from municipal solid waste to corn stover to
algae. EPA already has over 30 petitions for new fuel pathways under the RFS program that we
are currently reviewing. These fuels are also finding markets beyond just cars and trucks, and
are being introduced into planes, trains, ships, and home furnaces. In short, the opportunities for
the use of non-ethanol renewable fuels that will meet the requirements of the RFS program are
expanding quickly.
16 The plant oil-based fuel produced by POP Diesel is not currently identified as an acceptable renewable fuel under
the RFS program. EPA is currently considering the company's petition seeking approval of its product under the
RFS program. The RFS program established by Congress is the appropriate mechanism for evaluating the full
lifecycle emissions impact of this type of biofuel use, rather than a program focused principally on vehicle tailpipe
emissions.
6-136
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
The commenters focus narrowly on ethanol as the fuel to be used to meet the RFS
standard, since ethanol has been the predominant renewable fuel used to date. Since the RFS
standard increases over time, they then argue that EPA must provide additional mechanisms to
ensure that gasoline blends with greater than 10% ethanol can be used in both conventional
vehicles and flexible fuel vehicles. However, the commenters presume that additional EPA
action is necessary in order for this to occur. While EPA has and will continue to take actions
within its authority to help the marketplace achieve the RFS standards through the increased use
of ethanol and all other renewable fuels, ultimately EISA places this responsibility on the parties
obligated to do so under the RFS program. This makes sense, as the industry is not only capable
of making all the changes necessary to accommodate both the CAFE/LDGHG standards and the
RFS volume requirements, but is in the best position to do so in the most efficient manner. For
instance, in addition to developing drop-in fuels, the marketplace has been also been finding
ways to increase the use of ethanol. As a result of the commitment of the big 3 domestic vehicle
manufacturers to the President several years ago, there are now over 10 million flexible fuel
vehicles (FFVs) on the road capable of burning up to 85 percent ethanol. Similarly, hundreds of
new retail outlets are being converted every year to market E85 to supply higher level ethanol
blends to FFVs.
Thus, there are already a wide variety of solutions available to the market that will permit
the increasing use of renewable fuels to meet the RFS standards. Many, if not all of these
solutions will be implemented in the marketplace over the course of the next few years. By the
time the CAFE/LDGHG standards will be implemented for MY2017 and later, the market will
have sorted out the best mechanisms to expand the use of renewable fuels through both increased
use of ethanol and non-ethanol renewable fuels. Given the long lead time for this rule, the long
phase-in, and the long time it will take for the fleet to turn over, we have every confidence that
the market will assure compliance with both the RFS standards and CAFE/LDGHG standards
without the need of incentives in this rule.
Finally, while the current incentives for production of FFVs have not been effective at
increasing the use of renewable fuels by FFVs, the provisions of this rule have the potential to
provide an incentive for manufacturers to continue production of FFVs and to promote increased
use of renewable fuels by operators of FFVs, which would help to achieve the RFS volume
standards.
6.4. Comments Regarding the Treatment of Diesel-Fueled Vehicles
Organizations Included in this Section
BMW of North America, LLC
Chrysler Group LLC
Delphi Corporation
Manufacturers of Emission Controls Association (MECA)
Marz, Loren C.
Plant Oil Powered Diesel Fuel Systems, Inc.
U.S. Coalition for Advanced Diesel Cars
Volkswagen Group of America
6-137
-------
EPA Response to Comments
Organization: BMW of North America, LLC
The joint draft TSD assumes almost negligible diesel market share in 2021 to 2025 (control case)
which is in contradiction to increasing customer acceptance of diesel technology and automaker
efforts to improve diesel technology. Clean diesel technology is a further option in the list of
technologies with significant CC>2 reduction potential. Future diesel mix depends on factors such
as incentives, customer acceptance, fuel price development, etc. [EPA-HQ-OAR-2010-0799-
9579-A1, p.9]
Organization: Chrysler Group LLC
Diesel technology can provide significant greenhouse gas and fuel efficiency benefits.
We also request that the Agencies consider incentives for this technology such as volume
multipliers, or credit for enabling the use of biofuel blends such as BIO or B20. [EPA-HQ-OAR-
2010-0799-9495-A1, p.22]
Organization: Delphi Corporation
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 111.]
Second, Delphi has a proven track record in achieving energy and emissions reductions in diesel
technology. Specifically, Delphi's direct injection fuel systems and linear oxygen sensors support
diesel combustion with urea dosing systems, ammonia sensors and particulate matter or soot
sensors help meet stringent emissions and on-board diagnostic requirements.
Organization: Manufacturers of Emission Controls Association (MECA)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 181.]
Advanced diesel emission control technologies like particulate filters with lower backpressure
characteristics, selected reduction catalysts with improved performance at lower exhaust
temperatures and SCR catalysts coated directly on particulate filter substrates are examples of
emerging diesel emission control technologies that will allow future diesel powertrains to not
only be as clean as gasoline engines from a criteria pollutant perspective, but diesel powertrains
will deliver improved fuel consumption characteristics and lower greenhouse gas emissions. The
use of diesel particulate filters also delivers significant reductions in black carbon emissions
from diesel engines, a combustion emission that also has important climate change impact.
Organization: Marz, Loren C
The projected effectiveness of advanced diesel engine technology relative to advanced gasoline
engine technology may potentially be underestimated. A cursory review of current diesel
6-138
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
technology compared to current turbo-GDI technology in Europe reveals that diesel technology
retains a significant fuel consumption advantage over identical vehicles with turbo-GDI
technology in most cases. The following is a list of identical European-spec vehicles available
with diesel and turbo-GDI technology at equivalent or nearly equivalent performance (based on
'combined' fuel consumption in the European test cycle (NEDC) and manufacturers' listed 1-100
km/hour times where those values were readily available (time in parentheses for each vehicle;
diesel version listed first))... [NHTSA-2010-0131-0213-A1, p.l]
Audi A8 3.0 TDI- 6.6 1/100 km (6.1 sec)
Audi A8 3.0 TFSI- 9.1 1/100 km (6.1 sec)
MB S350 GDI BlueTEC L - 6.2 1/100 km (7.1 sec)
MB S350 CGI Blue Efficiency L - 7.7 1/100 km (7.1 sec)
MB C350 GDI Blue Efficiency - 5.9 1/100 km (6.0 sec)
MB C350 CGI Blue Efficiency - 7.0 1/100 km (6.0 sec)
MB C250 GDI Blue Efficiency - 4.8 1/100 km (7.1 sec)
MB C250 CGI Blue Efficiency - 6.7 1/100 km (7.2 sec)
Audi A3 2.0 TDI - 4.9 1/100 km (7.6 sec)
Audi A3 1.8 TFSI- 6.5 1/100 km (7.5 sec)
BMW 520d - 4.7 1/100 km (8-speed auto) (8.1 sec)
BMW 520i - 6.4 1/100 km (8-speed auto) (8.0 sec)
BMW X3 35d - 6.11/100 km (8-speed auto) (5.8 sec)
BMW X3 35i - 8.8 1/100 km (8-speed auto) (5.7 sec)
BMW 640d - 5.4 1/100 km (8-speed auto) (5.5 sec)
BMW 640i - 7.6 1/100 km (8-speed auto) (5.4 sec)
BMW 530d - 5.3 g 1/100km (8-speed auto) (6.0 sec)
BMW 535i - 7.6 g 1/100 km (8-speed auto) (5.9 sec)
MB E250 GDI Blue Efficiency - 4.9 1/100 km (7.5 sec)
(27.5% lower Fuel Consumption)
(19.5% lower FC)
(15.7% lower FC)
(28.4% lower FC)
(24.6% lower FC)
(26.6% lower FC)
(30.7% lower FC)
(28.9% lower FC)
(30.3% lower FC)
(25.8% lower FC)
6-139
-------
EPA Response to Comments
MB E250 CGI Blue Efficiency - 6.6 1/100 km (7.7 sec)
BMW X5 40d - 7.5 1/100 km (8-speed auto) (6.6 sec)
BMW X5 35i - 10.11/100 km (8-speed auto) (6.8 sec)
Audi A8 4.2 TDI - 7.6 1/100 km (5.5 sec)
Audi A8 4.2 TFSI - 9.5 1/100 km (5.7 sec)
BMW 120d - 4.4 1/100 km (7.3 sec)
BMW 1181 - 5.6 1/100 km (7.5 sec)
VW Golf 2.0 TDI - 4.8 1/100 km (manual) (9.3 sec)
VW Golf 1.4 TSI- 6.2 1/100 km (manual) (9.5 sec)
BMW 535d xDrive - 5.7 1/100 km (8-speed auto) (5.5 sec)
BMW 535i xDrive - 8.0 1/100 km (8-speed auto) (5.8 sec)
[NHTSA-2010-0131-0213-A1, pp. 1-2]
(25.7% lower FC)
(20.0% lower FC)
(21.4% lower FC)
(22.6% lower FC)
(28.8% lower FC)
(ave.-25.1% lower FC)
Interestingly, this is very close to the relative fuel consumption reduction that the National
Academies found (25.25%) in their recent study ("Assessment of Fuel Economy Technologies
for Light-Duty Vehicles." Committee on the Assessment of Technologies for Improving Light-
Duty Vehicle Fuel Economy, Board on Energy and Environmental Systems Division on
Engineering and Physical Sciences, National Research Council of the National Academies, Table
5.A.1). [NHTSA-2010-0131-0213-A1, p.2]
National Academies also conclude in this report...
'...An important characteristic of CI diesel engines is that they provide reductions in fuel
consumption over the entire vehicle operating range, including city driving, highway driving, hill
climbing, and towing. This attribute of CI diesel engines is an advantage when compared with
other technology options that in most cases provide fuel consumption benefits for only part of
the vehicle operating range....' (Finding 5.3) [NHTSA-2010-0131-0213-A1, pp.2-3]
This conclusion is generally supported by a study conducted by Motor Trend Magazine in 2007
(http://www.motortrend.com/features/I 12_0705_alternative_fuel_technology/vi ewall.html),
which showed that, based on its results, the diesel technology vehicle (a Mercedes-Benz E320
Bluetec) was the most fuel efficient ('work efficient') of the technologies it studied (gas-electric
hybrid technology represented by a Toyota Camry Hybrid, 'E85' technology represented by a
6-140
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
Chrysler Sebring, and turbo-GDI technology represented by a VW Passat 2.0T), and was very
close to the Camry Hybrid in 'carbon efficiency'. [NHTSA-2010-0131-0213-A1, p.3]
It should be noted that the fuel consumption gap between the European-spec BMW 535d and
535i has actually widened (from 27.4% to 28.9% for the 2012 model). On top of that, the
performance gap between the 535d and 535i has increased to 0.4 seconds (0-100 km/hr) in favor
of the diesel (5.5 sec vs. 5.9 sec) from 0.2 seconds (5.9 sec vs. 6.1 sec) from the previous
versions, according to the manufacturer's data
(http://www.bmw.co.Uk/bmwuk/pricesandspecifications/0,, 1156 bs-NQ%3D%3D%40bb-
TEkxMA%3D%3D%40sit-bmwuk,OO.html). The BMW GDI technology was specifically
identified in the Draft Joint Technical Support Document supporting this proposed rule as
already having advanced turbo-GDI technology (Section 3.4.1.5, Variable Valve Lift (VVL),
page 3-80). [NHTSA-2010-0131-0213-A1, p.3]
It is interesting to note that the BMW 535d has lower fuel consumption (and CC>2 emissions)
than the BMW 5-Series hybrid ('ActiveHybrid 5') in the combined European test cycle (NEDC),
in addition to significantly better 0-100 km/hr performance based on the preceding BMW link.
This, in addition to the two examples in the U.S. of diesel and hybrid technology available in the
same vehicle (Mercedes-Benz S350 Bluetec/S400 Hybrid and VW Touareg TDI/Hybrid) in
which the diesel versions have better fuel economy than the hybrid versions in the EPA 5-cycle,
suggests that the assumption that hybrid technology is a more fuel efficient technology than
diesel technology is not unequivocal. [NHTSA-2010-0131-0213-A1, p.3]
According to specification data provided in a BMW publication ('BMW Technology Day 2009 -
EfficientDynamics'), the minimum brake specific fuel consumption (BSFC) of the BMW 3.0
liter, 225 kW TwinPower' turbo-GDI engine is 245 g/kWh, while the minimum BSFC of the
previous version of the 3.0 liter, 225 kW 'TwinPower' diesel engine was 197 g/kWh (pages 28
and 34, respectively). That would equate to an efficiency gap of at least 24.3% (and gasoline
contains slightly more energy per unit mass than diesel fuel according to Argonne National
Laboratory's GREET model), and that efficiency advantage has apparently widened even more
for the 2012, 230 kW version of the BMW TwinPower' diesel engine. According to the
referenced spec data, the TwinPower' turbo-GDI gasoline engine incorporates many advanced
GDI engine technologies, e.g., 'jet guided' high precision injectors, 200 bar injection pressure,
variable intake valve lift adjustment ('VALVETRONIC') and infinite intake and outlet camshaft
adjustment ('dual-VANOS'), and 'twin-scroll' turbocharger technology. [NHTSA-2010-0131-
0213-Al,p.3]
One Automotive Industry (AID) executive describes the fuel efficiency of gasoline engines as
having improved by 3.5 percent over the past few years as a result of a shift to turbo-GDI
technology, but the fuel efficiency of diesel engine technology has improved by 7 percent over
the same time frame (http://www.wintonsworld.com/cars/carnews/carnews-201 I/Diesels-
Poised.html). He also points out that turbo gasoline cars are 'remarkably thirsty' in the real world
and generally do not meet their claimed fuel economy levels. [NHTSA-2010-0131-0213-A1, p.4]
Bosch has projected that the efficiency of diesel engine technology will increase even more than
gasoline engine technology (Climate and Transportation Solutions: Findings from the 2009
6-141
-------
EPA Response to Comments
Asilomar Conference on Transportation and Energy Policy, Chapter 10: The Case for Diesel
Cars To Reduce Greenhouse Gas Emissions.' by Johannes-Joerg Rueger; The internal-
combustion engine of the future: Excellent economy and high power despite smaller size.' Dr.
Rolf Leonhard, Executive Vice President Engineering, Diesel Systems, Presentation at the 59th
International Automotive Press Briefing, Boxberg, June 2009). This appears reasonable since
FEV has identified the potential for extremely high power density for diesel technology (>100
kW/liter - http://www.greencarcongress.com/201 l/04/fev-20100405.html#more) which may
allow as aggressive of downsizing as is assumed for advanced turbo-GDI in the proposed rule.
[NHTSA-2010-0131-0213-A1, p.4]
Whether advanced turbo-GDI technology can close the fuel consumption gap on advanced diesel
technology as much as estimated in the proposed rule seems very optimistic and speculative.
Furthermore, if diesel technology is capable of improving as much as Bosch estimates, it will
rival the other technologies considered in terms of fuel economy, especially if combined with
hybrid technology. [NHTSA-2010-0131-0213-A1, p.4]
EPA officials have reportedly stated that a diesel penetration of just 33% could reduce U.S. fuel
consumption enough to eliminate the need to import the amount of crude oil currently imported
from Saudi Arabia (http://www.businessweek.com/magazine/content/06_08/b3972138.htm).
This penetration appears possible based on recent U.S. sales data showing that diesel 'take rates'
are 39% in vehicles which offer diesel engines in addition to conventional gasoline engines,
while hybrid vehicles have a 'take rate' of only about 5% in vehicles in which hybrid technology
is offered in addition to conventional gasoline engines
(http://www.cleandieseldelivers.com/upload/CleanDieselDelivers_White_Paper.pdf - page 13).
In the few vehicles in the U.S. that are currently offered with all three of these technologies
(gasoline, diesel and hybrid technology - the Mercedes-Benz S-class and the VW Touareg SUV),
the diesel versions are easily outselling the hybrid versions
(http://www.hybridcars.com/news/december-2011-dashboard-sales-still-climbing-35093.html)
and in the case of the Touareg, the diesel model has recently been outselling the hybrid and
gasoline versions combined. It should be noted that this sales mix occurred in a month
(December 2011) in which the price gap between regular gasoline and diesel fuel increased to
over $0.50/gallon (national average per EIA). [NHTSA-2010-0131-0213-A1, p.4]
Many alternate diesel fuels ('synthetic' diesel fuels) are nearly carbon neutral when produced
from biomass. According to Argonne National Laboratory's latest version of the GREET model
released in October 2011 (GREET1_2011 - http://greet.es.anl.gov/), dimethyl ether (DME)
produced from biomass would generate about 11 grams/mile well-to-wheel (WTW) net GHG
emissions in the default diesel vehicle assumed in GREET, compared to 451 g/mi for the
baseline gasoline vehicle, 333 g/mi for an equivalent electric vehicle (EV) based on the assumed
U.S. electricity mix in GREET, and 253 g/mi for a fuel cell vehicle (FCV) using gaseous
hydrogen. Renewable diesel fuel produced from biomass using the Fischer-Tropsch process
(BTL) is not far behind DME at about 36 g/mi net WTW GHG emissions. BTL renewable diesel
fuel is a direct 'drop-in' replacement for petroleum diesel fuel, is infinitely miscible with
petroleum diesel fuel, and precludes the need to adopt an entirely new fuel distribution system.
Even the diesel vehicle using first-generation biodiesel (B20) produced from virgin soybean oil
6-142
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
generates lower net WTW GHG emissions than EV per GREET (-329 g/mi). [NHTSA-2010-
0131-0213-Al,p.5]
California also has identified biodiesel from 'Conversion of corn oil, extracted from distillers
grains prior to the drying process, to biodiesel' as having the lowest 'carbon intensity' of all of the
fuel pathways it has identified in its latest 'carbon intensity lookup table', much lower than either
the assumed electricity mix in California or any of the hydrogen fuels. This implies that the
WTW GHG emissions from this source of biodiesel would be significantly lower than
EV/PHEV/FCV, even taking the much higher 'fuel mileage' of those technologies into account.
[NHTSA-2010-0131-0213-A1, p.6]
GREET1_2011 shows that for most fuel pathways identified in GREET, WTW emissions of
criteria pollutants are generally lower for diesel technology/diesel fuel pathways than other
vehicle technology/fuel pathways, through at least 2020. Furthermore, GREET1_2011 projects
that DME produced from biomass produces the best overall well-to-wheels energy efficiency (of
the biomass-based fuels - D. Kittelson et al, "Performance and Emissions of a Second Generation
Biofuel - DME." (2010), http://www.me.umn.edu/centers/cdr/reports/E3_Kittelson.pdf),
petroleum and fossil fuel consumption reductions, GHG emission reductions, and arguably the
greatest across-the-board criteria pollutant emission reductions of any other combination of fuel
pathways and vehicle technologies identified in GREET through at least 2020, including any of
the 'advanced vehicle technologies' identified in the proposed rule as receiving special
incentives. Again, BTL is very close to DME with respect to aforementioned reductions. Diesel
engine technologies will be required to take advantage of these advanced biofuels, and should be
encouraged to the greatest extent possible. [NHTSA-2010-0131-0213-A1, p.6]
Diesel vehicles have substantially lower hydrocarbon emissions than gasoline vehicles, both
directly and indirectly. EPA has mentioned in previous reports that diesel technology has
'...near-zero evaporative hydrocarbon emissions due to the extremely low vapor pressure of
diesel fuel....' (e.g., 'Progress Report on Clean and Efficient Automotive Technologies Under
Development at EPA - Interim Technical Report.' January 2004, page 19). This appears to be a
very important characteristic in light of the DOE/NREL 'weekend ozone effect' studies which
suggest that hydrocarbon emissions are a more important factor in the accumulation of ground-
level ozone than NOX emissions in urban locations. Many studies (e.g., Eric Fujita et al,
'Weekend/Weekday Ozone Study in the South Coast Air Basin.' Proceedings of the 2002 DEER
Conference; John G. Watson et al, "Review of volatile organic compound source apportionment
by chemical mass balance." Atmospheric Environment, Volume 35, Issue 9, March 2001, Pages
1567-1584; Heidi Hellen et al, "Determination of source contributions of NMHCs in Helsinki
(60°N, 25°E) using chemical mass balance and the Unmix multivariate receptor models."
Atmospheric Environment, Volume 37, Issue 11, April 2003, Pages 1413-1424; Steven G.
Brown et al, "Source apportionment of VOCs in the Los Angeles area using positive matrix
factorization." Atmospheric Environment, Volume 41, Issue 2, January 2007, Pages 227-237)
have shown that gasoline exhaust and evaporative emissions from gasoline fuel (with
evaporative emissions being implicated as an increasingly more important source in latter
studies) account for a majority of hydrocarbon emissions in metropolitan areas where ground-
level ozone is most problematic. Diesel technology along with EV and FCV technology could
6-143
-------
EPA Response to Comments
have a dramatic impact on improving air quality in metropolitan areas. [NHTSA-2010-0131-
0213-Al,p.6]
Associated with this property of gasoline (relatively high evaporation rate) is the utter waste of a
very valuable resource (petroleum) through evaporation, which would be mitigated by at least a
partial switch of the U.S. light-duty fleet to diesel technology. Based on Table 4-12 (page 4-42)
of the Draft Joint Technical Support Document supporting this proposed rule, 'Conventional
Gasoline' produces about 5.70 grams of VOC per gallon well-to-pump (WTP), while 'Low Sulfur
Diesel' produces about 0.95 grams of VOC per gallon WTP, using the GREET default
BTU/gallon values for gasoline and low sulfur diesel fuel. According to EIA
(http://www.eia.gov/energyexplained/index.cfm?page=oil_home#tab2), 378 million gallons/day
of gasoline are consumer in the U.S. Assuming most of this consumption is by motor vehicles,
that's about 138,000,000,000 gallons of gasoline consumed by the U.S. vehicle fleet per year.
138,000,000,000 gallons X 5.70 g/gal = 867,063 tons of VOC WTP per year from the fuel
gasoline. Switching just 33% of the light-duty vehicles in the U.S. to diesel could reduce WTP
VOC emissions to (0.67 X 138,000,000,000 gallons X 5.70 g/gal) + (0.33 X 138,000,000,000
gallons X 0.95 g/gal) = 628,621 tons. 867,063 tons - 628,621 tons = 238,442 tons or almost
80,000,000 gallons of gasoline not evaporated as VOC. This does not take into account the
typically much lower fuel consumption of diesel vehicles, so assuming gasoline-hybrid
technology and diesel technology achieve roughly the same fuel economy on average in the real
world, as has been addressed previously, 80,000,000 gallons of gasoline/year would not only not
be wasted, but would not contribute to ozone formation in VOC-limited areas, even in the case of
gasoline-hybrid technology vehicles, for which special incentives are being proposed in this
proposed rule. This also does not take into account the demonstrably higher VOC emissions of
gasoline vehicles during vehicle refueling, diurnal + hot soak, and running loss. [NHTSA-2010-
0131-0213-Al,p.7]
If the goal of the proposed rule is to increase fuel economy and reduce greenhouse gas emissions
(and not increase emissions of some criteria pollutants in the process), diesel technology is a
more effective strategy than GDI, and as potentially 'game-changing' a technology as gasoline-
hybrid, and even EV, PHEV and FCV technology, possibly even more so in some cases. There
is no logical reason that diesel technology shouldn't be afforded the same consideration as any
other of the 'advanced technologies'. Preferably, no artificial incentives should be given to any
of the technologies considered and all should just stand on their own merits. I urge
EPA/NHTSA to reconsider the special incentives proposed for EV/PHEV/FCV/gasoline-hybrids,
or at least put diesel technology on a level playing field with these technologies. [NHTSA-2010-
0131-0213-Al,p.9]
As a disclaimer, I am in no way associated with the auto industry or any support industries to the
auto industry, including diesel engine manufacturers. [NHTSA-2010-0131-0213-A1, p.9]
Organization: Plant Oil Powered Diesel Fuel Systems, Inc.
6-144
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
2. The Proposed GHG Standards are arbitrary and capricious because their exclusive
consideration of tailpipe GHG emissions fails to take into account the relative life cycle
contribution to GHG emissions of various engine technologies and the energy sources that make
them run. The analysis of the wells-to-wheels energy inputs associated with various technologies
and fuels set forth herein demonstrates that the Proposed Regulations' apportionment of GHG
credits to various technologies and fuels is irrational because it considers only tailpipe emissions.
[EPA-HQ-OAR-2010-0799-10337-A2, p. 2]
c. re-do the weight the Agencies give to various alternative technologies and fuels according to a
wells-to-wheels approach that corresponds more accurately with their relative contribution to and
mitigation of atmospheric greenhouse gas accumulation; [EPA-HQ-OAR-2010-0799-10337-A2,
pp. 2-3]
Although the Renewable Fuel Standard provides incentives for the use of fuels covered by it,
such as biodiesel, which may have a lower life cycle emissions of carbon than petroleum, such as
biodiesel, pure plant oil is not eligible for the RFS. Therefore, the Proposed Regulations do not
provide any incentive for the use of 100 percent plant oil or an engine specially equipped to run
on this fuel. [EPA-HQ-OAR-2010-0799-10337-A2, p. 6]
In considering only tailpipe emissions, rather than the full life cycle GHG emissions of a
technology and fuel that would result from a wells-to-wheels analysis, the Proposed Regulations
arbitrarily favor and disfavor some alternatives over others. The net effect is that the Proposed
Regulations are not rationally related to their purpose of reducing or slowing global warming.
Following is factual analysis of the wells-to-wheels attributes of the relevant alternative
technologies and fuels, pointing to the idiosyncratic and counter-productive values that the
Proposed Regulations assign to them insofar as they mitigate GHG emissions. [EPA-HQ-OAR-
2010-0799-10337-A2, p. 6]
Organization: U.S. Coalition for Advanced Diesel Cars
A national policy that favors specific technologies will prevent America from achieving dramatic
petroleum reduction in the near- and medium-term. By favoring leap-ahead technologies that
will not see significant market penetration even by the end of this proposed rule's term, the
Administration is choosing a revolutionary path based on assumptions and uncertainties instead
of an evolutionary path that will achieve similarly dramatic petroleum and emission reductions
TODAY at a comparatively minimal cost to the consumer and avoid tremendous infrastructure
costs. [NHTSA-2010-0131-0246-A1, p.l]
Focusing on Fuel Savings, Not Market Challenges: The NPRM goes on to state that diesel
engines are not "advanced technology" per se" (FR 25454). In reality, diesel is the number one
selling advanced CO2 reduction technology sold in the world and is responsible for billions of
gallons saved annually. Diesel technology combines high consumer acceptance - both in the
United States and abroad - high residual values, high demand among used vehicle buyers and
real-world fuel saving performance that is aligned with consumer expectations. [NHTSA-2010-
0131-0246-Al,p.6]
6-145
-------
EPA Response to Comments
In 2006, EPA confirmed the benefit of clean diesel vehicles when it stated that if 33% of
America's vehicles were diesel-powered cars, the nation's fuel savings would be equal to the
amount of fuel America imports from Saudi Arabia. Yet, the NPRM's analysis and commentary
discount the role clean diesel vehicles are already playing to reduce national emissions and fuel
consumption. [NHTSA-2010-0131-0246-A1, pp.6-7]
CAFE credits offered in the NPRM will bring some of these future technologies to market, but
will not meet the Administration's expectations in changing the American vehicle fleet for
several decades. [NHTSA-2010-0131-0246-A1, p. 14]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 238-239.]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 240.]
To ensure that we spur not only innovation but broad innovation that will include multiple
technology paths, public policies, regulations and incentive plans must be technology neutral.
Government should set the goals, even aggressive goals, that inspire the freedom to innovate,
and then get out of the way. State, federal and public officials and regulators must resist the
temptation to pick winners and losers; to let politics and fads enter the debate or to engage in
centralized planning in a highly complex industry.
Organization: Volkswagen Group of America
Volkswagen anticipates that some stakeholders will propose to include hybridization
technologies as applied to all vehicles. Building upon this, Volkswagen proposes that the
agencies adopt the following:
- Credits for deployment of advanced technology compression ignition engines as applied to both
passenger cars and light duty trucks
- Credits for vehicles capable of operating on advance bio-fuels such as B20 (Biodiesel)
- Credits to promote combinations of expensive high-investment technologies such as
electrification of vehicles incorporating advanced compression ignition or bio-fuel capable
engines
Many technologies which deserve crediting may serve as 'bridging technologies' capable of
providing near- and mid-term CC>2 reductions until such time as technologies and market demand
for other more effective concepts mature. [EPA-HQ-OAR-2010-0799-9569-A1, p. 28]
Response:
EPA OMEGA Model does not project significant diesel market penetration
6-146
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
Comments from BMW and Loren Marz suggest that EPA's OMEGA model was
pessimistic in its projections of diesel market penetration and that this is inconsistent with
increasing consumer acceptance and market share for diesel vehicles. EPA emphasizes that the
OMEGA model is designed to project the most cost effective way, not to mandate a compliance
pathway, for automakers to meet the EPA GHG emissions standards. It is not designed to
account for all of the complex elements that, in the aggregate, will determine future market share
for any individual technology, whether conventional gasoline vehicles, electric vehicles, or diesel
vehicles. Manufacturers remain free to choose any means of compliance, which of course
includes use of diesel vehicles. For more discussion of diesel technology issues, see Section
12.2.
No incentive multiplier for diesel vehicles
Volkswagen, the U.S. Coalition for Advanced Diesel Cars, and Loren Marz suggested
that diesel vehicles be provided the same incentives as EV/PFIEV/FCV/CNG vehicles, such as
the incentive multipliers. EPA believes it is not appropriate to adopt incentive multipliers in this
rule for manufacturers of diesel vehicles. One, diesel technology is not a vehicle GHG emissions
game-changer—the tailpipe GHG emissions of diesel vehicles are typically 10-20% lower than
GHG emissions from conventional vehicles (of course, those lower values would be accounted
for in EPA compliance calculations), while EV/PHEV/FCVs all have the potential for much
larger game-changing GHG emissions reductions. Two, diesel vehicles do not face the same
consumer barriers as EV/PHEV/FCV/CNG vehicles—diesel technology has been in the market
for a long time, diesel fuel is available at a large number of fueling stations, and diesel vehicle
range is higher than that of gasoline vehicles.
The related comments regarding technology neutrality and "government picking winners
and losers" are addressed in Section 4.
No accounting of potential upstream GHG emissions benefits due to biodiesel (B20)
Volkswagen and Loren Marz suggested that credits should be available for vehicles that
can operate on biodiesel blends, such as B20, since the biofuel portion of B20 has the potential to
yield large lifecycle GHG emissions benefits due to the CO2 uptake during plant growth.
Likewise, Plant Oil Powered (POP) Diesel Fuel Systems criticized the proposal for considering
only tailpipe GHG emissions and not accounting for lifecycle GHG emissions. The use of
biofuels with lower lifecycle GHG emissions is already required under the Renewable Fuel
Standard (RFS) program, which has been in place since 2006 and is designed to achieve GHG
emissions benefits through the required use of renewable transportation fuels that have better
lifecycle GHG emissions performance than the gasoline or diesel fuel that they displace. EPA
has already quantified the GHG emissions benefits associated with the RFS program. Providing
an additional incentive in the MYs 2017-2025 GHG program, which is focused on vehicle
tailpipe emissions and not lifecycle emissions, would not achieve any greater use of renewable
fuels than is already required under the RFS program, and thus would not achieve any greater
emissions reductions from the use of such fuel. Thus, providing an additional incentive would
reduce the emissions benefits of the MYs 2017-2025 light-duty vehicle GHG emissions program.
Given that biofuel fuel use is already required by and accounted for under the RFS program, it
6-147
-------
EPA Response to Comments
therefore would be inappropriate to provide additional incentives in the MYs 2017-2025
program.
Finally, as noted in earlier responses, although the plant oil-based fuel produced by POP
Diesel Fuel Systems is not currently identified as an acceptable renewable fuel under the RFS
program, EPA is currently considering the company's petition seeking approval of its product
under the RFS program. The RFS program established by Congress is the appropriate
mechanism for evaluating the full lifecycle emissions impact of this type of biofuel use, rather
than a program focused principally on vehicle tailpipe emissions.
6.5. Comments Regarding Other Alternative Fuels
Organizations Included in this Section
Alliance of Automobile Manufacturers
Association of Global Automakers, Inc. (Global Automakers)
Environmental Consultants of Michigan
Ford Motor Company
Manufacturers of Emission Controls Association (MECA)
Plant Oil Powered Diesel Fuel Systems, Inc.
St. Clair-Detroit River Sturgeon for Tomorrow
Organization: Alliance of Automobile Manufacturers
Credits for Other Alternative Fuel Vehicles [EPA-HQ-OAR-2010-0799-9487-A1, p.68]
In the effort to continue the development of advanced technology vehicles, the Alliance would
like to show support of the following technologies, which will help drive our country down the
road toward energy independence. [EPA-HQ-OAR-2010-0799-9487-A1, p.68]
Dual-Fuel CNG and LPG Gasoline Vehicles [EPA-HQ-OAR-2010-0799-9487-A1, p.69]
CNG and LPG vehicles are another option that our country has to diversify the vehicle fleet and
use a domestically available energy source. The Alliance supports the development of a utility
factor approach very similar to the SAE standard mentioned above for PHEVs. The Alliance is
also in favor of the option to allow manufacturers to use the proposed utility factor-based
methodology as a "pull-ahead" option for MYs 2012-2015. [EPA-HQ-OAR-2010-0799-9487-
Al, p.69]
Based on the added cost of the vehicle technology and the cost advantage of using CNG and
LPG fuel relative to gasoline, customers that purchase a dual-fuel CNG or LPG vehicle will, to
the extent possible, use the intended alternative fuel. [EPA-HQ-OAR-2010-0799-9487-A1, p.69]
Many companies may leverage global designs in developing dual-fuel CNG and LPG vehicles
for the U.S. market. It is important that the variety of global design features available be allowed
into the U.S. market. Rather than making specific design requirements in the rules, a better
6-148
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
approach would be have these design features be factors in the calculation of the CNG and LPG
utility factors. The Alliance would like to propose a work group to discuss the constraints
mentioned in the NPRM for dual-fuel CNG and LPG vehicles. [EPA-HQ-OAR-2010-0799-
9487-A1, p.69]
In the NPRM, EPA specifically requested comments on the merits of providing sales multiplier
(similar to the EV/PHEV incentives) for dedicated and/or dual-fuel compressed natural gas
vehicles. The Alliance believes CNG and LPG technology also deserve multipliers. [EPA-HQ-
OAR-2010-0799-9487-A1, p.69]
The Alliance also supports EPA's proposal to continue use of the 0.15 divisor for gaseous and
liquid alternative fuels and the petroleum equivalency factor for electricity. As noted by the
Agencies, this approach will maintain consistency between dedicated and dual fuel vehicle
calculations and will continue to encourage manufacturers to build vehicles capable of operating
on fuels other than petroleum. [EPA-HQ-OAR-2010-0799-9487-A1, p.83]
Organization: Association of Global Automakers, Inc. (Global Automakers)
Furthermore, Global Automakers supports the extension of multiplier incentives to other
alternative fuels as well, such as liquid petroleum gas (LPG) or biodiesel. With regard to dual
fueled vehicles in general, we urge the agencies to reconsider the treatment of these vehicles as
part of the planned mid-term review of the standards, at which point the need for particular
incentives would be clearer. Whatever approach is adopted, we urge that EPA and NHTSA agree
on a single, harmonized set of incentives. [EPA-HQ-OAR-2010-0799-9466-A1, p. 7]
Organization: Environmental Consultants of Michigan
The Department of Energy lifecycle model demonstrates that switching to a renewable fuel using
the Fischer-Thropsch process can achieve carbon neutrality without any change to the vehicle
fleet. The Fischer-Thropsch 8 process has been used around the world since the 1920s to produce
a very high quality diesel that can be used in existing vehicles. It can also be used to produce a
high quality gasoline. The technology exists to produce fuels profitably at any crude oil price in
excess of $17 per barrel of crude oil. This leaves sufficient room for a profitable switch to a
renewable feedstock at today's oil prices. [NHTSA-2010-0131-0166-A1, p. 4]
8 This is not an ethanol fuel but a true, high quality gasoline and diesel product
Organization: Ford Motor Company
EPA further requested comment on the merits of providing similar multipliers for dedicated
and/or dual fuel compressed natural gas vehicles. Ford supports providing multipliers for natural
gas fueled vehicle, and further requests that the same multiplier be provided for dedicated and/or
dual fuel liquefied petroleum gas vehicles. Both gaseous fuels provide substantial reductions in
greenhouse gas emissions, as well as support the diversification of our energy supply, providing
6-149
-------
EPA Response to Comments
greater energy security. However, the vehicle technologies required to allow operation on these
fuels is expensive, and the market availability of the fuel, similar to the availability of public
charging stations for electric vehicles, remains very limited. Therefore, we believe that the
multiplier is appropriate to encourage the investment in these technologies for broader new
vehicles applications, and drive the volumes that will encourage greater investment in the
necessary re-fueling infrastructure. We further recommend that the credit values for dedicated
and bi-fuel gaseous vehicles be aligned with those provided for dedicated and bi-fuel electricity
fueled vehicles. [EPA-HQ-OAR-2010-0799-9463-Al, p. 18]
Organization: Manufacturers of Emission Controls Association (MECA)
Emission controls for gasoline and diesel engines are also generally compatible with low carbon,
alternative fuels (e.g., gasoline blends with renewable ethanol or biodiesel blends) that can
provide additional reductions in mobile source greenhouse gas emissions. Engine operating
strategies and emission control catalyst formulations, however, often need to be optimized
depending on fuel composition to ensure that criteria pollutant emission standards are met. It is
also important that specifications associated with any low carbon fuel should be compatible with
the use of available exhaust emission control technologies. [EPA-HQ-OAR-2010-0799-9452-A3,
p.3]
Organization: Plant Oil Powered Diesel Fuel Systems, Inc.
3. The Proposed GHG Standards are both inconsistent with law and arbitrary and capricious
because they, and other EPA Regulations they incorporate by reference, fail to take into account
in any respect the feasibility of equipping light duty engines to operate on 100 percent
untransesterified plant oil. If EPA took such feasibility into account, an effective way to regulate
GHG emissions would be to impose strict manufacturer GHG emissions averages that are
independent of the corporate average fuel economy standards already in place for light duty
vehicles. [EPA-HQ-OAR-2010-0799-10337-A2, p. 2]
d. recognize 100 percent plant oil as a viable renewable diesel engine fuel eligible to receive
Renewable Identification Number ("RIN") credits under the Renewable Fuels 2 standard ("RFS
2");
e. grant POP DieselTM's application, submitted separately, for a RIN pathway for 100 percent
plant oil fuel; and [EPA-HQ-OAR-2010-0799-10337-A2, p. 3]
f. impose strict corporate fleet averages for GHG emissions on all classes of manufacturers as the
most effective way to ramp down such emissions across the light duty market. [EPA-HQ-OAR-
2010-0799-10337-A2, p. 3]
As set forth below, the Proposed Regulations' treatment of the alternatives to fossil fuel
petroleum in light duty vehicles will not have the effect of mitigating greenhouse gasses. As a
result, even if the Proposed Regulations took into account the full scope of the rebound effect
arising from reliance on improvements in fuel economy, which they do not do, they fail to
6-150
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
establish a framework of incentives to "slow or reduce" Global Warming. Massachusetts v. EPA,
549 U.S. at 525, 127 S. Ct. at 1457. [EPA-HQ-OAR-2010-0799-10337-A2, p. 5]
Although the Renewable Fuel Standard provides incentives for the use of fuels covered by it,
such as biodiesel, which may have a lower life cycle emissions of carbon than petroleum, such as
biodiesel, pure plant oil is not eligible for the RFS. Therefore, the Proposed Regulations do not
provide any incentive for the use of 100 percent plant oil or an engine specially equipped to run
on this fuel. [EPA-HQ-OAR-2010-0799-10337-A2, p. 6]
In considering only tailpipe emissions, rather than the full life cycle GHG emissions of a
technology and fuel that would result from a wells-to-wheels analysis, the Proposed Regulations
arbitrarily favor and disfavor some alternatives over others. The net effect is that the Proposed
Regulations are not rationally related to their purpose of reducing or slowing global warming.
Following is factual analysis of the wells-to-wheels attributes of the relevant alternative
technologies and fuels, pointing to the idiosyncratic and counter-productive values that the
Proposed Regulations assign to them insofar as they mitigate GHG emissions. [EPA-HQ-OAR-
2010-0799-10337-A2, p. 6]
E Biodiesel
The International Council on Clean Transportation ("ICCT") has determined that based on
reliable analyses of the carbon intensity involved in manufacturing biodiesel, "replacing fossil
diesel with biodiesel would not help to mitigate climate change, unless biodiesel could be
produced entirely from wastes with no other use, crops grown on low value land [,] or some
other policy could be put in place to substantially improve performance on emissions." ICCT
Briefing: Biodiesel Carbon Intensity, Sustainability and Effects on Vehicles and Emissions
(2012), at 5 ("ICCT Briefing") (Exhibit 5). The following ICCT chart depicting Biodiesel Total
Emissions shows that the life cycle emissions of biodiesel derived from the most common
triglyceride feedstocks are higher than they are for fossil fuel petroleum. [See chart on p. 11 of
Docket number EPA-HQ-OAR-2010-0799-10337-A2] [EPA-HQ-OAR-2010-0799-10337-A2, p.
10]
Source: ICCT Briefing, at 5 (Exhibit 5).
High level officials in the diesel engine and petroleum industries agree that the manufacture of
100 percent plant oil fuel requires less energy input than biodiesel. Deposition testimony of the
organizational representative of the Engine Manufacturers Association, Roger Gault (Exhibit 7)
("EMA by Gault testimony"), at 170, lines 12-16) ("[T[here's a relative cost between raw
vegetable oil and biodiesel where biodiesel will by its nature be more expensive than raw
vegetable oil because the raw vegetable oil is a component of the biodiesel that's produced");
declaration of Andrew L. Pickard, Ph.D., P. Chem. ("Pickard decl."), para. 3.6 (Exhibit 9)("An
obvious advantage of using triglycerides (such as 'raw' vegetable oil) directly as fuel for diesel
engines is that no energy is spent to convert the 'raw' feedstock into an alternative fuel such as
biodiesel, and there are no by-products or waste products for disposal"). [EPA-HQ-OAR-2010-
0799-10337-A2, p. 11]
6-151
-------
EPA Response to Comments
The means to avoid the counter-productive carbon intensity of manufacturing biodiesel is to
leave the triglyceride feedstock as Nature made it, 100 percent plant oil, and to run it through a
diesel engine that is properly equipped to handle it. The only way that GHG Proposed
Regulations for mobile sources will slow or reduce Global Warming is if they take into account
the wells-to-wheels carbon intensity of all of the alternatives and reward or penalize them
accordingly. Since the Proposed Regulations, instead, expressly reward technologies and fuels on
the basis only of tailpipe emissions and they rely on other irrational assumptions, they fail
accomplish the underlying objective. They are, therefore, arbitrary and capricious. [EPA-HQ-
OAR-2010-0799-10337-A2, p. 12]
F. 100 Percent Plant Oil
The POP Diesel Fuel SystemTM, patented in 2011, may be installed after-market on any diesel
engine to permit it to operate on 100 percent untransesterified plant oil. The engine starts and
shuts down on No. 2 diesel drawn from the original tank, but in the interim, it runs on 100
percent plant oil coming from the auxiliary tank. This approach safeguards engine performance
and preserves the cleanliness of the crankcase oil, obviating the need for any alteration to service
intervals, other than monitoring of the plant oil fuel filter. The plant oil fuel is heated prior to
injection to reduce its viscosity and better assure a finely atomized spray pattern and clean and
efficient burn. [EPA-HQ-OAR-2010-0799-10337-A2, p. 12]
Aftertreatment equipment may even function better on plant oil fuel than No. 2 diesel, if
biodiesel is any indication. A. William, S. Black, and R.L. McCormick, "Biodiesel Fuel Property
Effects on Paniculate Matter Reactivity," DOE, National Renewable Energy Laboratory
("NREL") (biofuel enhances diesel paniculate filter function). [EPA-HQ-OAR-2010-0799-
10337-A2, pp. 12-13]
POP DieselTM's experience in installing its equipment on thirty experimental diesel engines of
all stripes and sizes demonstrates that this solution can work on any engine. The feasibility of
POP DieselTM's basic plant oil technology is proven. Rudolph Diesel himself observed in 2012:
The use of vegetable oils for engine fuels may seem insignificant today. But such oils may
become in course of time as important as the petroleum and the coal tar products of the present
time. [EPA-HQ-OAR-2010-0799-10337-A2, p. 13]
A.K. Babu and G. Devaradjane, "Vegetable Oils and Their Derivatives as Fuels for CI Engines:
An Overview, section 2, SAE 2003-01-0767 (Exhibit 8), at 0605. [EPA-HQ-OAR-2010-0799-
10337-A2, p. 13]
1. Exclusion of Untransesterified Plant Oil from Eligibility for the RFS 2
Because the RFS does not apply to untransesterified plant oil fuel, POP Diesel TM cannot
formally petition for a pathway that would entitle its fuel to a RIN and to earn GHG-reducing,
RIN credits. Therefore, the Proposed Regulations do not afford POP DieselTM the RIN credits
benefit they contemplate for other biofuels that do qualify for the RFS and RFS 2. In this regard,
the Proposed Regulations are arbitrary and capricious. POP DieselTM's separate application for
6-152
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
a RIN contains the life cycle information necessary for EPA to designate a pathway under RFS
2. [EPA-HQ-OAR-2010-0799-10337-A2, p. 13]
2. Institutional Barriers to Introduction of Plant Oil Fuel [EPA-HQ-OAR-2010-0799-103 3 7-A2,
p. 13]
Any plant oil consisting of triglycerides will work in a diesel engine equipped by POP
DieselTM. Just as, depending on source, there are a variety of crude petroleum oils, there are a
variety of plant oils that each have slightly different physical properties. "There is no question
that" all of these plant oils are capable of powering a diesel engine. Sam Jones, and Charles
Peterson, "Using Unmodified Vegetable Oils as a Diesel Fuel Extender," U. Of Idaho (Exhibit 8,
documents 0571 -0578). All of them will deliver undiminished engine performance and
emissions comparable to No. 2 diesel in any diesel engine equipped by POP DieselTM. [EPA-
HQ-OAR-2010-0799-10337-A2, pp. 13-14]
However, imprudent or illogical development of a standard for triglyceride fuel might
unreasonably restrict the scope of feedstock qualifying for plant oil fuel. For this reason, POP
DieselTM has opposed adoption of the first triglyceride standard specification by ASTM
International, to govern this fuel's use in commercial and industrial burners. An exposition of the
unreasonable and unjustified barriers this standard erects to the use of triglyceride fuel in the
diesel fuel market is beyond the scope of this petition. An antitrust lawsuit filed by POP
DieselTM has, thus far, prevented ASTM from publishing this standard, which event would
automatically make it, by law, the quality standard for triglyceride burner fuel in most states.
Plant Oil Powered Diesel Fuel Systems, Inc. v. ExxonMobil, et al. (D.N.M. No. l:ll-cv-00103-
JB-LFG) (filed Feb. 1, 2012) (see all versions of the complaint for enumeration of the Standard's
unreasonable and unjustified restrictions on triglyceride diesel fuel). [EPA-HQ-OAR-2010-0799-
10337-A2, p. 14]
The gist of the antitrust allegations are as follows. The National Biodiesel Board ("NBB")
instigated the drafting of the ASTM triglyceride burner fuel standard to purposefully restrict the
competing biofuel from undercutting its market. ExxonMobil used its dominance of ASTM's
Petroleum Products Committee, by expressly making a threat to vote against any triglyceride
standard that did not include the unreasonable restrictions, to enforce this arrangement. (The
biodiesel industry enjoys preferred status with the petroleum industry by virtue of the 5 percent
blending of biodiesel with No. 2 diesel authorized by ASTM D-975, Standard Specification for
Diesel Fuel Oils. This arrangement allows the petroleum industry to say to the public that it
supports renewable energy.) ASTM's Petroleum Products Committee approved the triglyceride
burner fuel standard without subjecting any of the test methods applied therein to ASTM's
validation procedure that would normally apply to a new fuel. Pickard decl., para. 3.12 (Exhibit
9). [EPA-HQ-OAR-2010-0799-10337-A2, pp. 14-15]
An example of the problems that arise with applying test methods developed for No. 2 diesel to
triglyceride fuel appears in the lab report that is Exhibit 10 (Confidential Business Information). 1
ASTM Test Method D-l 160 distillation "could not be completed beyond" 40 percent recovery
"after 449 degrees C due to the sample forming a gel that stopped the distillation." Id., footnote
(Exhibit 10) (Confidential Business Information). This example calls into question the precision
6-153
-------
EPA Response to Comments
of all other ASTM petroleum and biodiesel test methods for use with triglyceride fuel, none of
which have ever been validated for triglyceride fuel via an ASTM interlaboratory study ("ILS"),
a comprehensive study involving replicate testing done at between six and nine laboratories. See
Pickard decl., para. 3.12 (Exhibit 9). [EPA-HQ-OAR-2010-0799-10337-A2, p. 15]
The fact that there have not been any ILS's conducted, much less successfully concluded, for any
test methods for triglyceride fuel may make it premature for EPA to designate this fuel for
registration under 40 C.F.R. part 79. See supra. In the absence of test methods validated for
triglyceride fuel, a triglyceride fuel manufacturer, such as POP DieselTM, would not have
benchmarks for determining if its fuel submitted for EPA registration was within specifications
and EPA would lack rational means to evaluate the same question. [EPA-HQ-OAR-2010-0799-
10337-A2, p. 15]
The antitrust allegations are, further, that the conspirators used deception to orchestrate ASTM's
development and passage of the triglyceride burner fuel standard. These allegations are that the
NBB had a surrogate, Ralph Turner, who had previously served as the owner's representative
and managing agent of a 45 million gallon per year biodiesel facility, one of the largest in the
United States, propose to ASTM the drafting of a triglyceride standard. On the pretext that Mr.
Turner's ostensibly having used around 4,000 gallons per year of raw vegetable oil to heat
greenhouses on his farm gave him experience with triglyceride fuel, ASTM appointed him to
serve as Technical Contact for the ASTM Subcommittee that undertook to draft the standard.
The result has the primary effects of enshrining false shibboleths and unnecessarily crimping
restraints into a precedent-setting ASTM triglyceride fuel standard, the laws of most states and
possibly, federal law. [EPA-HQ-OAR-2010-0799-10337-A2, p. 16]
The federal district judge in New Mexico dismissed the antitrust lawsuit in July 2011 but
conducted a three-hour hearing on POP DieselTM's motion to reconsider in mid-December
2011. He has not issued his ruling yet on whether to reinstate this suit. [EPA-HQ-OAR-2010-
0799-10337-A2, p. 16]
3. Overcoming Prejudice Against POP DieselTM's Use of 100 Percent Plant Oil.
Two organizations, the Engine Manufacturers Association and the National Renewable Energy
Laboratory, have issued public statements arguing against the use of vegetable oil as fuel in a
diesel engine. As set forth below, both of these statements are unjustified and based on outdated
data. [EPA-HQ-OAR-2010-0799-10337-A2, p. 16]
i. Engine Manufacturers Association Statement [EPA-HQ-OAR-2010-0799-10337-A2, p. 16]
Research on the use of raw vegetable oil running in a diesel engine dating to the 1970's and early
1980's found that it caused carbon deposits and other problems. EMA by Gault testimony
(Exhibit 7) (referring to numbered documents that constitute Exhibit 8). As is evident from the
testimony of the Engine Manufacturers Association's representative Mr. Gault, this research, and
nothing more recent than that, was the primary basis for EMA to adopt a statement in 2006
condemning the use of raw vegetable oil in a diesel engine. EMA statement (Exhibit 8, document
0566). [EPA-HQ-OAR-2010-0799-10337-A2, pp. 16-17]
6-154
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
Based on documents kept in the EMA's file concerning development of its position statement,
the NBB's Steve Howell ("Mr. Howell") seemed to be the instigator of this statement. EMA by
Gault testimony, at 171, lines 18-22 (Exhibit 7) (referring to Exhibit 8, documents numbered
0569, 0579, 0582, 0603 and 0604). As other documents in the same file indicate, Mr. Howell, on
behalf of the biodiesel industry, also took the lead in agitating for EPA to impose additional
restrictions on the use of 100 percent plant oil in a diesel engine. Exhibit 8, document 0582 (Mr.
Gault's notes of teleconference organized in December 2005 by Mr. Howell with EPA officials
Jim Caldwell, Dave Kortum and Joseph Sopata); document 0603 (text of email by Mr. Howell to
EPA officials seeking meeting "on the subject of EPA registration of Straight Vegetable Oil or
Raw Vegetable Oil"). [EPA-HQ-OAR-2010-0799-10337-A2, p. 17]
POP DieselTM does not advocate, in fact it shuns, the methods of use of plant oil in the failed
research studies from the 1970's and early 1980's: either blending the vegetable oil with No. 2
diesel in a single tank, or else, using it at 100 percent concentration, but without the safeguards
that POP DieselTM has learned are necessary. These necessary safeguards include: [EPA-HQ-
OAR-2010-0799-10337-A2, p. 17]
1. Always starting the engine on 100 percent No. 2 diesel drawn from its own fuel tank, so as to
prevent excessive blow-by of plant oil fuel past the cold piston rings into the engine crankcase,
where it will polymerize and gum up the engine; [EPA-HQ-OAR-2010-0799-10337-A2, pp. 17-
18]
2. Always shutting down the engine on 100 percent No. 2 diesel drawn from its own fuel tank, so
that the plant oil fuel does not remain on the hot metal parts of the fuel injection system to sizzle
and plasticize and so that, in cooler weather, the plant oil fuel does not congeal upon engine
cool-down and then cause difficulty on engine start-up; and [EP A-HQ-OAR-2010-0799-103 3 7-
A2, p. 18]
3. Always flushing the engine and fuel system with 100 percent No. 2 diesel drawn from its own
fuel tank prior to engine shut-down, to take advantage of this fuel's excellent properties as a
solvent in removing plant oil from the internal fuel passages of the engine, where it may
eventually gel. [EPA-HQ-OAR-2010-0799-10337-A2, p. 18]
In fact, more recent studies than the ones from the 1970's and early 1980's speak favorably of
plant oil fuel. Jones, S. and Peterson, C., "Using Unmodified Vegetable Oils as a Diesel Fuel
Extender," U. of Idaho (Exhibit 8, at 0575 (citing Nag et al. (1995) and Sapaum et al. (1996))).
POP DieselTM has overcome the technical hurdles to warrant that the use of 100 percent plant
oil in a diesel engine is absolutely feasible. [EPA-HQ-OAR-2010-0799-10337-A2, p. 18]The
EMA position statement on the use of raw vegetable oil in a diesel engine is further suspect
because the final draft omitted language included in earlier drafts that seemed to approve of a
dual tank fuel system like POP DieselTM's: "Vehicles may be modified to achieve compatibility
between raw vegetable oil and animal fats with the fuel delivery system (e.g., by heating the fuel
system to reduce the fuel's viscosity)." Exhibit 8, document 0596. [EPA-HQ-OAR-2010-0799-
10337-A2, p. 18]
6-155
-------
EPA Response to Comments
ii. National Renewable Energy Laboratory Statement [EPA-HQ-OAR-2010-0799-10337-A2, p.
18]
Three sentences buried in NREL's Biodiesel Handling and Use Guide ("NREL statement"), at
page 8, advise avoiding the use of untransesterified plant oil as diesel fuel. NREL statement
(Dec. 2009) (Exhibit 11). Both the NREL and EMA statements turn on the conclusion that "the[]
problems [with plant oil fuel] are caused mostly by the greater viscosity, or thickness, of the raw
oils." NREL statement, at 8 (Exhibit 11). [EPA-HQ-OAR-2010-0799-10337-A2, pp. 18-19]
However, the fuel injection equipment manufacturer Bosch states that in contemporary, pressure-
regulated common rail fuel systems, the higher viscosity of vegetable oil fuel does not exceed
design thresholds for component strength. Dr. Jorge Ullmann and Dr. Heinz Stutzemberger,
"Biofuels of the Future - Injection System Requirements in Terms of Quality," section 2.1,
Robert Bosch GmbH (Nov. 2007) (Exhibit 12-A); deposition testimony of the organizational
representative of Bosch, Tom Livingston, at page 74, lines 5-8 and 21-24 (Exhibit 12-B). [EPA-
HQ-OAR-2010-0799-10337-A2, p. 19]
The NREL statement does not refer to any evidentiary source to justify its advisory against the
use of plant oil fuel. NREL statement, at page 8 (Exhibit 11). The EMA statement refers as its
only source to the conclusory NREL statement. EMA statement (Exhibit 8, document 0504). The
organizational representative of the EMA, trying to justify the sweep of EMA's statement, could
only cite to a single example of an engine that suffered a catastrophic - meaning sudden and
disabling - engine failure, allegedly due to use of untranesterified plant oil in the engine. EMA
by Gault testimony, at page 202, line 12 - page 203, line 4 (Exhibit 7). [EPA-HQ-OAR-2010-
0799-10337-A2, p. 19]
The close ties that the NBB's Mr. Howell has with Robert McCormick, the director of NREL's
Center for Transportation Technologies and Systems, are evident in the EMA's background file
on the development of its statement. Mr. McCormick keeps Mr. Howell apprized of his
communications with EPA on the subject of vegetable oil fuel. Exhibit 8, document 0569. The
reader is left to speculate whether Mr. Howell asked Mr. McCormick to speak negatively to EPA
about this fuel, as Mr. McCormick appears to have done in December 2005. Exhibit 8, document
0570 (Joe Sopata of EPA to Mr. McCormick: "You mentioned to me during the diesel
subcommittee meeting that using vegetable oil at any level in a diesel engine would render the
diesel engine inoperable within one year. Do you have any data on this issue?"). Mr. McCormick
forwards to Mr. Howell research papers on the topic of plant oil fuel. Exhibit 8, document 0604.
Mr. Howell uses Mr. McCormick's intelligence feed in the NBB's campaigns to get EMA and
EPA to take action to inhibit the use of plant oil fuel. [EPA-HQ-OAR-2010-0799-10337-A2, pp.
19-20]
All of the foregoing communications occur, and the EMA and NREL adopted their statements
condemning the use of raw vegetable oil as fuel based on, old, faulty evidence. [EPA-HQ-OAR-
2010-0799-10337-A2, p. 20]
POP DieselTM agrees that the improper management of plant oil fuel may cause longer term
problems in a diesel engine. This is no different from the fact that petroleum diesel fuel
6-156
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
functioned less than optimally in compression ignition engines for years, until its properties and
their behavior in the engine came to be better understood. ASTM D-975, Standard Specification
for [Petroleum] Diesel Fuel Oils, was not adopted until 1948, four decades after the diesel engine
came into wide usage on petroleum diesel fuel. Pickard decl., para. 2.9 (Exhibit 9). [EPA-HQ-
OAR-2010-0799-10337-A2, p. 20]
Plant oil fuel is in its infancy, but POP DieselTM has shown that the technology to run it at 100
percent concentration is feasible and practical. Moreover, given life cycle GHG emissions that
are better than the alternatives, plant oil fuel is particularly effective at reducing or slowing
global warming. The Proposed Regulations ought to embrace this solution, rather than ignore it.
The best way to embrace it would be for EPA to impose strict corporate fleet averages for GHG
emissions that are divorced from fuel efficiency considerations and that take into account the full
embodied energy and life cycle emissions inherent in the various engine technologies and fuels.
This approach would allow EPA to fulfill its duty to ramp down GHG emissions with a certainty
that is lost in the Agencies' false trust in fuel economy and myopic focus on tailpipe emissions,
as embodied in the Proposed GHG Standards. [EPA-HQ-OAR-2010-0799-10337-A2, pp. 20-21]
IThe fuel sample of jatropha plant oil used in this study had relatively high levels of
phosphorous and sulfur. Normally, virgin plant oils have negligible quantities of these elements
in them. The high levels got into the fuel sample through the use of fertilizer, herbicide or
pesticide. The grower will alter its cultivation method to eliminate the presence of these elements
in his extracted oil.
Organization: St. Clair-Detroit River Sturgeon for Tomorrow
We understand that smaller and lighter vehicles will be part of the equation to accomplish future
fuel economy standards, however many of us drive larger, heavier vehicles used to tow boats,
snowmobiles and travel trailers. We support the further development of alternative fuel sources
such as bio-diesel which as renewable energy sources will help to reduce dependence on oil, will
reduce emissions and will still allow us to drive vehicle suitable for towing and hauling. We are
glad to see the plan is designed to ensure that we will still have a full range of vehicle choices.
The development of alternative fuels will also help to control costs due to increasing global
demand for diminishing fossil fuel resources. [EPA-HQ-OAR-2010-0799-4151, p. 1]
Response:
The Alliance of Automobile Manufacturers, Association of Global Automakers, and Ford
recommended that incentive multipliers be available for manufacturers of liquefied petroleum
gas (LPG) vehicles. EPA is not adopting incentive multipliers for LPG vehicles because the
Agency does not believe that LPG vehicles promote the commercialization of technologies that
have, or technologies whose commercialization can be critical facilitators of next-generation
technologies that have, the potential to transform the light-duty vehicle sector by achieving zero
or near-zero GHG emissions and oil consumption.
6-157
-------
EPA Response to Comments
POP Diesel's comments regarding the merits of its product, and the (asserted) obstacles it
has faced from competitive interests and others, is beyond the scope of this rulemaking.
However, the comment that EPA should base compliance on fleet wide averaging is misplaced
since this is precisely how compliance is measured for all manufacturers.
6.6 Comments Regarding Issues Relevant to Multiple Fuels
Organizations Included in this Section
Alliance of Automobile Manufacturers (AAM)
American Petroleum Institute (API)
Bosch
Motor & Equipment Manufacturers Association (MEMA)
Nissan North America, Inc.
Plant Oil Powered Diesel Fuel Systems, Inc.
Securing America's Future Energy (SAFE)
Organization: Alliance of Automobile Manufacturers
The Alliance also supports EPA's proposal to continue use of the 0.15 divisor for gaseous and
liquid alternative fuels and the petroleum equivalency factor for electricity. As noted by the
Agencies, this approach will maintain consistency between dedicated and dual fuel vehicle
calculations and will continue to encourage manufacturers to build vehicles capable of operating
on fuels other than petroleum. [EPA-HQ-OAR-2010-0799-9487-A1, p.83]
Organization: American Petroleum Institute (API)
EPA and NHTSA Should Not Contravene the Will of Congress by Allowing an Unlimited Fleet
Fuel Economy Credit for MY 2020 and Later Dual-Fueled Vehicles
EPA and NHTS A also are requesting comment on whether to continue to use the 0.15 divisor for
CNG and ethanol, and the petroleum equivalency factor for electricity, both of which the statute
requires to be used through MY 2019, for model years 2020 and later dual-fueled vehicles. The
use of these factors in conjunction with the utility factor approach discussed above artificially
and substantially inflates the fuel economy of dual-fueled vehicles and thus provides an incentive
to the automakers to produce these for CAFE compliance purposes regardless of other
consequences. In essence, the agencies are proposing that automakers may ".. .increase their
calculated fleet fuel economy for dual-fueled vehicles by an unlimited amount using these
flexibilities." 16 However, Section 32906 of the Energy Independence and Security Act of 2007
(EISA 2007) phased-out the maximum fuel economy credit attributable to dual-fuel vehicles
(except electric vehicles) that could be taken by manufacturers of those vehicles such that the
credit was reduced from 1.2 mpg in model year 2014 (and previous model years) to 0.2 mpg in
model year 2019 to "0 miles per gallon for model years after 2019" (Section 32906(a)(7)).
Clearly, the EPA and NHTS A proposed treatment of model year 2020 and later dual-fueled
natural gas vehicles is overly generous and inconsistent with the intent and will of Congress. It
should be set aside. [EPA-HQ-OAR-2010-0799-9469-A1, p. 7]
6-158
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
It is also useful to note that for the many years that this CAFE credit incentive has been in place,
dual-fueled vehicles (particularly those using natural gas) have continued to remain a negligible
fraction of the fleet. In other words, the presence of the incentive has not contributed to the
influx of dual-fueled CNG vehicles. (In fact, there are no OEM dual-fuel CNG vehicles offered
today; only a few after-market conversion models.) [EPA-HQ-OAR-2010-0799-9469-A1, p. 7]
Organization: Bosch
EPA has proposed two options for the calculation for CAFE for alternative fuel vehicles in
MY2020 and beyond (after expiration of the calculation specified in 49 U.S.C. 32905). The
treatment of E85 FFV, CNG and electricity is called out specifically in the NPRM, however
there are a number of other alternative fuels, such as renewable diesel, in the market today and
under development. Bosch recommends, regardless of which calculation option the EPA should
decide on, clarification that all types of alternative fuels, not only E85, CNG and electricity, are
included and treated in an equivalent manner in the calculation. This recommendation applies to
treatment of dedicated alternative fuel vehicles as well. [EPA-HQ-OAR-2010-0799-9462-Al, p.
4]
Organization: Motor & Equipment Manufacturers Association (MEMA)
All alternative fuels, such as biodiesel, must be considered equally and not limited to just E85,
CNG and electricity. Dedicated alternative fuel vehicles should be treated equally, regardless of
fuel type. [EPA-HQ-OAR-2010-0799-9478-A1, p.2]
Regardless of which option EPA decides to adopt for MY2020 and beyond, MEMA recommends
that the agency clarify that all types of alternative fuels, such as biodiesel, are considered and
treated equivalently in this CAFE calculation, and not only limit it to E85, CNG and electricity.
In addition, MEMA believes that the treatment of dedicated alternative fuel vehicles should also
be equivalent regardless of the alternative fuel type. [EPA-HQ-OAR-2010-0799-9478-A1, p. 12]
All alternative fuels should be considered equally and not limited to just E85, CNG and
electricity. [EPA-HQ-OAR-2010-0799-9478-A1, p. 13]
Organization: Nissan North America, Inc.
Nissan Supports Continued Use of the Petroleum Equivalency Factor for CAFE Calculations in
MYs 2020-2025 [EPA-HQ-OAR-2010-0799-9471-A1 p.24]
EPA proposes to continue to use the petroleum equivalency factor for MYs 2020 and later.
Proposed Rule at 75,019. Nissan supports EPA's proposal to continue to use the petroleum
equivalency factor for electricity in MYs 2020-2025, which is consistent with the purpose of the
CAFE program-to reduce our country's dependence on foreign oil. See 65 Fed. Reg. 36,986,
36,986 (June 12, 2000) (establishing the petroleum equivalency factor). Not only is such an
approach consistent with the purpose of the CAFE Program, continued use of the petroleum
6-159
-------
EPA Response to Comments
equivalency factor will incentivize manufacturers to invest in EVs and PHEVs, thereby
increasing the rate of adoption of these technologies. [EPA-HQ-OAR-2010-0799-9471-A1 p.24]
Organization: Plant Oil Powered Diesel Fuel Systems, Inc.
b. de-couple fuel efficiency policy from GHG emissions policy, since they are distinct and the
former is not a surrogate for the latter; [EPA-HQ-OAR-2010-0799-10337-A2, p. 2]
c. re-do the weight the Agencies give to various alternative technologies and fuels according to a
wells-to-wheels approach that corresponds more accurately with their relative contribution to and
mitigation of atmospheric greenhouse gas accumulation; [EPA-HQ-OAR-2010-0799-10337-A2,
pp. 2-3]
Organization: Securing America's Future Energy (SAFE)
Use of Miles Per Gallon as Appropriate Metric: To calculate fuel economy across vehicles that
rely on an increasingly diverse portfolio of fuels, NHTSA relies on an alternative fuel vehicle's
"miles per gallon equivalent" (MPGe) as a representation of its fuel economy. Doing so,
however, measures the performance of alternative fuel vehicles in a manner that is not
particularly meaningful (miles per 115,000 BTU of energy) and is inconsistent with the original
intent of the CAFE program. But virtually no one understands the meaning of miles per BTU of
energy, and even if they did it is not particularly meaningful. Most importantly, however, it fails
to account for the very real value that most alternative fuels provide to the nation by reducing our
use of oil, helping to delink our economy from the global market, and reducing the economic and
national security consequence of that dependence. [EPA-HQ-OAR-2010-0799-9518-A1, p. 16]
The MPG metric was really developed to serve as a surrogate for operating costs. That made
sense when we relied on a single fuel, whose price was volatile. It allowed owners to compare
the relative efficiency of vehicles so that we could quickly compare their relative operating costs.
The use of MPG also allowed us to report a common measure of efficiency that isolated the
effects of fuel price volatility. [EPA-HQ-OAR-2010-0799-9518-A1, p. 16]
Calculating fuel economy on the basis of MPGe is perhaps simple but flawed. In essence, the
calculation upon which NHTSA relies is intended to promote efficiency for efficiency's sake.
SAFE believes, however, that NHTSA should consider whether it makes more sense for its
calculation to seek to optimize the primary goal of fuel economy regulations, which is to reduce
oil consumption, which is overconsumed because it is underpriced. [EPA-HQ-OAR-2010-0799-
9518-Al,p. 16]
A revised method of calculating fuel economy is warranted because using oil to fuel vehicles is
different than the consumption of other fuels; the unique manner in which oil dependence
undermines our nation's energy, economic and national security is different than other fuels.
Nearly every fuel used in the United States other than those derived from crude oil, including the
fuels used to generate electricity, is produced in North America. Their production supports
American jobs and does increase the trade deficit, and their prices are less volatile than the price
of oil. It was, in fact, concern about our consumption of oil that led to the first fuel economy
6-160
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
standards, which were required by the Energy Policy and Conservation Act of 1975. Moreover,
even as the United States established national policies to reduce our consumption of oil, we also
established national policies, and spent tens of billions of dollars to promote the production and
use of other fuels because of their merits relative to oil. [EPA-HQ-OAR-2010-0799-9518-A1,
pp. 16-17]
While several commenters at the public hearings concerning this regulation stated their desire for
"technology neutral" regulations, SAFE believes that different treatment is justified for
alternative fuels because their use does not have the same economic or security consequences as
using oil. In fact, given the importance, and statutory goal, of reducing petroleum consumption,
SAFE believes that vehicles that do not consume oil should be treated as such in the
development of these regulatory programs. Such calculations are not possible when fuel
economy is calculated on the basis of miles per gallon which is calculated as miles traveled
divided by gallons of fuel consumed, because they do not consume any gallons of fuel and the
denominator in the MPG calculation cannot be zero. They are, however, possible when fuel
consumption is calculated on the basis of gallons per mile (or per 100 miles) which is calculated
as gallons consumed divided by miles travelled, because the numerator in the equation can be
zero. [EPA-HQ-OAR-2010-0799-9518-A1, p. 17]
As demonstrated in Table 2,39 calculating the fleet average fuel consumption while treating
alternative fuel vehicles as requiring no oil is a simple calculation that accurately reflects their
contribution to our national goal of reducing oil consumption. Column 2 represents a vehicle's
fuel economy measure in miles per gallon, which is calculated by dividing miles travelled per
gallons of gasoline consumed. Column 3 represents the gallons of fuel consumed by the vehicle
per 100 miles travelled, which is calculated by dividing 100 by a vehicle's MPGe. Column 4
reflects the numbers in column 3 taking into account that that vehicles 8 and 9 were natural gas
vehicle and electric vehicles that consumed no oil and vehicle 10 was a PHEV that consumed
less oil than reflected in its MPGe rating. [Table 2 can be found on p. 18 of Docket number EPA-
HQ-OAR-2010-0799-9518-A1] [EPA-HQ-OAR-2010-0799-9518-A1, p. 17]
SAFE believes that calculating fuel economy as demonstrated in this table is more consistent
with the original intent of the statute, in that properly emphasizes the goal of reducing petroleum
consumption, and acknowledges that certain vehicles consume less or no petroleum products.
SAFE recognizes that the current calculation, which is based in a vehicle's MPGe, may be
required by statute at this point in time. SAFE nevertheless encourages NHTSA to evaluate
calculating fuel economy based on a gallons-per-mile metric, bring this issue to Congress'
attention at some point in the near future, and recommend that Congress amend the statute as
appropriate. This is the first period of time over which NHTSA is likely to be regulating large the
fuel economy of substantial numbers of electric drive vehicles. It is important to get the
regulatory approach right at the earliest possible time. [EPA-HQ-OAR-2010-0799-9518-A1, p.
18]
6-161
-------
EPA Response to Comments
39 The calculation of fuel consumption for a PHEV assumed calculation over a 100 mile trip
without charging, a combined MPGe of 73, an MPGe in charge depleting mode of 93 MPGe, an
MPG of 37 in charge sustaining mode, and a utility factor of 0.65.
Response:
Rejecting use of the 0.15 factor for GHG emissions compliance for all fuels
Many comments recommended that EPA use the 0.15 divisor, which has long been used
for CAFE credits for alternative fuel vehicles, as an incentive for GHG emissions compliance for
a variety of alternative fuels. Boyden Gray and Associates went so far as to argue that EPA is
legally compelled to do so because the divisor is included in the 2007 EISA legislation, issued
after the Supreme Court's decision in Massachusetts v. EPA. The argument goes that EISA and
the CAA are in conflict on this point, and since EISA is the later-enacted statute, it must take
precedence over both the CAA and the Supreme Court's opinion. EPA does not accept this
argument. There is no suggestion in either the EISA text establishing the divisor (or elsewhere
in EISA), or in the legislative history, of any Congressional intent to de facto amend the
emission-standard setting provisions of the Clean Air Act, or to restrict the scope of the Supreme
Court's holding that greenhouse gases are pollutants under the Clean Air Act (and therefore
potentially subject to all Clean Air Act provisions for "pollutants"). Nor are the statutes in such
dramatic conflict as the commenter would have it. The statutory divisor disappears for dual fuel
CNG (and other alternative fuel) vehicles after MY 2019, and the statutory divisor is of little
practical benefit to any CNG vehicles before then. This is because of a different limitation in
EISA on the upper limit on credit use under CAFE, and because all available credits are being
utilized by FFVs. See, e.g., comments of Encana and NGV America (alluding to this practical
limitation). Moreover, the EPCA/EISA statutory criteria for eligibility for dual fuel CNG
incentives are more restrictive than under the GHG rule. Under EPC A, dual-fuel CNG vehicles
are required to have a CNG-only range of at least 200 miles to qualify for the CAFE credit - a
requirement equivalent to a 95.4% natural gas usage rate according to the utility factor
methodology. As commenter VNG pointed out, this effectively results in vehicles expected to
fuel on natural gas a large majority of the time being treated as dedicated gasoline vehicles.
Thus, had EPA adhered to strict harmonization with EPC A/EISA, the GHG rule would be more
restrictive with respect to the use of utility factors for dual fuel CNG vehicles.
EPA thus does not accept that it is legally compelled to offer the 0.15 divisor as an
incentive under the GHG rules. EPA also rejects this approach for policy reasons. Congress
provided the 0.15 divisor for CAFE compliance because a vehicle that operates on a non-
petroleum fuel consumes zero or near-zero petroleum, and petroleum conservation is a primary
objective of the CAFE program. But the tailpipe GHG emissions from most alternative fuel
vehicles are not zero or near-zero, and in any case EPA believes that GHG emissions compliance
should simply be based on GHG emissions performance. The primary focus of the GHG
standards must be GHG emissions performance. Cf. Massachusetts v. EPA, 549 U.S. at 528
("But that DOT sets mileage standards in no way licenses EPA to shirk its environmental
responsibilities. EPA has been charged with protecting the public's 'health' and 'welfare' [citing
CAA section 202 (a)], a statutory obligation wholly independent of DOT's mandate to promote
energy efficiency.") Adopting the 0.15 factor for GHG emissions compliance for vehicles with
substantial tailpipe GHG emissions could yield a significant reduction of GHG programmatic
6-162
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
benefits that is not warranted by these vehicles. We also disagree with those commenters who
argued that EPA must adopt the 0.15 factor in order to not "negate the Congressional mandate"
for CAFE credits. The Congressional mandate still applies for CAFE purposes. EPA's GHG
program and NHTSA's CAFE program are harmonized in numerous ways, but there are a
number of instances where the programs diverge with respect to incentives and flexibilities. See
Preamble Section IB.4. Here, EPA believes that the paramount emission reduction goals of the
CAA warrant the difference in approach.
Adopting use of the 0.15 factor for CAFE compliance beginning in MY 2020
With one exception, commenters supported the proposal to continue to use the 0.15
divisor for CAFE compliance beginning in MY 2020. Nissan summarized the most common
argument for retaining the 0.15 divisor for CAFE compliance, stating that the 0.15 divisor "is
consistent with the purpose of the CAFE program—to reduce our country's dependence on
foreign oil." The Alliance of Automobile Manufacturers argued that "this approach will maintain
consistency between dedicated and dual fuel vehicle calculations and will continue to encourage
manufacturers to build vehicles capable of operating on fuels other than petroleum." There was
also support for retaining the 0.15 divisor for the CAFE program from other automakers, natural
gas advocacy groups, and ethanol/renewable fuel groups. The one comment against retaining the
0.15 divisor was the American Petroleum Institute. It argued: "Section 32906 of the Energy
Independence and Security Act of 2007 phased-out the maximum fuel economy credit
attributable to dual fuel vehicles (except electric vehicles) that could be taken by manufacturers
of those vehicles such that the credit was reduced from 1.2 mpg in model year 2014 (and
previous model years) to 0.2 mpg in model year 2019 to '0 miles per gallon for model years after
2019.' Clearly, the EPA and NHTSA proposed treatment of model year 2020 and later dual
fueled natural gas vehicles is overly generous and inconsistent with the intent and will of
Congress. It should be set aside."
EPA, pursuant to its EPCA authority, is finalizing the CAFE compliance treatment for
MY 2020 and later, as proposed, with one change being the addition of eligibility requirements
for dual fuel CNG vehicles to be able to use the utility factor approach, as discussed in RTC
Section 6.2. EPA is adopting the same approaches for weighting the fuel economy compliance
values for dual fuel vehicles for CAFE compliance as we have done for GHG emissions
compliance: using utility factors for PHEVs and dual fuel CNG vehicles (the latter must meet
the eligibility requirements), and providing manufacturers the option of using projected national
average E85 usage data, manufacturer-specific E85 usage data, or a 100% gasoline default value
for ethanol FFVs. EPA is adopting the 0.15 divisor, and petroleum equivalency factor for
PHEVs, for dual fuel vehicle CAFE compliance in MY 2020 and later, for two reasons. One,
this approach is directionally consistent with the overall petroleum reduction goals of
EPCA/EISA and the CAFE program, because it reflects the much lower or zero petroleum
content of alternative fuels and continues to encourage manufacturers to build vehicles capable
of operating on fuels other than petroleum. Two, the 0.15 divisor and petroleum equivalency
factor (PEF) are used under EPCA to calculate CAFE compliance values for dedicated
alternative fuel vehicles, and retaining this approach for dual fuel vehicles maintains consistency,
for MY 2020 and later, between the approaches for dedicated alternative fuel vehicles and for the
alternative fuel portion of dual fuel vehicle operation.
6-163
-------
EPA Response to Comments
In response to the comment from the American Petroleum Institute, EPA recognizes that
use of the 0.15 divisor, and petroleum equivalency factor for PHEVs, will continue to provide a
large increase in CAFE compliance values for the vehicles previously covered by the special
calculation procedures in 49 U.S.C. 32905, and that Congress chose both to end the specific
calculation procedures in that section and over time to reduce the benefit for CAFE purposes of
the increase in fuel economy mandated by those special calculation procedures. However, the
MY 2020 and later methodology differs significantly in important ways from the special
calculation provisions mandated by EPCA. Most importantly, the MY 2020 and later
methodology reflects actual usage rates of the alternative fuel and does not use the artificial
50/50 weighting previously mandated by 49 U.S.C. 32905. In practice this means the primary
vehicles to benefit from the MY 2020 and later methodology will be PHEVs and dual-fuel CNG
vehicles, and not ethanol FFVs, while the primary source of benefit to manufacturers under the
statutory provisions came from ethanol FFVs. Changing the weighting to better reflect real
world usage is a major change from that mandated by 49 U.S.C. 32905, and it orients the
calculation procedure more to the real world impact on petroleum usage, consistent with the
statute's overarching purpose of petroleum conservation. In addition, as noted above, Congress
maintained the 0.15 divisor in the calculation procedures for dedicated alternative fuel vehicles
that result in increased fuel economy values. Finalizing the 0.15 divisor for dual fuel vehicles is
consistent with this, as it uses the same approach for calculating fuel economy on the alternative
fuel when there is real world usage of the alternative fuel. Since the MY 2020 and later
methodology is quite different in effect from the specified provisions in 49 U.S.C. 32905, and is
consistent with the calculation procedures for dedicated vehicles that use the same alternative
fuel, EPA believes this methodology is an appropriate exercise of discretion under the general
authority provided in 49 U.S.C. 32904.
Equivalent treatment of all alternative fuels under CAFE beginning in MY 2020
Bosch and the Motor and Equipment Manufacturers Association commented that all
types of alternative fuels, including biodiesel, should be treated "equivalently" under the CAFE
program. EPA agrees with these comments, and all dedicated alternative fuel vehicles will use
the 0.15 divisor in CAFE calculations for MY 2020 and later. In addition, vehicles capable of
operating on diesel containing at least 85% biodiesel (B85), will also use the 0.15 divisor in
CAFE calculations for MY2020 and later. While B85 may not be considered an alternative fuel
under EPCA at this time, 20% biodiesel (B20) is recognized by Congress for purposes of section
32905, and B85 exhibits the same or better petroleum replacement benefits as the 85% alcohol
blend alternative fuels currently used in FFVs. Several commenters recommended that utility
factors be used for CAFE calculations prior to 2020. EPA is rejecting this recommendation, as
EPCA requires the Agency to assume 50% use of the conventional fuel and 50% use of the
alternative fuel for CAFE calculations through MY 2019. Finally, VNG.Co suggested that the
agencies consider possible ways to provide CAFE credits, in the pre-2020 timeframe, for duel
fuel CNG vehicles that have a CNG range of less than 200 miles. EPA is rejecting this
recommendation as well, as the 200-mile minimum range requirement is required under 49
U.S.C. 32901(c).
Finally, Plant Oil Powered Diesel Fuel Systems argued that EPA should re-evaluate the
weight given to various alternative technologies and fuels according to a life-cycle approach, and
6-164
-------
Treatment of Plug-in Hybrids, Alternative-Fueled, and Diesel-Fueled Vehicles
to decouple fuel efficiency policy from GHG emissions policy. In setting these emissions
standards, EPA reasonably chose to consider the impact on GHG emissions of the fuels used by
the different types of vehicles by measuring the tailpipe emissions of vehicles, including
alternative fuel vehicles (which normally emit less GHG emissions than gasoline or diesel-
powered vehicles). POP Diesel's statement that the rules arbitrarily assign zero emissions and
zero fuel consumption to electric vehicles is also misplaced. Electric vehicles have zero GHG
emissions measured at the tailpipe. POP Diesel states further that the standards are arbitrary in
the GHG-reducing weight given to some alternative technologies and fuels. POP Diesel's
complaint that the rule provides incentives for use of certain advanced technologies such as
hybrid electrification and hydrogen fuel cells questions legitimate policy choices unrelated to the
issue of fuel use. See also responses in RTC Section 4 above.
In the separate, congress!onally mandated, Renewable Fuel Standard program, there are
strong incentives for use of renewable diesel fuels (the commenter's specific interest). This
program is specifically designed to mandate increasing volumes of renewable fuel use in
transportation fuels. The definition of renewable fuel includes thresholds for reductions in
lifecycle greenhouse gas emissions, compared to petroleum fuel. For example, specified
volumes of biomass-based diesel fuel must be used in the diesel transportation sector, and
biomass-based diesel is defined in part as a diesel fuel that achieves a 50% reduction in life-cycle
greenhouse emissions compared to baseline petroleum diesel fuel.
6-165
-------
-------
Off-cycle Technology Credits
7. Off-Cycle Technology Credits
7.1. General Comments
Organizations Included in this Section
Alliance of Automobile Manufacturers
American Honda Motor Co., Inc.
Association of Global Automakers, Inc. (Global Automakers)
BMW of North America, LLC
Borg Warner, Inc.
Center for Biological Diversity
Chrysler Group LLC
Delphi Corporation
EcoMotors International, Inc.
Fisker Automotive, Inc.
Ford Motor Company
General Motors Company
Hyundai America Technical Center
International Council on Clean Transportation (ICCT)
Johnson Controls, Inc.
Mazda North American Operations
Mercedes-Benz USA, LLC
Motor & Equipment Manufacturers Association (MEMA)
National Wildlife Federation (NWF)
Natural Resources Defense Council (NRDC)
Porsche Cars North America, Inc. (PCNA)
United Automobile Workers (UAW)
Volkswagen Group of America
Volvo Car Corporation (VCC)
Organization: Alliance of Automobile Manufacturers
The Alliance Supports the Credits for Off-Cycle GHG Emission Reductions And Fuel Economy
Improvements. [EPA-HQ-OAR-2010-0799-9487-A1, p. 10]
The overall GHG emission reductions proposed in the NPRM are a formidable challenge that
requires new, creative approaches to emission reduction and energy efficiency. Continuing the
off-cycle credit program provides an incentive to manufacturers to introduce new technologies
that produce concrete environmental and fuel consumption benefits, provides flexibility toward
meeting the increasingly stringent standards and encourages investment in technologies that will
pay off over the longer term. [EPA-HQ-OAR-2010-0799-9487-A1, p. 10]
7-1
-------
EPA Response to Comments
The program flexibilities in the NPRM will help manufacturers introduce new technologies that
produce concrete environmental and fuel consumption benefits. [EPA-HQ-OAR-2010-0799-
9487-Al,p.lO]
The proposed rules properly include various provisions offering manufacturers some flexibility
in developing their plans to comply with the CAFE and GHG standards. Some of these
provisions enable manufacturers to earn credits that can be used to satisfy part of their
compliance obligations. While some may think the term 'credits,' as used here, connotes reduced
stringency or even 'loopholes,' that is not the case. The objective of the CAFE and GHG
standards is to reduce actual fuel consumption and actual GHG emissions from vehicles driven
on American roads. In some cases, however, the laboratory testing used by the agencies to
measure fuel economy and GHG emissions may not fully reflect the improvements built into a
vehicle by the manufacturer, due to limitations of laboratory-based tests. And improvements to
reduce MAC system refrigerant loss can reduce GHG emissions from vehicles while having little
or no impact on fuel economy. It is important for the rules to properly account for such factors.
Otherwise, manufacturers would be encouraged to focus solely on the test procedures, and
opportunities for real-world GHG reduction and fuel economy improvement would be lost. The
Alliance believes that the various credit provisions proposed by EPA and NHTSA are essential
elements of the rulemaking package. Below we offer our specific comments on the details of
these provisions. [EPA-HQ-OAR-2010-0799-9487-A1, p. 10] [[This comment can also be found
in Outline Heading 3.]]
Substantial GHG improvements should be achievable in off-cycle conditions using new
technologies. [EPA-HQ-OAR-2010-0799-9487-A1, p. 11]
While there are substantial emission reductions that can be achieved through off-cycle
technologies, it will be essential that the off-cycle program function effectively if the overall
emission reduction goals are to be achieved. [EPA-HQ-OAR-2010-0799-9487-A1, p.26]
Organization: American Honda Motor Co., Inc.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11786, p. 121.]
The addition of a thoughtful and reasonable approach to off-cycle credits is exciting to us and we
believe will result in the introduction of many new and innovative technologies.
Organization: Association of Global Automakers, Inc. (Global Automakers)
The off-cycle credits provide incentives for manufacturers to pursue technologies that produce
benefits in actual on-road driving but are not measured using the Federal Test Procedure (FTP).
[EPA-HQ-OAR-2010-0799-9466-A1, p. 1]
Global Automakers supports the availability of credits for technologies that provide on-road
efficiency and emissions benefits but whose benefits are not fully measured using the current
city-highway test. [EPA-HQ-OAR-2010-0799-9466-A1, p. 5]
7-2
-------
Off-cycle Technology Credits
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 66.]
Off-cycle credits provide incentives for manufacturers to pursue technologies that produce
benefits in actual on-road driving but are not measured using the FTP.
Organization: BMW of North America, LLC
BMW supports both approaches - predefined list and individual OEM applications; furthermore,
we welcome the proposed extension of the scope for off-cycle technologies. [EPA-HQ-OAR-
2010-0799-9579-A1, enclosure p. 1]
Organization: Borg Warner, Inc.
BorgWarner supports the inclusion of "off-cycle credits" that attempt to give manufacturers the
proper motivation for implementing technologies that achieve real world results that are not seen
on the official rating test cycles. While we support this type of thinking, a more robust solution
would be to employ updated testing methods that more accurately measure real world results
seen by the consumer. [EPA-HQ-OAR-2010-0799-9320-A1, p. 2]
Organization: Center for Biological Diversity
3. Off-cycle credits in general
The concept of allowing credit for the installation of new and energy efficient technology that is
early in the compliance cycle, or that cannot be measured by existing testing mechanisms, is
sound, as long as the duration of the credit period is brief and provides no disincentive to the
implementation of other available features. However, all such credits must be carefully vetted to
ensure that there is no double counting. Any technologies already required to be implemented
cannot also generate credits, and there must be verified data showing that actual efficiency gains
equal to the credits are being achieved. [EPA-HQ-OAR-2010-0799-9479-A1, p. 22]
We disagree with the Agencies' suggestion that even more off-cycle credits should be allowed,
without any rulemaking, if some unspecified data supports them. That the Agencies perceive a
need for this request simply points out the fact that technological innovation will race far ahead
of the weak standards the Agencies are here proposing, and that the Agencies are aware of this
fact. Instead, the Agencies must design much stronger standards, rather than requesting the right
to "catch up" with clearly foreseeable improvements without the requisite notice and comment
rulemaking process. [EPA-HQ-OAR-2010-0799-9479-Al, p. 22]
Organization: Chrysler Group LLC
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 54.]
7-3
-------
EPA Response to Comments
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 61.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 26.]
Secondly, Chrysler supports the additional detail proposed for catching off-cycle fuel economy
and greenhouse gas improvements. The agency's built on this facet of the 2012 through '16
model year regulation that recognizes improvements in fuel economy and greenhouse gases that
are not captured in laboratory tests but do have real-world reductions.
Organization: Delphi Corporation
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 108.]
We support the existing credit options
In addition, existing credit options and additional flexibility for off-cycle credits provide an
incentive for the industry to look across the entire automobile for solutions. [This comment can
also be found in section 7 of this comment summary.]
We applaud the agencies' efforts to extend additional flexibility for off-cycle credits.
In addition, existing credit options and additional flexibility for off-cycle credits provide an
incentive for the industry to look across the entire automobile for solutions. [This comment can
also be found in section 10.1 of this comment summary.]
Organization: EcoMotors International, Inc.
Several significant changes are being proposed to the off-cycle credits program, including some
modifications to the existing MYs 2012-2016 program. These changes include establishment of a
list of pre-approved off-cycle technologies with pre-defined CO2 credits, commencing in
MY2017; removing the requirement that off-cycle technologies must be 'new, innovative, and
not widespread', and that the benefits of these technologies must not be 'significantly measurable
over the 2-cycle test'; clarifying several requirements of the current two-tiered process for
demonstrating the CO2 reductions of off-cycle technologies and instituting this testing
methodology for MYs 2012-2016 credits as well; establishing a four-step process for reviewing
and providing a decisions on credits; and starting with MY2017, allowing manufacturers to
generate 'fuel consumption improvement values' equivalent to CO2 off-cycle credits for use in
the CAFE program. [EPA-HQ-OAR-2010-0799-9594-A2, pp. 12-13]
The concept of providing credits as a way to further incentivize technology development in key
areas is a good one. EcoMotors generally supports the changes made to the off-cycle credit
program to provide manufacturers with more certainty with regard to credit application and
testing. [EPA-HQ-OAR-2010-0799-9594-A2, p. 13]
7-4
-------
Off-cycle Technology Credits
• Specific Recommendation: EcoMotors generally supports continuation of the off-cycle
credit program with the changes proposed to the current program, as well as the
enhancements proposed for the future. [EPA-HQ-OAR-2010-0799-9594-A2, p. 13]
Organization: Fisker Automotive, Inc.
• Encourage application of the pre-approved list for earlier model years [EPA-HQ-OAR-
2010-0799-9266-A1, p. 5]
Organization: Ford Motor Company
Ford strongly supports many of the updates that the agencies have proposed to the off-cycle
technology program, as detailed in the comments provided by the Alliance. [EPA-HQ-OAR-
2010-0799-9463-A1, p. 15]
Organization: General Motors Company
GM supports the proposal for an updated off-cycle technology framework. Significant detailed
technical information on off-cycle technologies and the off-cycle framework is contained in the
Alliance comments. GM recommends that the off-cycle program be fully examined in the mid-
term review, and updated as appropriate. [EPA-HQ-OAR-2010-0799-9465-A1, p. 3]
Organization: Hyundai America Technical Center
Hyundai supports the proposed improvements in accounting for technologies whose benefits are
not realized on the city and highway cycles. Hyundai believes off-cycle technology is an area
that is ripe for innovation and can provide important gains in real world fuel economy. However,
we do have several suggestions for improvements to the off-cycle credit processes. [EPA-HQ-
OAR-2010-0799-9547-A1, pp.4-5]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 172.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 22.]
We support the credit and banking provisions and continued application of off-cycle credits for
technology whose benefits cannot be accounted for on the city and highway test cycles.
Hyundai believes that off-cycle technology is an area that is ripe for innovation, and can provide
important gains in real world fuel economy and greenhouse gas reductions.
Organization: International Council on Clean Transportation (ICCT)
7-5
-------
EPA Response to Comments
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 197.]
ICCT supports the concept of off-cycle credits. However, we will provide detailed written
suggestions on how to better implement them so that they are valid and avoid double counting.
Organization: Johnson Controls, Inc.
Rewarding various innovative off-cycle technologies encourages rapid adoption and increases
deployment into the fleet. [NHTSA-2010-0131-0253-A1, p. 4]
Organization: Mazda North American Operations
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 63-64.]
Mazda fully supports the proposed extension of the availability of off-cycle credits for model
years 2017 to 2025. We agree that continuing the off-cycle credit program provides an incentive
to manufacturers to introduce new technologies that produce concrete environmental and fuel
consumption benefits, provides flexibility toward meeting the increasingly stringent standards,
and encourages investment into technologies that will have a payoff over the longer term.
Organization: Mercedes-Benz USA, LLC
DAG supports the effort to include off-cycle credits that reduce CO2 in ways not measured by
the fuel economy test cycles. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-2]
Organization: Motor & Equipment Manufacturers Association (MEMA)
Taken as a whole, MEMA supports the proposal to provide off-cycle credits for any technologies
that demonstrate significant, incremental off-cycle CO2 reductions and the corresponding fuel
consumption improvement values. [EPA-HQ-OAR-2010-0799-9478-A1, p.7]
Organization: National Wildlife Federation (NWF)
In principle, we also support incentives for plug-in hybrid electric and electric vehicle
technology and for real off-cycle CO2 reductions, and we look forward to continuing to work
with automakers, the agencies and consumers to maximize the effectiveness of these credits and
other measures which enable rapid adoption of new technology, and to optimize short and long
term emissions impacts. [EPA-HQ-OAR-2010-0799-9887-A2, p. 4] [[This comment can also be
found in Outline Headings 4. and 5.]]
Organization: Natural Resources Defense Council (NRDC)
7-6
-------
Off-cycle Technology Credits
5. Off-cycle credits: Off-Cycle Technology Credits Should Only Be Awarded for Real and
Verifiable GHG Reductions
While NRDC appreciates EPA's efforts to evaluate GHG reduction technologies that are not
identified under current compliance tests and to encourage continued innovation in this area,
EPA should only provide credits if such technologies can be verified as providing real and
enforceable GHG reductions. As GHG reductions are indentified and evaluated, EPA should
consider the widespread adoption of these technologies when setting the stringency of future
standards. [EPA-HQ-OAR-2010-0799-9472-A2, p. 14]
Organization: Porsche Cars North America, Inc. (PCNA)
Porsche strongly supports provisions for off-cycle credits, which encourage creative approaches
to emission reduction and energy efficiency, provide compliance flexibility amid increasingly
stringent standards, and encourage investment in technologies for long term benefit. [EPA-HQ-
OAR-2010-0799-9264-A1, p. 5]
Organization: United Automobile Workers (UAW)
Off-cycle credits also recognize real-world emission reductions that are not accounted for in the
current official test procedures to measure vehicle emissions. [EPA-HQ-OAR-2010-0799-9563-
A2, p.3]
Organization: Volkswagen Group of America
Volkswagen contributed to and supports the comments submitted by the Alliance of Automobile
Manufacturers (Alliance) regarding off-cycle technology credits. Volkswagen continues to make
significant investments in deploying an array of innovative, fuel saving off-cycle technologies
for our consumers. [EPA-HQ-OAR-2010-0799-9569-A1, p. 32]
Organization: Volvo Car Corporation (VCC)
Off-cycle credits are a good opportunity for manufacturers to get credits for technology that does
not appear on the normal cycle but favors the overall fuel economy. [EPA-HQ-OAR-2010-0799-
9551-A2, p. 6]
Response:
EPA received widespread support for continuing the off-cycle credits program beyond
MY 2016. Several manufacturers noted that the program provides additional flexibility and
encourages the development of technologies that provide real world emissions reductions not
captured on the 2-cycle test procedure. EPA concurs with these comments and is extending the
off-cycle credit program to MY 2017 and later. The National Wildlife Federation and Natural
Resources Defense Council (NRDC) also supported the off-cycle credits program in principle as
long as credits can be verified as providing real and enforceable GHG reductions. Center for
Biological Diversity also raised the issue that EPA must ensure that there is no double counting
7-7
-------
EPA Response to Comments
of credits. As discussed in Section IILC.S.b., EPA believes that the program has been designed
to ensure credits are real and verifiable and to prevent double counting. Several commenters
provided comments on the various aspects of the proposed design of the off-cycle credits
program. These comments are summarized and addressed in this section below.
NRDC commented that as GHG reductions are indentified and evaluated, EPA should
consider the widespread adoption of these technologies when setting the stringency of future
standards. In response, EPA plans to closely monitor the use of the off-cycle credits program
and expects that it will be one of the factors considered in the mid-term evaluation. In addition,
EPA notes that the 2017-2025 model year standard stringencies in fact reflect the use of direct
and indirect air conditioning improvements, as well as the two cycle benefits of stop start and
active aero dynamic technologies.
ICCT comments in public hearing testimony that they support the concept of off-cycle
credits and will provide detailed written suggestions on how to better implement them so that
they are valid and avoid double counting. As discussed in RTC section 7.2 below, ICCT
provided detailed written comments regarding the proposed off-cycle credit technology list and
the issue of double counting.
7.2. Pre-Approved Technology List
Organizations Included in this Section
Alliance of Automobile Manufacturers
American Chemistry Council (ACC)
Association of Global Automakers, Inc. (Global Automakers)
Bayer Material Science
Bosch
California Air Resources Board (CARB)
California Manufacturers & Technology Association (CMTA)
California State Sheriffs' Association (CSSA), California Police Chiefs Association
(CPCA), California Narcotic Officers' Association (CNOA)
Chrysler Group LLC
Crime Victims United of California (CVUC)
CTIA - The Wireless Association
Denso International America, Inc.
EcoMotors International, Inc.
Enhanced Protective Glass Automotive Association (EPGAA)
Ford Motor Company
Garmin International Inc.
Guardian Automotive Products, Inc.
Hyundai America Technical Center
International Council on Clean Transportation (ICCT)
Mercedes-Benz USA, LLC
Motor & Equipment Manufacturers Association (MEMA)
Natural Resources Defense Council (NRDC)
Pittsburgh Glass Works (PGW)
-------
Off-cycle Technology Credits
Porsche Cars North America, Inc. (PCNA)
SAB 1C Innovative Plastics US LLC
Society of the Plastics Industry, Inc. (SPI)
TechAmerica
Toyota Motor North America
United Automobile Workers (UAW)
Volkswagen Group of America
Volvo Car Corporation (VCC)
Organization: International Council on Clean Transportation (ICCT)
16) Off-Cycle Credits
ICCT general comment on off-cycle credits and testing
ICCT strongly supports credits for off-cycle reductions in concept. Such credits can reduce the
cost to manufacturers for compliance in the short run and can create cost-effective pathways for
greater fuel consumption and GHG emission reductions in the long run. [EPA-HQ-OAR-2010-
0799-9512-A1, p. 36]
However, it is extremely important that the credits properly reflect actual in-use reductions, do
not duplicate on-cycle benefits, and can be validated. Credits that are artificial and do not
directly result in comparable in-use reductions can severely undermine the effectiveness and
credibility of the standards. [EPA-HQ-OAR-2010-0799-9512-A1, p. 36]
The same principle applies to default off-cycle credits. In theory they are a good idea that can
create incentives for manufacturers to invest in off-cycle technologies, but if not assessed
properly they create windfall credits that reduce fuel consumption and GHG emissions benefits
of the program. [EPA-HQ-OAR-2010-0799-9512-A1, p. 36]
The ICCT recommends that EPA establish procedures to quantify and validate off-cycle benefits
before granting a specific default off-cycle credit value. Absent a solid case for default off-cycle
credit values, traditional case-by-case testing is needed to properly access off-cycle credits. Any
default credits should be based on: [EPA-HQ-OAR-2010-0799-9512-A1, pp. 36-37]
1. Robust data showing real and quantifiable reductions that are not double counted on the
regulatory test cycles, and [EPA-HQ-OAR-2010-0799-9512-A1, p. 37]
2. Effective performance benchmarks and verification that ensure vehicles receiving these credits
will achieve the potential emission reductions in the real world. [EPA-HQ-OAR-2010-0799-
9512-Al,p. 37]
The off-cycle approval procedures adopted by EPA for the 2012-2016 final rule provide accurate
and appropriate guidelines for approval of off-cycle credits. These procedures should be
followed both for granting specific approvals to manufacturers for off-cycle credits and for
establishing default off-cycle credit values. [EPA-HQ-OAR-2010-0799-9512-A1, p. 37]
7-9
-------
EPA Response to Comments
Given the importance of maintaining the benefits of this rulemaking and the ability to make
additions to the default lists later as additional data is generated, technologies that do not clearly
meet these requirements should be dropped from the default list during this rulemaking. [EPA-
HQ-OAR-2010-0799-9512-A1, p. 37]
Solar Reflective Paint and Window Glazings
We agree with the criteria used for this category of off-cycle credits. US EPA has determined
that it will achieve real reductions that are not counted in the regulatory test cycle through
detailed technical studies including the CARB regulatory development process (these off-cycle
credits are in lieu of CARB regulation). Specific benchmarks in the draft TSD are based on well-
established principles of solar gain and OEMs must meet performance criteria to verify the
emission reductions. Thus, these credits meet the general principle of being verifiable and
additive off-cycle benefits. [EPA-HQ-OAR-2010-0799-9512-A1, p. 38]
As noted earlier, the off-cycle credits for solar reflective paint and window glazings must be
combined with other load reductions and A/C system efficiency in a multiplicative manner in
cases where an OEM wishes to claim both types of credits. [EPA-HQ-OAR-2010-0799-9512-
Al,p.39]
Active or Passive Ventilation
Vehicle active or passive ventilation may have the technical potential to reduce air conditioning
load, but they do not meet the general criteria discussed above for default credits. The NREL
report on these technologies was developed based on limited data and states that further
evaluation is needed.67 The NREL report also notes that floor-level ventilation could allow dust,
animals, and/or exhaust to enter the vehicles.68 Thus drivers (or dealers) may be motivated to
close them off. Similarly, the driver's response to ventilated seats is unclear at this time. [EPA-
HQ-OAR-2010-0799-9512-A1, p. 39]
These ventilation technologies could also compete with glazings and paints, which have been
more thoroughly evaluated, for solar load reduction credits. Default credits for active or passive
ventilation should be deferred. They can be reconsidered later if there is further study to verify
real-world performance and if a performance benchmark for verification is developed. [EPA-
HQ-OAR-2010-0799-9512-A1, p. 39]
Should credits be granted, the method of combining AC system efficiency and any such credits
in cases where an OEM wishes to claim both types of credits must be used, as noted above.
[EPA-HQ-OAR-2010-0799-9512-A1, p. 39]
General Credit Calculation for Reducing or Offsetting Vehicle Load
The draft TSD bases the 'off-cycle' benefits of reducing engine load by 100 W on the simulated
values provided in table 5-18 of the draft TSD. The benefits calculated on FTP/HWY cycle are
appropriate. However, the calculations of the 5-cycle benefits of a 100 w load reduction were
7-10
-------
Off-cycle Technology Credits
inappropriately applied, as they used a g/mile offset instead of a percentage offset. [EPA-HQ-
OAR-2010-0799-9512-A1, p. 42]
Table 10 compares the benefits of a 100 w load reduction on the FTP/HWY to the benefits on the
5-cycle. For each vehicle, the benefits on the 5-cycle are less then than the 2-cycle testing
benefits in terms of percentage CC>2 reduction. While the g/mi reductions for 5-cycle testing is
greater in terms of g/mi that on the 2-cycle testing, this is only because the baseline COz is much
higher on the 5-cycle. The benefits of reducing or offsetting vehicle load on the 5-cycle are
actually proportionally less than they are on the FTP/FIWY. It is not appropriate to apply 5-cycle
gCCVmi reductions to FTP/HWY baseline gCCVmi values. This is mixing apples and
oranges. [Table 10 can be found on p. 43 of Docket number EPA-HQ-OAR-2010-0799-9512-
Al] [EPA-HQ-OAR-2010-0799-9512-A1, pp. 42-43]
The last row in the table illustrates that using the 5-cycle g/mi instead of the percent benefit
produces a percentage benefit that is larger than the benefit on either the FTP/HWY or the U506.
This is artificial and unwarranted. The FTP/HWY percentage benefits must be used for any
electrical load reduction that does not occur on the test cycles (for instance headlights) and no
additional credits should be given for any electrical load reduction that occurs on the test cycle
(for instance thermoelectric generation). [EPA-HQ-OAR-2010-0799-9512-A1, p. 43]
LED Lighting
We agree that this technology has the potential to reduce emissions that are not captured on
FTP/highway testing cycles. However, as discussed above, the off-cycle credits must be based
upon the FTP/HWY percent and g/mile reductions and not on the 5-cycle g/mile reductions. As a
result the credit value should be 0.8 grams per mile rather than 1.1 g/mile, or 0.9 g/mile with
headlights, based on actual load reduction scaled to the potential benefits that US EPA modeled
for FTP/highway testing cycle as shown in Table 11 and Table 12. [Tables 11 and 12 can be
found on p. 44 of Docket number EPA-HQ-OAR-2010-0799-9512-A1] [EPA-HQ-OAR-2010-
0799-9512-A1, p. 43]
Thermoelectric and Solar Electrical Generation
Thermoelectric and solar electrical generation could reduce vehicle consumption of energy
generated by the engine by recharging the battery pack in hybrids or electric vehicles. However,
the premise that engine load reduction is undercounted on the FTP/HWY is incorrect, as noted
above. [EPA-HQ-OAR-2010-0799-9512-A1, p. 44]
In addition, the benefits of these technologies would be difficult to quantify and verify. An
NREL study indicates that potential thermoelectric output changes dramatically based on
temperature conditions.76 A rating based on theoretical peak output may not reflect real world
conditions with rapidly varying engine loads, competition for exhaust heat, high thermal stress,
etc. Similarly, the tailpipe benefits of vehicle rooftop solar electrical generation are highly
variable. A plug-in Prius may see little solar availability during early and late commute hours,
and displace grid electricity if parked at a vehicle charger during the day while a delivery vehicle
7-11
-------
EPA Response to Comments
in use all day may get more benefits. Solar availability also varies hourly, seasonally and
geographically. [EPA-HQ-OAR-2010-0799-9512-A1, p. 45]
Appropriate in-use data would be necessary to quantify and verify any proposed off-cycle credit.
Further any credit, including default credit, granted should be based on the FTP/HWY results in
Table 5-18, as discussed above. [EPA-HQ-OAR-2010-0799-9512-A1, p. 45]
Engine Heat Recovery
The off-cycle benefits for engine heat recovery are entirely based upon the erroneous assumption
that there are larger benefits off-cycle than on cycle for electricity generation or load reduction,
as discussed above. The benefits of electricity generation are larger on-cycle than on the 5-cycle
test. Thus, the proposed default off-cycle credits for engine heat recovery are not
appropriate. [EPA-HQ-OAR-2010-0799-9512-A1, p. 45]
There is some reason to believe that high vehicle loads will cause engine heat recovery systems
to operate more efficiently. However, there are at least three different ways to recover exhaust
heat as electricity; Rankine cycle devices, turbo-compounding, and thermo-electric generators.
Each operates very differently and has a different profile of energy captured. Thus, credits could
be appropriate, but only if a performance benchmark for verification is developed and valid data
is generated. [EPA-HQ-OAR-2010-0799-9512-A1, p. 45]
Active Transmission Warm-Up and Active Engine Warm-Up
The proposed off-cycle credits for active transmission and engine warm-up are highly
questionable. The primary problem is that EPA assumed no benefit from an active
transmissions/engine warm-up during the FTP. [EPA-HQ-OAR-2010-0799-9512-A1, p. 45]
However, normal engine operating temperatures are about 180°F. This is about 105°F above the
FTP test temperature and about 160°F above the 20°F test temperature. Thus, the benefit of
active engine warm-up on the FTP should be about two-thirds of the benefit at 20°F and the
proportional benefit will be even closer. [EPA-HQ-OAR-2010-0799-9512-A1, p. 45]
The statement about transmission warm-up is similarly incorrect:
'In cold temperatures, the exhaust heat warms the transmission fluid much more quickly than if
the vehicle relies on passive heating alone.' [EPA-HQ-OAR-2010-0799-9512-A1, p. 45]
In reality, the exhaust heat will warm the transmission fluid much more quickly than if the
vehicle relies on passive heating alone at all ambient temperatures. Thus, most of the benefit of
the warm-up systems will occur on-cycle during 2-cycle testing. [EPA-HQ-OAR-2010-0799-
9512-Al,p. 46]
Another concern is the statement about the benefits of active warm-up:
7-12
-------
Off-cycle Technology Credits
The Ricardo data indicates that there is a potential to improve GHG emissions by 7% at 20°F if
the vehicle is fully warm.' [EPA-HQ-OAR-2010-0799-9512-A1, p. 46]
The ICCT has thoroughly read the Ricardo report and all references to the Ricardo report in the
draft TSD. There is no reference of any kind to any modeling, detailed or otherwise, on active
transmission warm-up or accelerating powertrain warm-up from 20°F. More importantly, no data
is presented by the agencies to show what the improvement in GHG emissions would be at 75°F
if the vehicle is fully warm, as would also occur with active warm-up. Only if the percentage
improvement in GHG emissions at 20°F is larger than the percentage improvement at 75°F
would off-cycle credits be warranted - and even in this case the benefit would only be the
difference in the percentage improvement, averaged over the annual temperature
distribution. [EPA-HQ-OAR-2010-0799-9512-A1, p. 46]
Performance benchmarks need to be established and valid data generated before granting credits
for active engine and transmission warmup. As a minimum, the effect of active warmup needs to
be evaluated at both 20°F and at 75°F on the 2-cycle and the 5-cycle procedures, and evaluations
at intermediate temperatures would be helpful. Most vehicles are equipped with engine
temperature sensors, and usually also transmission temperature sensors, which could be helpful
in evaluating the length of the warm-up time, but efficiency data associated with warm-up time
and ambient temperatures is also needed. [EPA-HQ-OAR-2010-0799-9512-A1, p. 46]
The ICCT agrees that there may be some incremental off-cycle benefits from active warmup
systems, but most of the benefit will occur on cycle and it is important to properly evaluate the
incremental benefits before granting default credits. [EPA-HQ-OAR-2010-0799-9512-A1, p. 46]
Active Aerodynamics
Active aerodynamic devices may have real benefits beyond what is measured on the regulatory
test cycles, but such devices would also improve efficiency on the 2-cycle tests. Thus, additional
verification is needed to determine whether active aerodynamics would show incremental
improvement. Benchmarks would also be necessary to quantify any benefits for active
aerodynamics above and beyond the test cycle. [EPA-HQ-OAR-2010-0799-9512-A1, p. 46]
Coast-down testing for regulatory compliance could either understate or overstate the benefits of
active aerodynamics. Grill shutters could activate at higher speeds than tested, while on the other
hand the technology may be more active during the test cycle than when encountering real world
conditions, such as AC load and deactivation when there is a risk of freezing. 77 In addition,
quantification and verification would be necessary for any technologies that are not 'active' or
fully 'active' on the test cycle. For instance, the draft TSD notes that the potential benefits range
from 0-5%. Thus, we strongly encourage US EPA to develop performance criteria before
granting any off-cycle credits for active aerodynamics. [EPA-HQ-OAR-2010-0799-9512-A1, pp.
46-47]
Start-Stop Technology
7-13
-------
EPA Response to Comments
We agree with US EPA and NHTSA's principle that technologies inherent to the vehicle (mass,
tire rolling resistance, etc) are not appropriate for off-cycle credits. This principle also applies to
start stop technology. [EPA-HQ-OAR-2010-0799-9512-A1, p. 47]
The draft TSD states that real world vehicle stop times and start-stop emission benefits are
higher than reflected on the regulatory test cycle. However, this is based upon two erroneous
assumptions. [EPA-HQ-OAR-2010-0799-9512-A1, p. 47]
First, the idle rate during the FTP is listed at 16% in Table 5-23 of the draft TSD. This is
incorrect. Prior EPA documentation lists a 19% idle rate79 and a simple accounting of the LA
finds a 19.1% idle rate (1372 total seconds with 262 seconds at zero speed). A smaller error is
that the highway cycle was considered to have zero idle, while a simple accounting shows a
0.5% idle rate (764 total seconds with 4 seconds at zero speed). Weighted 55% for the FTP and
45% for the highway cycle, this yields an idle rate of 10.7%, not the 9% listed in the table. [EPA-
HQ-OAR-2010-0799-9512-A1, p. 47]
Second, and more important, the draft TSD improperly accounts for the reduction in idle off
operation at cold temperatures. The TSD assumes that the engine will continue to run 25% of the
time to provide cabin heating at cold ambient temperatures (vehicles that reduce this percentage
can apply for a separate credit). If the engine is also needed to power the air conditioner during
start stop then further adjustment will be needed. However, the draft TSD first calculates the
idle-off benefits assuming 100% idle-off time, then applies the 25% reduction only to the
calculated benefit. This is not appropriate. The proper accounting should reflect the fact that the
total idle-off time has been reduced by 25% and should apply the 25% reduction to the total in-
use idle-off time. The total in-use idle-off time is estimated to be 13.5%, so the actual amount of
idle-off time in-use is 10.1% (13.5% times 75%). [EPA-HQ-OAR-2010-0799-9512-A1, p. 47]
To the extent that air conditioning use further causes the engine to stay on at idle, in-use idle
time will be even lower. Accounting for both heating and air conditioning use, the in use idle-off
time could be as low as 6%. (This is assuming that the idle-off time from MOVES is accurate.
No documentation of the source of the 13.5% estimate is presented.) [EPA-HQ-OAR-2010-
0799-9512-A1, p. 47]
The amount of idle-off time in-use is significantly less that the idle-off time on the FTP-HWY
cycles. Thus, the FTP-HWY overstates the benefit of idle-off and no off-cycle credit is warranted
for idle-off systems. [EPA-HQ-OAR-2010-0799-9512-A1, pp. 47-48]
Electric Heater Circulation Pumps
We agree that electric heater circulation pumps have the potential for increment benefits for
start-stop and that further evaluation will help better quantify those benefits. As the base engine-
off time was not calculated properly, the assessment of the benefit of electric heater circulation
pumps needs to be redone as well with the proper assumptions about engine-off time. [EPA-HQ-
OAR-2010-0799-9512-A1, p. 48]
7-14
-------
Off-cycle Technology Credits
In addition, it is reasonable to reflect the entire idle period when calculating the engine-off time
on the FTP test cycle, since cabin heating is not active and not captured during FTP under any
circumstances (which is different than start-stop as noted in our comments on start-stop).
However, a downward adjustment is needed at colder ambient temperatures to account for some
idle conditions where the engine may be operated, such as for warm-up purposes and for
defroster use. Also, the amount of water pump electrical consumption needs to be accounted for
in calculating the emissions benefit of this technology. [EPA-HQ-OAR-2010-0799-9512-A1, p.
48]
Finally, off-cycle credits should be granted only if the total amount of engine-off time is less
than occurs on the 2-cycle tests and only for the amount of this reduction. [EPA-HQ-OAR-2010-
0799-9512-A1, p. 48]
Performance criteria need to be developed and valid data generated to quantify the potential
incremental improvement, including consideration of total engine-off time versus that on the 2-
cycle test, before granting off-cycle credits for electric heater water circulation pumps. [EPA-
HQ-OAR-2010-0799-9512-A1, p. 48]
67 J Rugh and R Farrington, Vehicle Ancillary Load Reduction Project Close-out Report,
January 2008 p51
68Ibidpl5
76 J Rugh and R Farrington, Vehicle Ancillary Load Reduction Project Close-out Report,
January 2008 pi 1.
79 see Table 6-9 of Federal Test Procedure Review Project: Preliminary Technical Report May
1993EPA420R-93-007
Response:
We appreciate the extensive comments from the International Council on Clean
Transportation (ICCT) and the effort that went into generating them. We agree with ICCT that
the off-cycle credit program will "reduce the cost to manufacturers for compliance in the short
run and can create cost-effective pathways for greater fuel consumption and GHG emission
reductions in the long run." In addition, we agree that it is "extremely important that the credits
properly reflect actual in-use reductions, do not duplicate on-cycle benefits, and can be
validated." Lastly, we agree with ICCT "that EPA establish procedures to quantify and validate
off-cycle benefits" and that any off-cycle credits should be based on "robust data showing real
and quantifiable reductions that are not double counted on the regulatory test cycles" and
"Effective performance benchmarks and verification that ensure vehicles receiving these credits
will achieve the potential emission reductions in the real world." We believe the off-cycle credit
program provisions we are finalizing today achieve this.
7-15
-------
EPA Response to Comments
Accordingly, we carefully considered the comments from ICCT on the off-cycle credit
program and technologies on the off-cycle technology menu. This consideration and our
responses are reflected throughout the Off-Cycle Program discussion in Section 5.2 of TSD
Chapter 5 for this final rule. In some cases, we felt that ICCT's comments had merit and either
revised the underlying credit analysis and credit value (e.g., engine idle start-stop) or are
finalizing the credit values as proposed (e.g., solar reflective paint, glazing) after considering and
responding to the comment in that part of the Joint TSD. In other cases (e.g., active
aerodynamics, waste heat recovery (formerly engine heat recovery), active and passive cabin
ventilation, vehicle load reduction offset estimate, electric heater circulation pump, active
transmission and engine warm-up, high efficiency exterior lights, solar and thermal electrical
generation), we disagreed with the comments from ICCT. Further, the supplemental comments
from the Alliance addressed ICCT's concerns and (as explained specifically in the technology-
by-technology discussion in section 5.2 of the Joint TSD) presented data that supported the
proposed credit values and represented "robust data showing real and quantifiable reductions."
Therefore, we are finalizing the off-cycle credit program and the off-cycle technology
menu as discussed on 5.2 of TSD Chapter 5 and Preamble II.F.2. addressing many of the
concerns expressed by ICCT.
Organization: Alliance of Automobile Manufacturers
The off-cycle technology credit menu is a necessary addition to the off-cycle program to avoid
administrative delays and burdensome credit application requirements. [EP A-HQ-OAR-2010-
0799-9487-Al,p.ll]
The procedures for earning off-cycle credits need to be kept simple. [EPA-HQ-OAR-2010-0799-
9487-Al,p.ll]
The pre-defined list will incentivize automakers to apply technologies earlier than they might
have otherwise. It also offers manufacturers certainty about how much credit they will earn if
they choose to apply one or more of the technologies on the list. The Alliance welcomes the
agencies' willingness to add further technologies to the list as additional information becomes
available. [EPA-HQ-OAR-2010-0799-9487-A1, p.26]
The proposed off-cycle credit menu is therefore a great addition to the GHG reduction and
corporate fuel economy programs, as the experience thus far with separately testing and applying
for off-cycle credits on each model has shown that the administrative obstacles inherent in this
approach prohibit an effective program. [EPA-HQ-OAR-2010-0799-9487-A1, p.26]
The Alliance supports establishment of credits for all of the proposed technologies, but, in a few
cases, recommends revisions to the proposed credit amounts. [EPA-HQ-OAR-2010-0799-9487-
Al, p.26]
High Efficiency Exterior Lighting [EPA-HQ-OAR-2010-0799-9487-A1, p.26]
7-16
-------
Off-cycle Technology Credits
The Alliance supports this proposed off-cycle credit, but with modifications. EPA's calculation
of the feasibility of a 60 watt total reduction threshold to qualify for this credit contains flaws in
the calculation. Because of these flaws, achieving a full 60 watt improvement from the lights
impacted by the credit may not be realistic. [EPA-HQ-OAR-2010-0799-9487-A1, p.26]
The 60 watt calculation included benefits from high efficiency low beam and high beam
headlights, even though these lights are not covered by the credit provision. Due to their high
wattage, the net benefits from these two high efficiency sets of lights are approximately 9 watts
of the estimated 60 watt improvement. Creating such an unrealistically high improvement
threshold for this technology could render the credit provision ineffective. In order to make the
incentive to implement this technology more functional, this improvement threshold should be
reduced to no more than 50 watts for the listed package of exterior lights, assuming no other
changes are made to this provision. The credit amount for this package of lights would need to be
adjusted accordingly. Also, Center High-Mount Stop Lamps (CHMSL) and brake lights impact
the two-cycle fuel economy test, and high efficiency CHMSL and brake lights should not be a
requirement to qualify for this off-cycle credit. [EPA-HQ-OAR-2010-0799-9487-A1, p.26]
In support of our above analysis, we recommend that the definition of "high efficiency exterior
lighting" be updated to: [EPA-HQ-OAR-2010-0799-9487-A1, p.26]
High efficiency exterior lighting means a lighting technology that, when installed on the vehicle,
is expected to reduce the total electrical demand of the exterior lighting system when compared
to conventional lighting systems. LED lights specifically qualify. Separate credit values may be
earned for high efficiency lighting installed in the following components: parking/position, tail
lights, license plate lights, low beam lights and daytime running lights. Credits may also be
earned for a high efficiency lighting bundle that is installed in the following components: front
and rear side markers, and backup/reverse lights. [EPA-HQ-OAR-2010-0799-9487-A1, pp.26-
27]
Additional changes to this credit provision are also attractive. Roll-out implementation may be
speeded if portions of the credit were available for separate, individual lights, rather than
requiring that all exterior lights feature high efficiency before a credit can be gained. This would
allow each light to be swapped at the earliest possible time, in order to gain credits as quickly as
possible. The most attractive candidates for individual credits are the largest three savings
opportunities on the EPA/NHTSA list: parking/position lights, tail lights and license plate lights.
Scaling the 1.1 gCCVmile credit proposed in the NPRM to the proportional benefits of these
individual lights would indicate that individual credits are warranted of 0.2 gCCVmile for
substitution of each of these lights individually (i.e., 0.2 gCCVmile for the parking/position
lights, 0.2 gCCVmile for the tail lights and 0.2 gCCVmile for the license plate lights). The
remaining 0.5 gCCVmile could then be earned by applying the package of all the remaining
listed smaller lights in the NPRM. [EPA-HQ-OAR-2010-0799-9487-A1, pp.26-27]
Because of their low usage and corresponding low energy consumption, we do not feel that it is
warranted to include the requirement for more costly high efficiency turn signals in this package
in order to qualify for the high efficiency lighting off-cycle credit. [EPA-HQ-OAR-2010-0799-
9487-Al,p.27]
7-17
-------
EPA Response to Comments
Our experience indicates that an off-cycle credit for low beam lights would also be beneficial.
The source used by EPA showed potential LED low beam benefits of only a few watts, whereas
automakers' recent development experience has identified potential low beam savings
opportunities of at least 60 watts. Based on EPA's usage calculations, a low beam savings of 60
watts should justify an off-cycle credit of 1.1 gCCVmile. We therefore recommend that a 1.1
gCCVmile off-cycle credit be offered on the menu for low beam lights that achieve power levels
consistent with a savings of 60 watts below the baseline halogen technology. [EPA-HQ-OAR-
2010-0799-9487-A1, p.27]
Beneficial emission reductions can also be achieved if a credit is offered for high efficiency
Daytime Running Lights (DRLs). Based on the calculation below, we estimate a credit of 0.6
gCCVmile is justified for application of LED DRLs. Although DRLs are not mandatory, the
reality is that they are often implemented as standard equipment by many manufacturers to
improve highway safety. Due to their safety impact, they are a socially beneficial technology that
has been encouraged by public policies at both EPA and NHTSA. Given that they are widely
used, and that more efficient LED DRLs are often prohibitively expensive, it makes sense to
offer an off-cycle credit as an incentive for LED DRLs. More widespread use of LED DRLs will
result in real-world energy savings and GHG reductions. Because they are illuminated such a
large portion of the time, they are the single most important exterior light to target for an off-
cycle credit. [EPA-HQ-OAR-2010-0799-9487-A1, p.27]
Engine Heat Recovery
The Alliance supports EPA's analysis for this credit. This technology is not yet available for
commercial implementation. Offering a credit is appropriate and could play an important role in
bringing this technology into commercial use. However, we believe that the credit amounts
should be determined by a scalable application of the metric that EPA proposed, rather than a
step-wise function that awards credits only in increments of 100 watt capacities. Further we
believe that it is appropriate to award credits for recovered heat that is converted to either
electrical or mechanical energy to meet vehicle requirements. To simplify implementation and
fairly reward each application, the credit should be made a linear function, based on the wattage
generated. [EPA-HQ-OAR-2010-0799-9487-A1, p.29]
We recommend that the definition be updated to: [EPA-HQ-OAR-2010-0799-9487-A1, p.29]
Engine heat recovery means a system that captures heat that would otherwise be lost through the
exhaust system or through the radiator and converting that heat to electrical or mechanical
energy to meet the requirements of the vehicle. Systems obtain credits according to the following
formula: [EPA-HQ-OAR-2010-0799-9487-A1, p.29]
Credit (gCO2/mile) = (System watt Capacity / 100) * 0.7 [EPA-HQ-OAR-2010-0799-9487-A1,
p.29]
Solar Panels
7-18
-------
Off-cycle Technology Credits
The Alliance supports EPA's analysis for this credit. Based on rough theoretical calculations and
experimental data, offering a credit as proposed for each 50 watt unit of electricity generation is
appropriate. Because there is a wide range of potential sizes for these panels, this credit should
be scalable to reward panels that are smaller or larger than SOW. Also, the credit should not be
confined to panels installed on the roof, since they may be installed elsewhere on the vehicle.
This credit should be available for all vehicles, not only for electric-propulsion vehicles, since all
vehicles can benefit from the additional battery charging to power accessories, even where it is
not used for propulsion. [EPA-HQ-OAR-2010-0799-9487-A1, p.29]
Therefore, we suggest the following update to the proposed technology name and definition:
[EPA-HQ-OAR-2010-0799-9487-Al,p.29]
Solar Panels means the installation of solar panels on a vehicle to capture and provide energy to
the vehicle (e.g., provide energy to an electric drive system via battery charging or provide
power to an electric motor or 12V battery trickle charging or cabin ventilation, etc.). Credit
levels are granted according to the following formula: [EPA-HQ-OAR-2010-0799-9487-A1,
p.29]
Credit (gCO2/mile) = (Equivalent watt Output / 50) * 3.0 [EPA-HQ-OAR-2010-0799-9487-A1,
p.29]
Active Aerodynamic Improvements
The Alliance supports EPA's analysis for this credit. Active aerodynamic technologies hold great
promise and are already entering commercial usage. Offering sizable off-cycle credits will be
very helpful to stimulate faster adoption. The tables on p. 5-64 of the Draft Joint Technical
Support Document (TSD) show the relationship between aerodynamic improvement and credit
amounts. The credits offered by EPA in the credit menu should be scalable, based on the lines in
this table, rather than simply using one point on the table. Application of multiple active
aerodynamic technologies can result in a Cd improvement of over 3%, whereas the proposed
credit amounts are based on a 3% improvement. Therefore, to maintain an incentive to maximize
the use of these technologies (e.g., active grille shutters plus active air dams), higher credit
amounts should be allowed on the menu for aerodynamic improvements above 3%. EPA
acknowledges in the TSD that larger aerodynamic improvements are possible, but suggests using
model-by-model testing and applications to EPA for situations where greater credit is sought for
these larger aerodynamic improvements. Case-by-case testing and applications are overly
burdensome, and it would be much simpler to amend the credit menu to use the tables below,
from p. 5-64 of the TSD, to award appropriate credit for higher levels of aerodynamic
improvement. [EPA-HQ-OAR-2010-0799-9487-A1, p.30] [For table referenced, please refer to
EPA-HQ-OAR-2010-0799-9487-Al,p.30]
In practice, drivers often operate vehicles at sustained, steady-state, high speeds. This condition
is barely represented in the drive cycles and weighting system used in the 5-cycle fuel economy
calculations. For a Cd improvement of 3%, this actually warrants a credit in excess of the
proposed 0.6 gCO2/mile for cars and 1.0 gCO2/mile for trucks. Therefore, EPA should consider
7-19
-------
EPA Response to Comments
the lines on p. 5-64 of the TSD as minimum possible credit amounts for these technologies.
[EPA-HQ-OAR-2010-0799-9487-Al,p.31]
We recommend the definition be updated as follows: [EPA-HQ-OAR-2010-0799-9487-A1,
P-31]
Active aerodynamic improvements means technologies that are actively controlled to improve
aerodynamic efficiency. Credits are awarded according to the following formulas: [EPA-HQ-
OAR-2010-0799-9487-A1, p.31]
Car: Credit (gCO2/mile) = (Percent Reduction in Aero Drag, Cd) * 0.2 [EPA-HQ-OAR-2010-
0799-9487-Al,p.31]
Truck: Credit (gCO2/mile) = (Percent Reduction in Aero Drag, Cd) * 0.33 [EPA-HQ-OAR-
2010-0799-9487-Al,p.31]
Engine Stop-Start
The Alliance supports the creation of a substantial off-cycle credit for this important technology.
The proposed potential credit of 2.9 gCCVmile for cars and 4.5 gCCVmile for trucks, as
proposed in the NPRM, is a major concern. We believe a credit of 5.5 gCCVmile is warranted;
credits for this technology below 2.9/4.5 gCCVmile could substantially undermine the ability of
the industry to achieve the overall GHG targets. [EPA-HQ-OAR-2010-0799-9487-A1, p.31]
Occupant Thermal Comfort Technologies (e.g., Electric Heater Circulation Pump) [EPA-HQ-
OAR-2010-0799-9487-A1, p.32]
In 2011, based on actual vehicle tests and 5-cycle calculations, EPA awarded General Motors
(GM) credits of 1.8 gCO2/mile for GM's 2009-2012 full-size truck hybrids and 1.5 gCO2/mile
for its 2012 Buick Lacrosse© and Regal© hybrids. These vehicles use the auxiliary coolant
pump to keep the stop/start feature working in cold weather, while continuing to provide heat to
the passenger cabin. In contrast, the proposed credits for this technology are only 1.0 gCO2/mile
for cars and 1.5 gCO2/mile for trucks. [EPA-HQ-OAR-2010-0799-9487-A1, p.32] Using the 5-
cycle methodology, the technology simply provides continued operation of the stop/start feature
during the idle portions of the cold weather test, and the amount of fuel savings should be fairly
consistent between applications. The differential between the proposed credit and the actual test
results is sufficiently large that automobile manufacturers may independently file separate credit
applications for the larger credit amount justified by actual vehicle testing of each application
using the 5-cycle provisions of the regulation. This would be a large and unnecessary testing and
administrative burden for the automobile manufacturers as well as the regulatory agencies. We
recommend that EPA avoid this unattractive situation by making the menu credit for this
technology more consistent with actual test values. A menu credit of at least 1.5 gCO2/mile for
cars and 1.8 gCO2/mile for trucks is justified. [EPA-HQ-OAR-2010-0799-9487-A1, p.32]
We recommend that the definition be modified slightly to: [EPA-HQ-OAR-2010-0799-9487-A1,
p.31]
7-20
-------
Off-cycle Technology Credits
Engine stop-start means a technology which enables a vehicle to automatically turn off the
engine when the vehicle comes to rest and to restart the engine with driver action (e.g., applying
pressure to the accelerator or releasing the brake). Off-cycle engine stop-start credits will only be
allowed if the Administrator has made a determination under the testing and calculation
provisions in 40 C.F.R. part 600 that engine stop-start is the predominant operating mode. [EPA-
HQ-OAR-2010-0799-9487-A1, p.31]
Various studies and agency literature suggest longer periods are spent at idle than would be
indicated by the FTP cycle, and support a high off-cycle credit for the stop-start technology.
[EPA-HQ-OAR-2010-0799-9487-Al,p.31]
To encourage additional technologies that provide similar benefits, the Alliance also
recommends that the proposed definition be broadened to include other methods of maintaining
occupant thermal comfort during off-engine periods. Specifically, we propose the following
technology name and definition updates: [EPA-HQ-OAR-2010-0799-9487-A1, p.32]
Occupant thermal comfort technologies means technologies or strategies that maintain occupant
thermal comfort during off-engine periods in a stop-start equipped vehicle or in a hybrid electric
vehicle or plug-in hybrid electric vehicle (e.g., PTC heater or electric heater circulation pump).
[EPA-HQ-OAR-2010-0799-9487-Al,p.32]
Active Drivetrain Warm-Up (e.g., Active Transmission Warm-Up)
The Alliance supports EPA's analysis for the active transmission warm-up off-cycle credit of at
least 1.8 gCO2/mi. EPA's proposed definitions for credits for these technologies should,
however, be broadened to allow the inclusion other methods of driveline fluid warm-up as well
as other sources of waste heat (perhaps using different credit amounts for other variations of this
technology). For example, credits should explicitly be allowed for systems that use a coolant
loop to transfer the heat from the exhaust system to the transmission and/or engine, since this
may be more practical than directly heating engine oil or transmission oil in a heat exchanger in
the exhaust system. Also, the performance of the system is not significantly changed by the use
or non-use of coolant in the heat exchange process. [EPA-HQ-OAR-2010-0799-9487-A1, p.32]
Provisions should also be made to provide similar credits for other technologies that hasten
transmission warm-up and viscosity management (perhaps without using exhaust gases). Some
of these technologies are discussed in the next section of our comments, including quantification
of potential credit amounts. [EPA-HQ-OAR-2010-0799-9487-A1, p.33]
In addition, we recommend the following updates to the proposed technology name and
definition: [EPA-HQ-OAR-2010-0799-9487-A1, p.33]
Active drivetrain warm-up means a system that uses waste heat or waste energy to warm-up
driveline fluids quickly and reduces parasitic drivetrain (transmission, axles, PTUs, t-cases)
system losses related to friction and fluid viscosity. In this category, active transmission warm-
up would receive credit of at least 1.8gCO2/mi. [EPA-HQ-OAR-2010-0799-9487-A1, p.33]
7-21
-------
EPA Response to Comments
As mentioned in on p. 5-68 of the TSD, it is not necessary to heat the differential in rear-wheel-
drive vehicles in order to qualify for this credit. However, we believe that heating the rear
differential in these vehicles for viscosity management might provide an attractive additional
credit opportunity, and urge EPA to re-examine this possibility. [EPA-HQ-OAR-2010-0799-
9487-A1, p.33]
Active Engine Warm-Up
Our research supports the 1.8 gCCVmile off-cycle credit proposed by EPA for this technology.
However, EPA's definitions for earning this credit should be broadened such that a coolant loop
may be used to transfer the heat. Provisions should be made to provide similar credits for any
other technologies that hasten engine warm-up to provide similar benefits. [EPA-HQ-OAR-
2010-0799-9487-A1, p.33]
We recommend the following updates to the proposed definition: [EPA-HQ-OAR-2010-0799-
9487-A1, p.33]
Active engine warm-up means a system that uses waste heat, thermal storage, or waste energy to
warm up targeted sub-systems of the engine such that frictional losses are reduced. It would
allow a faster transition from colder operation to warm operation, decreasing CO2 emissions and
increasing fuel economy. In this category, active engine warm-up would receive credit of at least
1.8 gCO2/mi. [EPA-HQ-OAR-2010-0799-9487-A1, p.33]
Thermal Control [EPA-HQ-OAR-2010-0799-9487-A1, p.33]
Substantial benefits are available from thermal management technologies, and we support
establishing off-cycle credits for these technologies. [EPA-HQ-OAR-2010-0799-9487-A1, p.33]
Glazing [EPA-HQ-OAR-2010-0799-9487-A1, p.33]
The Alliance supports including glazing as an available off-cycle credit. However, the most
effective of these technologies (solar reflective) have relatively high cost, weight and functional
impact hurdles that must be overcome to integrate these technologies into the vehicle. For
simplicity and clarity, the Alliance recommends that EPA state that the glazing area to be used in
the calculation is the total glazing surface area. Also, credit should be granted for all vehicles that
utilize glazing better than 62% Tts (except roof lights), regardless of whether the improved glass
is marketed as the standard glazing or an optional upgrade. [EPA-HQ-OAR-2010-0799-9487-
Al,p.33]
In addition, we ask that EPA and NHTSA consider the input of suppliers of alternative glazing
technologies on amendments or additions to the proposed rule. Consideration of a broader range
of technologies will provide the necessary flexibility to achieve the desirable air conditioning-
related emission reductions, for example, based on reduced glazing thermal conductivity. [EPA-
HQ-OAR-2010-0799-9487-A1, p.34]
Active Seat Ventilation [EPA-HQ-OAR-2010-0799-9487-A1, p.34]
7-22
-------
Off-cycle Technology Credits
The Alliance supports EPA's analysis for this credit. As a practical matter, only the front seats
need to be ventilated to qualify for this credit, and this should be stated in the final regulation.
The analysis EPA uses to quantify the credit is based on two ventilated front seats. Rear seats are
used much less than front seats, and the cost attractiveness of this credit opportunity would fall
dramatically if it were required that more than the front seats be ventilated. Also, EPA's
definitions should specify that this credit can be earned for systems that either pull air into the
seat or push air out. The impacts on occupant comfort and energy consumption are the same, and
both approaches are used. This could be accomplished by making the following minor
modifications to the proposed definition: [EPA-HQ-OAR-2010-0799-9487-A1, p.34]
Active seat ventilation means a device which draws (or pushes) air or transfers heat/energy from
the seating surface which is in contact with the occupant and exhausts (or pushes) it to a location
away from the seat. [EPA-HQ-OAR-2010-0799-9487-A1, p.34]
Solar Reflective Paint [EPA-HQ-OAR-2010-0799-9487-A1, p.34]
The Alliance supports this credit while noting that, as with glazings, the analysis of energy
benefits may be optimistic because of the "worst case" test conditions used in the studies by the
National Renewable Energy Laboratory. [EPA-HQ-OAR-2010-0799-9487-A1, p.34]
The draft EPA definitions for both active and passive ventilation satisfy that objective, since the
definitions allow for many ventilation techniques. [EPA-HQ-OAR-2010-0799-9487-A1, p.34]
Active Cabin Ventilation
Cabin ventilation can be attractive for reducing air conditioner energy consumption and
improving comfort upon vehicle entry. Research on ventilation technologies has confirmed that
interior breath level temperatures can be reduced to the levels that EPA used in its analyses for
both active and passive ventilation. [EPA-HQ-OAR-2010-0799-9487-A1, p.34]
There are many approaches that can be used, such as ventilating through slightly open windows
or sunroofs, existing air conditioner ducts, or new air flow passages with dedicated fans. The
ventilation may also be continuous or pulsed. Since such a wide range of approaches can be
applied, the definitions used for this technology should not be overly prescriptive. [EPA-HQ-
OAR-2010-0799-9487-A1, p.34]
Also, we have found that it is very difficult to physically measure air flow through the vehicle to
a tight margin, so it is not practical to set air flow thresholds in order to qualify for these
ventilation credits. [EPA-HQ-OAR-2010-0799-9487-A1, p.34]
The cost of these technologies can be high. For example, active ventilation fans may need to be
coupled to a photovoltaic panel which powers the fans, so that the system does not drain the
battery if the vehicle is parked for long periods. The system used in EPA's analysis featured a
unique sunroof with several small fans to pull hot air out of the cabin. Because are all very costly
items, the credit offered for these technologies needs to be ample in order to make the business
case for their implementation attractive. [EPA-HQ-OAR-2010-0799-9487-A1, p.35]
7-23
-------
EPA Response to Comments
The Alliance therefore supports the definition of "active cabin ventilation" as proposed. [EPA-
HQ-OAR-2010-0799-9487-A1, p.35]
Passive Cabin Ventilation
As previously stated in the discussion of active ventilation, cabin ventilation can be attractive for
reducing air conditioner energy consumption. Research on ventilation technologies has
confirmed that interior breath level temperatures can be reduced to the levels that EPA used in its
analyses for passive ventilation. All of our other comments relative to active ventilation also
apply to passive ventilation. For example, the system analyzed by EPA employed automatic
sunroof features together with eight new floor vents in the vehicle. These are significant
hardware changes to the vehicle which would require a significant credit in order to make an
adequate business case for implementation. [EPA-HQ-OAR-2010-0799-9487-A1, p.35]
We propose to broaden the definition of Passive Cabin Ventilation slightly as follows: [EPA-
HQ-OAR-2010-0799-9487-A1, p.35]
Passive cabin ventilation means ducts, devices or methods that utilize convective airflow to
move heated air from the cabin interior to the exterior of the vehicle. [EPA-HQ-OAR-2010-
0799-9487-A1, p.35]
High Efficiency Alternator [EPA-HQ-OAR-2010-0799-9487-A1, p.35]
This was a good recommendation on EPA's initial off-cycle technology list, as contained in the
EPA/NHTSA July 2011 Supplemental Notice of Intent. However, this technology subsequently
did not appear in the proposed credit menu contained in the NPRM. We recommend that it be
added back to the menu. [EPA-HQ-OAR-2010-0799-9487-A1, p.35]
The standard 2-cycle fuel economy test is performed with accessories "off," and even the 5-cycle
tests only activate some accessories, such as the air conditioner on the SCO3 test. In contrast,
real-world driving has higher average electrical loads from a variety of accessories such as
radios, lights, rear-seat entertainment systems, wipers, power window motors, etc.
Conservatively, we estimate that at least a 20 amp average electric load differential exists in
actual real-world driving over the typical 20 amp load during the 2-cycle test. High efficiency
alternators provide fuel consumption benefits for this extra 20 amp real-world-driving
differential which are not captured on the 2-cycle test, and so these benefits should be eligible for
an off-cycle credit. [EPA-HQ-OAR-2010-0799-9487-A1, pp.35-36]
A traditional baseline alternator might have had an efficiency rating under the Verband der
Automobilindustrie (VDA, the trade association represent German automobile manufacturers)
test procedure of 60% to 64%, with high efficiency models having ratings above 68% VDA. To
translate these differences into a GHG-equivalent, GM ran simulations of three different
alternators on a range of four different vehicles using the NEDC drive cycle. The alternators
were the Valeo SGI 1 (61% VDA), Bosch E6 (69% VDA) and Denso DSO (70% VDA). [EPA-
HQ-OAR-2010-0799-9487-A1, p.36]
7-24
-------
Off-cycle Technology Credits
Each of these was simulated using the GM Unified Models for the Cadillac SRX, Chevrolet
Sonic, Chevrolet Cruze, and the new GM Alpha platform. Actual performance curves for each of
the alternators were used for one set of simulations. To simplify the comparisons, another set of
simulations was done for the high efficiency Bosch and Denso alternators, wherein the actual
performance curves were compared to alternator performance curves set to be exactly 10% lower
than the actual curves. Also, a very simple set of simulations was done to compare a flat 70%
efficiency alternator to a 60% efficiency alternator. [EPA-HQ-OAR-2010-0799-9487-A1, p.36]
The following chart shows the efficiency curves for the Bosch and Valeo alternators, and also
shows the curve for the Bosch alternator modified to be exactly 10% below the actual Bosch
data: [EPA-HQ-OAR-2010-0799-9487-A1, p.36] [For the chart please refer to EPA-HQ-OAR-
2010-0799-9487-A1, p.36]
Using this approach, the following CC>2 savings were estimated for the extra 20 amps typical of
real word driving, compared to the 2-cycle test's 20 amp load: [EPA-HQ-OAR-2010-0799-9487-
Al, p.37] [For the chart please refer to EPA-HQ-OAR-2010-0799-9487-A1, p.37]
As would be expected, the complexity of vehicle operations results in a spread in results from
this exercise. However, there are consistently CO2 savings, with a representative savings
appearing to be approximately 1.0 gCO2/mile. We therefore recommend that an off-cycle credit
of 1.0 gCO2/mile be established for vehicles that use an alternator rated at 68% VDA or better.
Alternator loads are rising as more electric features are used in vehicles; this credit amount is
conservative in that it does not account for this trend of increasing vehicle-generated electricity
usage. [EPA-HQ-OAR-2010-0799-9487-A1, p.38]
HVAC Eco-Mode
We appreciate the agencies' willingness to recognize the real-world fuel economy and GHG
improvements from driver-selectable technologies. We understand that expected usage data will
be required as a basis for adding these technologies to the menu. Since 2011, GM has featured an
"eco button" on the Chevrolet Equinox® that allows drivers to select a driving mode which
adjusts powertrain operation to achieve an improvement of approximately one mpg in combined
city/highway driving. This has proven to be a popular feature with many customers, and GM has
collected substantial data that documents high customer usage of this driving mode. In a two-
week survey of 3,500 owners of the 2011 Equinox conducted through OnStar® technology, the
following usage information was collected: [EPA-HQ-OAR-2010-0799-9487-A1, p.38]
50.3% of customers were using the eco mode for in excess of 90% of their driving, [EPA-HQ-
OAR-2010-0799-9487-A1, p.38]
57.4% of customers were using the eco mode in excess of 50% of the time, and [EPA-HQ-OAR-
2010-0799-9487-Al,p.38]
34% had never activated their eco mode. [EPA-HQ-OAR-2010-0799-9487-A1, p.38] While the
fuel economy benefits of the powertrain eco settings appear in the city and highway fuel
economy tests, the benefits of the new HVAC eco settings do not. These HVAC eco features
7-25
-------
EPA Response to Comments
should therefore be candidates for off-cycle GHG emissions credits. [EPA-HQ-OAR-2010-0799-
9487-A1, p.38]
The driver selectable HVAC eco mode initiates alternative air conditioner settings, such as
reduced blower speeds and evaporator core temperatures, both of which reduce load on the
compressor. During cold weather, the blower speed is also reduced, which reduces blower
energy consumption while also improving powertrain warm-up. Below are tables presenting test
data from six SCO3 tests and two Cold CO tests on a 2013 Equinox. This data clearly shows the
different, energy-saving operating characteristics from normal mode to eco mode. [EPA-HQ-
OAR-2010-0799-9487-A1, p.38]
Based on GM 5-cycle testing on the 2013 Equinox, GM calculated that the HVAC energy
savings for the eco button are 1.8 g CCVmile. Based on GM OnStar usage data, 50% usage is an
appropriate adjustment for this credit, since at least 50% of the drivers are using it at least 90%
of the time, with another 7% of drivers using it between 50% and 90% of the time, and 13% of
drivers using it between 0% and 50% of the time. Multiplying 50% usage by GM's tested 5-
cycle improvement of 1.8 gCCVmile yields a credit of 0.9 gCCVmile. The Alliance therefore
recommends that a 0.9 gCO2/mile credit for an HVAC eco button be established on the EPA
menu. [EPA-HQ-OAR-2010-0799-9487-A1, pp.38-39] [For the figure please refer EPA-HQ-
OAR-2010-0799-9487-A1, p.39]
Bypass Valve for Transmission Oil Cooler
This is an alternative approach to faster transmission warm-up and viscosity management,
without using exhaust gases. Many vehicles, especially large trucks, feature transmission oil
coolers that provide increased functionality to operate under heavy loads. One drawback,
however, of the traditional transmission oil cooler is that it continuously cools the oil, even under
circumstances when it would be advantageous for fuel economy to have the transmission oil
gaining heat more rapidly. Adding a bypass valve for the transmission oil cooler allows the oil
flow to be controlled to provide maximum fuel economy under a wide variety of operating
conditions such as cold weather. However, bypass valves are not currently commonly used with
transmission oil coolers. [EPA-HQ-OAR-2010-0799-9487-A1, p.39]
The Alliance recommends that an off-cycle credit of 0.3 gCO2/mile be established for vehicles
that have a transmission oil cooler with a bypass valve. This 0.3 gram proposed credit is
proportional to the 1.8 gram benefit observed for active transmission warm-up using exhaust
gases, based on the benefits observed during GM engineering development work with these
technologies. Also, the bypass valve is additive, and even synergistic to the benefits of using
exhaust gases for faster transmission warm-up, so both of these active transmission warm-up
credits should be available on a vehicle. For example, a transmission with an oil cooler,
combined with the bypass valve and exhaust gas-assisted warm-up, allows fine tuning of
viscosity management, since accelerated heating or cooling of the oil can both be accomplished,
depending on operating conditions. [EPA-HQ-OAR-2010-0799-9487-A1, p.39]
Electronic Thermostat and Electric Water Pump
7-26
-------
Off-cycle Technology Credits
This technology provides both faster engine warm-up and tighter continuous control of engine
block temperature. The variable electric water pump only performs as much work as is
demanded of it at any given time, based on instructions coming from the thermostat. This allows
the water pump to work less immediately after startup, thereby warming the engine faster, since
less heat is taken from the engine by its cooling system. This is especially valuable on the cold
CO test cycle. The pump also works less under other operating conditions, thereby reducing the
parasitic drag on the engine when compared to a conventional mechanical belt driven pump. This
provides for tighter control of the engine temperature to its ideal (which optimizes fuel
economy), with less energy spent on engine cooling. In an analysis using a conservative 3% on
FTP City combined cycle, the improvement from a mechanically driven water pump and a
conventional thermostat produces a 1 gram CO2/ benefit using the 5-cycle calculation method.
The vehicle used for this analysis was a 2.4L four cylinder SUV. [EPA-HQ-OAR-2010-0799-
9487-A1, p.40]
As noted above, we also recommend the following updates to the off-cycle technology
definitions: [EPA-HQ-OAR-2010-0799-9487-A1, p.41] [For the figures 'above' please refer to
EPA-HQ-OAR-2010-0799-9487-A1, pp.40-41]
High efficiency exterior lighting means a lighting technology that, when installed on the vehicle,
is expected to reduce the total electrical demand of the exterior lighting system when compared
to conventional lighting systems. LED lights specifically qualify. Separate credit values may be
earned for high efficiency lighting installed in the following components: parking/position, tail
lights, license plate lights, low beam lights, and daytime running lights. Credits may also be
earned for a high efficiency lighting bundle that is installed in the following components: front
and rear side markers, and backup/reverse lights. [EPA-HQ-OAR-2010-0799-9487-A1, p.41]
Engine heat recovery means a system that captures heat that would otherwise be lost through the
exhaust system or through the radiator and converting that heat to electrical or mechanical
energy to meet the requirements of the vehicle. Systems obtain credits according to the following
formula: [EPA-HQ-OAR-2010-0799-9487-A1, p.41]
Credit (gCO2/mile) = (System watt Capacity / 100) * 0.7 [EPA-HQ-OAR-2010-0799-9487-A1,
p.41]
Solar Panels means the installation of solar panels on a vehicle to capture and provide energy to
the vehicle (e.g., provide energy to an electric drive system via battery charging or provide
power to an electric motor or 12V battery trickle charging or cabin ventilation, etc.). Credit
levels are granted according to the following formula: [EPA-HQ-OAR-2010-0799-9487-A1,
p.41]
Credit (gCO2/mile) = (Equivalent watt Output / 50) * 3.0 [EPA-HQ-OAR-2010-0799-9487-A1,
p.41]
Active aerodynamic improvements means technologies that are actively controlled to improve
aerodynamic efficiency. Credits are awarded according to the following formulas: [EPA-HQ-
OAR-2010-0799-9487-A1, p.41]
7-27
-------
EPA Response to Comments
Car: Credit (gCO2/mile) = (Percent Reduction in Aero Drag, Cd) * 0.2 [EPA-HQ-OAR-2010-
0799-9487-A1, p.41]
Truck: Credit (gCO2/mile) = (Percent Reduction in Aero Drag, Cd) * 0.33 [EPA-HQ-OAR-
2010-0799-9487-Al,p.41]
Engine stop-start means a technology which enables a vehicle to automatically turn off the
engine when the vehicle comes to rest and restart the engine with driver action (e.g., applies
pressure to the accelerator or releases the brake). Off-cycle engine stop-start credits will only be
allowed if the Administrator has made a determination under the testing and calculation
provisions in 40 C.F.R. part 600 that engine stop-start is the predominant operating mode. [EPA-
HQ-OAR-2010-0799-9487-A1, p.42]
Occupant thermal comfort technologies means technologies or strategies that maintain occupant
thermal comfort during off-engine periods in a stop-start equipped vehicle or in a hybrid electric
vehicle or plug-in hybrid electric vehicle (e.g., PTC heater or electric heater circulation pump).
[EPA-HQ-OAR-2010-0799-9487-Al,p.42]
Active drivetrain warm-up means a system that uses waste heat or waste energy to warm-up
driveline fluids quickly and reduces parasitic drivetrain (transmission, axles, PTUs, t-cases)
system losses, related to friction and fluid viscosity. In this category, active transmission warm-
up would receive credit of at least 1.8 gCO2/mi. [EPA-HQ-OAR-2010-0799-9487-A1, p.42]
Active engine warm-up means a system that uses waste heat, thermal storage, or waste energy to
warm up targeted sub-systems of the engine such that frictional losses are reduced. It would
allow a faster transition from colder operation to warm operation, decreasing CO2 emissions, and
increasing fuel economy. In this category, active engine warm-up would receive credit of at least
1.8 gCO2/mi. [EPA-HQ-OAR-2010-0799-9487-A1, p.42]
Active seat ventilation means a device which draws (or pushes) air or transfers heat/energy from
the seating surface which is in contact with the occupant and exhausts (or pushes) it to a location
away from the seat. [EPA-HQ-OAR-2010-0799-9487-A1, p.42]
Passive cabin ventilation means ducts, devices or methods that utilize convective airflow to
move heated air from the cabin interior to the exterior of the vehicle. [EPA-HQ-OAR-2010-
0799-9487-A1, p.42]
Finally, opportunities exist to streamline traffic flow, reduce congestion and reduce emissions
through better driving. For example, there are technologies that provide the driver or the vehicle
with information for improved routing, or that provide the driver or the vehicle with information
for more efficient vehicle operation. GPS technology can play a role in improving both driver
behavior and vehicle operation. The opportunities for improvements through these eco driving
technologies are not sufficiently defined for the Alliance to propose specific credit definitions
and criteria at this time, but the industry hopes that it can work with the agencies in the future to
create off-cycle credits for these technologies. [EPA-HQ-OAR-2010-0799-9487-A1, p.44]
7-28
-------
Off-cycle Technology Credits
The following supplemental comments address the comments of the International Council on
Clean Transportation (ICCT). While ICCT purports to support the proposed rule, it advocates
eliminating or rendering de minimis many of the proposed flexibility mechanisms. [EPA-HQ-
OAR-2010-0799-11790-A1, p.2]
1. ICCT's Approach Would Delay Important Program Flexibilities Needed to Encourage
Experimentation and Early Adoption of Innovative Technologies.
The mechanisms under attack by ICCT are a key feature of the proposed regulation, and have
helped this rulemaking to proceed on an expedited timeline compared to similar major EPA and
NHTSA rulemaking processes. Many of ICCT's comments call for further study before
compliance credits are granted under the flexibility provisions. There will, in fact, be further
study of the effectiveness of these technologies, but the timing for establishing the flexibility
mechanisms cannot be separated from the expedited timing for the overall regulation. With this
in mind, we encourage EPA to move forward with establishing a broad array of credit
opportunities in the flexibility provisions of their regulation, to encourage early experimentation
and early adoption of innovative new technologies. As the Agencies gain experience with the
new approaches, they can refine the flexibility mechanisms appropriately. [EPA-HQ-OAR-
2010-0799-11790-A1, p.2]
2. ICCT's Approach Would Make It Impossible for Automakers to Achieve the Level of Off-
Cycle Credits that EPA Included in Setting the Stringency of the Overall GHG Regulations.
Although ICCT states that it "strongly supports" credits for off-cycle emission reductions (ICCT
Comments, p. 1), the net effect of its specific recommendations would almost completely
eliminate the off-cycle improvement program. [EPA-HQ-OAR-2010-0799-11790-Al,p.2]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 98.]
Finally, manufacturers should be encouraged through flexibilities and incentives to implement
verifiable innovations that enhance vehicle safety, that explore new technology applications and
reduce CO2 emissions.
The following supplemental comments address the comments of the International Council on
Clean Transportation (ICCT). While ICCT purports to support the proposed rule, it advocates
eliminating or rendering de minimis many of the proposed flexibility mechanisms. [EPA-HQ-
OAR-2010-0799-11790-A1, p.2]
For most technologies in EPA's proposal, ICCT either entirely opposes credits (e.g., stop-start,
active engine and transmission warm-up, ventilated seats and active and passive ventilation), or
requests further study (e.g., engine heat recovery, solar panels, active aerodynamic
improvements, and electric heater circulation pumps). Only three technologies would remain; for
these, ICCT recommends reducing the credit amounts to levels well below the credit levels
proposed in the NPRM. The remaining credits that ICCT recommends would be LED lights (at
0.8 gCO2/mile) and solar reflective paint and glazing (jointly capped at 1.8 gCO2/mile for cars
7-29
-------
EPA Response to Comments
and 2.6 gCCVmile for trucks, following a recommended 40% reduction for expected MAC
efficiency improvements). Based on these ICCT recommendations, the maximum potential off-
cycle credits for any car would be 2.6 gCCVmile and the maximum truck off-cycle credit would
be 3.4 gCO2/mile. [EPA-HQ-OAR-2010-0799-11790-Al, p.2]
In contrast, EPA included off-cycle credits for widespread implementation of start-stop and
active aerodynamic technologies in setting the stringency of the overall GHG standards. The
combined off-cycle credits for these two technologies are proposed to be 3.5 gCCVmile for cars
and 5.5 gCCVmile for trucks (76 Fed. Reg. 74854, 75022 (Dec. 1, 2011)). Thus, if ICCT
recommendations were fully implemented, it would be impossible to achieve the level of off-
cycle credits that EPA included in setting the stringency of the overall greenhouse gas
regulations. [EPA-HQ-OAR-2010-0799-11790-Al, p.3]
1. ICCT's Approach Would Delay Important Program Flexibilities Needed to Encourage
Experimentation and Early Adoption of Innovative Technologies.
The mechanisms under attack by ICCT are a key feature of the proposed regulation, and have
helped this rulemaking to proceed on an expedited timeline compared to similar major EPA and
NHTSA rulemaking processes. Many of ICCT's comments call for further study before
compliance credits are granted under the flexibility provisions. There will, in fact, be further
study of the effectiveness of these technologies, but the timing for establishing the flexibility
mechanisms cannot be separated from the expedited timing for the overall regulation. With this
in mind, we encourage EPA to move forward with establishing a broad array of credit
opportunities in the flexibility provisions of their regulation, to encourage early experimentation
and early adoption of innovative new technologies. As the Agencies gain experience with the
new approaches, they can refine the flexibility mechanisms appropriately. [EPA-HQ-OAR-
2010-0799-11790-A1, p.2]
2. ICCT's Approach Would Make It Impossible for Automakers to Achieve the Level of Off-
Cycle Credits that EPA Included in Setting the Stringency of the Overall GHG Regulations.
Although ICCT states that it "strongly supports" credits for off-cycle emission reductions (ICCT
Comments, p. 1), the net effect of its specific recommendations would almost completely
eliminate the off-cycle improvement program. [EPA-HQ-OAR-2010-0799-11790-Al,p.2]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 98.]
Finally, manufacturers should be encouraged through flexibilities and incentives to implement
verifiable innovations that enhance vehicle safety, that explore new technology applications and
reduce CO2 emissions.
3. Credit Calculation for Specific Off-Cycle Technologies
a. General Credit Calculation for Reducing Vehicle Load
7-30
-------
Off-cycle Technology Credits
EPA states a goal of matching off-cycle credits to real world emission reductions, and ICCT
endorses the principle that "the credits properly reflect actual in-use reductions" (ICCT
Comments, p. 36). However, ICCT then states that credits for reductions in electrical load should
be based on the (lower) electrical loads on the two-cycle FTP/HWY tests, rather than the (higher)
loads on the five-cycle tests. Yet it is the higher electrical loads on the five-cycle test that are
more representative of "actual in-use reductions," since some accessories such as the air
conditioner are activated in the five-cycle tests, the fuel pump works harder at higher speeds, etc.
In fact, since there are electrical features such as radios, phones, etc. not activated on the five-
cycle procedures, the real world benefits are probably even higher. Despite ICCT's comments to
the contrary, there is no reason that grams per mile of CC>2 calculated using the five-cycle
procedure, or any other more "real world" basis, cannot be subtracted from baseline emissions
measured on the two-cycle tests. Doing so is consistent with the principle of providing off-cycle
credits that reflect actual in-use reductions. [EPA-HQ-OAR-2010-0799-11790-A1, p.3]
b. High Efficiency Exterior Lighting
ICCT supports off-cycle credits for this technology, although it proposes changes in the
calculation methodology to base it on the 2-cycle drive cycles, rather than 5-cycle calculations.
As discussed above, this change would go against the goal of the program to grant credit based
on real world emission reductions. The 5-cycle procedures are intended to be more representative
of real world conditions. [EPA-HQ-OAR-2010-0799-11790-A1, p.3]
ICCT does not note the two most important changes that are needed to the exterior lighting
credit, which are to offer credit for LED low beam and daytime running lights. These two sets of
lights offer the greatest potential emissions reductions in the exterior lighting category. [EPA-
HQ-OAR-2010-0799-11790-A1, p.3]
c. Electric Heater Circulation Pump
The Alliance recommendation for these credits was based on actual vehicle testing, quantifying
the credit as the incremental 5-cycle test benefit over the 2-cycle benefit (although the 2-cycle
benefit is zero, since the heater would never be "on" for 2-cycle test temperatures). The Alliance
recommendation should fit ICCT criteria for a credit. All of the ICCT criticisms of EPA's
calculations for this technology become moot if the actual vehicle test data are used (e.g., time at
idle, electricity to run the pump, and any engine warm-up at idle). [EPA-HQ-OAR-2010-0799-
11790-Al,p.4]
d. Active Aerodynamic Technologies
Active aerodynamic features have been in production for some time, and the performance is
reliable and well understood. The factors that ICCT notes do not create a significant deterioration
or uncertainty in the benefits. For example, when there is a risk of freezing, active grill shutters
are typically "deactivated" by placing them in the closed position, which maximizes the
aerodynamic benefits while also hastening powertrain warm-up. This "ice mode" for active grill
shutters is typically activated for all temperatures below approximately 40-45oF (vehicle
temperature sensors typically indicate slightly warmer temperatures than the true ambient, so an
7-31
-------
EPA Response to Comments
indicated temperature in this range is chosen since the true ambient may be close to the
temperature for ice formation). The shutters are kept shut, even as the temperature warms, for a
sufficient time for any ice to melt. So a significant portion of real world vehicle operation is
conducted in cold weather where the benefits of active grill shutters are actually higher than
would be measured on the standard FTP/HWY test cycles. [EPA-HQ-OAR-2010-0799-11790-
Al,p.4]
For ambient temperatures above approximately 80oF, active grill shutters are typically kept open
to provide ample air flow for both the powertrain and the air conditioner. Opening the shutters in
this condition actually saves fuel compared to the alternative of making the air conditioner and
engine cooling fan work harder. For mild ambients - between approximately 45-80 oF - active
grill shutter operation is typically controlled in accordance with the engine cooling fan, so the
control system is fairly sophisticated in maximizing fuel economy while providing adequate air
flow. We do not know how EPA simulations for this technology included these various modes,
but it can be easily seen that this technology provides higher benefits in certain off-cycle
conditions, such as high speeds and cold weather, and is therefore suitable for an off-cycle credit.
Further, the conditions where the system is "deactivated" do not uniformly reduce the benefit,
but would be expected, on balance, to actually increase the net real world benefit, given the large
proportion of time spent with the shutters closed in "ice mode." Active air dams operate
similarly. Adjustable ride height is comparatively simple in operation, with straightforward high
speed benefits. [EPA-HQ-OAR-2010-0799-11790-A1, p.4]
As recommended by the Alliance, a good performance criterion for these credits is the
coefficient of drag (Cd) of the vehicle when the active aero features are deployed. A close
relationship exists between Cd and the overall greenhouse gas savings, which can be the basis for
granting credits based on Cd, thereby encouraging the maximum possible implementation of
these technologies. It is not realistic to require case-by-case vehicle testing for these
technologies, which would be prohibitively burdensome, thereby greatly slowing progress in this
promising area. [EPA-HQ-OAR-2010-0799-11790-Al, p.5]
e. Active Engine and Drivetrain Warm-up
ICCT makes the case that off-cycle credits for active engine and transmission warm-up are
"highly questionable," since "most of the benefit of the warm-up systems will occur on-cycle
during 2-cycle testing" (ICCT Comments, p. 46). ICCT bases this on an assertion that the
amount of warm-up on the FTP, measured in degrees of engine temperature, is about two-thirds
of the warm-up on the 20oF cold cycle:
However, normal engine operating temperatures are about 180oF. This is about 105oF above the
FTP test temperature and about 160oF above the 20oF test temperature. Thus, the benefit of
active engine warm-up on the FTP should be about two-thirds of the benefit at 20oF and the
proportional benefit will be even closer. (ICCT Comments, p. 45). [EPA-HQ-OAR-2010-0799-
11790-Al,p.5]
This analysis is grossly incorrect, since it omits the viscosity behavior of fluids such as engine oil
and transmission fluid at low temperatures. Viscosity is the measure of a fluid's resistance to
7-32
-------
Off-cycle Technology Credits
flow, or fluid friction, and is therefore strongly related to powertrain and driveline efficiency.
Kinematic viscosity increases exponentially as temperature falls, such that the viscosity of
engine oil and transmission fluid is many times higher at the start of the cold test compared to the
FTP. The graph below shows this for some common engine oils. At the starting temperature for
the cold test (which at 20oF is actually -6.7oC, well below the starting point for this graph),
viscosity would be above 600 centistokes (cSt). In contrast, at the start of the FTP, around 24oC,
viscosity is around 125 cSt. Therefore, engine friction could be reduced several times by
warming the temperature of the engine oil rapidly into the range of the FTP. Transmissions and
transmission fluids behave similarly, as do rear differentials, etc. That is why accelerated warm-
up of these components produces significant off-cycle benefits in cold weather. Improvements in
engine oil viscosity taper off above 50oC, to the normal engine operating temperatures above
80oC, so most of the benefits of these technologies occur off-cycle and not on the two-cycle
tests. [EPA-HQ-OAR-2010-0799-11790-A1, p.5]
f. Ventilated Seats and Other Ventilation Technologies
ICCT suggests that credits for ventilation technologies are not appropriate because they are
based on "limited data", and the driver response is "unclear" (ICCT Comments, p. 39). However,
there are additional supporting studies and data beyond the series of National Renewable Energy
Laboratory (NREL) studies that were cited in the EPA analysis. For example, studies of thermal
comfort from heated and cooled seats were performed at the Technical University of Denmark,
resulting in technical publications such as the summary in the journal "Ergonomics" in 2007 by
Zhang, Dyon, Fang and Melikov (Vol. 50, Issue 4, pp. 586-600, "The Influence of Heated or
Cooled Seats on the Acceptable Ambient Temperature Range"). [EP A-HQ-OAR-2010-0799-
11790-Al,p.6]
Quoting the abstract of this study:
In 11 climate chamber experiments at air temperatures ranging from 15 to 45 degrees C, a total
of 24 subjects, dressed in appropriate clothing for entering a vehicle at these temperatures, were
each exposed to four different seat temperatures, ranging from cool to warm. In one simulated
summer series, subjects were preconditioned to be too hot, while in other series they were
preconditioned to be thermally neutral. They reported their thermal sensations, overall thermal
acceptability and comfort on visual analogue scales at regular intervals. Instantaneous heat flow
to the seat was measured continuously. At each ambient room temperature, the percentage
dissatisfied was found to be a second-order polynomial function of local heat flow. Zero heat
flow was preferred at an air temperature of 22 degrees C and the heat flow that minimized the
percentage dissatisfied was found to be a single linear function of air temperature in all
conditions. The analysis indicates that providing optimal seat temperature would extend the
conventional 80% acceptable range of air temperature for drivers and passengers in vehicle
cabins by 9.3 degrees C downwards and by 6.4 degrees C upwards. [EP A-HQ-OAR-2010-0799-
11790-Al,p.7]
Only 20% of occupants were dissatisfied by the cabin temperature in the range from 10.80 to
34oC when the seat was heated or cooled optimally, according to a simple control strategy that
changed seat heat flux as a linear function of ambient temperature. Regarding the potential for
7-33
-------
EPA Response to Comments
lower air conditioner usage in hot weather, it was concluded that 80% of occupants would be
satisfied by seats that were cooled even if the cabin temperature was raised by up to 6.4oC. Note
that this is more than the cabin temperature increases used in the NREL studies as the basis for
their calculations of the fuel savings from reduced air conditioner usage due to ventilated seats.
Making a rough estimate based the EPA factors for translating cabin temperature reductions to
CC>2 reductions (Draft Joint Technical Support Document (TSD), p. 5-73), that 6.4oC
temperature change would equal a 1.9 gCCVmile credit for cars and a 2.6 gCCVmile credit for
trucks. The proposed off-cycle credits of 1.0 gCCVmile for cars and 1.3 gCCVmile for trucks,
based on the NREL study, are modest in comparison. [EPA-HQ-OAR-2010-0799-11790-Al,
p.7]
Also, the seat heat flux of 60 W/m2 in the NREL study (Figure 11) equals the optimal flux in the
Zhang study at about 37oC (Figure 8). Thus, the actual seat heat transfer performance of the
production seats in the Cadillac STS used in the NREL study is more than sufficient to achieve
the results seen from the laboratory set-up used by Zhang et al, at least through ambient
temperatures up to 37oC. Therefore, the comfort results quantified by Zhang et al can be
achieved using actual ventilated seat components that are already in the market. Moreover, the
air conditioner energy savings attributed to ventilated seats by NREL are not excessive compared
to similar estimates for related thermal technologies in the TSD and elsewhere. [EPA-HQ-OAR-
2010-0799-11790-A1, p.7]
This Technical University of Denmark data and the resulting polynomial function are
summarized in the chart below. [EPA-HQ-OAR-2010-0799-11790-A1, p.7] [[See Docket
Number EPA-HQ-OAR-2010-0799- 11790-A1, p.8 for the chart.]]
Ventilated seats are a popular feature on luxury vehicles, despite the typically high price.
Therefore, if the feature becomes more widespread as a result of the off-cycle credit program, it
can be expected that the "driver response" will be to learn to appreciate and use this luxury
feature, which provides quicker cool-down, as well as fuel savings. When the ventilated seats are
in use, it can be reasonably expected that the air conditioner would be turned down to maintain
comfort levels, providing the energy savings and emission reductions estimated in these
analyses. [EPA-HQ-OAR-2010-0799-11790-A1, p.8]
g. Active and Passive Ventilation
As with ventilated seats, more research data and field experience is available for active and
passive ventilation than was cited in the EPA TSD. Several manufacturers already offer active or
passive ventilation technologies on production vehicles. The 2010 Toyota Prius began offering
options of a solar panel ventilation system and a remote air conditioning controls system, both
designed to reduce cabin temperature when the vehicle is parked in hot ambient conditions. Data
has been provided by Toyota to the EPA on the performance of the Prius solar panel ventilation,
corroborating the NREL report which EPA used as the basis for its proposed active ventilation
off-cycle credit. Furthermore, market experience has already shown these features to be quite
popular, as the projected installation rate of 3% has been actually running at 12% - which
equates to about 50,000 units sold. Given the popularity of the solar panel ventilation system and
the potential for expanding this technology to provide additional electrical energy to power the
7-34
-------
Off-cycle Technology Credits
vehicle, it would be prudent for EPA to encourage development via off-cycle credits, rather than
defer credits as ICCT suggests. [EPA-HQ-OAR-2010-0799-11790-Al, pp.8-9]
In addition, General Motors commissioned NREL in 2008-2009 to analyze over a dozen
variations of active and passive ventilation, as well as additional combinations of ventilation
technologies with solar reflective technologies, with the goals of identifying the most effective
combinations, as well as validating a comprehensive range of improved thermal modeling
methods. [EPA-HQ-OAR-2010-0799-11790-A1, p.9]
The ventilation technologies used the existing HVAC blower or additional fans at various power
levels to provide either continuous or pulsed exchanges of fresh air into the vehicle. Based on a
standardized solar load of 800 W/m2, among the variations using solely active ventilation, five
out of twelve applications produced average interior temperature reductions during solar soaks in
excess of the 6.9oC reduction measured in the older NREL study which was used as the basis for
the proposed off-cycle credit. The biggest reduction was 11.4oC. Moreover, six of the lowest
performing active ventilation applications were simply low-wattage versions of a system that
achieved a 7.2oC average interior temperature reduction in its seventh, most high-powered
application. Since each version of this system would cost the same, regardless of the wattage, the
low-performance versions of this system can be disregarded as not commercially attractive when
compared to the version that achieved a 7.2oC reduction at the same cost. If these low-powered
systems are disregarded, only one application achieved an interior temperature reduction of less
than 6.9oC, while five systems surpassed the 6.9oC reduction level. [EP A-HQ-OAR-2010-0799-
11790-Al,p.9]
In comparison, a very simple passive system that opened the windows 2 cm achieved an average
interior temperature reduction of 3.5oC, and also provided an additional improvement of
approximately 1.5oC when combined with one of the active ventilation technologies. While this
system was not as sophisticated as the one evaluated by EPA as the basis for the passive
ventilation credit, it shows that there is significant potential for low cost emission reductions
from this passive ventilation approach. [EPA-HQ-OAR-2010-0799-11790-A1, p.9]
In summary, the early experience with active and passive ventilation technologies has been
promising, and the interior temperature data from these experiences supports the levels of off-
cycle credit proposed by EPA. We therefore urge EPA to offer the proposed credits to encourage
further progress in implementing and improving these technologies. [EPA-HQ-OAR-2010-0799-
11790-Al,p.9]
Response:
The EPA agrees with the comments from the Alliance that the "off-cycle technology
credit menu is a necessary addition to the off-cycle program" and appreciates the accolade that it
is a "great addition to the GHG reduction and corporate fuel economy programs." As a result we
are finalizing this rule with the off-cycle technology credit menu.
Regarding the Alliance comments that "recommend[ed] revisions to the proposed credit
amounts", the EPA responded to the comments regarding each of these technologies in greater
detail in Chapter 5.2 of the TSD and Preamble II.F of this final rule. Specifically, our responses
7-35
-------
EPA Response to Comments
for each of the technologies on the off-cycle technology menu can be found in TSD Chapter 5 as
follows: High Efficiency Exterior Lighting (5.2.3), Waste Heat Recovery (5.2.2; formerly
termed "Engine Heat Recovery"), Solar Panels (5.2.4), Active Aerodynamic Improvements
(5.2.6), Active Drivetrain Warm-Up (e.g., Active Transmission Warm-Up; 5.2.8.3), Active
Engine Warm-Up (5.2.8.4), Thermal Control Technologies (5.2.9) including Glazing (5.2.10),
Solar Reflective Paint (5.2.12), Active Seat Ventilation (5.2.11), Active Cabin Ventilation
(5.2.13), and Passive Cabin Ventilation (5.2.13). In addition, our responses regarding additional
technologies that the Alliance recommended we consider adding to the off-cycle technology
credit menu or allowing credit for including: High Efficiency Alternator, HVAC Eco-Mode,
Bypass Valve for Transmission Oil Cooler, and Electronic Thermostat and Electric Water Pump;
are discussed in Section II.F.2. of the preamble for this final rule. Finally, our responses to the
comments from the Alliance regarding clarifying the technology definitions are included in TSD
Chapter 5 and the definitions for specific off-cycle technologies can be found in 5.2.5, 5.2.7.,
5.2.8.5, and 5.2.15.
The EPA also agrees with and appreciates the supplemental comments from the Alliance.
The EPA sought to ensure that the off-cycle credits for technologies on the off-cycle technology
menu were verifiable and supported by data. This supporting information from the Alliance was
helpful to support the basis for the credit values that we are finalizing in this rule.
Organization: Association of Global Automakers, Inc. (Global Automakers)
Global Automakers supports the availability of credits for technologies that provide on-road
efficiency and emissions benefits but whose benefits are not fully measured using the current
city-highway test. In a number of cases, these technologies are currently known, as indicated by
the "menu" of credits developed by the agencies for the proposed rule. However, given the long
time-frame for the proposed standards, it is very possible that additional technologies will be
identified which should qualify for off-cycle credits, and the characteristics of these technologies
cannot currently be predicted. In order to provide an incentive for manufacturers to pursue the
implementation of these technologies and realize the resulting benefits, it is important that the
agencies provide maximum flexibility to manufacturers to obtain credits. For these reasons, we
urge the agencies to avoid imposing unnecessary restrictions on qualification for off-cycle
credits. The proposed rule establishes numerous restrictions on the use of off-cycle credits which
appear to be arbitrary and unnecessary to the effective functioning of the GHG and CAFE
programs. [EPA-HQ-OAR-2010-0799-9466-A1, p. 5]
(1) The pre-approved technology "menu." Global Automakers supports the inclusion of the
menu in the regulations as a default list of pre-approved technologies, with manufacturers being
authorized to petition for larger credit or credits for additional technologies, based on credible
data. [EPA-HQ-OAR-2010-0799-9466-A1, p. 5]
The agencies should also update the menu list from time-to-time, as they receive information on
additional technologies that provide off-cycle benefits. Inclusion of technologies on the pre-
approved menu provides a significant incentive for manufacturers to implement those
technologies, so the menu should be as comprehensive as possible. One example of such a
technology that is mentioned in the comments on the proposed standards is high efficiency
7-36
-------
Off-cycle Technology Credits
alternators. This technology provides benefits greater than those measured in 2-cycle testing,
since its efficiency advantage is applied to the electrical loads of equipment that is operated
during typical on-road driving but that is not operated during 2-cycle tests (e.g., lighting, radio,
etc.). [EPA-HQ-OAR-2010-0799-9466-A1, pp. 5-6]
EPA should not maintain any of the restrictions on off-cycle credits in the absence of a strong
showing of need for the restriction. Additionally, we believe that the agencies should update the
off-cycle credits menu in the mid-term review. [EPA-HQ-OAR-2010-0799-9466-A1, p. 7]
Response:
The EPA agrees with the comments from the Global Automakers that it is important to
"provide an incentive for manufacturers to pursue the implementation of these technologies and
realize the resulting benefits" and we believe the off-cycle program achieves this.
In contrast, the EPA disagrees with statements from the Global Automakers that all of the
eligibility criteria to receive off-cycle credits are "arbitrary and unnecessary to the effective
functioning of the GHG and CAFE." We did revise the criteria for receiving off-cycle credit
menu default values by eliminating the requirement for 10% market penetration for the
technologies on the off-cycle technology menu (see Preamble IILC.S.b.i.). However, other
criteria such as the 10 g/mile total cap for menu-based credits have been retained since these
criteria "balanc[e] the goal of providing a streamlined pathway to encourage significant
introduction of innovative off-cycle technologies with the uncertainty inherent with the estimated
level of credits being provided" (see Preamble IILC.S.b.i.). Therefore, other than the 10%
market penetration rate requirement, we believe that the eligibility criteria for the default credit
values in the menu are appropriate. Manufacturers may, of course, seek credits in greater
amounts for the technologies on the menu using the case-by-case demonstration procedures.
The EPA agrees with the comments from the Global Automakers that we should review
the list of technologies and consider additions to the off-cycle technology menu. EPA will
continue to closely watch new technologies and evaluate applications for new off cycle credits as
they come in.
Finally, the comments from the Global Automaker regarding high efficiency alternators
are discussed in greater detail in Section II.F.2. of the preamble for this final rule.
Organization: Bosch
The agencies have recognized certain technologies, while having a measurable impact on CC>2
and fuel economy on the 2-cycle test, have an even greater impact off-cycle and as such the
agencies have included these technologies on the pre-approved off-cycle technology credit list.
Bosch commends the agencies for the inclusion of stop/start and active aerodynamics on this off-
cycle list. In response to the agencies' request for input regarding the off-cycle credit list, Bosch
is proposing the addition of brushless technology for engine cooling fans and high efficiency
alternators to the pre-approved off-cycle technology credit list. [EPA-HQ-OAR-2010-0799-
9462-Al,p. 2]
7-37
-------
EPA Response to Comments
Brushless technology (EC) for Engine Cooling Fans - This high efficiency technology for
electrical motors / drives should be added to the pre-approved list of technologies for off-cycle
credits. Most of today's vehicles utilize brushed motors (DC) in a series-parallel dual fan
configuration, which allows for only three fan power levels. In a typical high-power system,
these levels could equate to 0 watts (OFF), 170 watts (Low Speed), and 660 watts (High Speed).
Transitioning from series-parallel brushed motors to advanced brushless motor technology
reduces average vehicle electrical power consumption by 81 watts (Appendix A) - resulting in a
direct fuel economy improvement of 0.27 mpg assuming standard measurements and
calculations that form a general rule that reducing vehicle electrical consumption by 30 watts
will result in a fuel economy improvement of 0.1 mpg. Field data at major OEMs have proven
this relationship over a number of years for both passenger cars and light duty pickups. [EPA-
HQ-OAR-2010-0799-9462-A1, pp. 2-3]
High Efficiency Alternators - While Bosch recognizes high efficiency alternators were included
as an integral technology in the setting of the standards, and are thus precluded from off-cycle
credits, the fuel savings and CO2 reduction attributable to high efficiency alternators are greater
in the 5-cycle versus the 2-cycle tests. Alternator efficiency plays an even greater role in real life
applications and drive cycles where a higher, more realistic vehicle load is encountered. The base
alternator efficiency assumed in the NPRM is approximately 65%. Increases in alternator
efficiency to 75% and up to 82% can be realized using a combination of existing and new
technologies respectively. Alternators with increased efficiency are a drop-in replacement with
no other changes needed to the vehicle architecture. Bosch therefore recommends the addition of
high efficiency alternators to the pre-approved off-cycle technology list. [EPA-HQ-OAR-2010-
0799-9462-A1, p. 3]
An example demonstrating the effect of a high efficiency alternator is provided in Appendix B.
In tests on a GM 2.4L 4 cylinder gasoline engine, an increase in alternator efficiency of 10%
resulted in 1.23% improvement in fuel economy on the 2-cycle test and 1.93% improvement on
the 5-cycle test. Typical vehicle electrical loads are included in the appendix. At higher, more
real world electrical loads, this off-cycle benefit would have an even greater impact on fuel
consumption. Upon request, additional calculations using the MOVES model as well as
additional 5-cycle test data can be provided. [EPA-HQ-OAR-2010-0799-9462-Al, p. 3]
Response:
We appreciate the comments from Bosch and the supporting information that the
company supplied. However, we disagree with Bosch that high-efficiency alternators and
brushless technology for engine cooling fans should be added to the off-cycle technology menu.
Our detailed responses to the comments from Bosch on additional technologies for the
off-cycle technology menu are in Section II.F.2. of the preamble for this final rule. To
summarize, we are not adding high efficiency alternators and brushless technology for engine
cooling fans to the off-cycle credit menu due to the variability in implementation strategy and
electrical loads for the systems and related components. This makes it difficult to pinpoint a
single, default value for the off-cycle technology menu. Therefore, we feel that these
technologies are better suited for off-cycle credit consideration using the alternate case-by-case
7-38
-------
Off-cycle Technology Credits
approval process for technologies not on the off-cycle technology menu. As a result,
manufacturers may seek off-cycle credit for high efficiency alternators and brushless technology
for engine cooling fans but must make an individualized demonstration in order to obtain such
credits.
Organization: Chrysler Group LLC
The Agencies have established separate credits for off-cycle technologies which are expected to
have different greenhouse gas and fuel consumption benefits for passenger cars and light-duty
truck. Similar to many of the other off-cycle technologies, active engine and transmission warm-
up technologies are expected to yield a greater absolute benefit for light-duty trucks. [EPA-HQ-
OAR-2010-0799-9495-A1, p. 6]
Recommend improvements to the process for qualifying additional off-cycle technologies;
[EPA-HQ-OAR-2010-0799-9495-A1, p. 9]
And provide numerous other technical comments and recommendations on off-cycle
technologies. [EPA-HQ-OAR-2010-0799-9495-A1, p. 9]
Support the establishment of a table of pre-approved off-cycle technologies with defined
greenhouse gas and fuel consumption benefits; [EPA-HQ-OAR-2010-0799-9495-A1, p. 9]
Support expansion of the pre-approved off-cycle technology list; [EPA-HQ-OAR-2010-0799-
9495-A1, p. 9]
The Agencies propose a pre-approved table of greenhouse gas and fuel consumption
improvement values for GHG and CAFE compliance applicable to the 2017-2025 MYs. The
Agencies note that this "Off-Cycle Technology Table" would "significantly streamline and
simplify the [off-cycle credit] program for manufacturers choosing to use it and would provide
manufacturers with certainty that credits may be generated through the use of pre-approved
technologies." EPA further notes that the values in the Off- Cycle Technology Table were
developed using "a combination of available activity data from the MOVES model, vehicle and
test data, and EPA's vehicle simulation tool to estimate a proposed credit value EPA believes to
be appropriate." The approach of the Off-Cycle Technology Table makes sense. By providing
manufacturers certainty that their efforts to improve real-world greenhouse gas emissions and
fuel economy will be taken into account for compliance purposes, the Agencies encourage the
adoption of these technologies. [EPA-HQ-OAR-2010-0799-9495-A1, p. 9]
Chrysler recommends that the Agencies define separate passenger car- and light-duty truck-
specific credits for active engine and transmission warm-up technologies. [EPA-HQ-OAR-2010-
0799-9495-A1, p. 10]
EPA is proposing to establish a list of pre-defined and pre-approved off-cycle technologies. This
list contains three basic technology types according to the Agencies' Draft Joint Technical
Support Document7 ("DJTSD"): technologies which reduce or offset electrical loads; active
7-39
-------
EPA Response to Comments
aerodynamic improvement technologies; and advanced load reduction technologies. [EPA-HQ-
OAR-2010-0799-9495-A1, p. 10]
The advanced load reduction technologies proposed for inclusion in the pre-defined and pre-
approved list are engine start-stop (idle off), electric heater circulation pump, active transmission
warm-up, active engine warm-up, and thermal/solar control technologies. All of these advanced
load reduction technologies, except for active transmission and active engine warm-up, have
passenger car and light-duty truck-specific credits derived for them based on their relative
benefit for cars and trucks. In the case of active transmission and engine warm-up, EPA based
the estimated benefits on a mid-size car only. EPA should treat all advanced load reduction
technologies in a similar manner by estimating passenger car and light-duty truck-specific credits
for active transmission and engine warm-up technologies. [EPA-HQ-OAR-2010-0799-9495-A1,
p. 10]
If additional technologies are added to the pre-defined and pre-approved off-cycle technology
list, Chrysler supports passenger car and light-duty truck specific credits where such
technologies affect vehicle greenhouse gas emission and fuel consumption in a similar manner to
advanced load reduction technologies. [EPA-HQ-OAR-2010-0799-9495-A1, p. 10]
Response:
We appreciate the comments from Chrysler Group LLC and agree with the comments on
establishing a table of pre-approved off-cycle technologies and credit values, and improvements
to the process for qualifying additional off-cycle technologies.
Regarding the comments from Chrysler for separate passenger car and light-duty truck-
specific credits for active transmission and engine warm-up technologies, we reviewed our
estimates for active transmission warm-up and active engine warm-up and revised the default
credit amount as discussed in Section 5.2.8.3 and 5.2.8.4, respectively of Joint TSD Chapter 5
and Section II.F.2. of the preamble for this final rule.
Based on our revised estimates, we agree with Chrysler that there is a clear difference in
the benefit of active transmission and engine warm-up technologies between passenger cars and
light-duty trucks. Therefore, we are including separate car and truck credits on the off-cycle
technology menu for active transmission and engine warm-up of 1.5 grams/mi for cars and 3.2
grams/mi for trucks.
Organization: Denso International America, Inc.
DENSO has developed high efficiency alternators for use in light vehicles and, as a result, has
significant expertise in this technology. These alternators have a higher degree of effectiveness in
reducing real-world CC>2 emissions than is measured using the Federal Test Procedure/Highway
Fuel Economy Test 2-cycle procedure. This difference in performance levels is similar to that of
stop-start systems and active grill shutters, which are included in the pre-defined technology
"menu" list in section 86.1866-12(d)(l)(i) of the agencies' proposed 2017-25 rule. Therefore, we
request that EPA and NHTSA add high efficiency alternators to the off-cycle menu list along
7-40
-------
Off-cycle Technology Credits
with the other technologies that have similar performance characteristics. [EP A-HQ-OAR-2010-
0799-9269-A1, p. 1]
We would be pleased to work with EPA and NHTSA to develop any data or other information
that EPA and NHTSA need in order to make a determination regarding the appropriateness of
adding high efficiency alternators to add the pre-defined list. [EPA-HQ-OAR-2010-0799-9269-
Al,p. 1]
I. Background.
EPA and NHTSA published on August 9, 2011 a Supplemental Notice of Intent announcing
plans to propose stringent federal greenhouse gas and fuel economy standards for model year
(MY) 2017-2025 light-duty vehicles (hereinafter referred to as the SNOI). The SNOI described
high efficiency alternators as one of candidates for the off-cycle credits. However, the high
efficiency alternator was not included in an applicable technology list of § 86.1866-12(d)(l) of
the proposed rule. Therefore, the proposed off-cycle credit program does not allow
manufacturers to obtain credits of the high efficiency alternator without EPA prior approval.
Inclusion of the technology in the off-cycle menu is important, since it provides an assurance to
vehicle manufacturers that they will receive a specified credit for use of the technology,
significantly improving the marketability of the technology. In this way, the emissions and
energy benefits of the technology will be maximized. [EPA-HQ-OAR-2010-0799-9269-Al, p. 1]
II. Electrical load over 2 cycle (FTP/HFET) test and real world condition.
High efficiency alternators supply electrical power to vehicle electrical equipment with less
required engine power than normal efficiency alternators. The reduction of required engine
power by the high efficiency alternators yields a corresponding reduction of CC>2
emissions. [EPA-HQ-OAR-2010-0799-9269-Al, p. 1]
The benefit of the high efficiency alternators over real world condition cannot be sufficiently
captured by the 2 cycle (FTP/HFET) test procedure, however. This is because the electrical load
over the 2 cycle test condition is much less than the load over real world condition. [EPA-HQ-
OAR-2010-0799-9269-A1, p. 2]
DENSO estimates that the electrical load of vehicles over 2 cycle test conditions and real world
conditions are as shown in Table 1. We estimate the electrical load over 2 cycle test conditions is
240W and over real world condition is 750W. If the electrical load of optional equipment which
may be selected by the driver is considered, the real world electrical load is increased to 1470W.
This means that the CO2 reduction benefit by the high efficiency alternator, which we project to
be 510W (750W - 240W) at minimum, is not captured by the 2 cycle test. Therefore, we believe
that the high efficiency alternator is qualified as an off-cycle technology. [See Table 1 on page 2
of Docket number EPA-HQ-OAR-2010-0799-9269-A1] [EPA-HQ-OAR-2010-0799-9269-Al,
p. 2]
According to the Draft Technical Support Document (TSD) for the NPRM, section 5.2.1, EPA
and NHTSA estimate that a reduction of required engine power of 100W yields 3.0g/mi CO2
7-41
-------
EPA Response to Comments
emission reduction over the 2 cycle test and 3.7g/mi CC>2 emission reduction over the 5 cycle
test. Table 2 shows our brief simulation of CC>2 reduction benefit by improving the alternator
efficiency from an average 65% to average 75% and using the EPA and NHTSA study in the
TSD and our estimation of vehicle electrical load. Based on this simulation, we can estimate that
a 2.8 g/mi CC>2 reduction is available by improving of the alternator efficiency. This constitutes a
substantial real world CC>2 emission reduction. Therefore, the high efficiency alternator should
be included in the menu list of off-cycle credits to promote the introduction of the technology.
[See Table 2 on page 3 of Docket number EPA-HQ-OAR-2010-0799-9269-A1] [EPA-HQ-OAR-
2010-0799-9269-A1, pp. 2-3]
III. Off-cycle credit for high efficiency alternators in passenger car CC>2 emission regulation in
Europe.
The European Union (EU) has adopted CO2 emission reduction regulations for passenger cars
effective in 2012, through their Regulation (EC) No. 443/2009. Regulation (EC) No. 443/2009
provides "eco-innovation" credits, which are similar to the U.S. proposed off-cycle credits. The
eco-innovation credits are available for technologies whose CC>2 reduction benefit cannot be
fully measured using the EU CC>2 emission test methodology (New European Driving Cycle,
"NEDC"). [EPA-HQ-OAR-2010-0799-9269-A1, p. 3]
On July 25, 2011, the EU published a regulation (Commission Regulation (EU) No. 725/2011)
and a technical guideline document to establish type approval procedures for eco-innovation
credits. The technical guideline document describes the high efficiency alternator as one of the
technologies that qualifies for eco-innovation credits, and establishes the credit calculation
methodology for such alternators. This methodology should be considered by EPA and NHTSA
as a reference for developing an off-cycle credit for high efficiency alternators in the U.S. final
rule. According to the guideline, because the electrical load of the vehicle over real world
conditions is larger than the load over NEDC test, the CO2 reduction benefit of the high
efficiency alternator cannot be sufficiently measured using the NEDC test. Therefore, EU
determined the high efficiency alternator as one of technologies that qualifies for eco-innovation
credits. See the technical guideline at
http://ec.europa.eu/clima/policies/transport/vehicles/cars/docs/guidelines_en.pdf [EPA-HQ-
OAR-2010-0799-9269-A1, p. 3]
The eco-innovation credit calculation methodology for the high efficiency alternator is described
in paragraph 8.4 of the EU technical guideline. The credit of the alternator is calculated as
follows. [See the calculation on page 4 of Docket number EPA-HQ-OAR-2010-0799-9269-
Al] [EPA-HQ-OAR-2010-0799-9269-A1, p. 4]
Response:
We appreciate the comments from Denso International America, Inc. and the supporting
information that they supplied. However, we disagree with Denso that high-efficiency
alternators should be added to the off-cycle technology menu.
7-42
-------
Off-cycle Technology Credits
Our detailed responses to the comments from Denso on the addition of high-efficiency
alternators to the off-cycle technology menu are in Section II.F.2. of the preamble for this final
rule. To summarize, we are not adding high efficiency alternators to the off-cycle technology
menu due to variability in implementation strategy and electrical loads for the systems and
related components. This makes it difficult to pinpoint a single, default value for the off-cycle
technology menu. Therefore, we feel that this technology is better suited for off-cycle credit
consideration using the alternate method approval process for technologies not on the off-cycle
technology menu. As a result, manufacturers seeking off-cycle credit for high efficiency
alternators must pursue this path.
Organization: EcoMotors International, Inc.
It is vital that EPA continue to evaluate off-cycle technologies and consider adding technologies
to the pre-approved list even after the Final Rule's adoption. Similarly, manufacturers should
always have the ability to provide data for pre-approved technologies to demonstrate a credit
value greater than that assigned on the EPA pre-approved list. EcoMotors encourages EPA to
continue to provide as much guidance and certainty to OEMs as possible (via guidance letters or
other mechanisms), as this program continues to evolve and as new technologies emerge and are
developed. [EPA-HQ-OAR-2010-0799-9594-A2, p. 13]
Response:
The EPA agrees with the comments from EcoMotors International, Inc. The alternate
method approval process for technologies not on the off-cycle technology menu is a pathway for
manufacturers to "provide data for pre-approved technologies to demonstrate a credit value
greater than that assigned on the EPA pre-approved list." Therefore, we believe the provisions
for the off-cycle credit program in this final rule address the comments from EcoMotors
International, Inc.
Organization: Ford Motor Company
Further, we believe that there is opportunity to expand the menu beyond the currently proposed
list to capture other fuel-saving technologies such as high efficiency alternators, HVAC Eco-
Mode, transmission oil cooler bypass valves, and electronic thermostats and electric water
pumps. The inclusion of these items to the list may encourage more widespread implementation
of these technologies. The list of technologies (currently proposed and new) and credit levels, as
proposed by the Alliance and supported by Ford, is shown below: [The list can be found on p. 16
of Docket number EPA-HQ-OAR-2010-0799-9463-A1] [EPA-HQ-OAR-2010-0799-9463 -Al,
p. 15]
The addition of the predefined technology menu is extremely beneficial to manufacturers as it
provides a clear methodology to achieve credits for technologies that provide real world fuel
economy benefits that are not reflected in the regulated test procedures. To improve this method
even further, Ford agrees that several of the menu technology definitions should be revised to
improve clarity or to broaden their scope of applicability. We also propose that some of the
7-43
-------
EPA Response to Comments
credits should be adjusted to higher levels, based on industry data, as detailed in the Alliance
comments. [EPA-HQ-OAR-2010-0799-9463-Al, p. 15]
In addition to the technologies discussed and listed above, we anticipate working with EPA to
establish the correct methodologies to account for benefits of in-vehicle systems that provide
tools for more efficient driving. Driver coaching or feedback systems, such as Ford EcoMode,
can result in more fuel efficient driver behavior (e.g., less aggressive acceleration or braking,
more efficient shifting, etc.) and have already deployed successfully in our hybrid electric
vehicles and the new Ford Focus. Similarly, vehicle maintenance alerts and reminders can help
drivers ensure that their vehicles are operating efficiently; for example, Ford's Crew Chief
program, offered to fleet customers, currently helps drive fleet efficiency through improved
vehicle maintenance by communicating oil life and low tire pressure to the fleet manager.
Opportunities to expand these capabilities could provide significant real world fuel savings
across our customer fleet. Finally, route planning tools can assist drivers in finding the best route
as well as avoiding (and thus reducing) congestion. Real world benefits to both greenhouse gas
emissions and fuel economy can be achieved through these technologies, and while quantifying
the benefit is an acknowledged challenge, we look forward to further discussion with the
agencies. [EPA-HQ-OAR-2010-0799-9463-Al, p. 16]
While the pre-approved technology list is only proposed to apply for 2017 and later MYs, Ford
would support an allowance to also use it for 2012-2016 MY vehicles. If the same technologies
are used prior to 2017, we believe they should be eligible for the same benefits. Such an
extension of the menu would help to encourage earlier implementation of these technologies.
[EPA-HQ-OAR-2010-0799-9463-A1, p. 17]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 44-47.]
Further, we anticipate working together to establish the correct methodologies to account for the
benefits of driver-activated technologies. For example, coaching systems result in more fuel-
efficient driver behavior as well as eco-route planning tools can provide a significant
improvement in real-world fuel economy.
Response:
The EPA agrees with the comments from Ford Motor Company that "the predefined
technology menu is extremely beneficial to manufacturers as it provides a clear methodology to
achieve credits for technologies that provide real world fuel economy benefits."
Our responses to the comments from Ford Motor Company on additional technologies for
the off-cycle technology credit menu including High Efficiency Alternators, HVAC Eco-Mode,
Bypass Valves for Transmission Oil Cooler, and Electronic Thermostat and Electric Water Pump
are discussed in Section II.F.2. of the preamble for this final rule. In summary, we are not
adding these technologies to the off-cycle technology menu but credit for these technologies may
be requested using the alternate method approval process for technologies not on the off-cycle
7-44
-------
Off-cycle Technology Credits
technology menu. Responses to comments regarding off-cycle credit eligibility for crash
avoidance and driver interactive technologies are likewise discussed in preamble section II.F 2.
Organization: Hyundai America Technical Center
1) Modifications to the Off-Cycle Menu: Hyundai supports the menu format for off-cycle
technologies which will allow for a less burdensome path of accounting for the performance of
several well-accepted technologies. [EPA-HQ-OAR-2010-0799-9547-A1, p.5]
2) Update of Off-Cycle Technology Menu: Hyundai recommends that the agencies conduct an
annual update of the existing menu technologies to ensure that improvements in the technologies,
which are likely to occur over the extended time period of the rule, are properly reflected in the
menu. In addition, Hyundai strongly requests that the menu list be updated annually with new
technologies that have been approved by the agencies. Hyundai believes it is unnecessary for
manufacturers to generate burdensome confirmatory data of off-cycle technology benefits if the
data is already available. Additionally, this has the potential of reducing the agencies' burden in
reviewing redundant technologies and reducing the time and number of public review requests.
[EPA-HQ-OAR-2010-0799-9547-Al,p.5]
Response:
We agree with the comments from Hyundai America Technical Center that the off-cycle
technology menu "will allow for a less burdensome path of accounting for the performance of
several well-accepted technologies." However, we disagree with the comments from Hyundai
that the agencies should "conduct an annual update of the existing menu technologies to ensure
that improvements are properly reflected in the menu."
The off-cycle technology menu was adopted to add a certain level of stability to the off-
cycle credit program. Continually updating the off-cycle technology menu on an annual basis
has the complete opposite effect. Further, the menu is part of the rule and can only be amended
through notice-and-comment rulemaking proceedings.
In addition, the alternate demonstration methods for technologies not on the off-cycle
technology menu offers a pathway for manufacturers to demonstrate benefits and request credit
beyond the technologies (or the amounts) offered in the off-cycle technology menu. The off-
cycle technology menu credit values are based on existing technology and currently available
information using conservative estimates. As individual manufacturers develop specific
technology that achieves greater benefits (than those listed on the menu), it would be imprudent
to reflect this on annual basis in the off-cycle technology menu since not all vehicles are not
expected to have identical technology effectiveness and implementation. Thus, credit values are
expected to vary. Therefore, the alternate demonstration method process is better suited for case-
by-case evaluations where there is insufficient data to support a default credit or where the level
of credit may depend on a specific manufacturer's design.
Finally, regarding the Hyundai comments on burden, it should be noted that the
information used in the alternate demonstration method process can be used as long as the off-
7-45
-------
EPA Response to Comments
cycle technology and the vehicle application remain unchanged. In this manner, this data can be
carried over on an annual basis, provided no changes have occurred, thus reducing the burden for
requesting and approving credit. Further, as Hyundai points out in their comments, if the data is
already available to the manufacturer, there is no need to "generate burdensome confirmatory
data of off-cycle technology benefits."
Organization: Mercedes-Benz USA, LLC
DAG supports credits to encourage vehicle technologies that reduce CC>2 emissions by reducing
collisions resulting in fuel consuming traffic congestion. Below DAG suggests a package menu
approach with conservatively-based credit opportunities that will encourage the deployment of
these technologies and considerably reduce CO2 emissions. [EPA-HQ-OAR-2010-0799-9483-
Al,p.2]
With regard to particular off-cycle credits, DAG supports the Alliance proposal for calculating
the potential for High Efficiency Light Savings. However, in the event that the agencies do not
adopt the Alliance proposal, DAG suggests that the agencies adopt EPA's methodology, as
described in the draft Joint Technical Support Document (TSD § 5.2.1.1). DAG believes that all
cars equipped with LED lighting systems should be eligible for an off-cycle credit, even if LED
lighting is not used on all lamps throughout the vehicle. DAG proposes both that the credit be
premised on the real power consumption of the LED-light systems actually incorporated into the
vehicle, and further that both low and high beam LED light systems be eligible. [EPA-HQ-OAR-
2010-0799-9483-A1, p. A-3]
The process DAG envisions to account for this off-cycle credit would be that the manufacturer
supply the agencies with electric power consumption of each LED light system on the vehicle.
Using that data, the off-cycle credit can be derived according to the methodology described in
Table 5.21 in the draft TSD, with the exception that the electric power consumption of the high
efficiency LED system supplied by the manufacturer be used rather than the values in the table.
This change in the methodology will not limit the off-cycle credit to vehicles fully equipped with
high efficiency LED lighting; it will instead allow vehicles partially equipped with high
efficiency LED lighting to also be eligible for the off-cycle credit. [EP A-HQ-OAR-2010-0799-
9483-A1, p. A-3]
As the agencies began to construct a CO2 program complementing the traditional fuel economy
program, EPA and NHTSA recognized that the traditional definition of'fuel economy' is
restrictive and that significant additional reductions in emissions and fuel consumption can be
attained by encouraging the advent of vehicle-based technologies that reduce fuel consumption
in ways that are not reflected in the federal test procedures. As a result, the agencies have
included within their assessments CO2 and fuel consumption reductions associated with
enhanced air conditioning efficiencies and reduced refrigerant leakage. The agencies have also
created an off-cycle CO2 and fuel consumption improvement program to encourage the
proliferation of technologies capturing these additional benefits. [EP A-HQ-OAR-2010-0799-
9483-A1, pp. A-6-A-7]
7-46
-------
Off-cycle Technology Credits
Similar to off-cycle technologies are technologies that lead directly to CO2 and fuel
consumptions reductions by avoiding crashes and the associated traffic congestion they cause.
Crash avoidance technologies serve not only to promote motor vehicle safety, but also to ease the
flow of traffic and to mitigate traffic congestion that is associated with motor vehicle collisions.
The real world CO2 and fuel economy benefits of these technologies, when they are not
mandated through regulation, should be recognized and their widespread deployment encouraged
within the context of the GHG and fuel economy programs.13 [EPA-HQ-OAR-2010-0799-9483 -
Al, p. A-7]
Below DAG sets forth the analytic foundation and the suggested elements of a program to
encourage and to acknowledge the significant CO2 and fuel consumption benefits associated with
the potential for these technologies to reduce crash-induced congestion. While these benefits are
derived independently of NHTSA's safety mission, promoting vehicle-based technologies that
avoid crashes in order to reduce fuel consumption and CC>2 emissions is entirely consistent with
that mission. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-7]
Significantly, in the context of saving fuel and reducing CC>2 emissions, the relevant linkage in
terms of any technology's effectiveness is whether the agencies can link the technology to crash
avoidance and enhanced traffic flow, not whether the agencies can link the technology to
reduced fatalities and injuries. As a result, the technologies encouraged within the GHG and
CAFE programs need not be premised on technologies already approved by NHTSA within the
New Car Assessment Program or other safety programs linked to fatalities and injuries. [EPA-
HQ-OAR-2010-0799-9483-A1, p. A-7]
DAG acknowledges the inherent limitations in trying to quantify specific levels of CC>2
reductions to particular features. There is clear data, however, relating unnecessary fuel
consumption to traffic congestion and traffic congestion to collisions. There is also data showing
the effectiveness of certain crash avoidance technologies. The agencies have linked crash-
induced congestion to excess fuel consumption and CC>2 emissions. With the CC>2 benefits of
crash mitigation clear, the agencies have an opportunity to encourage significant additional
emissions benefits through promoting crash avoidance technologies, and can do so through a
process utilizing conservative assumptions. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-7]
The fact that crash avoidance technologies are a primary countermeasure within NHTSA's safety
program should not preclude the agencies from gaining the substantial CC>2 and fuel
consumption benefits associated avoiding crashes and enhancing the efficiency of the
transportation system. The agencies need not limit their authority to advance the fundamental
policies embedded in each empowering statute by focusing too narrowly on the specific type of
regulatory action each has traditionally issued. The National Program in particular represents a
regulatory transformation. Three government bodies are working together under a historic
program to harmonize regulatory programs all aimed at common theme; and the historically
separate considerations of emissions and safety have converged. This convergence is an
opportunity to improve emissions reductions and fuel economy within the GHG and CAFE
program with the corollary effect of also advancing motor vehicle safety. [EPA-HQ-OAR-2010-
0799-9483-A1, p. A-7]
7-47
-------
EPA Response to Comments
The Clean Air Act obligates EPA to redress endangerments to public health and welfare arising
as the result of the emission of air pollutants. The concept of welfare, in particular, is broad and
encompasses a wide array of potential dangers. As set forth in more detail below, EPA has
determined that traffic congestion is a substantial contributor endangering public health and
welfare due to the excessively unnecessary amounts of fuel consumed, and also that climate
change is leading to more weather-related traffic accidents and delays. Having already linked
traffic accidents, congestion, climate change and the endangerment to public health and welfare,
EPA is well within its authority under the Clean Air Act to redress the endangerment posed by
undue CO2 emissions caused by traffic crashes by encouraging the deployment of crash
avoidance technologies. [EPA-HQ-OAR-2010-0799-9483-A1, pp. A-7-A-8]
Similarly, the CAFE program has long promoted the convergence of safety and fuel economy
considerations. Not only has NHTSA long taken into account any potentially adverse safety
implications that might arise from mass reduction, but also NHTSA has affirmatively designed
the CAFE program with the explicit aim of addressing safety. Specifically, while it is widely
acknowledged that weight is more closely aligned with fuel economy, the agency chose footprint
as the attribute upon which to base the CAFE program. The decision to base the fuel economy
program on a footprint attribute was expressly linked to the fact that doing so promoted motor
vehicle safety in addition to fuel economy. NHTSA, therefore, has already inexorably linked the
CAFE program with advancing its safety mission. The provision of congestion mitigation credits
based on crash avoidance technologies is simply a further extension of the well-received policy
decisions the agency has previously made. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-8]
EPA has also confirmed the correlation between reducing congestion from motor vehicle crashes
and reducing emissions. In a recent report aimed at providing information to local governments
on effective Transportation Control Measures, the agency noted that 'efforts to improve the
efficiency of transportation ... help reduce air pollution and GHG emissions, improve energy
security and independence, and save money. One of the specific measures suggested by EPA is
to: [EPA-HQ-OAR-2010-0799-9483-A1, pp. A-9-A-10]
Enhance incident management systems. Incident management systems focus on quickly clearing
roadways of accidents and stalled vehicles. These systems typically include roving tow or service
vehicles, motorist aid call boxes, contingency planning, and other means for quickly responding
to incidents (U.S. EPA, 1998b). Traffic incidents account for about one-quarter of all congestion
on U.S. roadways, and for every minute that a freeway travel lane is blocked during a peak travel
period, four minutes of travel delay results after the incident is cleared (National Traffic Incident
Management Coalition, Undated). Since traffic incident management helps to minimize and
prevent congestion, these systems can reduce fuel consumption by more than I percent annually
and save 2,600-7,700 gallons of gasoline per incident, thereby reducing associated vehicle
emissions [U.S. DOT, Undated(d)]. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-10]
NHTSA's most recent Vehicle Safety and Fuel Economy Rulemaking and Research Priority Plan
for 2011-2013 identifies the potential for crash avoidance technologies to reduce these
congestion-causing collisions:
7-48
-------
Off-cycle Technology Credits
From the crash avoidance perspective, NHTSA looks at types of crashes that might be mitigated
by new technologies. Based on the General Estimates System (GES) and the Fatality Analysis
Reporting System (FARS), four types of crashes total 85 percent of all crashes. These include
Run-Off-Road (23%), Rear-End (28%), Lane Change (9%), and Crossing Path (25%). [EPA-
HQ-OAR-2010-0799-9483-A1, p. A-10]
Longitudinal assistance, lateral assistance, and driver attention monitoring can alleviate a
significant number of these collisions. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-10]
The Agencies can Reasonably Estimate the Fuel Savings Associated with Crash Avoidance
Technologies
Certain crash avoidance technologies have had enough exposure the market to establish that they
have a statistically significant impact on reducing collisions. Data from the German insurance
institute GDV/UDV shows that Advanced Driver Assistance Systems have significantly reduced
collisions. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-10]
With 25% of the congestion in the United States due to traffic incidents, and an overall fuel loss
from congestion of approximately 38 million tons, about 9.5 million tons of CO2 loss annually is
associated with traffic incidents. Scaling this loss to vehicle miles traveled results in
approximately 6 grams CO2 per vehicle per mile if all accidents could be avoided. [EPA-HQ-
OAR-2010-0799-9483-A1, p. A-10]
The longitudinal assistance technologies Forward Collision Warning and Adaptive Brake Assist
have already been proven effective in real world field data. Scaling the GDV/UDV field
experience to U.S. crash data, DAG estimates up to 15% of crashes could be avoided by
deploying such a Primary Longitudinal Assistance Package. [EP A-HQ-OAR-2010-0799-9483-
Al,pp. A-10-A-11]
Adding to the proven effectiveness of primary longitudinal assistance technology is a more
Advanced Longitudinal Assistance Package incorporating Autonomous Emergency Braking and
Adaptive Cruise Control. DAG estimates that such a system could potentially avoid up to 18% of
crashes. This package provides the most advanced longitudinal anti-collision technology and is
currently cost-effective only on high priced luxury vehicles. [EP A-HQ-OAR-2010-0799-9483-
Al,p. A-ll]
There are other technologies where effectiveness estimates are more difficult to attain but where
data suggests that the technology will have a significant positive impact on avoiding traffic
collisions. NHTSA has already recognized lane departure warning as an effective crash
avoidance technology (along with forward collision warning). Active Lane Keeping Assist
combined with Blind Spot Assist provides a Lane Tracking Package that offers significant
potential to reduce CO2 both by averting up to 5% of crashes and by maintaining the flow of
traffic by averting 'near misses.' [EPA-HQ-OAR-2010-0799-9483-A1, p. A-ll]
Driver Attention Monitor is another promising technology. A survey of owners who have had the
attention assistance feature in Mercedes vehicles for about a year found that the system was
7-49
-------
EPA Response to Comments
effective in helping drivers to avoid fatigue. Sixty-eight percent of those surveyed indicated that
they took a break from driving when the attention assistance alerted them to the fact that their
driving behavior had become more erratic.20 Fatigue, in turn is a significant factor in traffic
collisions.21 [EPA-HQ-OAR-2010-0799-9483-A1, p. A-ll]
Adaptive Forward Lighting systems provide enhanced visibility in a variety of driving conditions
which enhance the driver's ability to safely operate their vehicle. Emerging field experience
suggests these systems may be highly effective in reducing crashes. [EPA-HQ-OAR-2010-0799-
9483-Al,p. A-ll]
There are currently accepted technical understandings regarding the definitional and/or
performance criteria for many of the technologies listed below. Brake Assist systems are defined
in ECE regulations (UN-R-13H, Annex 9, Part B). NHTSA's NCAP program already includes
performance specifications for Forward Collision Warning and Lane Departure Warning, and the
agency is working towards performance specifications for Dynamic Brake Support and Collision
Imminent Braking systems. Adaptive Cruise Control and Lane Keeping Assist are subject to
various ISO definitions which could be applied as appropriate. For those technologies where
NHTSA is currently working, we would anticipate that the work would be complete well before
Model Year 20 17 and further that NHTSA or other standards organizations will address
additional technologies, such as Attention Assist or Adaptive Forward Lighting. [EPA-HQ-
OAR-2010-0799-9483-A1, p. A-ll]
Regulation to mandate new technology and/or to link technology directly to fatalities or injuries
necessitates specific definitions and performance criteria to determine compliance or eligibility.
DAG understands that NHTSA, SAE, ISO, and others are working towards concrete and
performance based definitions applicable to ensuring that these features will result in reduced
fatalities and injuries. However, the level of stringency needed to develop and validate functional
definitions and objective test procedures for collision avoidance safety systems is necessarily
causing this process to take a considerable amount of time. In the context of gaining the
emissions and fuel economy benefits of reducing collision-induced congestion, there is no need
to link the definitions and performance criteria to reduced fatalities and injuries; instead,
technologies are appropriate if they can reasonably be shown to avoid accidents, and thereby
reduce congestion and its associated fuel consumption and CO2 emissions. [EPA-HQ-OAR-
2010-0799-9483-A1, pp. A-ll-A-12]
The chart below summarizes a proposed credit methodology with technology packages and
suggested credit opportunities. DAG proposes that NHTSA allow a manufacturer to submit to
the agency data specific to its product offerings showing that its technology is effective in
reducing vehicles collisions. NHTSA may approve the application and determine the amount of
the credit and would be assured that the technology is robust and effective in terms of crash
avoidance and the consequent fuel savings.22 [EPA-HQ-OAR-2010-0799-9483-A1, p. A-12]
DAG conducted an extensive review of the available literature, including published OEM studies
by, for example, Honda and Bosch, and the German Insurance Institute GDV/UDV
quantification of brake assist benefits for all crashes (including non-injury crashes) based on
POL insurance data (20022006) case-by-case simulation. Consistent with DAG's suggestion that
7-50
-------
Off-cycle Technology Credits
each company present its package, the benefits may be adjusted slightly to account for which
features are included. For example, the GDV study finds that an emergency brake assist (EBA2)
system with Forward Collision Warning and Adaptive Brake Assist results in an approximate
12% reduction in all passenger vehicle crashes in all crash types with all crash partners within
the German study. Adaptive Brake Assist with Autonomous Emergency Braking (EBA2+)
results in an approximate 13.9% reduction in all passenger vehicle crash types with all partners
within the German study. Adjusting for the percentage of crashes that are rear-end crashes
(22.2% in GDV vs. 28% in US) renders an effectiveness rate between 15.3% and 17.5% for these
longitudinal assistance packages. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-12]
With regard to the Lane Keeping Package, NHTS A has estimated effectiveness of approximately
6%. This includes an assumption of 55% availability. Taking a more conservative approach, for
this purpose it is reasonable to assume a 5% effectiveness rate in reducing crashes. The
remaining technologies listed below will produce effectiveness data before and through the
rulemaking model years and should be considered for inclusion in a congestion reduction credit
program as they are becoming offered in the light duty fleet. [EPA-HQ-OAR-2010-0799-9483-
Al,p. A-12]
Individually and collectively these technologies will measurably diminish traffic incidents, and
therefore fuel consumption. In light of the significant amount of fuel wasted every year in
collision-induced congestion, applying maximum credit opportunities of 1 g/m or less per
package places a conservative value on proliferating these technologies throughout the fleet.
Manufacturers should be encouraged to incorporate all fuel saving and emissions reducing
technologies into their offerings, whether those features reduce CO2 emissions on a per vehicle
basis or whether they reduce CC>2 emissions through technologies proven to be effective in
reducing a significant cause of fuel-consuming congestion. [EP A-HQ-OAR-2010-0799-9483-
Al,p. A-13]
The Agencies Have Ample Legal Authority to Provide Congestion Mitigation Credits
Both EPA and NHTSA have ample legal authority to provide credits for fuel consumption
improvements that lead directly to CO2 reductions. In reviewing this authority, it is important to
consider that providing credits for technologies that reduce fuel consuming congestion due to
traffic congestion involves no policy trade-offs. To the contrary, the credits would promote each
of the policies that both agencies are charged with promoting: environmental protection, fuel
economy, public health and welfare and motor vehicle safety. As such, the suggested credit
program is fully consistent with the public objectives underlying each of the agencies' enabling
statutes and would be fully harmonious with all statutory provisions. [EP A-HQ-OAR-2010-
0799-9483-A1, pp. A-13-A-14]
First, the legal authority for congestion reduction credits is similar to that utilized by the agencies
to establish off-cycle and fuel consumption improvement credits for technologies that reduce
CO2 in ways that are not measured in the applicable and traditional fuel economy tests. There has
been no dispute that EPA has the authority to promote further CO2 reductions under the Clean
Air Act. As the agencies have recognized, the authority to apply such credits under EPCA is
7-51
-------
EPA Response to Comments
based on EPA's authority to define the methodology to calculate fuel economy for purposes of
determining compliance. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-14]
Second, the congestion reduction credits are wholly consistent with EPA's obligation to address
the endangerment to public health and welfare identified as arising from the air pollutant at issue.
In this case, EPA has found that part of the endangerment to public and welfare arising from
climate change is a potential increase in traffic incidents. The agency concluded, for example,
that 'the increase in heavy precipitation will cause increases in weather-related accidents, delays,
and traffic disruptions in a network that is already being challenged by increasing congestion.
Traffic congestion leads to excess CC>2 emissions and CC>2 emissions lead to more traffic
congestion - creating a circle of endangerment and effect that can be diminished through the
advent of technologies that help to avert the cause of the emissions and the resulting additional
endangerment. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-14]
Third, a credit program that achieves CC>2 reductions while also advancing safety is also
consistent with both the Clean Air Act and with EPCA. EPA has long considered any adverse
safety impacts from mandating a particular emissions control technology. The agency, moreover,
has construed 'effects on welfare' broadly to encompass an array of considerations that may
result from the consequences of air pollution. The courts have also long upheld NHTSA's
consideration of safety impacts when determining maximum feasible fuel economy
standards. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-14]
Indeed, the agencies have embedded considerations of safety into the fabric of the regulatory
program by taking safety considerations into account in deciding upon footprint as the attribute
and in deciding on the structure of the curves. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-14]
The agencies need not base the legal authority to establish congestion reduction credits on the
advancement of safety. The credits are independently justified by the fuel consumption and CC>2
reductions they create. Significantly, however, there is robust precedent for linking together the
GHG program with advancing motor vehicle safety and promoting both CC>2 reductions and
motor vehicle safety. [EPA-HQ-OAR-2010-0799-9483-A1, pp. A-14-A-15]
13 As with off-cycle credits, the fuel consumption reductions associated with these technologies
need not be specifically accounted for when establishing the CC>2 and CAFE standards. These
technologies represent another area where significant gains can be made if the agencies
incentivize the widespread deployment of these technologies.
20 The attention assist operates by analyzing steering wheel movements for the driver and
providing an alert when steering inputs deviate from that driver's normal pattern. Attention assist
not only helps alert drivers to the need to rest when fatigued, but also can help alert drivers who
have become distracted.
21 ANHTSA study showed that 80% of accidents and 65% of near-accidents are caused by the
inattentiveness of the driver, including drowsiness. SeeNHTSA, The Impact of Driver
7-52
-------
Off-cycle Technology Credits
Inattention on Near-Crash/Crash Risk: An Analysis Using the 100-Car Naturalistic Driving
Study Data, DOT HS 810 594 (Apr. 2006). Various studies have estimated that between 10 and
25% of severe traffic accidents can be attributed to driver drowsiness. NHTSA has reported that
annually about 100,000 crashes in the U.S., with 40,000 persons injured and 1,550 killed, are the
result of driver sleepiness. NHTSA, Research on Drowsy Driving,
http://www.nhtsa.gov/Driving+Safety/Distracted+Driving/Research+on+Drowsy+Driving.
22 DAG does not believe that this process would overwhelm the agency. Agency personnel are
already familiar with the technologies and much of the data relating to these technologies. This
process would put the onus on each manufacturer to develop robust data regarding its
technologies and to present that information in a clear and concise manner to enable the agency
to make a determination as to whether the credit should be applicable. Manufacturers may be
required to submit this data with their pre-model year report and/or in their EPA certification
applications. This process is similar to applying for air conditioning credits and DAG believes it
can be implemented efficiently and without the need for substantial agency resources to be
devoted to an additional task.
Response:
We appreciate the comments from Mercedes-Benz USA, LLC and agree with the
comments on high efficiency exterior lighting. As discussed in greater detail in Section 5.2.3 of
TSD Chapter 5, we are allowing manufacturers to receive off-cycle credit for partial lighting
elements and agree that the approach suggested by Mercedes-Benz makes sense. In addition, we
are allowing scaling of the lighting elements if the benefits achieved exceed those set forth in
Table 5-21, Section 5.2.3 of TSD Chapter 5.
However, we disagree with the comments from Mercedes-Benz regarding eligibility of
crash avoidance technologies for off-cycle credits. This issue is discussed further in Section
II.F.2. of the preamble for this final rule. As stated there, the agencies do not believe that a
"calculable relationship between congestion mitigation and fuel/CO2 savings directly attributable
to individual vehicles produced by a manufacturer, or even to a manufacturer's fleet of vehicles"
and that "for a technology to be "counted" under the credit provisions, it must make direct
improvements to the performance of the specific vehicle to which it is applied." In addition, and
importantly, in the agencies' judgment, evaluation of crash avoidance technologies is better
addressed under NHTSA's vehicle safety authority than under a case-by-case off-cycle credit
process.
Therefore, we are finalizing today that crash avoidance technologies are not eligible for
off-cycle credit under any off-cycle credit pathway (e.g., off-cycle technology menu, alternate
method demonstration process).
Organization: Motor & Equipment Manufacturers Association (MEMA)
In response to the agencies' request for input on off-cycle technologies and the "Pre-Defmed
Credit List," MEMA has a few proposals. [EPA-HQ-OAR-2010-0799-9478-A1, p.7]
7-53
-------
EPA Response to Comments
Second, collectively, the MEMA supports the technologies, emissions and fuel consumption
estimates in the NPRM's proposed Pre-Defined Credit List. The estimates presented in the
NPRM tables are relatively on par, and, in some cases may even be on the conservative side.
Also, MEMA believes there are other technologies currently in the field with proven off-cycle
benefits that were not in the NPRM (some examples include high efficiency alternators and
brushless motor technology for engine cooling fans). These and other technologies, as
appropriate, should be considered for inclusion on the list. Since MEMA represents a wide
variety of motor vehicle parts manufacturers that make a huge range of various products,
components and systems, we fully expect individual member companies to submit comments
and specific remarks not only about the Pre-Defined technologies list and their corresponding
ranges in the NPRM, but also about adding to the agencies' "menu" of technology choices for
the final rule. MEMA asks that the agencies consider and fully evaluate those requests that have
comprehensive, valid and confirmed data demonstrating the real-world, off-cycle benefits for
revision to or inclusion in the final rule's Pre-Defined Credit List. [EPA-HQ-OAR-2010-0799-
9478-A1, p.7]
Fourth, with respect to the "engine heat recovery" technology credit in the tables and in the
proposed regulatory text definition, MEMA finds the term not very descriptive and confusing;
also, it is inadvertently interchanged in the NPRM with "exhaust heat recovery" (also see our
comment in Section IX). The engine heat recovery technology mentioned in the agencies'
Technical Support Document (thermoelectric) can, in fact, be used to recover exhaust heat or any
other source of heat. The industry, academia, and the Department of Energy have called the
group of technologies that fall under the rulemaking nomenclature of "engine and exhaust heat"
as "waste heat recovery" (WHR) technologies. Utilizing recovered heat and repurposing for
other vehicle tasks, increases efficiencies for all types of vehicles - internal combustion engines
and hybrids, alike. In some cases, the WHR system generates electricity and in other cases it can
be used to expedite the warm-up of engines, transmissions, rear axles, and even the passenger
compartment, to reduce ancillary loads and, for hybrid vehicles, to speed up the transition to all-
electric mode. The source of the waste heat - whether the exhaust stream, engine coolant EGR
cooler, or other - is all dependent on numerous criteria selected by the OEM to produce the most
cost-effective solution. [EPA-HQ-OAR-2010-0799-9478-A1, p.8]
In keeping with our technology-neutral thesis, MEMA recommends that all these technologies be
classified as WHR and the credits be listed separately as has been proposed in the NPRM. If the
technology converts waste heat into 100W of electrical power, regardless of the technology, then
a 0.7 g/mi credit is applied. If the technology uses waste heat for active transmission or engine
warm-up, then the 1.8 g/mi credit would be applied. Due to its significant benefit, a credit for
using waste heat to warm the passenger compartment in hybrid vehicles should be considered.
[EPA-HQ-OAR-2010-0799-9478-Al,p.8]
Furthermore, MEMA believes that essentially any WHR technology, beyond those listed in the
proposal (such as, thermal control of electronics and vehicle cabin climate control) that achieves
the significant improvements, efficiencies and goals of the Program, should be considered for
credit. If the EPA and NHTSA desire to have separate nomenclature, then we recommend that
they be more descriptive (but technology-neutral) and be consistent throughout the rule, rather
7-54
-------
Off-cycle Technology Credits
than "engine" or "exhaust" heat recovery. For example, engine heat recovery could be labeled as
"eWHR" for electric WHR. [EPA-HQ-OAR-2010-0799-9478-A1, p.8]
There are special cases where even off-cycle technologies are difficult to evaluate using
traditional test methods (e.g., dynamometer testing, etc.). Advances being made in vehicle
telematics can very directly influence driving behavior - but it requires active driver inputs. By
providing information that will aid the driver to drive more efficiently, we propose that there are
considerations made in the decision-making process to allow technologies that cannot be
quantified literally, but rather could be argued to have a positive impact on fuel consumption
reduction and improved emissions. For example, the use of real-time traffic information to avoid
congestion has been demonstrated to significantly reduce CO2 emissions. Since historical testing
methodologies cannot accurately quantify these benefits, new test methodologies that currently
do not exist must be developed. MEMA encourages the agencies to form a working
"partnership" to develop new test methodologies. The use of existing statistical traffic data
should be used as much as possible in analytically modeling and quantifying the benefits.
Instrumented vehicles and road tests would be required to statistically validate the results of any
analytical models. There is precedent for providing CAFE credits based on a projected usage
factor of a fuel saving device. Since the actual real-world usage of a traffic avoidance system
cannot be guaranteed for 100 percent of the time, a similar percentage credit should be applied
based on the anticipated usage rate. In addition to real-time traffic technologies, the agencies
should be open to consider other automatic and driver-initiated location content-based
technologies that have been shown to reduce fuel consumption. [EPA-HQ-OAR-2010-0799-
9478-A1, p.9]
Under the Pre-Defmed Credit List and related tables, MEMA points out some needed
clarifications. First, the term "engine heat recovery" - which is used in Tables II-11, III-17 and
111-18, in the proposed regulatory text (§ 86.1866-12 at page 75383), and in the TSD (at page 5-
62) - is contrary to the NPRM text at page 75023 in Columns 2 and 3, which uses the term
"exhaust heat recovery" (emphasis added). MEMA believes the unwitting interchange of
"engine" with "exhaust" in this instance was an error. Therefore, for clarification purposes,
MEMA asks that as the agencies develop the final rule, they ensure the nomenclature used to
describe "engine heat recovery" is consistent with the term's application in the Tables and in the
regulatory text and is not interchanged with the term "exhaust heat recovery." (Please refer to
Section VI.B.2. for more information.) [EPA-HQ-OAR-2010-0799-9478-A1, p.12]
Response:
The EPA agrees with the comments from the Motor & Equipment Manufacturers
Association (MEMA) regarding the terminology and range of technologies considered for waste
heat recovery. This is reflected in our responses in 5.2.2 and 5.2.5 (i.e., definitions) of Joint TSD
Chapters.
Regarding the comments from MEMA on interactive, driver-based technologies, our
responses on this topic are discussed in Section H.F.2., III.C and III.E.l 1. of the preamble for this
final rule. As stated, we believe that there is a high burden of proof from the OEMs that off-
cycle credits could be justified for these interactive, driver based technologies but manufacturers
7-55
-------
EPA Response to Comments
may pursue this using the alternate demonstration methods for technologies not on the off-cycle
technology menu if they choose.
Organization: Natural Resources Defense Council (NRDC)
EPA should only provide credits for off-cycle technologies if such technologies can be verified
as providing real and enforceable GHG reductions. Based on data in the Draft Joint Technical
Support Document, some technologies on the pre-defined list do not meet these criteria. EPA
needs to scale-back the technologies provided on the pre-defined list until sufficient evidence of
verifiable real world GHG reductions is available to the public. [EPA-HQ-OAR-2010-0799-
9472-A2, p. 3]
In general, NRDC believes EPA should only allow off-cycle credits for measures that meet the
following conditions: [EPA-HQ-OAR-2010-0799-9472-A2, p. 14]
The agency has verified that the GHG reductions are real through actual testing and real-world,
in-use testing data from a statistically representative fleet of vehicles. [EPA-HQ-OAR-2010-
0799-9472-A2, p. 14]
The magnitude of the credits offered per vehicle should account for any degradation (including
potential for failure and operator misuse) in the off-cycle technology over the life of the vehicle
and not base the credits solely on performance during the test or from simulation
modeling. [EPA-HQ-OAR-2010-0799-9472-A2, p. 14]
The credits must not double count reductions with that are partially captured over the 2-cycle
tests. In some cases, technologies will also produce some measurable reductions in the 2-cycle
test. EPA acknowledges that off-cycle credits are intended for technologies that provide benefits
that are not fully captured on the 2-cycle test but may be partially captured. It is critical that
credits awarded for off-cycle operations only account for the portion not captured on the 2-cycle
test. [EPA-HQ-OAR-2010-0799-9472-A2, p. 14]
EPA should ensure that the benefits of the technology can be verified and enforced in use. The
agency should require the manufacturers to collect and provide real-world data on an ongoing
basis. [EPA-HQ-OAR-2010-0799-9472-A2, p. 14]
Additionally, test procedures should be subjected to periodic review to keep up with the latest
technology advancements both in the off-cycle technologies and the other vehicle characteristics
as each may impact the level of GHG reductions that should be attributed to the off-cycle
technology. [EPA-HQ-OAR-2010-0799-9472-A2, p. 14]
Meeting the above criteria is especially critical for technologies on the pre-defined list. In
addition, EPA must ensure the following:
The pre-defined list should require actual, publically available representative test data and not
just be based on computer simulation or limited data, which appears to be the case for many of
the technologies on the pre-defined list. The agencies should also require the manufacturers to
7-56
-------
Off-cycle Technology Credits
collect and provide real-world measurement data on an ongoing basis to validate the model and
credit levels going forward. [EPA-HQ-OAR-2010-0799-9472-A2, p. 14]
EPA must verify that there is no double-counting of benefits due to the interaction between
multiple off-cycle technologies a manufacturer chooses to use. For example, credits for solar
load reduction through glazing must account for improvements to the A/C system. A vehicle
with a very efficient, low leak A/C system may only generate very small or insignificant benefits
from the addition of glazing. [EPA-HQ-OAR-2010-0799-9472-A2, p. 14]
NRDC does not support the full range of off-cycle credit opportunities in the pre-defined menu
because some fail to meet criteria for verifiable real world GHG reductions based on data
presented in the Draft Joint TSD. EPA itself acknowledges that the proposed credits ".. .were
largely determined from research, analysis and simulations, rather from full vehicle
testing..." [EPA-HQ-OAR-2010-0799-9472-A2, p. 15]
Active grill shutters is an example of a proposed credit that does not appear to be well supported
by data. It is unclear how EPA developed its assumption of 3 percent improvement in
aerodynamics, given that it does not provide the underlying manufacturing data that it relies
upon and does not justify its assumption that the 3 percent improvement can apply over the entire
drive cycle.40 The 5-cycle benefits are clearly dependent on how the manufacturer chooses to
design its system and its durability. NRDC believes that the active grill shutters menu credits
should not be provided at this time until further data is provided and put into the public
domain. [EPA-HQ-OAR-2010-0799-9472-A2, p. 15]
The same general concerns apply to many of the other technologies on the pre-defined list.
Before finalizing the pre-defined list, EPA should provide in the public domain much more data
that it proposes to use to justify credit levels. [EPA-HQ-OAR-2010-0799-9472-A2, p. 15]
40 EPA and NHSTA. Draft Joint TSD. Page 5-65. [EPA-HQ-OAR-2010-0799-9472-A2, p. 15]
Response:
The EPA welcomes the comments from Natural Resources Defense Council (NRDC) and
agrees with NRDC that off-cycle technology benefits must "be verified as providing real and
enforceable GHG reductions." In addition, we agree that it is important that the credits be based
on actual data, do not duplicate on-cycle benefits, and that "test procedures [for determining
credits] should be subjected to periodic review to keep up with the latest technology
advancements." We believe the off-cycle credit program provisions we are finalizing today
achieve this and satisfy NRDC's concerns.
Regarding the NRDC comments that "[t]he magnitude of the credits offered per vehicle
should account for any degradation (including potential for failure and operator misuse) in the
off-cycle technology over the life of the vehicle," we believe such a dynamic approach would
make administering the off-cycle program nearly untenable since it would require individual
7-57
-------
EPA Response to Comments
manufacturer' vehicle-specific failure rates, deterioration curves and failure modes for every off-
cycle technology, and overlay this onto the off-cycle technology menu. In lieu of this
complexity, we believe that the certification durability requirements used for other emissions
components and applied to off-cycle technologies will provide similar results in a less complex
fashion.
For the comments from NRDC that "EPA must verify that there is no double-counting of
benefits due to the interaction between multiple off-cycle technologies a manufacturer chooses to
use," EPA is finalizing the rule with the provisions for the 10 g/mi cap on off-cycle technology
menu credits. In addition, we have revised certain technologies as discussed in TSD Chapter 5
(e.g., engine idle start-stop and electric heater circulation pump, solar panels and active cabin
ventilation) to account for synergistic affects. Therefore, we believe that these measures will
account for the interaction between multiple off-cycle technologies and prevent benefits from
being double counted, where appropriate.
Next, NRDC stated in their comments that: "Active grill shutters is an example of a
proposed credit that does not appear to be well supported by data. It is unclear how EPA
developed its assumption of 3 percent improvement in aerodynamics, given that it does not
provide the underlying manufacturing data that it relies upon and does not justify its assumption
that the 3 percent improvement can apply over the entire drive cycle. The 5-cycle benefits are
clearly dependent on how the manufacturer chooses to design its system and its durability.
NRDC believes that the active grill shutters menu credits should not be provided at this time
until further data is provided and put into the public domain." We believe that NRDC has
misinterpreted this information and would like to clarify this below.
In the TSD to the proposal, Section 5.2.2, we stated that "the EPA conducted an analysis
of the reduction in emissions corresponding to a general reduction of aerodynamic drag on a
vehicle. Using EPA's full vehicle simulation tool described in EPA's draft RIA, the agency
evaluated the change in fuel consumption for increasing reductions in aerodynamic drag." Later
in this same section, EPA stated "Based on manufacturer data, active grill shutters provide a
reduction in aerodynamic drag (Cd) from 0 to 5% when deployed. EPA expects that most other
active aerodynamic technologies will provide a reduction of drag in the same range as active grill
shutters. EPA also expects that active aerodynamic technologies may not always be available
during all operating conditions. Active grill shutters, for example, may not be usable in very cold
temperatures due to concerns that they could freeze in place and cause overheating. Control and
calibration issues, temperature limitations, air conditioning usage, and other factors may limit the
usage of grill shutters and other active aerodynamic technologies. Therefore, EPA is proposing
to provide a credit for active aerodynamic technologies that any of these technologies will
achieve an aerodynamic drag of at least 3% improvement."
Therefore, EPA used the simulation tool to develop a correlation between aerodynamic
efficiency and CO2 reduction, as shown in Table 5-26 and Figure 5-11, Section 5.2.6 of TSD
Chapter 5 for this rule, and simply referenced the manufacturer's data as validation of this
correlation and to select credit value for active aerodynamics, not to develop the credit. As a
result, EPA has documented the 3% value for the active aerodynamics credit. Subsequent to this
rulemaking, the ALPHA (Advanced Light-Duty Powertrain and Hybrid Analysis Tool) that EPA
7-58
-------
Off-cycle Technology Credits
used to perform this simulation will be available to the public and we encourage NRDC to
examine its potential.
Finally, NRDC made the comments that "Before finalizing the pre-defined list, EPA
should provide in the public domain much more data that it proposes to use to justify credit
levels," and "[t]he pre-defined list should require actual, publically available representative test
data and not just be based on computer simulation or limited data."
In response, we disagree with NRDC since EPA used currently available, public data to
support the development of the off-cycle technology menu credits. In addition, any additional
materials used as the basis for the off-cycle credit values are available in the public docket for
this final rule (see EPA docket #EPA-HQ-OAR-2010-0799). The Alliance also submitted
supplemental comments in response to the detailed comments from ICCT as discussed in TSD
Chapter 5 for this rule regarding supporting data (see EPA docket #EPA-HQ-OAR-2010-0799)
citing actual manufacturer test data to support the credit values they suggested. Much of the
Alliance test data and proposed credit values aligned with EPA's off-cycle credit values and
serve to bolster the off-cycle technology menu credits that EPA determined. Consequently, the
EPA feels there is sufficient information in the public domain to justify the credit values we are
finalizing today.
Regarding the NRDC comments that we based the credits solely on vehicle simulation,
the EPA light-duty vehicle simulation tool, Advanced Light-Duty Powertrain and Hybrid
Analysis Tool or ALPHA, is discussed in greater detail in the RIA Chapter 2 of this final rule.
For all of the off-cycle credits other than solar and thermal control technologies, a mix of actual
vehicle data and vehicle simulation was used to develop the off-cycle credits. The ALPHA
model depends on actual vehicle data (e.g., engine torque curves) to provide a reasonable
(though not absolute) prediction of the fuel economy and GHG emissions of specific vehicles
produced in the future. Therefore, none of the credit values are based solely on vehicle
simulation or actual vehicle data since the vehicle simulation depends on actual vehicle data to
function. Finally, in order to ensure transparency of the models and free public access, EPA has
developed the tool in MATLAB/Simulink environment with a completely open source code.
Subsequent to this final rule, this open source code will be made available to the public and we
encourage NRDC to take advantage of this ability to evaluate the ALPHA tool.
Organization: Porsche Cars North America, Inc. (PCNA)
• Porsche supports the Alliance's comments on inclusion of additional technologies in the table
of default off-cycle credits. However, our analysis shows that the potential GHG benefit for high
efficiency alternators is on the order of 2.0 grams/mile. We therefore request that the Agencies
allow a default credit of 1.6 grams/mile for this technology. In addition, our analysis shows that
the potential GHG benefit for electronic thermostat can be realized in configurations which do
not include an electric water pump. We therefore request that the Agencies not limit this off-
cycle credit to such configurations, but to instead allow the electronic thermostat credit to stand
alone regardless of any other cooling system specifics. [EPA-HQ-OAR-2010-0799-9264-Al, pp.
5-6]
7-59
-------
EPA Response to Comments
Response:
The EPA would like to thank Porsche for their comments. Our responses on high
efficiency alternators are discussed in Section II.F.2. of the preamble for this final rule. To
summarize, we are not adding high efficiency alternators to the off-cycle credit menu due to the
variability in implementation strategy and electrical loads for the systems and related
components. This makes it difficult to pinpoint a single, default value for the off-cycle
technology menu. Therefore, we feel that high efficiency alternators are better suited for off-
cycle credit consideration using the alternate case-by-case approval process for technologies not
on the off-cycle technology menu.
As a result, Porsche may seek off-cycle credit for high efficiency alternators but must
make an individualized demonstration in order to obtain such credits. Porsche did not submit the
underlying data that was used to develop their estimates of benefits for high efficiency
alternators in their comments. However, the underlying data that Porsche seemingly has can be
used in this process to request the level of credit they proposed.
Organization: Toyota Motor North America
Second, EPA has added a list of off-cycle technologies in §86.1866-12(d)(l) that awards pre-
determined credit values to all vehicles and manufacturers employing those technologies.
Toyota generally supports the proposed changes to EPA's off-cycle regulations, subject to
specific comments below. [EPA-HQ-OAR-2010-0799-9586-A1, p. 10]
Off-Cycle Credits: Pre-Determined Credit List [EPA-HQ-OAR-2010-0799-9586-A1, p.ll]
EPA has proposed a list of off-cycle technologies with pre-determined levels of credit for each
technology on a per vehicle basis. The manufacturer would only need to demonstrate in its
application for certification that a technology meets EPA's proposed definition for that
technology. However, EPA has proposed to limit the amount of credits that can be earned in a
given model year to 10 g/mi on a fleet-wide basis. Further, several technologies require a 10
percent minimum market penetration (combined car and truck production) before credits can be
generated.3 [EPA-HQ-OAR-2010-0799-9586-A1, p.ll]
Toyota supports the proposed pre-determined list of off-cycle technologies. The predetermined
list provides a level playing field for all manufacturers and uses a conservative per-vehicle credit
value and an overall 10 g/mi cap that will protect against concerns of unwarranted credit
generation. Toyota also supports expanding the predetermined list to include additional
technologies as discussed in more detail in the Alliance comments. [EPA-HQ-OAR-2010-0799-
9586-Al,p.ll]
3 - Because NHTSA has proposed to accept EPA's approval of off-cycle credits for CAFE,
EPA's proposed restrictions also impact credit generation for CAFE purposes. [EPA-HQ-OAR-
2010-0799-9586-Al,p.ll]
7-60
-------
Off-cycle Technology Credits
Response:
The EPA appreciates the comments from Toyota for their support of the off-cycle
technology menu and the accompanying 10 g/mi cap and 10% market penetration requirements
on credits.
The full discussion on comments concerning the 10 g/mi cap and 10% market penetration
is provided in section IILC.S.b.i and II.F. of the preamble. Briefly, we are retaining the 10 g/mi
cap and finalizing those provisions in this final rule. However, we are finalizing the off-cycle
credit program without the 10% threshold requirement due to adverse comments that this
requirement would be counterproductive and no favorable comments to the contrary.
Accordingly, we are eliminating the 10% sales threshold to qualify for off-cycle credit for the
applicable technologies on the off-cycle technology menu.
Finally, regarding Toyota's support for the Alliance comments for expanding the list of
technologies on the off-cycle technology menu, our responses to these comments are discussed
in Section II.F.2. of the preamble for this final rule.
Organization: United Automobile Workers (UAW)
The UAW applauds EPA for proposing a pre-approved list of off-cycle technologies. [EPA-HQ-
OAR-2010-0799-9563-A2, p.3]
Response:
The EPA would like to thank the UAW for their support of the off-cycle technology
menu and their continued support for the rule in general. We are finalizing the off-cycle
technology menu and believe this will sufficiently address the UAW comments.
Organization: Volkswagen Group of America
Volkswagen is supportive of the agencies proposal for a list of technologies being made
available with pre-determined off-cycle credit levels. Based on experience from the European
Union, having a manageable procedure offers incentives to include CC>2 reducing technologies
earlier and shows real world benefit for consumers. [EPA-HQ-OAR-2010-0799-9569-A1, p. 32]
Volkswagen understands that the intention is for the list of technologies to be a 'living document'
and that additional technology may be added over time. Volkswagen further understands that the
process for how this list will be updated may be fluid as the industry seeks to add new
technologies. We look forward to a transparent process which will be based on testing and
technical evidence. Volkswagen supports adding new technologies to the pre-determined credit
list once benefits have been established under either of the other two pathways. This will help
reduce redundant testing and further streamline this flexibility. [EPA-HQ-OAR-2010-0799-
9569-Al,p. 32]
HIGH EFFICIENT LIGHTING
7-61
-------
EPA Response to Comments
The Volkswagen Group remains an innovator in advanced, power-saving, lighting technology.
Audi has been involved in the development of off-cycle credits related to lighting within the
European Commission 'Eco-Innovations' regulatory system. Volkswagen offers the following
information based on Audi's application regarding EU eco-innovation. [See Table APP-1 on p.
33 of Docket number EPA-HQ-OAR-2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-
Al,p.33]
Although significant focus has been made with regards to LED lights, Volkswagen suggests that
several other technologies including Xenon and OLED (Organic LED) will be capable of similar
savings. Volkswagen offers the following proposal for the High Efficiency Lighting definition to
clarify the baseline from which improvements are measured (building upon the proposal from
the Alliance): [EPA-HQ-OAR-2010-0799-9569-A1, p. 33]
'High efficiency exterior lighting means a lighting technology that, when installed on the vehicle,
is expected to reduce the total electrical demand of the exterior lighting system when compared
to conventional lighting systems employing halogen bulb technology. LED lights specifically
qualify. Separate credit values may be earned for high efficiency lighting installed in the
following components: parking/position, tail lights, license plate lights, low beam lights, and
daytime running lights. Credits may also be earned for a high efficiency lighting bundle that is
installed in the following components: front and rear side markers, and backup/reverse
lights.' [EPA-HQ-OAR-2010-0799-9569-A1, p. 33]
ENGINE HEAT RECOVERY
Volkswagen proposes that the definition for Engine Heat Recovery be broadened to include
applications which may convert recovered energy into cooling. Building upon the definition
proposed by the Alliance:
'... converting that heat to electrical, mechanical energy or other thermal energy ...' [EPA-HQ-
OAR-2010-0799-9569-A1, p. 33]
ACTIVE DRIVETRAIN WARM UP
Volkswagen proposes that the definition be broadened to include indirect drivetrain warm-up
such as could be accomplished via secondary water loop.
'.. uses waste heat or waste energy to directly or indirectly warm-up driveline fluids...' [EPA-
HQ-OAR-2010-0799-9569-A1, p. 33]
HIGH EFFICIENCY ALTERNATOR
Volkswagen supports the proposal by the Alliance to include High Efficiency Alternators as an
off-cycle option. Volkswagen believes that these components have promising potential for CO2
reductions and will continue to evaluate their potential through technical analysis. [EPA-HQ-
OAR-2010-0799-9569-A1, p. 34]
7-62
-------
Off-cycle Technology Credits
Response:
We appreciate the comments from Volkswagen and their support for the off-cycle
technology menu. We provided detailed responses in TSD Chapter 5 on many of the
technologies that Volkswagen mentioned in their comments as follows: High Efficiency
Exterior Lighting (5.2.3), Waste Heat Recovery (5.2.2; formerly termed "Engine Heat
Recovery"), Active Drivetrain Warm-Up (e.g., Active Transmission Warm-Up; 5.2.8.3); and
High Efficiency Alternators in Section II.F.2. of the preamble for this final rule. In addition, the
technology definitions we are finalizing for specific off-cycle technologies can be found in 5.2.5,
5.2.7., 5.2.8.5, and 5.2.15 of TSD Chapter 5.
In short, we agreed with Volkswagen's comments on expanding the definition for waste
heat recovery (formerly engine heat recovery) and active drivetrain warm-up. For high
efficiency exterior lighting, we are allowing credits for separate lighting elements as suggested
by Volkswagen and others, and expanded the high efficiency exterior lighting definition in a
similar, but not exact, fashion to Volkswagen's suggestion. Finally, we agree with Volkswagen
that the off-cycle credit program will be "a transparent process which will be based on testing
and technical evidence," and over time will consider whether or not technologies should be
added to the off-cycle technology menu.
In contrast, we disagree with Volkswagen on the inclusion of high efficiency alternators
on the off-cycle technology menu. The variability in implementation strategy and electrical
loads for the systems and related components makes it difficult to pinpoint a single, default value
for the off-cycle technology menu. Therefore, we feel that high efficiency alternators are better
suited for off-cycle credit consideration using the alternate case-by-case approval process for
technologies not on the off-cycle technology menu and are not adding this technology to the off-
cycle technology menu at this time.
Organization: Volvo Car Corporation (VCC)
VCC strongly supports the pre-defined list. This is a simple effective way to advance innovations
and enable manufacturers to take steps that traditionally would not be taken in an early stage of
development. The proposed regulation will be a challenge for VCC and for small manufacturers,
because new technology is directly linked to high development costs which limit the choice to
embark upon an unlimited innovation path. Introducing a new technology, even in small volume,
is both costly and risky for manufacturers. If customers do not choose the option in sufficient
volumes, the manufacturers will suffer both from the resulting lack of return of investment and a
lack of contribution to the fleet's regulatory targets. [EPA-HQ-OAR-2010-0799-9551-A2, p. 6]
• Substantial greenhouse gas improvements can be achieved in off-cycle conditions using new
technologies. [EPA-HQ-OAR-2010-0799-9551-A2, p. 7]
• The off-cycle technology credit menu is a necessary addition to the off-cycle program to avoid
administrative delays and burdensome credit application requirements. [EPA-HQ-OAR-2010-
0799-9551-A2, p. 7]
7-63
-------
EPA Response to Comments
A manufacturer that has completed this extensive testing and is first to complete the approval
process will be first out in utilizing the credits once accepted; off-cycle credits should be
accessible to applicants without the need to retest the technology. After the technology has been
approved for one manufacturer, it should become part of the pre-defined list for other
manufacturers to utilize. [EPA-HQ-OAR-2010-0799-9551-A2, p. 7]
• If a manufacturer applies and is granted off-cycle credits by EPA for a new technology for one
model year, this technology should eventually be added to the off-cycle predefined technology
list within a reasonable timeframe after the approval giving the introducing manufacturers
opportunities to do their initial introduction. [EPA-HQ-OAR-2010-0799-9551-A2, p. 7]
• Criteria for a proven CO2-case should be reasonable and kept at a same level for all
technologies; enormous testing burdens might be an obstacle which may hinder the development
toward positive GHG actions rather than evolving them. [EPA-HQ-OAR-2010-0799-9551-A2, p.
8]
Response:
The EPA would like to thank Volvo for their support of the off-cycle technology menu
and agrees with Volvo's comments that it is "is a simple effective way to advance innovations
and enable manufacturers to take steps that traditionally would not be taken in an early stage of
development."
However, we disagree with the comments from Volvo regarding a technology being
added to the list a year after approval is granted. First, the off-cycle technology menu was
adopted to add a certain level of stability to the off-cycle credit program. Continually updating
the off-cycle technology menu on an annual basis has the complete opposite effect. Further, the
menu is part of the rule and can only be amended through notice-and-comment rulemaking
proceedings.
Second, the off-cycle technology menu credit values we are finalizing today are based on
existing technology and currently available information using conservative estimates. In
contrast, the alternate demonstration methods for technologies not on the off-cycle technology
menu offers a pathway for manufacturers to demonstrate benefits and request credit beyond the
technologies (or the amounts) offered in the off-cycle technology menu. As individual
manufacturers develop specific technology that achieves greater benefits (than those listed on the
menu), it would be imprudent to reflect this on an annual basis in the off-cycle technology menu
since not all vehicles are not expected to have identical technology effectiveness and
implementation. Thus, credit values are expected to vary. In this case, the alternate
demonstration method process is better suited for case-by-case evaluations where there is
insufficient data to support a default credit or where the level of credit may depend on a specific
manufacturer's design.
Therefore, we believe a better approach is to address technology improvements that may
achieve greater benefits than the default values in the off-cycle technology menu on a case-by-
case basis using the alternate demonstration method process until this technology, or associated
level of benefit achieved, is common across the industry.
7-64
-------
Off-cycle Technology Credits
Finally, regarding the comments from Volvo that "If customers do not choose the option
in sufficient volumes, the manufacturers will suffer both from the resulting lack of return of
investment and a lack of contribution to the fleet's regulatory targets.", we are eliminating the
10% sales threshold to qualify for off-cycle credit for the applicable technologies on the off-
cycle technology menu. This should provide Volvo and other manufacturers the necessary
flexibility to request credits in the off-cycle credit program.
Organization: American Chemistry Council (ACC)
(5) The final rule should extend the proposed off-cycle credit for thermal control to recognize the
benefits of glazing materials with superior insulation performance
In addition to lightweighting, polycarbonate (PC) glazing delivers insulating benefits, which
reduce the demand on a vehicle's air conditioning (A/C) system. PC glazing's thermal
conductivity is approximately five times lower than glass. In simple terms, PC glazing better
insulates the passenger cabin, thereby reducing the load on the air conditioning associated with
maintaining a comfortable cabin temperature. The result is an off-cycle benefit analogous to that
in the proposed credit calculation for glazing reducing solar transmittance into the cabin. [EPA-
HQ-OAR-2010-0799-9517-A2, p. 5]
Certain technologies that reduce A/C demand are not fully captured by current drive test cycles.
For this reason, the agencies have proposed off-cycle credits for various technologies that
provide this benefit. Unfortunately, the proposed off-cycle credit for glazing does not explicitly
recognize the thermal insulation benefits of advanced automotive glazing exemplified by PC.
The NPRM discusses the benefits of certain types of glazing, exemplified primarily by infrared
(IR) reflective glass, in reducing solar energy transmission into a parked vehicle. In contrast,
while PC glazing provides some solar control in relation to the agency's proposed baseline, it
generally provides a greater benefit by inhibiting the transfer of heat from warmer outside air
into a cooler cabin. As such, insulation benefits accrue in a broader range of scenarios including
those where solar radiation is absent or diminished - for example, at nighttime and on overcast
days. [EPA-HQ-OAR-2010-0799-9517-A2, pp. 5-6]
ACC urges the agencies to make clear that the "Glass" or "Glazing" category for these credits
includes reduced thermal conductivity, and include within the final rule a calculation to quantify
credits related to this effect. The intent of the agencies to address benefits such as thermal
conductivity is clear from the administrative record. The Joint Technical Support Document, for
example, discusses incentivizing technologies that "reduce the amount of solar energy which
enters the vehicle's cabin area, reduce the amount of heat energy build-up within the cabin when
the vehicle is parked, and/or reduce the amount of cooling/heating energy required through
measures which improve passenger comfort. [EPA-HQ-OAR-2010-0799-9517-A2, p. 6]
While glazing with superior insulation value responds to the agencies' stated intent, the NPRM
and associated documents neglect to provide a methodology for quantifying thermal conductivity
benefits. Modifying the existing credit to include appropriate references and a calculation to
cover RTC benefits is consistent with the scope of the rulemaking and the intent of the agencies
in the area of thermal control. As such, ACC believes that the agencies can accomplish this in the
7-65
-------
EPA Response to Comments
present rulemaking, and that a separate petition process is not necessary. [EPA-HQ-OAR-2010-
0799-9517-A2, p. 6]
We support and incorporate by reference the detailed written comments separately submitted by
a member company of ACC's Plastics Division, SAB 1C Innovative Plastics, with respect to this
issue. We believe the methodology proposed by SAB 1C is sound and will provide the agencies
with a tool to recognize fully the thermal control benefits of advanced glazing. [EPA-HQ-OAR-
2010-0799-9517-A2, p. 6]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 267-268.]
The proposed rule contains an option for off-cycle technology credit but, unfortunately, the off-
cycle credit in the proposed rule does not recognize the thermal control benefits of polycarbonate
in automotive glazing. The formula does recognize the benefits of certain types of glass in
controlling solar radiation in parked vehicles, but in contrast, while polycarbonate glazing
provides some solar control in relation to engaging this proposed baseline, the benefits accrue in
a broader range of scenarios in which the effect of solar radiation is absent or less pronounced.
These include nighttime and overcast days as well as those times when the vehicle is in motion.
More detailed comments will be presented by other colleagues later today, but we do urge that
this will make and consider a parallel credit that fully recognizes thermal control benefits of
polycarbonate in glazing applications.
Organization: Bayer Material Science
The Final Rule Should Expand the Off-Cycle Credit to Account for Thermal Benefits
Bayer Material Science is dedicated to developing innovative high performance materials that
will give automakers a choice of materials when it comes to meeting the CAFE requirements.
Bayer Material Science produces polycarbonate in the United States, thus giving auto
manufacturers a domestically-made alternative to glass. The off-cycle credit in the proposed rule
fails to take into account the thermal control benefits of polycarbonate glazing. The final rule
should take this benefit into account by expanding the off-cycle credit when polycarbonate
glazing is used. Polycarbonate would help automakers to meet CAFE requirements and reduce
greenhouse gases by providing increased insulation benefits, contributing to net weight reduction
of the vehicle, offering more aerodynamic styling options to the manufacturer (and thus
increasing fuel efficiency) and lowering CO2 emissions over the lifecycle of polycarbonate. As a
result, for purposes of the current rulemaking, Bayer Material Science feels it is appropriate to
include the additional methodology for calculating thermal conductivity benefits within the Final
Rule, and that a separate petition process for this rule is not needed. [EPA-HQ-OAR-2010-0799-
9198-A2, pp. 1-2]
Using polycarbonate as a glazing material will contribute to lower thermal conductivity. This
benefit of polycarbonate will contribute to better energy efficiency in all vehicle types. Thus, we
reiterate our support for an expansion of the off-cycle credit to account for this benefit or the
addition of a new corresponding credit. [EPA-HQ-OAR-2010-0799-9198-A2, p. 2]
7-66
-------
Off-cycle Technology Credits
Polycarbonate Glazing has Additional Benefits for Automakers and the Environment
For years automotive manufacturers have used polycarbonates and polycarbonates composites in
the manufacture of their vehicles. Polycarbonate glazing allows for integration of parts that was
previously not possible (exhibit 1). [See exhibit 1 in Docket number EPA-HQ-OAR-2010-0799-
9198-A2, p. 5.] This can contribute to vehicles being lighter in weight without compromising the
structural integrity of the vehicle. For example, it is now possible to manufacture a clear view
roof module and window pane or rear side window and window pane using a two-shot injection
molding process. This injection molding process also allows the manufacturer to functionally
integrate brackets, ribs and attachment points into the backlight assembly. And, of course,
polycarbonate can be used for better insulation benefits, which can reduce demand on the
vehicle's battery and HVAC units, thereby reducing greenhouse gases. [EP A-HQ-OAR-2010-
0799-9198-A2, p. 2]
Polycarbonate has an extensive history of serial applications in the automotive glazing industry.
In fact, the first commercial application was in 1998 with a rear quarter window on the Smart
ForTwo vehicle. The number of applications has steadily grown through the years as automakers
have seen the many benefits that polycarbonate can provide. These applications now include rear
side windows, sun roof systems, panoramic roof systems and transparent rear body parts. I have
included two slides with the handouts that show the progression of applications since 1998
(exhibit 2). [See exhibit 2 in Docket number EP A-HQ-OAR-2010-0799-9198-A2, pp. 6-7.]
Polycarbonate is also recognized as a suitable glazing material by authorities around the world,
including the United Nations Economic Commission for Europe. [EPA-HQ-OAR-2010-0799-
9198-A2, p. 2]
Bayer Material Science has developed innovative and sustainable material solutions using
polycarbonate and polycarbonate composites for glazing applications. These materials enable
weight reductions of up to 50 percent compared to glass, as already demonstrated by the use of
polycarbonate in panoramic roofs and fixed side windows already in commercial production
(BayerNews, October 7, 2011). The density of polycarbonate is less than half the density of glass
(1200 Kg/m3 for polycarbonate vs. 2500 Kg/m3 for glass) and contributes to the weight
reduction of up to 50 percent versus glass. This weight reduction contributes to CO2 emissions
being cut by up to 728 pounds per vehicle over a vehicle's service life of 95,000 miles compared
to cases where glass is used. [EPA-HQ-OAR-2010-0799-9198-A2, p. 3]
With polycarbonate enabling weight reductions of up to 50 percent compared to glass,
automakers can achieve better fuel efficiency and greater stability by lowering the vehicle's
center of gravity. Use of polycarbonate in a panoramic roof, for example, can help to
significantly lower the vehicle's center of gravity and improve handling (exhibit 4). [See
exhibit 4 in Docket number EPA-HQ-OAR-2010-0799-9198-A2, pp. 24-32.] [EPA-HQ-OAR-
2010-0799-9198-A2, p. 3]
Bayer Material Science has developed transparent tinted colors specifically for polycarbonate
glazing that filter out a large proportion of the sun's infrared (IR) rays. As a result, the vehicle
interior does not heat up as much under the effects of sunshine. Appropriately treated glazing
made of IR grade polycarbonate enables IR light and energy transmission values for dark colors
7-67
-------
EPA Response to Comments
that are at least as low as commercial thermal insulation pigments for glass. Polycarbonate
glazing also offers benefits in terms of thermal insulation thanks to the plastic's thermal
conductivity, which is roughly five times lower than that of glass. In cold weather conditions,
this increases the temperature of the internal surfaces of the polycarbonate glazing inside the
vehicle significantly, which in turn cuts the energy needed to heat the vehicle and also improves
comfort. This feature, too, can help boost the travel range of electric vehicles. [EPA-HQ-OAR-
2010-0799-9198-A2, p. 3]
The wide choice of styling options with polycarbonate is testing conventional assumptions of
automotive window design and creating whole new opportunities for advanced vehicle styling.
This design flexibility of windows can contribute to better aerodynamics for vehicle
manufacturers, which of course leads to lighter weight vehicles and better fuel economy. The
ability to add colors to glazing parts, along with sharp corners, smooth corner radii and complex
three dimensional shapes are among the many other benefits associated with these styling
options by using polycarbonate. [EPA-HQ-OAR-2010-0799-9198-A2, p. 3]
Polycarbonate Glazing Reduces Life-Cycle Greenhouse Gas Emissions Compared to Glass
An independent study from a renowned Europe-based company indicates that when studying
polycarbonate vs. glass over the life of the product, which would be from initial production to
usage of the product to the waste phase, polycarbonate can help to substantially lower CC>2
emissions (Exhibit 3). [See exhibit 3 in Docket number EPA-HQ-OAR-2010-0799-9198-A2, pp.
8-23.] 1 KG (2.2046 Ibs.) of polycarbonate saves 14-22 KG (30.85-48.50 Ibs.) of CO2 emission
over the lifecycle of the material. If all of a car's windows with the exception of the windshield
were made of polycarbonate (a total of 33 pounds of the plastic), the lower fuel consumption
could cut CC>2 emissions by up to 728 pounds per vehicle over a vehicle's service life of 95,000
miles compared to cases where glass is used. [EPA-HQ-OAR-2010-0799-9198-A2, p. 4]
Polycarbonate Glazing Enhances Vehicle Safety
You don't need to start smashing windows to know that polycarbonate has a significant impact
strength advantage over glass. With polycarbonate's superior impact resistance it can contribute
to safety by improving passenger retention in the event of a crash. [EPA-HQ-OAR-2010-0799-
9198-A2, p. 4]
In closing, we would like to express our support for the expansion of the off-cycle credit to
account for the thermal control benefits that polycarbonate glazing can provide for automotive
manufacturers looking to contribute to the reduction of harmful greenhouse gases. The benefits
of a material like polycarbonate, such as weight reduction, reduced CO2 emissions and safety
improvements, would give automotive manufacturers a valuable alternative to consider when
trying to achieve these valuable CAFE requirements. [EPA-HQ-OAR-2010-0799-9198-A2, p. 4]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 271-274.]
Organization: California Air Resources Board (CARB)
7-68
-------
Off-cycle Technology Credits
During the public comment period on the notice of proposed rulemaking for the '2017 and Later
Model Year Light-Duty Vehicle, Greenhouse Gas Emissions and Corporate Average Fuel
Economy Standards,' U.S. EPA received numerous comments on the proposed off-cycle credits
for advanced solar load reduction technologies. Unfortunately, several of these comments
contained inaccuracies with regard to the California Air Resources Board's (CARB or Board)
prior work on 'the 2009 proposed Cool Gars regulation. I welcome this opportunity to make you
aware of these inaccuracies and set the record straight. [EPA-HQ-OAR-2010-0799-11799-A2,
p.l]
The primary inaccuracy was that CARB ceased work on the Cool Cars regulation due to the
belief that the metallic glazing used to comply with the rule interferes with radio signals, thus
jeopardizing public safety. While these concerns were brought to the attention of CARB, they
were not the basis of the decision to cease-work on the regulation. In fact, the decision to cease
work stemmed from a June 2009 Board hearing during which the Board directed staff to revise
the proposed regulation and subsequently return with a proposal for a performance-based option,
which, would have increased the stringency of the rule while also providing greater flexibility in
achieving the greenhouse gas (GHG) benefits. It was this increase in stringency that could have
resulted in greater use of metallic glazing, which spurred concerns of public safety advocates.
Due to the inability to achieve consensus on the best path forward during the timeframe required,
staff ceased work on the regulation. Instead, it was determined that the direction of the Board
would be best implemented by folding the objectives of Cool Cars into the Advanced Clean Cars
regulation. [EPA-HQ-OAR-2010-0799-11799-A2, pp. 1-2]
As you know, staff from ARB and U.S. EPA worked together to craft the off-cycle credit option
for solar control and thermal load, reduction technologies. Contrary to the comments received,
this credit option provides increased flexibility to manufacturers to achieve their fleet GHG
targets. The solar control off-cycle credits are not proscriptive in any way and manufacturers
may use any glazing technology on the market in order to receive credits, as long as the
performance of the glazing is better than baseline glass. To date, there are multiple technology
options available to manufacturers, including solar absorbing (non-metallic) and solar reflective
(both metallic and nonmetallic) glazing. In addition, there is at least one company with a new
non-metallic, non-radio interfering reflective product in development that is expected to be in
production by 2014. Ultimately, a manufacturer may choose not to use solar control glazing and
achieve their GHG targets through any other means, including mass reduction or improved
aerodynamics, both of which can be aided by the use of polycarbonate glazing. [EPA-HQ-OAR-
2010-0799-11799-A2, p.2]
It is important to note that many manufacturers are already using some level of solar control
product on their vehicles today. These products are safe, and testing conducted by ARB indicated
that there were no statistically significant effects pf metallic reflective glazing on the operation of
GPS ankle bracelets or cell phone operation in an urban environment. Although there may be
adverse effects of metallic glazing on cell phone connectivity in a rural environment, which was
not tested by ARB, it is worth repeating that metallic glazing is used today on many vehicles in
the United States and Europe, both as a manufacturer-installed option and as an aftermarket film,
without any known public safety impacts. [EPA-HQ-OAR-2010-0799-11799-A2,p.2]
7-69
-------
EPA Response to Comments
The reason that solar control products are widely used is because of their ability to improve
occupant comfort and, by extension, reduce GHG emissions and fuel use due to reduced loads on
the air conditioning system. The analysis conducted by ARE for Cool Cars, and subsequently
applied by both U.S. EPA and ARB to determine the off cycle credit calculations, demonstrates a
benefit of solar control glazing of up to three grams per mile for a passenger car. Contrary to the
comments received by U.S. EPA suggesting that this methodology is 'flawed,' the benefit
calculations were based on several peer-reviewed reports and refined through consultation with
industry experts. [EPA-HQ-OAR-2010-0799-11799-A2, p.2]
We therefore maintain that the three gram per mile benefit for passenger cars is an accurate, and
likely conservative estimate of the true benefit of solar control glazing. [EPA-HQ-OAR-2010-
0799-11799-A2, p.3]
In closing, I urge U.S. EPA to retain the structure of the off-cycle credits for solar control
technologies. Doing so will properly credit the benefits of a wide range of solar load reduction
products, while still providing manufacturers 'with the flexibility to use any available engine or
vehicle technology to achieve their fleet GHG targets. It will also appropriately reward the early
adopters of advanced solar control materials and continue to spur innovation in the glazing
industry. [EPA-HQ-OAR-2010-0799- 11799-A2, p.3]
Organization: California Manufacturers & Technology Association (CMTA)
CMTA understands that the joint USEPA-National Highway Transportation and Safety
Administration (NHTSA) notice of proposed rulemaking for fuel economy and greenhouse gas
emission regulations for model year 2017-2025 light-duty vehicles, dated December 1, 2011,
includes options under which auto manufacturers may obtain "off-cycle" greenhouse gas
emission reduction credits. In 2010, we were involved in a similar proposal put forth by the
California Air Resources Board (CARB) which CARB eventually dropped. The savings in fuel
was exceptionally small (under 4-1/2 gallons year for the average vehicle) for the amount of
possible complications that would have occurred. [EPA-HQ-OAR-2010-0799-9536-A2, p.l]
While the CARB regulation would have mandated the use of a reflective glazing material in car
windshields and windows, it would have had a significant negative impact on radio frequency
transmissions of cell telephones, garage door openers, global positioning system (GPS)
equipment, toll tag transponders (Fast Track), emergency equipments signals (police, fire,
ambulance), and even parolee ankle bracelets. While we understand that the decision to choose a
particular technology to obtain an off-cycle credit will be voluntary, it is reasonable to assume
that auto manufacturers seeking to maximize credits under the proposed rule would be inclined
toward use of metallicized reflective materials in the glass. [EPA-HQ-OAR-2010-0799-9536-
A2,pp.l-2]
In addition, this approach will benefit reflective glass technologies, but fails to recognize other
technologies which can achieve similar results. For example, off-cycle reduction in air
conditioning load can also be achieved through use of polycarbonate glazing technologies that
reduce thermal conductivity, helping to maintain a more comfortable interior temperature. Such
technologies should also be accommodated in the final federal rule so that vehicle manufacturers
7-70
-------
Off-cycle Technology Credits
have greater flexibility in meeting the stringent emission limits contemplated in the draft
regulation. [EPA-HQ-OAR-2010-0799-9536-A2, p.2]
For the above reasons, we believe these incentives need to be more thoroughly evaluated. [EPA-
HQ-OAR-2010-0799-9536-A2, p.2]
Organization: California State Sheriffs' Association (CSSA), California Police Chiefs
Association (CPCA), California Narcotic Officers' Association (CNOA)
On behalf of the California State Sheriffs' Association (CSSA), California Narcotic Officers'
Association (CNOA) and the California Police Chiefs Association (CPCA), we write to express
our concern regarding the joint United States Environmental Protection Agency (USEPA) and
National Highway Traffic Safety Administration (NHTSA) proposed rule making for fuel
economy and greenhouse gas (GHG) emissions for model year 2017-2025 light-duty vehicles of
December 1, 2011. [EPA-HQ-OAR-2010-0799-9488-A1, p. 1]
While we support the intended goals of establishing certain GHG emission reduction credits and
appreciate that this federal proposal takes a voluntary approach relative to ARB's Cool Cars
proposal, we remain concerned that the proposal will incentivize the use of metallic reflective
window technology. There are a number of implications that this regulation will have on GPS
technology for ankle bracelets used to monitor offenders and the ability of law enforcement,
parole agents, and probation officers to monitor and track offenders accurately as well as
Enhanced 9-1-1. [EPA-HQ-OAR-2010-0799-9488-A1, pp. 1-2]
Over the last year California has made significant changes to the delivery of criminal justice
services to address its prison overcrowding crisis. This has led the state to take measures to
reduce the prison population, one of which is to place more offenders on GPS or electronic
monitoring. The use of metallic reflective window technology presents the potential for
unintended, and very adverse, consequences associated with RF device interference. ARB's own
analysis illustrated a doubling of dropped GPS signals under varying circumstances. Even a
slight drop or deviance in connectivity and the ability to locate an offender as a result of metallic
glazing is problematic and concerning, especially in light of the availability of alternative
solutions that achieve energy savings while not presenting the same public safety impacts. [EPA-
HQ-OAR-2010-0799-9488-A1, p. 2]
In addition to concerns relative to GPS monitoring, we are concerned that use of metallic
reflective window technologies can increase the likelihood of interference with reliable operation
of cell phones and Enhanced 9-1-1 capabilities for PSAP's. This concern is magnified in
emergency situations where a caller may need to place an emergency 9-1-1 call and where signal
strength may already be lessened such as in rural areas. Further, in may impact the ability of
PSAPs to locate a caller via Enhanced 9-1-1. [EPA-HQ-OAR-2010-0799-9488-A1, p. 2]
We appreciate the opportunity to comment on this regulation and for your consideration of our
comments. We would be remiss if we did not share these concerns with you and the implications
of this regulation on public safety. For reasons stated, we ask that you consider reworking the
7-71
-------
EPA Response to Comments
current proposal and specifically removing the off-cycle credit that incentivizes the use of
metallic reflective window technology. [EPA-HQ-OAR-2010-0799-9488-A1, p. 2]
Organization: Crime Victims United of California (CVUC)
On behalf of Crime Victims United, of California(C VUC),I am writing to convey serious
concerns regarding the joint United States Environmental Protection Agency (USEPA) and
National Highway Traffic Safety Administration (NHTSA) proposed rulemaking for fuel
economy and greenhouse gas (GHG) emissions for model year 2017-2025 light-duty vehicles of
December 1, 2011. [EPA-HQ-OAR-2010-0799-9883-A1, p. 1]
CVUC is a nonprofit organization that uses education, legislative advocacy and political action
to enhance public safety, promote effective crime-reduction measures and strengthen the rights
of crime victims. [EPA-HQ-OAR-2010-0799-9883-A1, p. 1]
As you may be aware, California is facing a prison overcrowding crisis. Such crisis has led the
state to take measures to reduce the prison population, one of which is to place more offenders
on GPS or electronic monitoring. CVUC understands local law enforcement's need for
alternative custody options and has been generally supportive of providing these alternative
options; however, our position on the use of this technology is dramatically altered in light of the
potential consequences of this joint regulatory proposal. [EPA-HQ-OAR-2010-0799-9883-A1, p.
1]
As you may know, in 2010 California's Air Resources Board (ARB) proposed a regulation
known as 'Cool Cars' that would have effectively mandated the use of metallic reflective window
technology. CVUC adamantly opposed this proposal due to the serious implications for RF
signal interference and the associated potential for public safety consequences. As a result of
CVUC and other stakeholders' concerns, California's ARB ultimately abandoned the Cool Cars
regulation in recognition of the fact theft the emission reduction benefit calculations were based
on flawed methodology and that use of this technology presented the potential for unintended
adverse consequences associated with RF device interference. Despite this history, EPA and
NHTSA appear to be using the same methodology in this proposed regulation for establishing
certain GHG emission reduction credits. While we understand that this joint federal proposal
takes a voluntary approach relative to ARB's Cool Cars proposal, we remain concerned that it
will incentivize use of metallic reflective window technology, giving rise to the same RF
interference and public safety concerns at issue under the Cool Cars proposal. [EPA-HQ-OAR-
2010-0799-9883-A1, pp. 1-2]
ARB's own analysis illustrated a doubling of dropped GPS signals under varying circumstances.
While this is significant, it is also important to note that the testing was done in an urban area
where signal strength was very strong. What about in areas where signal strength is not strong
(i.e. rural areas where our prison facilities are located or foothill/mountain communities where
signals are lost in canyons)? [EPA-HQ-OAR-2010-0799-9883-A1, p. 2]
7-72
-------
Off-cycle Technology Credits
Given the difficulty in adequately monitoring the prison, jail and parolee population in California
as it is, CVUC feels strongly that the approach under the federal regulation should be reworked
to address the potential problems for the state in monitoring its GPS population. In these grave
times of prison overcrowding, the early release of inmates, and more, such an approach to global
warming is unacceptable and has crime victims in California highly concerned. In our
discussions with other stakeholders and the ARB in 2010, we came to learn that there are other
options to achieve GHG emission reductions that do not have to compromise signal strength that
could ultimately impact the ability to monitor offenders' activities through GPS. [EPA-HQ-
OAR-2010-0799-9883-A1, p. 2]
In addition to concerns relative to GPS monitoring, we are concerned that use of metallic
reflective window technologies as contemplated in the joint rulemaking - even under limited
circumstances -can increase the likelihood of interference with reliable operation of cell phones.
This would be particularly problematic in troubling emergency situations where a motorist might
need to place an emergency 911 call - especially in rural locations where signal strength may
already be lessened. [EPA-HQ-OAR-2010-0799-9883-A1, p. 2]
While increased fuel efficiency and lower greenhouse gas emissions are both laudable goals,
under the proposed rule these goals could be achieved at the expense of significant potential
adverse impacts on the ability of consumers, emergency workers and law enforcement personnel
to contact help in an emergency, communicate life-saving instructions, and track prisoners
released under electronic surveillance. [EPA-HQ-OAR-2010-0799-9883-A1, p. 2]
For these reasons, we ask EPA and NHTSA to consider reworking the current proposal and
specifically removing the off-cycle credit that effectively incentivizes use of metallic reflective
window technology. [EPA-HQ-OAR-2010-0799-9883-A1, p. 2]
Organization: CTIA - The Wireless Association
On behalf of CTIA-The Wireless Association®, the international trade association representing
wireless carriers, equipment manufacturers, and Internet service providers, I write to express the
wireless industry's concerns regarding potential regulations which would reward "off-cycle"
GHG credits for the use of a single type of technology for window glazing. [EPA-HQ-OAR-
2010-0799-11759-A2, p. 1]
The current draft of the regulations would create incentives for the use of metallic films for
glazing in automobiles. Metallic films can interfere with electronic devices that depend on radio
frequency (RF) transmissions, such as cellular telephones, GPS systems, and other
devices. [EPA-HQ-OAR-2010-0799-11759-A2, p.l]
While we support lowering greenhouse gas emissions and increasing fuel efficiency, that should
not be done at the risk of interfering with wireless devices, which are frequently used to
communicate during emergencies and to provide location assistance for drivers. [EPA-HQ-
OAR-2010-0799-11759-A2, p.l]
7-73
-------
EPA Response to Comments
There are other glazing technologies that offer similar emission reduction benefits without
compromising the performance of wireless devices or other technologies that rely on RF
transmissions. One example is polycarbonate glazing which can help reduce air conditioning
load through superior insulating properties. [EPA-HQ-OAR-2010-0799-11759-A2, p.l]
We ask EPA and NHTSA to consider alternatives that do not encourage solar reflective glazing
only. We would ask you to consider credits for other types of glazing technologies that are less
obstructive to wireless devices. [EPA-HQ-OAR-2010-0799-11759-A2, p.l]
Organization: Enhanced Protective Glass Automotive Association (EPGAA)
Member companies of the EPGAA provide glazing products to the automotive market. These
products include solar control glazing, which include technologies that reduce the solar heat load
in a vehicle. The reduction of the solar heat load results in lower air conditioning load, which in
turn results in lower fuel consumed and reduced greenhouse gas emissions. Since the cabin
comfort requirements are indifferent to the powertrain technology, the solar glazing impact is
just as valid on Internal Combustion Engine vehicles as it is on Hybrid-Electric or fully electric
vehicles. Since the glazing technology is a passive technology for the consumer, in that it does
not require any consumer interface, the benefits to the consumer and to the environment are
independent of consumer behavior. Finally, the solar control glazing technologies are designed to
meet or exceed the safety, security, health, and other benefits of glass that are either required by
regulations or expected by the customers. [EPA-HQ-OAR-2010-0799-9301-A1, p. 1]
EPGAA supports the proposed rule for the off-cycle credits for technologies whose impact on
fuel consumption and emissions cannot be measured in the test cycles. The calculation proposed
by the EPA on the off-cycle credit for solar glazing provides a simplified model for defining the
impact of glazing on the heat load reduction and the emissions. EPGAA supports the general
concept but recommend that the following changes be considered: [EPA-HQ-OAR-2010-0799-
9301-Al,p. 1]
1. There should be a method to account for the total glass surface in a vehicle. The credit
calculation as defined in the NPRM treats all vehicles in a class as being similar in the amount of
heat load coming through the glass. There has been a trend in the market to have larger size
glass, which would lead to higher heat load and therefore higher emissions. Therefore, we
recommend that there be an accounting for the total glass surface. A simple multiplier could be
applied. See below for an example:
Base line glass surface = 4 sq.m.
Actual glass surface = 4.4 sq.m.
Therefore, total impact = 4.4/4.0 = 1.1 times the baseline impact. Thus the total impact of glazing
on the emissions would be 110% of the baseline vehicle. [EPA-HQ-OAR-2010-0799-9301-A1,
p. 2]
7-74
-------
Off-cycle Technology Credits
2. The impact captured by the formula as defined in the NPRM was based on several studies of
internal combustion engine vehicles in drive cycles and modeling studies that the EPGAA
supports. However, the introduction of technologies such as start/stop, hybrid, electric, etc.
would provide additional benefits from the use of solar glazing. Additionally, the formula does
not capture the benefits of solar glazing during the times when the cabin temperature in the
vehicle may only increase marginally above setpoint due to heat load. In such instances, the use
of heat load reduction technologies may completely eliminate the need for air conditioning by
keeping the cabin temperature below setpoint. These benefits have not been captured in the
formula and EPGAA recommends that further analysis be done to quantify these benefits and
include them in the regulation at the time of the mid-term evaluation. [EPA-HQ-OAR-2010-
0799-9301-A1, p. 2]
3. The NPRM puts a maximum limit on the credit from thermal control technologies at 3 g/mi
for passenger automobiles and 4.3 g/mi for light trucks. The credit for glazing is also limited to
3.0 g/mi for passenger automobiles and to 4.3 g/mi for light trucks. Since the data used for the
calculations has been based on currently known technologies, it would be difficult to predict the
actual savings from the solar glazing in the higher efficiency vehicles. EPGAA recommends that
the impact of solar glazing on (higher efficiency) vehicles should not be capped. EPGAA
believes that regulation should promote innovation and is concerned that such a cap could
potentially stifle innovation in solar glazing rather than promote continued advancement of the
technology. [EPA-HQ-OAR-2010-0799-9301-A1, p. 2]
5. EPGAA supports the use of the off-cycle credits as provided in these regulations and urges the
Agency to adopt them in the final rule. EPGAA also recommends that these regulations be
adopted for the MY 2012-2016 without the formal review process as currently required.
Allowing these credits earlier would encourage the use of the technologies that provide the
benefits sooner. [EPA-HQ-OAR-2010-0799-9301-A1, p. 3]
In conclusion, the EPGAA supports the agencies in considering the off-cycle technologies and
specifically the solar glazing technologies. [EPA-HQ-OAR-2010-0799-9301-A1, p. 3]
Organization: Garmin International Inc.
The first area of concern is that the proposed rule would reward (with Thermal Control 'off-cycle'
GHG credits) only the automobile manufacturers who select a single type of technology for
window glazing. This is a fundamentally flawed approach because it limits choices, thereby
stifling innovation and artificially raising prices due to lessened competition. [EPA-HQ-OAR-
2010-0799-9508-Al,p.l]
Since 2009, it has been commonly accepted that metallicized reflective glazing that reflects the
solar rays also attenuates radio frequency (RF) signals. This reflection of RF signals is one of the
factors that caused California to reject this technology. The lack of flexibility in window
materials technology that vehicle manufacturers are given by the NPRM—to achieve GHG
credits—will negatively affect consumers, emergency responders, RF-signal-dependent device
manufacturers (GPS ankle bracelets and transponders for parolees, mobile phones, GPS devices,
toll tags, to name a few) and their service providers. [EPA-HQ-OAR-2010-0799-9508-A1, p. 2]
7-75
-------
EPA Response to Comments
The proposed rule also provides a disincentive for any manufacturer to utilize off-cycle design
technologies that are very beneficial in terms of air emissions and exceed (together or separately)
the 109/mi. threshold imposed by (d)( 1) of the 'CO2 fleet average credit and incentive programs'
section. We view the threshold as a defacto limit on the investments you will see in off-cycle
environmental technologies, because some beneficial technologies may not be able to be
adequately demonstrated using the EPA 5-cycle methodology described by section (d)(2), and
there is no guarantee the manufacturer will receive the required permission from the EPA, per
section (d)(3) to perform a technology demonstration using an alternative EPA-approved
methodology. In addition, the technology demonstrations per (d)(2) and (d)(3) must be
performed, documented, submitted to, and approved by, the EPA. To follow this regimen for
several models in the fleet would be prohibitive in terms of time, resources, cost and uncertainty.
For manufacturers who wish to move forward quickly to improve the CC>2 emissions of their
fleet, we ask that you provide ways to validate a CO2 credit for a technology being adopted in
many models without having to go through the (d)(2) or (d)(3) demonstration process for every
model. [EPA-HQ-OAR-2010-0799-9508-A1, pp.2-3]
Strategic development plans and roadmaps for numerous models in the fleet can hardly
withstand this degree of uncertainty over the lengthy research and development cycles that
precede the rollout of a car or light truck model. This disincentive that the rule has constructed
may reduce the investment in breakthrough CCVreducing technologies that would otherwise be
deployed in the US automobile market. This brings to light the importance of NHTSA and
USEPA (1) working with industry to frequently test, validate and add other CO2-reducing
technologies to the off-cycle technology table, and giving serious consideration to removing the
109/mi. threshold. We are not in favor of limiting the credits manufacturers' rightly receive for
innovative, environmentally responsible design features. [EPA-HQ-OAR-2010-0799-9508-A1,
p.3]
Research has shown that metallicized reflective glazing will cause significant adverse effects on
the reception and transmission of E911, mobile phone and GPS navigation signals. Two years
ago, Garmin and a broad coalition of interested parties field-tested the impact of the 'Cool Cars'
regulations that were being promoted by the California Air Resources Board (CARB) under AB
32 (the Global Climate Change regulations). At that time, CARB was pursuing a vehicle glass
requirement which would have required a layer of metallic reflective material in the windshield
to reflect solar rays. CARB had similar goals as described in the U.S. EPA NPRM, but forcing
car and light truck manufacturers to use this type of glazing could have been very
counterproductive. If 10% of drivers quit using GPS because of signal interruptions caused by
metallicized reflective glazing, the increased GHG emissions from these vehicles more than
cancels out all GHG reduction benefits of metallicized glazing. Put another way, for every
theoretical 1 ton decrease of GHG emissions from metallicized glazing, vehicles send 2 extra
tons of GHG emissions into the atmosphere. [EPA-HQ-OAR-2010-0799-9508-A1, p. 3]
We see no reason why lower-weight and lower-cost alternative solutions such as non-metallic
polycarbonate materials are not listed as options in the NPRM. An advanced insulating or solar
absorbent technology with solar transmittance (Tts) properties of 54% is equally as effective as
metallic reflective (50% Tts with 10% deletion windows) in blocking the sun's rays from the auto
interior and has none of the negative shortcomings as far as attenuating signals. We respectfully
7-76
-------
Off-cycle Technology Credits
ask EPA and NHTSA to include an off-cycle credit that recognizes the relative benefit of
insulating glazing for reducing GHG emissions without harming systems such as E911. [EPA-
HQ-OAR-2010-0799-9508-A1, p. 3]
We would be happy to share the results of the coalition's testing and discuss this matter with you
in greater detail. Our nation's cellular networks and global positioning system are national assets
in which US taxpayers have invested billions. These systems support our economic growth, as
well as our personal and public safety. [EPA-HQ-OAR-2010-0799-9508-A1, p. 3]
Garmin's second area of concern is that the proposed rule does not give vehicle manufacturers
the opportunity to generate a defined minimum off-cycle credit for some verifiable real-world
fuel saving and CO2-reducing technologies. These would include in-dash GPS navigation and in-
dash GPS navigation with traffic avoidance. We respectfully ask that the current literature and
research be thoroughly explored and reviewed with the goal of facilitating the generation of CO2
credits for these additional technologies in some standardized way. We would be happy to
discuss this with you. [EPA-HQ-OAR-2010-0799-9508-A1, p. 3]
In order to assist manufacturers in meeting their 2025 targets ahead of schedule, Garmin believes
these companies should have no regulatory disincentives to fully utilize every kind of smart
driving CO2-reducing technology that they are willing to invest in. [EPA-HQ-OAR-2010-0799-
9508-Al,p.3]
We look forward to working with you towards getting credits placed on the off-cycle technology
menu for in-dash GPS navigation technologies. [EPA-HQ-OAR-2010-0799-9508-A1, p.3]
Organization: Guardian Automotive Products, Inc.
Guardian commends NHTSA and EPA for recognizing through off cycle credits a variety of
technologies which can significantly improve fuel economy and emissions, yet were previously
excluded due to the short falls of the current vehicle test cycles. [EP A-HQ-OAR-2010-0799-
9299-A1, p. 1]
Thermal Control and Glazing
Guardian recommends that the formula for solar glazing credits be adjusted to include a factor
that accounts for the overall surface area of glazing in the vehicle. The proposed formula
accounts for the incremental area contribution of each glazing aperture with respect to the total,
but ultimately provides the same potential credit for a vehicle with a small glazing area and no
sunroof as it does for a vehicle with a large glazing area and large sunroof. [EPA-HQ-OAR-
2010-0799-9299-A1, pp.1-2]
While the 2012-2016 GHG regulation permits an OEM to apply for glazing or heat load
reduction credit, the glazing credit formula in the 2017 and later regulation should improve and
simplify this process and be made available for OEMs to use immediately. [EPA-HQ-OAR-
2010-0799-9299-A1, p. 2]
7-77
-------
EPA Response to Comments
Solar Roof Panels
Guardian applauds NHTSA's and EPA's recognition of the potential benefits photovoltaics can
offer, especially as the popularity of hybrids and EV's grows. [EPA-HQ-OAR-2010-0799-9299-
Al,p.3]
This technology is rapidly evolving to the point that the 50 Watt threshold required in the
proposed regulation is likely to be significantly surpassed by the time the regulation takes effect
in 2017. In fact, there are examples today which already significantly surpass this value. For
instance, the Fisker Karma today employs a photovoltaic roof panel which produces in excess of
100 Watts at standard conditions. As a result, Guardian urges NHTSA and EPA to adopt a
formula based credit for this technology in order to fully recognize future benefits and to
encourage the development and use of higher power systems. Presuming that the same logic the
agencies used to arrive at the credit listed for the 50 Watt threshold holds for higher power, is
this first equation simply a linear relationship based on this value? Guardian acknowledges that
while it is fairly simple to determine output of any PV panel at any given conditions of direct
normal solar irradiance combined with angle and temperature, it is not so evident today to predict
exactly what total benefit will be achievable based on average vehicle use and driving as well as
parking conditions. We suggest for this reason that at this time a simple equation for credit is
appropriate, and as systems increase in popularity there will be more data available to refine the
credit, perhaps at the mid term review. However, given the long timeframe of the proposed
regulation and the pace of innovation in the photovoltaic industry, it seems imperative that such a
credit not be simply a fixed value if the true objective is to incentivize further advancement in
output, and hence potential reduction in GHG emissions and fuel consumption. [EPA-HQ-OAR-
2010-0799-9299-A1, p. 3]
As the primary goal of the regulation is to generate significant improvements to emissions and
fuel economy (and the associated economic and societal benefits), Guardian also urges that the
credit for solar roof panels be made available prior to 2017. [EPA-HQ-OAR-2010-0799-9299-
Al,p.3]
Moreover, as a clarification point, Guardian recommends that the proposed credit be allowed for
any solar panel with appropriate output and not be limited to roof mounted panels, as suggested
by the term 'solar roof panel'. [EPA-HQ-OAR-2010-0799-9299-A1, p. 4]
Guardian also requests that the test conditions to establish panel power with respect to the
proposed rule be defined as part of the rule. For instance, in the photovoltaic industry it is
common to provide output values at STC (Standard Test Conditions) which are most commonly
a direct normal solar irradiance of 1000 W/m2 and a panel temperature of 25°C± 2°C. [EPA-
HQ-OAR-2010-0799-9299-A1, p. 4]
Conclusion
In summary, Guardian applauds the efforts of EPA and NHTSA with respect to the treatment of
off cycle credits in the proposed regulation. These credits will encourage innovation and
technological advancements as well as corresponding improvements in fuel economy and
7-78
-------
Off-cycle Technology Credits
emissions. We hope the agencies find the above comments useful and relevant, and will draw
upon them to further improve the regulation and drive incentives to maximize benefits offered by
such technologies. [EPA-HQ-OAR-2010-0799-9299-A1, p. 4]
Organization: Pittsburgh Glass Works (PGW)
Pittsburgh Glass Works (PGW) supports the proposed rule's provisions for providing credit for
off-cycle technologies. The benefits of solar glazing, for example, are not measured in any
current test cycle, but have been proven to reduce emissions and improve fuel efficiency. Solar
glazing has been proven to reduce interior cabin temperatures by as much as 10 deg C and thus
reduce the work load of the air conditioning system. Solar glazing technologies provide
additional benefits to the consumer, such as improved noise reduction, UV protection, better
security, etc. beside the emissions reduction. [EPA-HQ-OAR-2010-0799-9300-Al, p. 1]
PGW would like to provide the following suggestions for the agencies' consideration:
1. The off-cycle credit for glazing is calculated using a formula that correlates the benefit to the
glass properties. PGW supports the general concept of the formula used, but would like to offer a
recommendation to improve the methodology to enable a more accurate accounting of the
contribution of solar glazing. The formula, as defined in the NPRM, calculates the temperature
reduction from the glass where the contribution of each piece of glass is measured as a
percentage of the total glass area. However, there is no accounting for the fact that the total glass
area in the vehicle is in itself a very large contributor to the heat load in a vehicle. There is a
general trend of increasing glass size in the vehicles, and the larger amount of glass would
actually contribute a larger proportion of heat load that would be affected by the kind of glazing.
Therefore, it is PGW's recommendation that the agencies introduce a factor that accounts for the
total glass area in the vehicle. For example, if the average glass surface in a car is 4.0 sq.m., then
if the glass usage is greater than 4.0 sq.m. the contribution of the solar glazing should be
proportionately larger. Therefore, the revised equation would be as follows: [EPA-HQ-OAR-
2010-0799-9300-A1, p. 2]
Baseline glass size = 4.0 sq.m.
Actual glass used = 5.0 sq.m.
Contribution of glass in actual vehicle = 5.0/4.0 = 125% of baseline glass. [EPA-HQ-OAR-2010-
0799-9300-A1, p. 2]
2. The off-cycle credit for thermal load reduction technologies is capped at 3.0 g/mile for cars
and 4.3 g/mile for light-duty trucks. The credit for glazing technologies is also subject to the
same limitations. The data to support the benefits of the glazing technologies and heat load
reduction technologies has been gathered from analysis of current technologies. There are likely
to be innovations in the technologies before and during the time frame of the regulations that
might surpass the performance of existing technologies. Therefore, applying the limits to the
benefits could inhibit innovation. PGW urges the agencies to remove these maximum limits so
that technology innovation is encouraged. [EPA-HQ-OAR-2010-0799-9300-Al, p. 2]
7-79
-------
EPA Response to Comments
4. The data used for the credit calculation has been based on testing and modeling of existing
technologies primarily on internal combustion engine vehicles. The benefit of the solar glazing
technologies would be compounded with other technologies such as start/stop, hybrid, electric,
etc. Therefore, PGW recommends that the agencies continue to consider the full benefit of the
solar glazing technologies and refine the model at the mid-term review of the regulations. [EPA-
HQ-OAR-2010-0799-9300-A1, p. 3]
5. Finally, PGW strongly urges that the credit be made available in the MY2012-2016
regulations without the burdensome review process as currently stipulated. This will enable
earlier implementation of the technologies and the benefits could be accrued much sooner. [EPA-
HQ-OAR-2010-0799-9300-A1, p. 3]
PGW support the agencies' consideration of off-cycle credits in general, and the impact of solar
glazing in particular. If there is any further information that can be provided, please do not
hesitate to contact us. [EPA-HQ-OAR-2010-0799-9300-A1, p. 3]
Organization: SABIC Innovative Plastics US LLC
These comments focus on the proposed off-cycle and fuel consumption improvement credits for
Thermal Control Technologies. Specifically, SABIC-IP requests that the agencies make clear
that the "Glass or Glazing" category for these credits includes reduced thermal conductivity
benefits ("RTC" benefits or credits) as well as reduced solar transmittance benefits ("RTts"
benefits or credits), and further that the agencies include within the regulatory text a calculation
to quantify credits associated with the RTC benefits. A modification of the proposed credit to
encompass thermal conductivity benefits is within the scope of the NRPM, and can therefore be
accomplished during the next stage of this rulemaking. As such, a separate petition process to
achieve this result is not necessary. The Alliance of Automobile Manufacturers, the American
Chemistry Council, Bayer Material Science and the Society of the Plastics Industry support this
request. [EPA-HQ-OAR-2010-0799-9467-A1, pp. 1-2]
Modifying the existing credit to recognize the additional benefits of other glass or glazing
technologies generally, and RTC glazing specifically, is consistent with the intent to promote
advanced energy management within the passenger compartment, or cabin, to reduce air
conditioning (A/C) loads. Accounting for the RTC benefits also promotes continued innovation
in glazing technologies. Finally, placing RTC-based technologies on an even footing with RTts-
based technologies ensures that all glass and glazing technologies will be treated similarly within
the regulatory program and will remain available in the marketplace. [EPA-HQ-OAR-2010-
0799-9467-A1, p.2]
In addition to a calculation to quantify RTC benefits, SABIC-IP presents test data measuring the
fuel economy benefits of lightweight materials and confirming the traditional estimates that
vehicle weight reductions of 10% result in approximately 6-7% better fuel economy. Finally,
SABIC-IP presents information regarding how additional GHG emissions and fuel economy
benefits from improved aerodynamics and other factors can result from the integration of
engineering thermoplastics into the front six inches and most of the rear six inches of a light duty
motor vehicle. [EPA-HQ-OAR-2010-0799-9467-A1, p.2]
7-80
-------
Off-cycle Technology Credits
In sum, engineering thermoplastics offer three-fold emissions and fuel economy benefits: (1)
polycarbonate glazing reduces air conditioning load by substantially reducing window thermal
conductivity relative to traditional glass; (2) engineering thermoplastics offer significant mass
reduction opportunities throughout the vehicle; and (3) engineering thermoplastics offer
aerodynamic design opportunities that further reduce GHG emissions and fuel consumption.
[EPA-HQ-OAR-2010-0799-9467-Al,p.2]
The agencies propose off-cycle GHG and fuel consumption improvement credits for advanced
glass or glazing technology and specify a calculation to quantify this benefit based on the ability
to reduce the amount of solar energy entering the passenger cabin of the vehicle, relative to a
baseline glazing. 1 This technology decreases the "total solar transmittance," or "Tts", of the
glazing and, as a result, lowers the "soak" temperature in the cabin of a "standing" vehicle under
hot sunny conditions.2 By lowering soak temperature, reduced Tts glass or glazing reduces the
subsequent demand on the A/C system to cool the cabin air to a comfortable temperature. [EPA-
HQ-OAR-2010-0799-9467-A1, p.3]
SABIC-IP endorses off-cycle credits for reduced Tts glass or glazing as long as the regulatory
structure remains technology neutral and does not advantage a particular glazing technology.3
SABIC-IP therefore requests that the agencies also include a calculation to quantify reduced
thermal conductivity credits for glazing that provides similar GHG reduction benefits. These
benefits are independent of those resulting from reductions in Tts. Moreover, RTts and RTC
benefits can coexist not only within the same vehicle but also within the same window
application when both Tts and thermal conductivity are reduced below the respective baselines
for solar transmittance and thermal conductivity. [EPA-HQ-OAR-2010-0799-9467-A1, p.3]
To support this request, SABIC-IP sets forth below a detailed methodology to account for and
quantify the RTC benefits associated with advanced glass or glazing. This methodology tracks
the methodology in the proposed rule for quantifying RTts benefits, adopting the same standards
and analytical steps applied by the agencies for the RTts credit. The result is an off-cycle credit
formulation for RTC benefits analogous to that in the proposed rule for RTts benefits. [EPA-HQ-
OAR-2010-0799-9467-A1, p.3]
Reducing window thermal conductivity inhibits heat transfer between the ambient air outside the
vehicle and the passenger cabin. Thus, the amount of heat transfer into the cabin is reduced. This
reduction in heat transfer can be identified with a reduction in A/C load, 4 which in turn yields a
reduction of the A/C related GHG emissions associated with maintenance of a comfortable cabin
temperature. PC glazing can provide this benefit because it offers an inherent thermal
conductivity five times lower than glass, thereby offering a significantly greater insulating
capacity. [EPA-HQ-OAR-2010-0799-9467-A1, p.4]
The purpose of the proposed off-cycle credits for Thermal Control TechnologiesS is to
encourage innovations that "reduce the amount of solar energy which enters the vehicle's cabin
area, reduce the amount of heat energy build-up within the cabin when the vehicle is parked,
and/or reduce the amount of cooling/heating energy required through measures which improve
passenger comfort." [EPA-HQ-OAR-2010-0799-9467-Al, p.4]
7-81
-------
EPA Response to Comments
Throughout the process of developing the proposal, EPA and NHTSA sought industry guidance
regarding a broad category of thermal control technologies. At the outset, the agencies met with
OEMs to assess major technology areas, including "thermal management technologies." The
proposed list of Thermal Control Technologies is indicative of this approach and includes a
varied list of features that rely on many distinct technological innovations to achieve GHG and
fuel economy benefits. [EPA-HQ-OAR-2010-0799-9467-A1, p.4]
The proposed regulatory text furthers this intent by referring to the off-cycle credits for Thermal
Control Technologies as applicable to "Glass or Glazing," and this reference is repeated in the
TSD. [EPA-HQ-OAR-2010-0799-9467-A1, pp.4-5]
However, when setting forth the calculation to quantify the credits, the agencies refer only to a
single glazing attribute, Tts, and do not include thermal conductivity values. Consequently,
although RTC benefits fall squarely within the stated intent and the scope of the credits as
expressed in the proposal, the regulation fails to encompass the full range of benefits and credits
associated with Glass or Glazing Thermal Control Technologies. Extending the existing credit to
include appropriate references and a calculation to cover RTC benefits is clearly within the scope
of the proposed rule and a logical extension of the proposed regulatory text. As a result, for
purposes of the current rulemaking, SABIC-IP believes it is appropriate to include the additional
methodology for calculating thermal conductivity benefits within the final rule, and that a
separate petition process is not necessary. [EPA-HQ-OAR-2010-0799-9467-Al, p.5]
The comparison in the following table of the mechanisms underlying the RTts and RTC benefits
illustrates why both should be included on the off-cycle credit menu. The RTts benefit
recognizes the role of solar energy transmission in generating high soak temperatures in parked
unoccupied vehicles. RTC glazing insulates the passenger cabin from the effects of higher
outside air temperatures and reduces the demand on the A/C system to maintain a comfortable
cabin temperature. Both technologies inhibit energy transfers that tend to increase the cabin
temperature. Both technologies reduce the amount of fuel required by operation of the A/C
system, during cool down from the soak state in one case and while maintaining a comfortable
cabin temperature in the other. The two technologies through different mechanisms provide
similar benefits in terms of A/C related fuel use and GHG emissions. [EP A-HQ-OAR-2010-
0799-9467-A1, p.5] [For the associated table please refer to EPA-HQ-OAR-2010-0799-9467-
Al,p.6]
Significantly, RTC glazing does not appreciably influence soak temperature or negatively offset
the GHG and CAFE benefits estimated for RTts glazing. Thus, because RTC and RTts operate
through independent, but not mutually exclusive mechanisms, the benefits from RTts glazing and
RTC glazing are independent and entirely additive. [EPA-HQ-OAR-2010-0799-9467-A1, p.6]
The agencies' proposed methodology for RTts-based credits may be applied simultaneously with
the methodology for the RTC-based credits presented below. The methodology for quantifying
RTC credits is closely modeled after the approach in the proposed rule for quantifying the RTts
credits. [EPA-HQ-OAR-2010-0799-9467-Al, p.6]
7-82
-------
Off-cycle Technology Credits
Quantifying the Benefits of Reduced Tts and Reduced Thermal Conductivity [EPA-HQ-OAR-
2010-0799-9467-A1, p.6]
The RTts credit methodology in the proposal provides a common structure for quantifying the
GHG reduction benefits of both reduced solar transmission and reduced thermal conductivity.
[EPA-HQ-OAR-2010-0799-9467-Al,p.6]
The proposed RTts credit calculations rely on National Renewable Energy Laboratory (NREL)
studies that evaluated technologies to reduce soak temperature for climate control purposes.
Based on NREL's finding that reduced Tts glazing decreases the cabin temperature gain when a
car is left parked in the sun, the proposal calculates GHG reductions based on window Tts values
relative to location-specific window baseline values. The agencies have proposed an off-cycle
credit opportunity for glazing of up to 2.9 g/mi for passenger vehicles and 3.9 g/mi for light
trucks to recognize this benefit. 12 [EPA-HQ-OAR-2010-0799-9467-Al, pp.6-7]
Vehicles equipped with both RTts glazing and RTC glazing would be entitled to separate and
cumulative off-cycle credits for each technology, as long as their combined cumulative credit is
no more than 2.9 g/mi for cars and 3.9 g/mi for trucks. [EPA-HQ-OAR-2010-0799-9467-Al,
p.7]
Summary of the Proposed Calculation for Reduced Tts [EPA-HQ-OAR-2010-0799-9467-A1,
p.7]
The existing glass or glazing credit uses Tts as the measurable attribute to quantify the GHG
reduction and off-cycle credit amount. This arises from the theory that limiting the amount of
solar energy transmitted into the passenger cabin during a solar soak will decrease the amount of
fuel required to subsequently cool the cabin. Tts describes the percentage of the incoming solar
energy transmitted through the automobile glazing. [EPA-HQ-OAR-2010-0799-9467-A1, p.7]
The first step in the proposed RTts-based calculation is to quantify the connection between Tts
reductions and the reduction in cabin temperature during a standing car's prolonged sun
exposure (i.e. the "soak" temperature). Working from NREL data that pairs Tts values with soak
temperature reductions, the draft Joint TSD assumes a linear correlation to find a relationship
between Tts and temperature reduction. The equation developed in this step can be used to
calculate an expected temperature reduction from window Tts values. [EPA-HQ-OAR-2010-
0799-9467-A1, p.7]
The draft Joint TSD uses a weighted average to combine individual window contributions into a
temperature reduction average for the entire vehicle. 13 This accounts for differences in area and
Tts values across windows. The proposed methodology, as set forth in the draft Joint TSD and
the regulatory text, uses each window's Tts value to calculate an individual window contribution
to temperature reduction via the relationship between Tts and cabin soak temperature. The draft
Joint TSD assumes that each window's contribution to the reduction in soak temperature is
proportional to its area independent of window orientation. [EPA-HQ-OAR-2010-0799-9467-
Al, pp.7-8]
7-83
-------
EPA Response to Comments
The second analytical step of the proposed Tts analysis quantifies the connection between
reduced cabin temperature and reduced A/C related fuel use. The draft Joint TSD quotes NREL's
published result, based on simulation data, that a 12 degree centigrade reduction in cabin soak
temperature results in a 26% reduction in A/C fuel consumption. This corresponds to a 2.2%
reduction in A/C fuel consumption for every 1 degree centigrade reduction in the soak
temperature. 14 [EPA-HQ-OAR-2010-0799-9467-A1, p.8]
The third and final step connects the decrease in A/C fuel use, expressed in terms of the Tts
glazing attribute, to a GHG reduction. Working from agency assumptions about the CC>2 impact
of A/C systems (13.8 g/mi for cars and 17.2 g/mi for trucks), the draft Joint TSD calculates a
CC>2 reduction of 0.3 g/mi (cars) and 0.4 g/mi (trucks) for each degree centigrade reduction in air
cabin temperature. [EPA-HQ-OAR-2010-0799-9467-A1, p.8]
The proposed Tts methodology allows the agencies to calculate a vehicle GHG reduction based
on a set of vehicle window areas and Tts values. Below, we present a methodology using the
same analytical steps to calculate GHG reductions from the thermal conductivity and thickness
of a reduced thermal conductivity glazing. [EPA-HQ-OAR-2010-0799-9467-A1, p.8]
Calculating the CO2 Benefits of Reduced Thermal Conductivity [EPA-HQ-OAR-2010-0799-
9467-A1, p.8]
SABIC-IP proposes a calculation to quantify the benefits of RTC glazing that is similar to the
calculations included in the proposal for RTts glazing. The RTC approach set forth below is
analytically premised on two peer-reviewed SAE papers demonstrating how PC glazing, with its
lower thermal conductivity as compared to glass, reduces the A/C load required to maintain
cabin temperature and the lack of any adverse practical impact on the cabin soak temperature
when PC glazing is used. The RTC credit analysis parallels the proposal's methodology for the
RTts credits. 17 [EPA-HQ-OAR-2010-0799-9467-A1, p.8]
After we describe the measurable glazing attribute that underlies the RTC off-cycle glass or
glazing benefit (here, thermal conductivity normalized to window thickness rather than Tts), the
RTC credit calculation proceeds in three steps: (1) quantification of the cabin response as a
function of the measured window attribute (for the RTts credit, the agencies related soak
temperature reduction to Tts reduction; here, we relate a reduction in the heat transfer into a
cabin to a reduction in window thermal conductivity normalized to window thickness); (2)
relating the cabin response to a reduction in A/C fuel use; and (3) relating the reduction in A/C
fuel use to GHG emission reduction. The net result is a set of equations that match the RTts
credit's form and methodology, but which relate the GHG emission reduction to a reduction in
window thermal conductivity rather than to a reduction in Tts. 18 The full calculation is described
in identical steps and in more detail in the attached Annex A. [EPA-HQ-OAR-2010-0799-9467-
Al,p.9]
RTC glazing's GHG benefits are derived from a lower thermal conductivity (relative to glass)
that inhibits heat transfer between the vehicle cabin and the outside air. In the governing physical
relationships, the glazing thermal conductivity (k) appears with glazing thickness (d) as a
reciprocal factor (k/d). For example, at a given window location, insulation performance can be
7-84
-------
Off-cycle Technology Credits
enhanced by lowering thermal conductivity and/or increasing window thickness. Accordingly, to
calculate the off-cycle credit for a car with RTC technology, the thermal conductivity normalized
to window thickness (k/d) is selected as the glazing attribute. This parallels the adoption of Tts as
the measurable vehicle attribute for the RTts credit calculation. Though thermal conductivity is
intrinsic to a given material, the typical window thickness generally varies from location to
location and across different car models. 19 [EPA-HQ-OAR-2010-0799-9467-A1, p.9]
Step 1: Express the Cabin Response (a change in heat transfer) In Terms of the Attribute [EPA-
HQ-OAR-2010-0799-9467-A1, p. 10]
As in the RTts case, the proposed methodology is based on a linear relationship between the
cabin response and a change in window attribute. Thus, the cabin response to RTC glazing,
namely the reduction in steady state heat transfer (in Watts), is related to the change in window
thermal conductivity normalized to window thickness (k/d). The area-weighting used in the RTts
credit calculation to account for variations in window size is also used here to account for similar
variations as well as the selective application of PC glazing to the rooflite and backlite positions
in the prototype case. This case, studied in the underlying SAE papers, nevertheless provides the
basis for a general result applicable to other glazing configurations. [EPA-HQ-OAR-2010-0799-
9467-Al,p.lO]
Data from the relevant SAE paper is used to calculate the relationship between (k/d) and the heat
transfer into the cabin. This data can be found within Annex A as well as in the table below.
[EP A-HQ-OAR-2010-0799-9467-A1, p. 10] [For the table please refer to EP A-HQ-OAR-2010-
0799-9467-Al,p.lO]
The above table summarizes glazing parameters for two comparison vehicles. The baseline
vehicle has standard glass windows at all positions and provides the baseline values for
calculating the RTC credit. The other vehicle has PC glazing at the backlite and rooflite positions
and glass windows at all remaining positions. Thermal conductivity (k), thickness (d), and (k/d)
are listed for each vehicle's window position. "Change" represents the difference in (k/d) values
for each window where glass glazing is replaced with PC glazing. Since there is no change in the
windshield or side window from the baseline vehicle, the corresponding "change" value for those
positions is zero. [EPA-HQ-OAR-2010-0799-9467-A1, p. 10]
Applying parameters presented above and following the reduced Tts approach to account for
individual window contributions, the area-weighted change in thermal conductivity normalized
to thickness is 118.6 W/m2-K. Again following the SAE paper's results which show a heat
transfer reduction of 107 Watts for the window configuration in the above table, and adopting the
same linear relationship assumed for the reduced Tts credit, implies a response constant of
0.9021. Therefore, the following equation quantifies the heat transfer reduction (cabin response)
due to a change in (k/d):[EPA-HQ-OAR-2010-0799-9467-A1, pp. 10-11] [For the equation
please refer to EP A-HQ-OAR-2010-0799-9467-A1, p. 11]
The external temperature and solar radiation data used to generate this result incorporate a range
meant to reflect real-world variations. The data represent mid-day August conditions in Phoenix,
Arizona averaged over all Augusts from 1991-2005. As such, the data are not limited to a single
7-85
-------
EPA Response to Comments
sky condition but represent clear sunny days as well as the actual range of cloud cover
configurations. [EPA-HQ-OAR-2010-0799-9467-Al, p.ll]
Step 2: Use the Cabin Response to Calculate the Resulting Reduction in A/C Fuel Use [EPA-
HQ-OAR-2010-0799-9467-A1, p.ll]
For vehicles with RTC glazing technology installed at the backlite and rooflite window positions
and with cabin air recirculating so that the A/C load reduction can be identified with the
reduction of heat transfer through the glazing, the SAE study demonstrated a decrease in the
steady state air conditioning load of 107 Watts, or 6.4%. This allows us to use the equation
developed in Step 1 to calculate individual window contributions to a reduced A/C load. [EPA-
HQ-OAR-2010-0799-9467-A1, p.ll]
A/C load reduction can be related to A/C fuel use reduction by following the NREL
methodology used for the reduced Its credit. The RTts credits derived in the proposal rely on
two separate NREL computer simulations that model, respectively, how a decrease in soak
temperature reduces the A/C load for subsequent cool down and how, in turn, a decrease in A/C
load reduces fuel consumption. A/C load was simulated to show a decrease of 29.8% for a 12
degree centigrade reduction in soak temperature (the latter generated in part by differences from
the baseline vehicle other than the glazing). Fuel use was simulated to show a 26% decrease for
this reduction in A/C load. [EPA-HQ-OAR-2010-0799-9467-A1, p.ll]
Adapting these two NREL simulation results (i.e. using the ratio of 26% to 29.8%) to calculate
fuel reductions attributable to RTC shows a 5.6% percent decrease in fuel use for a 107 Watt
decrease in air conditioning load. 21 This corresponds to a 0.052% A/C fuel use reduction for
each Watt reduction in the air conditioning load. [EPA-HQ-OAR-2010-0799-9467-A1, p.l 1]
Step 3: Relate Fuel Use Reductions to CO2 Reductions [EPA-HQ-OAR-2010-0799-9467-A1,
p.12]
In order to arrive at a final credit amount, the RTC reduction in A/C fuel use must be related to a
reduction in GHG emissions expressed in grams of CC>2 per mile. The proposed calculation for a
reduced Tts Solar Control credit does this by multiplying the area-weighted average of individual
window contributions (Step 1) by a conversion factor Z. This conversion factor can be calculated
by using the relationship between A/C load reduction and fuel use found in Step 2 (a 0.052%
decrease in A/C/ fuel use for each Watt reduction in A/C load). [EP A-HQ-OAR-2010-0799-
9467-Al,p.l2]
Applying the same air conditioning CC>2 emissions data used in the agencies' RTts-based credit
calculation (13.8 g/mi for cars and 17.2 g/mi for trucks), Z values applicable to RTC are derived:
0.0072 (g/mi)/Watt for cars and 0.0090 (g/mi)/Watt for trucks. [EP A-HQ-OAR-2010-0799-
9467-Al,p.l2]
Example: RTC-Based Credit Calculation for a Car with PC Glazing [EPA-HQ-OAR-2010-0799-
9467-Al,p.l2]
7-86
-------
Off-cycle Technology Credits
Again working from the above table of glazing parameters, this example calculates a
representative off-cycle credit for a car22 where half of the glass window area is replaced with
PC. We chose a value of 220 as a reasonable midpoint between the change values for thermal
conductivity divided by window thickness in the table above. Since we have chosen an example
where one-half of the vehicle windows remain unchanged, this introduces a factor of one-half via
the area-weighted average. Thus, the calculated RTC credit for a car with half of the glass
window area replaced by PC is: [EPA-HQ-OAR-2010-0799-9467-Al, p. 12] [For the equation
please refer to EPA-HQ-OAR-2010-0799-9467-A1, p. 12]
This calculated value falls within the range of proposed values on the off-cycle credit menu. It is
greater than the 0.4 g/mi proposed for solar reflective paint, another Thermal Control
Technology credit, and close to the proposed credit for active aerodynamics (0.6 g/mi), a credit
on the general Off-Cycle Technology menu. [EPA-HQ-OAR-2010-0799-9467-A1, p. 12]
Summary [EPA-HQ-OAR-2010-0799-9467-A1, p. 12]
Linking the above steps leads to an RTC off-cycle credit that is consistent with the RTts credit. It
uses similar factors in the same methodology to calculate an off-cycle credit for RTC glazing.
Following from the structure and placement of the RTts credit, we propose that the summary
below be added to the Code of Federal Regulations at 40 C.F.R. 86.1866-12(d)(l)(i)(D) to
calculate an off-cycle credit (CTC) for RTC glazing as follows: [EPA-HQ-OAR-2010-0799-
9467-A1, p. 12] [For the associated figure please refer to EPA-HQ-OAR-2010-0799-9467-A1,
p.13]
Where ZTC = 0.0072 for passenger automobiles and 0.0090 for light trucks; Gi = the measured
area of window i, in square meters and rounded to the nearest tenth; G = the total window area of
the vehicle in square meters and rounded to the nearest tenth; Qi = the steady state load reduction
for window i, determined by using the following formula: [EPA-HQ-OAR-2010-0799-9467-Al,
p. 13] [For the associated figure please refer to EPA-HQ-OAR-2010-0799-9467-A1, p. 13]
Where (k/d)new,i, = the thermal conductivity of window i normalized to thickness d; (k/d)base,i
= the thermal conductivity for a standard glass window in i's position normalized to thickness
(k/d)base,i = 312 for the backlite location, 260 for the rooflite location, and 200 for the
windshield, side-front, side-rear, and rear quarter locations. [EPA-HQ-OAR-2010-0799-9467-
Al, p.13] [For the associated figure please refer to EPA-HQ-OAR-2010-0799-9467-A1, p.13]
The methodology proposed here for RTC credits closely tracks the methodology proposed in the
regulation for calculating RTts credits. Adding a calculation applicable to reduced thermal
conductivity benefits expands the off-cycle credit menu in a way that furthers the express intent
of the credit program to capture the full range of Thermal Control Technologies, including Glass
or Glazing able to achieve and/or maintain comfortable cabin temperatures with reduced load on
the A/C system. SABIC-IP believes it is appropriate to include the additional methodology for
calculating thermal conductivity benefits within the final rule, and that a separate petition process
to accomplish this is not necessary. [EPA-HQ-OAR-2010-0799-9467-A1, p. 13]
7-87
-------
EPA Response to Comments
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 283-286.]
1 - We use the term "off-cycle" credit as a general reference encompassing the "off-cycle"
credits provided in EPA's greenhouse gas program as well as the corollary "fuel consumption
improvement" credits in the CAFE program. See, e.g., 76 Fed. Reg. 75,021. [EPA-HQ-OAR-
2010-0799-9467-A1, p.3]
2 - A "standing" vehicle for this purpose is one promoting the maximum soak temperature for a
given glazing type: the A/C off, the windows closed, no ventilation and no shading. The term
"standing" is used throughout these comments with the same meaning. [EPA-HQ-OAR-2010-
0799-9467-A1, p.3]
3 - When regulating products, "the overriding principle of fairness is always the same: the
government must govern with an even hand." U.S. v. Undetermined Quantities of an Article of
Drug Labeled as Exachol, 716 F. Supp. 787, 795 (S.D.N.Y. 1989) (holding that the FDA applied
an "uneven regulatory policy" by not treating one product like similar situated other product). It
is well-established that an agency cannot treat similarly situated parties differently without a
reasoned basis for doing so. See, e.g., Burlington Northern and Santa Fe Ry. Co. v. Surface
Transp. Bd., 403 F.3d 771, 776-777 (D.C. Cir. 2005) ("Where an agency applies different
standards to similarly situated entities and fails to support this disparate treatment with a
reasoned explanation and substantial evidence in the record, its action is arbitrary and capricious
and cannot be upheld."). [EPA-HQ-OAR-2010-0799-9467-A1, p.3]
4 - For a vehicle equipped with PC glazing technology rather than traditional glass in the backlite
and rooflite windows, research has demonstrated a 107 Watt or 6.4% reduction in the A/C load
required to maintain a comfortable cabin temperature for particular solar and temperature
conditions and with air recirculating. See Reduced Steady State Heating and Air Conditioning
Loads via Reduced Glazing Thermal Conductivity, SAE Technical Paper 2011-01-0126, 2011.
Although the benefits of air recirculation and RTC are synergistic, the latter is an independent
incremental benefit over and above the benefit of recirculation previously recognized by the
agencies. [EPA-HQ-OAR-2010-0799-9467-Al, p.4]
5 - The Proposed Rule and supporting documents inconsistently categorize some of the proposed
off-cycle credits as both Thermal and Solar Control technologies. For example, when the
category is introduced within the draft Joint Technical Support Document (TSD), it is proposed
as "Thermal (and Solar) Control Technologies." p.5-69 (Section 5.2.3.5). This categorization is
consistently applied through that Section. However, the draft Joint TSD later abandons reference
to the Thermal Control Technologies when it summarizes the proposed off-cycle credits,
referring only to Solar Control. See draft Joint TSD at 5-74 (table 5-26). Because Solar Control
fails to accurately characterize all of the technologies listed in the Thermal Control category, the
terminology should be revised in the final Joint TSD. This would also align it with the proposed
regulatory language at 76 Fed. Reg. 75,381-2 where Thermal Control is used. [EPA-HQ-OAR-
2010-0799-9467-A1, p.4]
7-88
-------
Off-cycle Technology Credits
12 - The proposed regulatory language for 40 C.F.R. § 86.1866-12(d)(l)(i)(B) appears to
mistakenly set the "glass or glazing" credit caps at 3.0 g/mi for passenger automobiles and 4.3
g/mi for light trucks. See 76 Fed. Reg. 75,382. Conflicting "Glass or glazing" caps of 2.9 g/mi
(cars) and 3.9 g/mi (trucks) are indicated in the Thermal Control Technology Table on the same
page of the Federal Register and within the draft Joint TSD. See Draft Joint TSD at 5-73 (Table
5-25). This seems to arise from an accidental substitution of the categorical Thermal Control
Technology caps for the specific glass or glazing limit. [EPA-HQ-OAR-2010-0799-9467-A1,
p.7]
13 - Although the draft Joint TSD does not explicitly use area weighting until a later step of its
analysis, we summarize it here to parallel the RTC calculation discussion. Area-weighting serves
to preserve the analogy between RTts, where 100% of the glazing area is modified in the
prototype case from which the off-cycle credit is derived, and RTC, where only 50% of the
glazing area is modified in the prototype case. The resulting analogous expressions for the
incremental cabin response to a change in attribute at one window (subject to area weighting) are
labeled as the "General Case" in the attached Annex A. [EPA-HQ-OAR-2010-0799-9467-A1,
p.7]
14 - The origin of this result and its reliance on computer simulations is explained in more detail
below when the RTC-based credit calculation is presented. [EPA-HQ-OAR-2010-0799-9467-
Al,p.8]
17 - The agencies have not specified any particular approach to calculating off-cycle or fuel
consumption improvement benefits, and recognize that the demonstration of such benefits may
involve "on-road testing, modeling, or some other analytic approach," Instead, the agencies
require that, regardless of approach, the demonstration must be "robust, verifiable, and capable
of demonstrating the real-world emissions benefit of the technology with strong statistical
significance." 76 Fed. Reg. 75,021; Draft Joint TSD at 5-56 (Section 5.2) ("The estimates of
these credits were largely determined from research, analysis and simulations, rather than from
full vehicle testing, which would have been cost and time prohibitive.") To that end, we propose
a method of demonstrating the real world benefits associated with the thermal control properties
of PC glazing that tracks the methodology proposed with regard to Tts technology. As noted
above, the PC glazing approach is also supported by published peer-reviewed SAE papers. In
addition, the proposed methodology employs the applicable assumptions in the 2007 NREL
paper cited frequently in the proposal and the TSD. See Reduction in Vehicle Temperatures and
Fuel Use from Cabin Ventilation, Solar-Reflective Paint, and New Solar-Reflective Glazing,
SAE Technical Paper 2007-01-1194. [EPA-HQ-OAR-2010-0799-9467-Al, pp.8-9]
18 - The agencies have recognized in the context of the proposed Tts methodology that an
analytic approach is necessary to calculate the benefits for thermal and solar technologies. The
same is true for RTC glazing. The SC03 test cycle does not capture PC glazing's benefits which
are most pronounced when the A/C is maintaining a cabin air temperature much cooler than the
outside air and the A/C is allowed to run for long periods. The SC03 cycle in the 5-cycle test,
though it imposes an outside air temperature 12.8 C higher than the cabin temperature
automatically targeted by the A/C, has a much smaller average temperature difference over the
test duration because the cycle, only 10 minutes long, immediately follows a soak phase. This is
7-89
-------
EPA Response to Comments
too short to attain and simulate the steady state cabin conditions (common in the real world)
where RTC glazing's benefits are most pronounced. Instead, the SC03 cycle simulates cabin cool
down from a solar soak state where RTC glazing provides practically no net effect. An analytic
methodology is therefore appropriate. [EPA-HQ-OAR-2010-0799-9467-A1, p.9]
19 - An example of how these variations are treated in practice can be seen in the PC glazing
credit calculation below. [EPA-HQ-OAR-2010-0799-9467-A1, p.9]
21 - See Annex A for a complete description of how the NREL results are applied to calculate
the RTC fuel use reduction. [EPA-HQ-OAR-2010-0799-9467-A1, p. 11]
22 - See id. for a calculation of a representative truck RTC credit value. [EPA-HQ-OAR-2010-
0799-9467-Al,p.l2]
Organization: Society of the Plastics Industry, Inc. (SPI)
We respectfully request modification of the proposed off-cycle credit addressing thermal control
technology to specifically recognize the insulation benefits of innovative glazing technologies
such as polycarbonate (PC) glazing, in order to employ a technology neutral approach. This can
be achieved by clarifying that the "glass or glazing" category includes both reduced thermal
conductivity benefits (for which a calculation for corresponding credits should be included
within the regulatory text) and reduced solar transmittance benefits. [EPA-HQ-OAR-2010-0799-
9492-A1, p.2]
The Agencies Should Clarify that Glazing with Reduced Thermal Conductivity is Eligible for the
Proposed Off-Cycle Credit (OCC) for Thermal Control, and Include a Methodology for
Quantifying This Benefit [EPA-HQ-OAR-2010-0799-9492-A1, p.6]
SPI supports the inclusion of an off-cycle credit (OCC) for thermal control. As the agencies are
aware, the performance of technologies that reduce air conditioning demand are not captured on
test drive cycles, and are therefore appropriate for recognition under the OCC program. As
proposed, the credit appears focused on solar control technologies.29 This phenomenon would be
relevant to some PC glazing products, including those that filters a proportion of infrared rays.
However, we note that the proposed glazing credit formulation is inadequate to capture other
qualities of advanced glazing that reduce A/C load and associated emissions. [EPA-HQ-OAR-
2010-0799-9492-A1, p.6-7]
In particular, SPI respectfully requests consideration for modification of the proposed off-cycle
credit for thermal control to employ a technology neutral approach, and include the full range of
glazing with reduced thermal control properties. With a thermal conductivity approximately five
times lower than glass, PC glazing helps to maintain a comfortable temperature with less air
conditioning use. The substantial off-cycle reduction on the air conditioning (A/C) load is
expected to result in improved energy efficiency regardless of vehicle type or power train. [EPA-
HQ-OAR-2010-0799-9492-A1, p.7]
7-90
-------
Off-cycle Technology Credits
The administrative record makes clear the agencies' intent to encourage innovations that:
"reduce the amount of solar energy which enters the vehicle's cabin area, reduce the amount of
heat energy build-up within the cabin when the vehicle is parked, and/or reduce the amount of
cooling/heating energy required through measures which improve passenger comfort." [EPA-
HQ-OAR-2010-0799-9492-A1, p.7]
This intent is also reflected in the regulatory text and the Technical Support Document, both of
which refer to thermal control technologies applicable to "glass or glazing." While glazing with
superior insulation value clearly responds to the agencies' stated intent, the NPRM and
associated documents neglect to provide a methodology for quantifying thermal conductivity
benefits. Modifying the existing credit to include appropriate references and a calculation to
cover reduced thermal conductivity benefits is consistent with the scope and intent of the
agencies in the area of thermal control. As such, SPI believes that providing such a methodology
can be accomplished in the present rulemaking, and that a separate petition process is not
necessary. [EPA-HQ-OAR-2010-0799-9492-Al, p.7]
SPI understands that comments to be submitted by SAB 1C Innovative Plastics will provide
details for quantifying the off-cycle benefits from reduced thermal conductivity, and we urge the
agencies carefully consider modifying the OCC to incorporate such a calculation. An amended
credit is appropriate in assuring vehicle manufacturers are provided with appropriate flexibility
to meet standards. Recognition in an OCC of thermal benefits and other technologies would be
consistent with agencies' planned mid-term evaluation, and would not favor a particular material
or technology over another. [EPA-HQ-OAR-2010-0799-9492-Al, p.7]
SPI again expresses its appreciation for the opportunity to comment, in support for the inclusion
of thermal control benefits in an off-cycle credit for automotive manufacturers. [EPA-HQ-OAR-
2010-0799-9492-A1, p.8]
29 - The equation at 76 FR 75382 includes Tts for total solar transmittance
Organization: TechAmerica
We would like to bring to your attention a concern we have identified in the proposal as it relates
to the available options through which auto manufacturers may obtain "off-cycle" greenhouse
gas emission reduction credits. One of the options included in the proposed rule involves
window glazing technologies to reduce heat buildup in parked cars, which can reduce fuel
consumption associated with air conditioning use. [EPA-HQ-OAR-2010-0799-9470-A1, p.l]
To the best of our knowledge, the most effective of these technologies is glass treated with
metallicized reflective materials. While we understand that the decision to choose a particular
technology to obtain an off-cycle credit will be voluntary, it is reasonable to assume that auto
manufacturers seeking to maximize credits under the proposed rule would be inclined toward use
of the metallicized reflective materials in glass. [EPA-HQ-OAR-2010-0799-9470-A1, p.l]
7-91
-------
EPA Response to Comments
This incentive is of great concern because metallic films are known to interfere with electronic
devices that depend on radio frequency (RF) transmissions, such as global positioning systems,
toll tag transponders and cellular telephones. Even limited use of metallicized reflective
technology (e.g. only in windshields) can increase the likelihood of interference with reliable
operation of these devices. The potential for cell phone interference or dropped calls is especially
troubling in emergency situations. [EPA-HQ-OAR-2010-0799-9470-A1, p.l]
While increased fuel efficiency and lower greenhouse gas emissions are both laudable goals,
under the proposed rule these goals would be achieved at the expense of significant adverse
impacts on the ability of consumers, emergency workers and law enforcement personnel to
contact help in an emergency, communicate life-saving instructions, determine the most direct
route to a destination, and track prisoners released under electronic surveillance. For these
reasons, we ask EPA and NHTSA to consider removing the off-cycle credit that effectively
incentivizes metallicized reflective glazing. [EPA-HQ-OAR-2010-0799-9470-A1, p.2]
We also request that the EPA and NHTSA consider the impact of adding metallic film on the
cost of recycling mass produced windows. With this proposal's implementation, the EPA and
NHTSA would need to consider providing recyclers a list of benign metals (similar to the SNAP
list) that manufacturers can use as a reference for materials that do not need to be recovered.
[EPA-HQ-OAR-2010-0799-9470-Al,p.2]
There are also safety considerations that go beyond the interference with RF transmission due to
the metallic glazing of driver's windows. This concern is evident in some local laws in North
America such as in British Columbia that requires that no film is permitted on the driver's
compartment right or left. Such legislation indicates a tint of any kind may be considered a
means to increase the risk of an accident. [EPA-HQ-OAR-2010-0799-9470-A1, p.2]
As an industry, we have dealt with this issue most recently at the state level in California. In
March of 2010, the California Air Resources Board (CARB) abandoned a regulatory proposal to
mandate use of this technology in recognition of the fact that the emission reduction benefit
calculations were based on flawed methodology and that use of this technology presented the
potential for unintended adverse consequences associated with RF device interference. The
California Legislature subsequently passed SB 1328 (Lowenthal, 2010), which requires CARB
to consider the following factors when adopting or amending regulations to reduce motor vehicle
cabin temperature in order to reduce greenhouse gas emissions: [EPA-HQ-OAR-2010-0799-
9470-A1, p.2]
(a) Potential reductions in air-conditioning use that can be achieved while a motor vehicle is
moving, in addition to reductions in air-conditioning use when a motor vehicle is parked. [EPA-
HQ-OAR-2010-0799-9470-A1, p.2]
(b) Potential conflicts between, and relative benefits of, motor vehicle cabin temperature
reduction requirements and technologies that provide motor vehicle greenhouse gas emission
reductions through various means. [EPA-HQ-OAR-2010-0799-9470-Al, p.2]
7-92
-------
Off-cycle Technology Credits
(c) The flexibility necessary to achieve overall maximum greenhouse gas emission reductions
from motor vehicles. [EPA-HQ-OAR-2010-0799-9470-A1, p.2]
In light of this history, it is not clear why USEPA is now effectively promoting future use of a
technology rejected by California because it is known to interfere with RF transmissions. At a
minimum, we ask that USEPA consider the same factors before adopting any regulation that
purports to reduce vehicle cabin temperature as a means of achieving greenhouse gas emission
reductions. [EPA-HQ-OAR-2010-0799-9470-Al, p.2]
Response:
We appreciate all of the comments on the off-cycle credit for glazing from all of the
commenters. The range of comments fell into three main areas: 1) accounting for the overall
glazing surface area in the calculations and a minimum level of solar transmittance, 2) concerns
regarding metallic glazing and incentivizing this technology, and 3) granting of credit for
polycarbonate (PC) glazing technology. EPA responds to the comments on PC glazing in greater
detail in Chapter 5 of the TSD for this final rule (See 5.2.10). In addition, we will briefly
summarize those responses here.
For the comments from the EPGAA, Guardian and PGW regarding accounting for the
total glass surface in a vehicle, this is discussed further in Section 5.2.10 of TSD Chapter 5. In
summary, the equation that was included for calculating the glazing benefits includes a variable
for the total glazing surface area when accounting for each location where glazing is applied.
Further, the comments advocate for proportional scaling based on data larger glass area. We
believe that this scaling provides a perverse incentive to increase glass area on vehicles even
more than levels seen today, which would in turn have deleterious environmental impacts, as the
interior cabin would experience greater heat loads. Therefore, we are finalizing the format for
the glazing credit formula as proposed.
Regarding the comments on metallic glazing and incentivizing this technology, this is
discussed in greater detail in Section 5.2.10 of TSD Chapter 5 and Section II.F.2. of the preamble
for this final rule. To briefly summarize, we met with the Enhanced Protective Glass
Automotive Association, which represents the automotive glass manufacturers and suppliers, and
representatives from the automotive glass industry including PGW, Guardian, and AGC to
discuss the concerns with metallic glazing and the potential for signal interference and/or radio
frequency (RF) attenuation (details of this meeting are available in EPA docket # EPA-HQ-
OAR-2010-0799 and NHTSA docket #NHTSA-2010-0131). Based on their feedback and
supporting data supplied, there was no statistically-significant increase in signal interference or
RF attenuation when reflective (or metallic) glazing was used. They also supplied a list of
vehicles that currently use metallic glazing was supplied but there have been no wide scale
reports of signal interference or RF attenuation on these vehicles.
In addition, we received comments from the California Air Resources Board (CARB) in
response to the comments on concerns with metallic glazing and it's affect on the Cool Cars
Regulation, and supporting the information from automotive glass industry. CARB stated that
the reason they did not finalize a mandate for metallic glazing in the Cool Cars Regulation was
primarily the timing for when the signal interference and RF attenuation concerns were raised.
7-93
-------
EPA Response to Comments
They also clarified that they were not requiring a specific type of glazing and that the
performance-based approach ultimately adopted in the Advanced Clean Cars Regulation
accomplished the same objectives as proposed under the Cool Cars Regulation. Finally, CARB
also performed testing of signal interference and RF attenuation (see test results in EPA docket
#EPA-HQ-OAR-2010-0799-41752) echoing the findings of the automotive glass industry that
there is "[n]o effect of reflective glazing observed on monitoring ankle bracelets or cell phones"
and that any "[e]ffects on GPS navigation devices [are] completely mitigated by use of [the]
deletion window" placing either the device or the external antennae in this area. CARB urged
EPA to finalize the proposed credit values for glass and glazing as proposed. Based on these
statements, the primary reason for CARB ceasing work on the regulation was not due to
concerns raised regarding reflective/metallic glazing as many of the commenters asserted.
Based on the information supplied by the automotive glass industry and CARB, there is
no evidence to support the commenters' claims of significant adverse effects on signal
interference and RF attenuation. However, to allay the commenters' concerns, we will
emphasize that manufacturers strongly consider and evaluate the potential for signal interference
and RF attenuation in their vehicle design and glazing technology when requesting the solar
control glazing credit.
Regarding the comments on PC glazing, several commenters (American Chemistry
Council or ACC, Bayer Material Science, California Manufacturers and Technology
Association, CTIA-The Wireless Association, Garmin, SAB 1C Innovative Plastics, and the
Society of Plastics Industry) touted the benefits of polycarbonate (PC) glazing (e.g., reduced
thermal conductivity compared to glass reduced weight of PC glazing compared to other
materials) and suggested that the glazing credit not be restricted to metallic glazing and, further,
recommended that a separate PC glazing credit should be established. In addition, SABIC
Innovative Plastics supplied an equation for calculating the thermal conductivity benefits from
PC glazing similar to the equation for glazing credit in Section 5.2.10 in TSD Chapter 5.
In response, we believe it is important to note that we are not mandating a particular
technology to qualify for the off-cycle glazing credit. The off-cycle glazing credit is technology
neutral and performance based with manufacturers able to select the glazing technologies and
designs based on desired heat rejection performance and considering signal interference or RF
attenuation (if any), as discussed above. Therefore, we believe that a separate PC glazing credit
is not necessary since this credit covers all types of glazing technologies.
Second, the formula we referenced in Section 5.2.10 of TSD Chapter 5 for solar
transmittance is an established ISO procedure (ISO 13837) that can be used and referenced to
ensure a consistent basis for information supporting the credit request. To offer a separate credit
for PC glazing on the off-cycle technology menu, we would need to have a similar, established
set of procedures to validate the equations, and substantiate a credit for PC glazing. Therefore,
we are not including the specific equations used to calculate the benefits of thermal conductivity
from PC glazing. If manufacturers believe that there is some additional benefit, they may apply
for additional glazing credit using the demonstration methods for technologies not on the defined
technology list. See preamble section II.E.5.
7-94
-------
Off-cycle Technology Credits
Therefore, we agree with the comments from CARB "to retain the structure of the off-
cycle credits for solar control technologies." Accordingly, we are finalizing the off-cycle
provisions for solar and thermal control technologies, including glazing, as proposed in this final
rule. More detailed discussion on the solar and thermal technologies can be found in Section
5.2.9 of TSD Chapter 5 and Section II.F.2. of the preamble for this final rule.
The EPA also agrees with the comments from the Enhanced Protective Glass Automotive
Association (EPGAA) that the off-cycle credit for solar glazing "provides simplified model for
defining the impact of glazing on the heat load reduction and the emissions." and Pittsburgh
Glass Works (PGW) that "the benefits of solar glazing.. .have been proven to reduce emissions
and improve fuel efficiency."
Regarding the comments from EPGAA and PGW on capturing the additional benefits of
glazing in conjunction with other advanced technologies, we encourage EPGAA, PGW and other
member companies to develop measurement standards to capture these benefits. If a method for
demonstrating these benefits can be developed, this process may be used for the alternate
demonstration methods for technologies not on the off-cycle technology menu.
For the comments from EPGAA and PGW on the 3.0 g/mi for passenger automobiles and
to 4.3 g/mi for light trucks limit for solar and thermal control technologies, the alternate method
approval process for technologies not on the off-cycle technology menu is a pathway for
manufacturers to demonstrate benefits and request credit above and beyond these limits. The
default values in the off-cycle technology menu were developed based on available information.
However, it is possible a manufacturer may have data specific to their design that exceeds the
default values in the off-cycle technology menu. Therefore, the alternate method approval
process would be the arena to present this information and receive credit beyond the imposed
solar and thermal control technology limits.
For the comments from EPGAA and PGW regarding extension of the off-cycle
technology menu to the MY2012-2016 GHG Program are discussed in Section III.C.5 of the
preamble for this final rule, as well as EPA's decision to do so under the circumstances described
in the preamble.
Regarding the comments from Garmin relating to a defined minimum off-cycle credit for
some technologies such as in-dash GPS navigation traffic avoidance, our response to this is
discussed in greater detail in Section II.F.2 of the preamble for this final rule. In summary, these
technologies face a high hurdle in quantifiable associated benefit and demonstrated real-world
activity. These factors make it difficult to develop a pre-defined minimum off-cycle credit and
we believe that the technologies are more relevant to a more flexible, open process such as the
alternate demonstration methods for technologies. As such, EPA is not including these "driver
selectable" off-cycle technologies on the final rule off cycle menu.
We agree with the comments from Guardian on solar roof panels and the changes they
recommended as explained in Section 5.2.4 of TSD Chapter 5. In summary, we now use the
term "Solar Panels" to describe this credit and the definition in 5.2.5 of TSD Chapter 5 reflects
this revised terminology. In addition, the definition also explicitly states that this credit is
7-95
-------
EPA Response to Comments
available for "horizontally-oriented" surfaces, not just the roof, and that the rated power for the
solar panel be determined using standardized test conditions as suggested by Guardian. Finally,
we agree with Guardian regarding the need to account for different panel power ratings. We
received similar comments from other commenters advocating for scaling of the solar panel
credit since panel power may vary. In response to their comments, we developed a formula that
can be scaled according to the rated solar panel power and takes into account various
environmental factors such as on average vehicle use and driving and parking conditions. These
revisions are being finalized in today's action.
In general, we believe the off-cycle technology menu will provide some certainty to
requesting off-cycle credits. In addition, the technologies on the off-cycle technology menu and
associated credit values are based on robust data and verifiable methods and produce real-world
benefits. For technologies not on the off-cycle technology menu, we believe one of the alternate
methods for approval provides manufacturers the necessary flexibility to have the agency
consider other technologies.
We believe that the technologies in the off-cycle program also will be durable in-use. As
noted in section III.C. 5 of the preamble to the final rule, EPA requires off-cycle components to
be durable in-use and continues to believe that this is an important aspect of the program. See
86.1866-12 (d)(l)(iii). The technologies upon which the credits are based are subject to full
useful life compliance provisions, as with other emissions controls. Unless the manufacturer can
demonstrate that the technology would not be subject to in-use deterioration over the useful life
of the vehicle, the manufacturer must account for deterioration in the estimation of the credits in
order to ensure that the credits are based on real in-use emissions reductions over the life of the
vehicle. In-use requirements apply to technologies generating credits based on the pre-defined
list as well as to those based on a manufacturer's demonstration. In addition, the data we used to
support the credit values is based on actual, real world vehicle data, where available, and
represents the durability that can be expected on future vehicle applications.
In conclusion, we believe that all of the comments were helpful to improving the off-
cycle credit program and we are finalizing the off-cycle credit program with the revisions based
on the comments above in this final rule.
7.3. Comments Regarding Using Pre-Approved List in MYs 2012-
2016
Organizations Included in this Section
Alliance of Automobile Manufacturers
American Honda Motor Co., Inc.
Association of Global Automakers, Inc. (Global Automakers)
BMW of North America, LLC
Chrysler Group LLC
Fisker Automotive, Inc.
General Motors Company
7-96
-------
Off-cycle Technology Credits
Hyundai America Technical Center
Johnson Controls, Inc.
Motor & Equipment Manufacturers Association (MEMA)
Porsche Cars North America, Inc. (PCNA)
Toyota Motor North America
Volkswagen Group of America
Volvo Car Corporation (VCC)
Organization: Alliance of Automobile Manufacturers
The improved off-cycle technology framework for MY 2017 and later years should be made
available for MYs 2012-16. The Alliance supports the additional detail and improved processes
proposed for capturing off-cycle fuel economy and GHG improvements. This facet of the MY
2012-16 regulation recognizes improvements in fuel economy and GHGs that are not captured in
current laboratory tests but do have real-world benefits. Recognizing the real-world
improvements that these technologies achieve and how challenging it will be to place these
technologies in the market, the agencies should allow automakers to apply all aspects of the
revised off-cycle framework to MYs 2012-2016. [EPA-HQ-OAR-2010-0799-9487-A1, p.4]
The improved off-cycle technology framework for MY 2017 and later years should be made
available for MYs 2012-16. [EPA-HQ-OAR-2010-0799-9487-A1, p. 11]
The Alliance urges the agencies to allow manufacturers to utilize the off-cycle pre-defined
technology list and values for MYs 2012-2016. Providing this program feature in the earlier
years improves the usefulness of the credit program and encourages manufacturers to introduce
the listed technologies sooner, in lieu of postponing them to MY 2017 and beyond. There is
every reason to incentivize early adoption of these technologies, since this would result in real
CO2 emissions reductions. [EPA-HQ-OAR-2010-0799-9487-A1, p. 11]
Additionally, such action would provide manufacturers with the same planning certainty
regarding available credits as will be provided in 2017 and beyond. This in turn would help
encourage earlier investments in off-cycle technologies. The alternative that an OEM faces
(pathway 2 or 3) otherwise would be to make the investment without the certainty provided by
the list, which may result in postponing investment until 2017. [EP A-HQ-OAR-2010-0799-
9487-Al,p.ll]
Off-cycle technologies will have to compete with resource demands for other vehicle
technologies, and knowing that the same credit for the technology available in MY 2017 would
be available starting in MY 2012 would help the business case for earlier deployment. The result
could be earlier availability of GHG-reducing technologies for consumers to buy. [EPA-HQ-
OAR-2010-0799-9487-A1, p. 11]
Organization: American Honda Motor Co., Inc.
7. Off-cycle Credits:
7-97
-------
EPA Response to Comments
• Off-cycle Credit Menu for Model Years 2012 - 2016. Honda believes that the off-cycle
credits identified in the menu represent real, environmentally-beneficial reductions in
greenhouse gases. Therefore, Honda proposes to allow the applicability of the off-cycle
credit menu to models prior to model year 2017. Real, effective greenhouse gas
reductions can be achieved by off-cycle technologies implemented before model year
2017, and their credits should be recognized. This is good public policy as it is certain
that earlier, effective environmental benefits are better for society. In the preamble, EPA
states: "As noted above, EPA proposes to make the list available for credit generation
starting in MY 2017. Prior to MY 2017, manufacturers would need to demonstrate off-
cycle emissions reductions in order to generate credits for off-cycle technologies,
including those on the list." This has the potential to create significant problems and
discrepancies. If EPA awards credits higher or lower than the credit menu, it will create
unfairness. EPA is already modifying the 2012 -2016 requirements by removing the
language requiring off-cycle technologies to be "new, innovative, and not widespread."
The best approach is to allow the inclusion of the off-cycle credit menu in the 2012 -
2016 standards. [EPA-HQ-OAR-2010-0799-9489-A1, p. 5]
Organization: Association of Global Automakers, Inc. (Global Automakers)
Global Automakers supports the availability of credits for technologies that provide on-road
efficiency and emissions benefits but whose benefits are not fully measured using the current
city-highway test. In a number of cases, these technologies are currently known, as indicated by
the "menu" of credits developed by the agencies for the proposed rule. However, given the long
time-frame for the proposed standards, it is very possible that additional technologies will be
identified which should qualify for off-cycle credits, and the characteristics of these technologies
cannot currently be predicted. In order to provide an incentive for manufacturers to pursue the
implementation of these technologies and realize the resulting benefits, it is important that the
agencies provide maximum flexibility to manufacturers to obtain credits. For these reasons, we
urge the agencies to avoid imposing unnecessary restrictions on qualification for off-cycle
credits. The proposed rule establishes numerous restrictions on the use of off-cycle credits which
appear to be arbitrary and unnecessary to the effective functioning of the GHG and CAFE
programs. [EPA-HQ-OAR-2010-0799-9466-A1, p. 5]
(1) The pre-approved technology "menu." Global Automakers supports the inclusion of the
menu in the regulations as a default list of pre-approved technologies, with manufacturers being
authorized to petition for larger credit or credits for additional technologies, based on credible
data. EPA characterizes the menu credits as being conservative estimates of actual on-road
benefits, so we see no reason to limit the availability of the menu credits to MY 2017 and
thereafter. Therefore, we request that EPA revise section 86.1866-12(d)(l) to make the menu
credits also available inMYs 2012-16. [EPA-HQ-OAR-2010-0799-9466-Al, p. 5]
Organization: BMW of North America, LLC
As many of these technologies will be introduced in the timeframe before 2017, we would
appreciate the ability to use the predefined list as soon as possible. That would avoid unnecessary
workload on both sides. [EPA-HQ-OAR-2010-0799-9579-A1, enclosure p. 1]
7-98
-------
Off-cycle Technology Credits
Organization: Chrysler Group LLC
Recommend establishing the list of pre-approved off-cycle technologies for the 2012-2016
rule; [EPA-HQ-OAR-2010-0799-9495-A1, p. 9]
Organization: Fisker Automotive, Inc.
Support the off-cycle technology credits as proposed
Fisker supports the design-based or "menu" approach to accounting for emissions reductions
benefits from off-cycle technologies proposed to start in model year 2017. This approach is
simpler and imposes less of a testing burden on automakers than the approach currently in
place, so we would encourage the implementation of the new approach before model year
2017. [EPA-HQ-OAR-2010-0799-9266-A1, p. 5]
Organization: General Motors Company
To help foster these technologies, we urge the agencies to also make all aspects of the updated
off-cycle framework available for the 2012-2016 model years. [EP A-HQ-OAR-2010-0799-9465-
Al,p.3]
Organization: Hyundai America Technical Center
Additionally, Hyundai asks that EPA and NHTSA allow the menu technologies to be used to
comply with the MY 2012-2016 regulations. [EPA-HQ-OAR-2010-0799-9547-A1, p.5]
[This comment was also submitted as testimony at the San Francisco, California public hearing
on January 24, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11787, p. 22.]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11786, p. 172.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11788, pp. 22-23.]
Now that the agencies have quantified the value of off-cycle technologies in a menu format,
Hyundai asks that EPA and NHTSA allow the menu technologies to be used in the 2012 through
2016 model years.
Organization: Johnson Controls, Inc.
Additionally, since the 2012-2016 joint rule on CAFE and CO2 allowed for the usage of off-
cycle credits to contribute towards compliance, Johnson Controls recommends that any credits
defined through the NPRM process for 2017-2025 is applied retroactively to the 2012-2016 MY
regulatory timeframe. [NHTSA-2010-0131-0253-A1, p. 4]
7-99
-------
EPA Response to Comments
Organization: Motor & Equipment Manufacturers Association (MEMA)
First, MEMA recommends the agencies consider making available the off-cycle credits for
MY2012-2016 to encourage early implementation of these technologies without the formal
review process required under the MY2012-2016 National Program rule. [EPA-HQ-OAR-2010-
0799-9478-A1, pp.9-10]
Organization: Porsche Cars North America, Inc. (PCNA)
Substantial greenhouse gas improvements should be achievable in off-cycle conditions using
new technologies, but procedures for earning credits must be simplified. Porsche submits the
following comments on the program: [EPA-HQ-OAR-2010-0799-9264-A1, p. 5]
• The concept of a pre-defined off-cycle technology credit menu is a valuable addition, which
will prevent administrative delays and eliminate the need for burdensome analyses and credit
applications. However, we believe that this simplified program should be extended retroactively
to the 2012-2016 program in order to accelerate innovation during these early years. [EPA-HQ-
OAR-2010-0799-9264-A1, p. 5]
Organization: Toyota Motor North America
Off-Cycle Credits: Availability to 2012-2016 Model Years [EPA-HQ-OAR-2010-0799-95 86-
Al,p.l2]
Toyota requests EPA and NHTSA revise the 2012-2016 model year regulations to allow off-
cycle credits to be generated using the proposed pre-determined credit list. Such a revision of the
existing regulations would promote earlier development and deployment of off-cycle
technologies, which in turn could accelerate real world CO2 reduction and fuel savings by as
much as five model years. It would also provide further harmonization of the EPA and NHTSA
regulations for 2012-2016 model years. In addition, the certainty of pre-determined credits for
the 2012-2016 model year regulations would further minimize the need for the arbitrary sales
volume threshold proposed for 2017-2025 model years. Finally, this approach is consistent with
the agency's proposal to make both the revised 5-cycle and non-5-cycle demonstration methods
discussed below retroactive to the 2012-2016 model year regulations. [EPA-HQ-OAR-2010-
0799-9586-Al,p.l2]
Organization: Volkswagen Group of America
Volkswagen supports the proposal made by the Alliance to make the credited list of technologies
available for use in the 2012-2016MY regulatory program. [EPA-HQ-OAR-2010-0799-9569-
Al,p.32]
Organization: Volvo Car Corporation (VCC)
7-100
-------
Off-cycle Technology Credits
VCC also wants to emphasize that the pre-defined list from the proposal for 2017-2025 be
standard for the MY 2012-2016. The purpose of granting off-cycle credits is to enable early
introduction of advanced technology, so it is a reasonable strategy to incentivize early adoption
of these technologies, since this would result in real CC>2 emissions reductions. [EPA-HQ-OAR-
2010-0799-9551-A2, p. 6]
The off-cycle credit program in 2012-2016 is difficult for industry to utilize. Since EPA intends
to maintain and also enhance the off-cycle credit program for 2017-2025, it would be helpful to
strengthen the overall program by making it available for the entire 2012-2025 period. [EPA-
HQ-OAR-2010-0799-9551-A2, p. 6]
• The off-cycle program should be made available for the entire 2012-2025 period. [EPA-HQ-
OAR-2010-0799-9551-A2, p. 8]
Response:
There is broad support in the comments submitted by manufacturers to allow the use of the
pre-defined list in MYs 2012-2016. In response to these comments, EPA is allowing
manufacturers to use the pre-defined list beginning in MY 2014. EPA's full response and
discussion of the topic of using the pre-defined list prior to MY 2017 is provided in Section
Ill.C.S.b.i.
7.4. Comments Regarding Credit Cap and Sales Thresholds Proposed
for Pre-Approved List
Organizations Included in this Section
Alliance of Automobile Manufacturers
American Honda Motor Co., Inc.
Association of Global Automakers, Inc. (Global Automakers)
Borg Warner, Inc.
Chrysler Group LLC
EcoMotors International, Inc.
Ferrari
Ford Motor Company
Hyundai America Technical Center
International Council on Clean Transportation (ICCT)
Mazda North American Operations
Mercedes-Benz USA, LLC
Motor & Equipment Manufacturers Association (MEMA)
Natural Resources Defense Council (NRDC)
Porsche Cars North America, Inc. (PCNA)
Toyota Motor North America
Volkswagen Group of America
Volvo Car Corporation (VCC)
7-101
-------
EPA Response to Comments
Organization: Alliance of Automobile Manufacturers
The proposed fleet penetration requirements and credit cap could slow new technology
implementation and should therefore be removed. Throughout the NPRM, the agencies suggest
that an automaker be required to apply advanced technologies to a minimum percentage of its
fleet before receiving any level of credit. That would be the case even when the addition of an
advanced technology to a single vehicle results in measurable, real-world GHG emission
reductions. We propose that all actions be recognized, as they historically have been, on a per-
vehicle-so-equipped basis. This is an equitable and efficient approach, under which every vehicle
built with the required technology for our customers receives credit. The prerequisite of specific
penetration rates and imposition of a credit cap are economically inefficient and inconsistent
with the goals of the rulemaking and may well have the unintended consequence of delaying the
introduction of these technologies. [EPA-HQ-OAR-2010-0799-9487-A1, p.4]
However, the 10% minimum penetration threshold and the credit cap are barriers to the success
of this feature and could result in the level of credits being out of sync with the level of GHG
reductions that is actually achieved. [EPA-HQ-OAR-2010-0799-9487-A1, p. 10]
It is counterproductive and unfair to create a 10% sales threshold during the initial phase-in
period before some technologies can begin earning off-cycle credits. [EPA-HQ-OAR-2010-
0799-9487-Al,p.ll]
It is counterproductive to cap off-cycle credit attainment at 10 grams of carbon dioxide
(gCO2)/mile. [EPA-HQ-OAR-2010-0799-9487-A1, p.ll]
The proposed fleet penetration requirements and credit cap could slow new technology
implementation and should therefore be removed. [EPA-HQ-OAR-2010-0799-9487-A1, p. 12]
While the Alliance strongly supports the concept of a pre-defined list, two proposed limitations -
- the 10% minimum penetration rate and the 10 g/mi cap — will constrain its ability to incentivize
technology application. The public policy goal of maximizing early introduction of these
technologies is at odds with both of these limitations and the NPRM fails to provide a
compelling justification for either restriction. [EPA-HQ-OAR-2010-0799-9487-A1, p. 12]
Further, the 10% threshold and 10 g/mi cap add an element of planning uncertainty that
discourages use of the off-cycle program. The threshold also unfairly withholds credit for actual,
real-world emission reductions that are achieved in the early stages of technology roll-out, before
a 10% penetration can be achieved. [EPA-HQ-OAR-2010-0799-9487-A1, p. 12]
New, innovative technologies are customarily initially introduced at low volumes in order to
demonstrate the benefits, reduce costs and work through technology problems before the
technology is rolled out in larger volumes. To minimize warranty concerns and expense,
automakers always try to phase-in new technology at a measured pace across their fleets (often
during the course of major vehicle redesigns). Requiring large step changes to get widespread
penetration - i.e., above a 10% penetration - is unlikely even with these off-cycle incentives.
[EPA-HQ-OAR-2010-0799-9487-Al,p.l2]
7-102
-------
Off-cycle Technology Credits
Requiring a minimum penetration rate would discourage companies from offering a new
technology on a limited basis to test the technology and gauge consumer acceptance before
launching it more broadly. [EPA-HQ-OAR-2010-0799-9487-A1, p. 12]
The 10% minimum penetration threshold - or any other minimum penetration rate - may also
have the unintended consequence of delaying investment in some technologies, at least until they
can be applied to higher-volume models. Similarly, the 10 g/mi cap on credits would discourage
maximum adoption of the pre-defined off-cycle technologies. Manufacturers would have less
incentive to introduce technologies that would take them beyond the cap, leaving untapped GHG
emissions reductions on the table. We think it would be productive to have further dialogue with
the agencies regarding these issues. [EPA-HQ-OAR-2010-0799-9487-A1, p. 12]
Organization: American Honda Motor Co., Inc.
Minimum Fleet Percentages. EPA requested comment on applying a minimum threshold of 10
percent for several of the listed technologies, and the proposed treatment of HEV/PHEV/EV
specific technologies and exhaust heat recovery (see Table III-17). Honda believes that the
minimum threshold concept is unnecessarily restrictive. New, expensive technologies often are
applied first on more expensive, lower volume models. This process has the salutary affect of
lowering a manufacturer's risk. Consumer feedback on lower volume cars can provide: a)
important consumer feedback, and b) production experience prior to much higher volumes which
can help lower costs. Additionally, the "minimum fleet percentages" can have the unintended
consequence of slowing the introduction of new technologies into the market. Honda currently
has about sixteen models in our U.S. line-up, only three of which account for 10% or more of our
sales in a given year. If an off-cycle credit technology is ready for market introduction at a time
when it is not convenient to add it to one of the three models that exceed 10% of sales, there
would be no credit allowed for adding it to any one of the other thirteen models that Honda sells
in the U.S. The fact that the credits are weighted to U.S. sales means that there is no windfall for
an automaker who only manages to apply one of these technologies to less than 10% of its sales.
We believe that EPA is unnecessarily complicating and constraining the introduction of off-cycle
credit technologies. [EPA-HQ-OAR-2010-0799-9489-A1, pp. 5-6]
Organization: Association of Global Automakers, Inc. (Global Automakers)
(2) Cap on off-cycle credits. EPA proposes several caps on off-cycle credits. Under section
86.1866(d)(l)(i)(B), EPA establishes maximum allowed credits for thermal control technologies
and advanced glazing. A cap on menu credits of 10 grams per mile is also established (paragraph
(d)(l)(ii)). Manufacturers may exceed the 10 gram cap by demonstrating the benefits using 5-
cycle testing or analysis. See preamble page 75023. However, since EPA characterizes the menu
credits as being based on conservative estimates of benefits, we see no reason to require testing
when the menu values exceed the 10 gram limit. [EPA-HQ-OAR-2010-0799-9466-A1, p. 6]
The basis for these maximum credits is not clear. EPA should either provide an explanation for
the need for these caps or eliminate them. [EPA-HQ-OAR-2010-0799-9466-Al, p. 6]
7-103
-------
EPA Response to Comments
(5) Minimum market penetration to qualify for credit. EPA proposes minimum market
penetration rates of 10 percent of the manufacturer's combined car-truck fleet for most of the
off-cycle menu technologies, in order to qualify for credits. The minimum penetration rate
creates an unnecessary impediment to the introduction of new technologies. The off-cycle
technologies may be relatively new items, and consumers may not be familiar with these items.
Implementation of these technologies at low levels may, if successful, lead to substantial benefits
in the future, and manufacturers should be encouraged to pursue such technologies. A smaller
penetration rate would create a correspondingly smaller credit, so we see no problem being
created at lower penetration levels. EPA has failed to demonstrate a clear need for the minimum
penetration restriction. [EPA-HQ-OAR-2010-0799-9466-A1, p. 7]
Organization: Borg Warner, Inc.
However, we also believe there should not be a double standard of requiring a 10% market
penetration threshold for non hybrid-based technologies and no market penetration requirement
for hybrid-based technologies in order to receive the off-cycle credit. There are technologies that
are much less proven than hybrids and this threshold could unnecessarily complicate and
discourage the introduction of new, higher risk, technologies. Credit would only be given for
those vehicles with the technology, so a lower penetration rate has no artificial benefit.[EPA-
HQ-OAR-2010-0799-9320-A1, p. 2]
Organization: Chrysler Group LLC
Oppose minimum penetration rates for all technologies and the 10 g/mi maximum cap for using
the credit table as unnecessary restrictions; [EPA-HQ-OAR-2010-0799-9495-A1, p. 9]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 54-55.]
And, finally, there are references to minimum penetration levels in various aspects of the
proposed rule. These thresholds are unnecessary in our opinion and serve as potential
disincentives to invest in new technologies. We propose that all actions be recognized as they
had historically been on a per-vehicle-so-equipped basis. This is an equitable approach where
every vehicle built with the required technology for our customers is acknowledged. If a
minimum penetration rate is required, a manufacturer may be discouraged from pursuing
innovative technologies with uncertain acceptance and possibly no credit or payback.
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 61-62.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 26-27.]
And finally, there are references to minimum penetration levels in various aspects of the
proposed rule. These thresholds are unnecessary and will serve as potential disincentives to
investing in new technologies. We propose that all actions be recognized, as they have been
7-104
-------
Off-cycle Technology Credits
historically, on a per-vehicle-so-equipped basis. This is an equitable approach where every
vehicle built with the required technology for our customers is acknowledged.
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 62.]
If a minimum penetration rate is required, the manufacturer will be discouraged from pursuing
innovative technologies with uncertain acceptance and possibly no credit or pay backs.
Organization: EcoMotors International, Inc.
Except for technologies specific to HEVs/PHEVs/EVs (e.g., solar roof panels) and exhaust heat
recovery, EPA is proposing to require minimum penetration rates for the pre-approved off-cycle
technologies - 10% of a manufacturer's combined car and light truck production. Again,
EcoMotors encourages the agencies to remove the market penetration requirements established
for the credits, to better reflect historic market penetration issues facing new technologies. As
discussed above, new technologies typically take years to prove themselves and attain significant
market penetration. Thus, 10% is likely too high a threshold for these technologies during the
time period in question. [EPA-HQ-OAR-2010-0799-9594-A2, p. 13]
However, EcoMotors encourages the agencies to remove the market penetration requirements
established for some of the off-cycle credits in order to better reflect historic market penetration
issues facing new technologies. [EPA-HQ-OAR-2010-0799-9594-A2, p. 13]
Organization: Ferrari
It is also necessary to eliminate the minimum market penetration requirement for such
technologies. If a vehicle is fitted with one or more of such technologies it can reduce the GHG
emissions, and therefore it make sense to account that, even if only a small percentage of the
manufacturer fleet is equipped. [EPA-HQ-OAR-2010-0799-9535-A2, p. 14]
Organization: Ford Motor Company
Ford is not in favor of the proposed minimum penetration thresholds that have been proposed for
the menu technologies. As new technologies are developed, they are often introduced on certain
models or trim levels, as opposed to making them widely available across the entire fleet. The
gradual introduction of new technologies reflect product cycle plan cadence, the need to gain in-
use experience and familiarity with a new technology, and customer acceptance and/or interest in
a new feature or option. Generally, we anticipate that the technologies will become more
widespread over time. However, requiring a minimum sales threshold does not incentivize the
introduction of these technologies, which typically require extensive development at significant
cost. Instead, manufacturers may choose not to implement new technologies, or to delay
introduction based on the fact that they cannot know with certainty if they will be able to meet
the proposed penetration rates. In fact, we find ourselves aligned with the agencies when they
state that".. .for most of these technologies the agencies have no data on what the rates of
penetration of these technologies would be during the rule timeframe" (76 Fed. Reg. 74941). The
7-105
-------
EPA Response to Comments
business cases for some of these new technologies will be based on the ability to achieve
expected credit amounts. If the credit is contingent upon a volume threshold, which in turn is
contingent upon marketplace factors beyond our control, manufacturers may find it difficult to
justify the incorporation of the technology. Ford therefore recommends that the agencies award
credits on a per-vehicle-so-equipped basis, or alternatively consider some flexibility in the
minimum penetration rates, such as a phase-in over time. We would like the opportunity to
explore this issue further with the agencies in the future. [EPA-HQ-OAR-2010-0799-9463-Al, p.
17]
For similar reasons, Ford also does not support the proposed 10 g/mile fleet-based cap on credits
earned from using technologies from the pre-approved menu as it may discourage manufacturers
from maximum adoption of the pre-defined technologies. [EPA-HQ-OAR-2010-0799-9463-Al,
p. 17]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 35-36.]
In order to pave the way for such technologies, manufacturers must have confidence that their
efforts and investment will be evaluated fairly and given appropriate credit.
We also strongly encourage that the agencies to reconsider the production volume thresholds that
have been established in order to reflect new technology introductions in our compliance
strategy.
Setting high thresholds, which are entirely dependent on consumer acceptance, may actually
serve a hindrance to the investment of these new technologies.
Organization: Hyundai America Technical Center
3) Market Penetration Requirement: EPA has proposed that credits for most off-cycle menu
technologies will only be available if an automaker achieves a minimum market penetration rate
of 10% of its combined fleet. Hyundai believes that if the agency wants to encourage new
technology, such a hurdle should not be included. EPA notes that the 10% threshold does not
apply to hybrids or electric vehicles because EPA does not want to impede the introduction of
these technologies. The same should hold true for off-cycle technologies. Often times, off-cycle
technologies are only introduced in limited production initially until they are proven in the
marketplace. Yet, there are still benefits available even if a technology is not widely adopted. We
ask that EPA encourage the introduction of innovative and efficient technologies by eliminating
minimum penetration levels. [EPA-HQ-OAR-2010-0799-9547-A1, p.5]
EPA plans to implement a 10 gram cap on the menu credits for off-cycle technologies because
they are based on limited data. However, EPA notes that these credits are conservative and
Hyundai agrees. For this reason, and because it is possible to exceed 10 grams using the menu
technologies, we do not believe a cap is necessary and urge the agency to remove it. The industry
should receive credits for all applications that provide real world benefits without requiring
additional testing. [EPA-HQ-OAR-2010-0799-9547-A1, p.5]
7-106
-------
Off-cycle Technology Credits
[This comment was also submitted as testimony at the San Francisco, California public hearing
on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 22.]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 172-174.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 23.]
We recommend also that the agencies eliminate the ten-gram cap on the menu technology.
EPA planned the cap because the menu technology credits are based on limited data. However,
Hyundai agrees with the agency that the credits offered are conservative and thus a cap is not
necessary.
Organization: International Council on Clean Transportation (ICCT)
Because some uncertainty is inherent even in a well-designed process the ICCT also supports the
proposed 10 g/mile cap. ICCT's comments on specific off-cycle credits below are designed to
make the off-cycle credit system as accurate as possible and to maximize the overall benefits of
the rule. The NPRM and draft TSD show that some of the technologies meet ICCT's
recommended criteria for off-cycle credits, such as some of the proposed AC system credits,
while other proposed off-cycle credits do not. We note that excluding the later category will not
affect the very favorable benefit-cost ratio for this rule because the draft TSD did not consider
these technologies in that analysis. [EPA-HQ-OAR-2010-0799-9512-A1, p. 37]
Organization: Mazda North American Operations
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 64.]
While we strongly support the concept of a predefined list of off-cycle technologies, we urge the
agencies to eliminate the proposed 10 percent minimum penetration rate. Requiring a minimum
penetration rate would discourage companies from offering a new technology on a limited basis
to test the technology and gauge consumer acceptance before launching it more broadly.
Moreover, new technologies are typically added when a model is redesigned or updated. To give
a specific example, adding one of the off-cycle technologies on the predefined list to either the
Mazda2, MazdaS or the Miata models would result in no credit because they each account for
less than 10 percent of our fleet. The 10 percent minimum penetration threshold or any other
minimum penetration rate may well have the unintended consequence of encouraging
manufacturers to postpone technology application until a model that accounts for the acquired
percentage is redesigned rather than installing it earlier on a lower volume model.
Organization: Mercedes-Benz USA, LLC
7-107
-------
EPA Response to Comments
The off-cycle credits are necessary to continue to provide an incentive for these technologies to
assure their continued implementation. Incorporating these technologies into vehicles with lower
price points and smaller volumes remains challenging from a cost perspective, and the ability to
do so may require longer lead times before certain technologies proliferate through the fleets.
[EPA-HQ-OAR-2010-0799-9483-A1, p. A-2]
The agencies should gain the maximum benefit from off-cycle technologies by applying the
credits on a vehicle basis, rather than requiring threshold penetrations before the credits can be
applied. A threshold requirement deters incremental investment, especially on lower volume
model lines, and may detract from overall, real world CC>2 emissions reductions. Manufacturers
should be recognized for applying off-cycle technologies in all vehicles. Similarly, since off-
cycle credits must meet demonstrated performance criteria linking them to real world CC>2
reductions, imposing caps on the off-cycle credits would be inconsistent with the real world
benefits and a detraction from the incentive that the agencies are intending to provide.
Accordingly, DAG urges the agencies to apply off-cycle credits on a per vehicle basis without
threshold penetration rates and without artificial caps. [EPA-HQ-OAR-2010-0799-9483-A1, p.
A-2]
Organization: Motor & Equipment Manufacturers Association (MEMA)
However, the current cap on credits is ultimately limiting. Removing the cap would reward the
full lot of vehicles/technologies that achieve or exceed the National Program goals of reduced
emissions and improved fuel consumption. Thus, MEMA urges the agencies to remove the cap
on credits. [EPA-HQ-OAR-2010-0799-9478-A1, p.5]
First, regarding the off-cycle technologies' credits, MEMA believes the agencies' minimum
penetration requirement of 10 percent of manufacturer's overall combined car and light truck
production (with the HEV, PHEV and EV exceptions) is not only a significant hurdle for OEMs
to meet, but also an undue influence of the market pushing the "preferred vehicle technologies"
that we discussed earlier in our comments. Therefore, MEMA requests that the penetration rates
for off-cycle technologies should be eliminated entirely, so that the marketplace can determine
"winners and losers." [EPA-HQ-OAR-2010-0799-9478-A1, p.7]
Penetration rate requirements and caps on credits should be eliminated. [EPA-HQ-OAR-2010-
0799-9478-Al,p.l3]
Organization: Natural Resources Defense Council (NRDC)
While NRDC strongly supports the use of a cap per manufacturer for off-cycle credits, NRDC
believes it is critical that EPA fully evaluate the adequacy of the 10 g/mi cap level, given the
uncertainties in real, verifiable emissions reduction. EPA should adopt a lower cap if
necessary. [EPA-HQ-OAR-2010-0799-9472-A2, p. 14]
Organization: Porsche Cars North America, Inc. (PCNA)
7-108
-------
Off-cycle Technology Credits
• Imposing an arbitrary 10 grams/mile cap for total off-cycle credit has no basis in real world
accounting, and is counterproductive to innovation. The Agencies should encourage maximum
adoption of all GHG improvements by providing unlimited additive credits. [EPA-HQ-OAR-
2010-0799-9264-A1, p. 5]
• It is counterproductive and unjust to impose a 10% sales threshold before some technologies
can earn off-cycle credits. Every gram of GHG improvement is just as valuable as any other. In
addition, gradual introduction of new technologies is often necessary, and should not be
penalized. Sensible sales weighting would provide more reasonable credit accounting. [EPA-
HQ-OAR-2010-0799-9264-A1, p. 5]
However, there is no engineering justification for setting arbitrary limits and thresholds for credit
availability. To be a meaningful feature of the program, the level of off-cycle credit must be in
sync with the level of actual GHG reductions. Worse, such limits and thresholds are potentially a
perverse disincentive to introduce valuable innovations or to maximize penetration of known
technologies. Ironically, it is likely that such disincentives will thus unnecessarily increase actual
GHG emissions. [EPA-HQ-OAR-2010-0799-9264-A1, p. 5]
Organization: Toyota Motor North America
Off-Cycle Credits: Pre-Determined Credit List (10 Percent Sales Volume Threshold) [EPA-HQ-
OAR-2010-0799-9586-A1, p. 11]
EPA's intent is for the 10 percent minimum sales threshold is to encourage companies to more
rapidly adopt off-cycle technologies for larger volume vehicle models and bring these
technologies into the mainstream. Toyota opposes a minimum sales volume threshold for
generating off-cycle credits and we believe a threshold will be counterproductive to achieving
EPA's goal. [EPA-HQ-OAR-2010-0799-9586-A1, p. 11]
If the agencies expand the list of technologies on the pre-determined list in the future and/or as
more performance data on off-cycle technologies becomes available, Toyota requests that the 10
g/mi cap be revisited. This could be done as part of the mid-term review. [EPA-HQ-OAR-2010-
0799-9586-Al,p.ll]
First, GHG benefits are realized for each and every vehicle purchased with a given off-cycle
technology. The accumulation of benefits does not somehow begin when an arbitrary sales
threshold is met. As such, manufacturers should earn credits for each and every vehicle sold with
a given off-cycle technology. Second, an arbitrary sales threshold does not recognize the
potential for high deployment rates on low sales volume vehicles. As proposed, a manufacturer
could introduce an off-cycle technology over an entire model or configuration, but not be eligible
for credits if that model or configuration does not make up at least 10 percent of the
manufacturer's fleet. Third, absent market demand, the arbitrary 10 percent sales threshold will
do nothing to speed deployment due to significant risks to the manufacturer. Despite the
motivation for a rapid return on investment, new technologies typically enter the market at a
slow pace. It is common practice for new automotive technologies to be introduced on a single
model, or even single configuration within a model. This low production trial period allows
7-109
-------
EPA Response to Comments
manufacturers to monitor technology performance and reliability, gauge consumer acceptance,
and make necessary adjustments before expanding the technology to other models. Technology
is typically integrated into those other models during a redesign, which typically occurs every
five to seven years. Achieving a 10 percent sales threshold could literally take years to achieve
depending on the technology. Appendix I shows actual penetration rates for various automotive
technologies, and while consumer uptake rates vary, achieving a 10 percent market penetration
can take a decade or more for certain technologies. Finally, the proposed sales threshold could
actually create a disincentive for manufacturers to deploy off-cycle technologies. The risk of
forcing off-cycle technology on consumers beyond natural market demand and then falling short
of the 10 percent threshold provides a substantial disincentive for even trying, unless the
manufacturer is extremely confident the threshold can be reached. [EPA-HQ-OAR-2010-0799-
9586-A1, pp.11-12]
Organization: Volkswagen Group of America
Further, the max fleet improvement, commonly referred to as the 'credit cap', of lOg/mi should
be increased on a regular basis as new technologies are added to the list. The will further
improve the value of this flexibility and provided added planning certainty as newer technologies
are added to the list. [EPA-HQ-OAR-2010-0799-9569-A1, pp. 32-33]
Volkswagen supports the comments of the Alliance that the penetration threshold should be
removed and that credits are awarded on a per-vehicle equipped basis. We echo the concerns
raised by the Alliance regarding fleet phase-in trends for new technologies and agree that the
high threshold may inadvertently create a disincentive to delay new technology. [EPA-HQ-OAR-
2010-0799-9569-A1, p. 33]
Organization: Volvo Car Corporation (VCC)
In the NPRM, the proposed penetration requirements of 10% risk hobbling the entire proposal
and the program may fail to work in practice. The 10% sales threshold may limit a smaller
manufacturer from introducing new innovative, but uncertain, technology. VCC supports the
approach taken in Europe of one car one credit. However, any threshold should start at 0% in
order to expedite advanced technologies. [EPA-HQ-OAR-2010-0799-9551-A2, p. 6]
• It is counterproductive to create a 10% sales threshold during the initial phase-in period. [EPA-
HQ-OAR-2010-0799-9551-A2, p. 7]
• The 10% sales threshold may limit the small manufacturer from introducing new technology
due to the uncertainty around the possible credit situation. [EPA-HQ-OAR-2010-0799-9551-A2,
p. 7]
Response:
10 Percent Penetration Threshold
7-110
-------
Off-cycle Technology Credits
EPA received many adverse comments from manufacturers regarding the proposed 10%
production threshold for the pre-defined list and no comments in favor of the proposal. As
discussed in section IILC.S.b.i of the preamble, EPA understands and agrees with the concerns
raised by commenters that the proposed requirement could well be counterproductive, and is
therefore finalizing the off-cycle credits program without the 10% threshold requirement.
10 g/mile Credit Cap
EPA received several comments from manufacturers recommending that EPA eliminate
the 10 g/mile fleetwide cap on credits that could be generated using the predefined list. EPA also
received comments from ICCT and NRDC supporting the proposed 10 g/mile cap. Further,
some commenters commented that the pre-defined list should be revisited and updated on regular
intervals. EPA is retaining the 10 g/mile cap as proposed. The full discussion on comments is
provided in section IILC.S.b.i and II.F. of the preamble. As there explained, the cap is only on
the amount of default credits under the menu. Manufacturers remain free to provide data to
demonstrate on a case-specific basis through the 5-cycle testing or public review pathways that
additional credit values are warranted for their technology, even though that technology is
included on the menu.
7.5. Step-by-Step Process and Test Procedures
Organizations Included in this Section
Alliance of Automobile Manufacturers
Association of Global Automakers, Inc. (Global Automakers)
Ford Motor Company
Hyundai America Technical Center
Motor & Equipment Manufacturers Association (MEMA)
Toyota Motor North America
United Automobile Workers (UAW)
Volvo Car Corporation (VCC)
Organization: Alliance of Automobile Manufacturers
Regarding the EPA approval process for technologies not included in the pre-defined list, the
Alliance welcomes the efforts to provide a step-by-step process and 60-day timeline for approval
of new technologies. [EPA-HQ-OAR-2010-0799-9487-A1, p.10]
The process changes outlined below would further streamline the program and provide more
certainty to manufacturers irrespective of which approval process is used. [EPA-HQ-OAR-2010-
0799-9487-Al,p.lO]
Process for Qualifying Off-Cycle Credits from New Technologies [EPA-HQ-OAR-2010-0799-
9487-A1, p.42]
EPA originally adopted this program for model years MYs 2012-2016 as an optional credit
opportunity for new and innovative technologies that reduce vehicle CO2 emissions, but for
7-111
-------
EPA Response to Comments
which CC>2 reduction benefits are not significantly captured over the 2-cycle test procedure. The
agency adopted the off-cycle credit option to provide an incentive to accelerate the introduction
of these types of technologies that result in concrete reductions in CO2 emissions. However well-
meaning this program, its actual use has been undermined by uncertainties over which
technologies would be deemed eligible, how much credit would be provided, and the risks and
burdens on manufacturers inherent in a cumbersome case-by-case approval process. [EPA-HQ-
OAR-2010-0799-9487-A1, p.42]
The NPRM would require three complete sets of 5-cycle tests (with technology "on" and
technology "off") for relatively large impacts of over 3% GHG reduction. For technologies with
less than a 3% impact, manufacturers would be required to run five complete 5-cycle tests (with
technology "on" and technology "off"), plus complete an analysis using EPA's Vehicle
Simulation Tool. It can be expected that almost all of the off-cycle technologies will individually
yield emission reductions of less than 3%, making mandatory the completion of five full test
series and the simulation analysis. [EPA-HQ-OAR-2010-0799-9487-A1, pp.42-43]
While an extensive off-cycle credit menu will result in the largest portion of off-cycle emission
reductions, the regulatory agencies also need to have an open system for submitting and
evaluating new off-cycle technologies, since an ongoing flow of new technologies can be
expected. In this regard, simplicity and openness should be the goals, since the program benefits
from bringing in new approaches that can be developed into future credit menu items for
widespread implementation. As currently proposed, the provisions for off-cycle credit
applications require very extensive vehicle testing and modeling. These proposed requirements
lean towards a very high level of accuracy and proof, but would also serve to hinder the flow of
new technologies by setting such a high administrative burden. [EPA-HQ-OAR-2010-0799-
9487-A1, p.43]
Our expectation is that the vast majority of credits would be pursued through the menu, and that
the process for alternative individual applications will represent a small amount of total credit. It
may be counterproductive to require a high test and analysis burden, in return for small credits,
since manufacturers may choose simply not to undertake such unattractive projects. This may
discourage efforts which, if undertaken, could eventually grow beyond the initial low-volume
stage into widespread usage, with corresponding broad emission benefits. This was, after all, the
original goal of the MY 2012-2016 off-cycle program. [EPA-HQ-OAR-2010-0799-9487-A1,
p.43]
The Alliance proposes some simplifications to these provisions. Based on our members'
experiences over the past year evaluating technologies for off-cycle credit in the MY 2012-2016
timeframe, we would expect that the credit menu would be used almost universally to gain credit
for any technologies that are listed on the menu, rather than testing and quantifying slightly
larger credits for each model under this section of the regulation. The overwhelming majority of
credits would be expected to flow from the menu, and the relatively small amount of credits
arising through this alternative section of the regulation does not warrant the proposed very high
level of accuracy and documentation through repeat testing and modeling. [EPA-HQ-OAR-
2010-0799-9487-A1, p.43]
7-112
-------
Off-cycle Technology Credits
In order to encourage development of new technologies under this section of the regulation, the
Alliance recommends that only three five-cycle tests be required for all applications, with no
requirement to use the EPA Vehicle Simulation Tool. This retains a high level of accuracy, but
with lower administrative obstacles. We expect the mechanism for energy savings to be easily
explained and, if documented through actual vehicle testing, do not see the need to also conduct
simulations. Although we have no experience with this particular tool, we anticipate that any
single simulation tool may not be compatible or easily adaptable to analyze specific, unusual
technologies, especially technologies which address the proliferation of very diverse sources of
off-cycle energy losses. [EPA-HQ-OAR-2010-0799-9487-A1, p.43]
We also recommend that EPA retain discretion to approve applications which forego some of the
5-cycle tests if such testing is deemed unnecessary. In many cases, technologies would
reasonably be expected to have no impact on certain test cycles. For example, cold weather
technologies might be expected to have no impact on the SCO3 cycle. In these cases, it would be
wasteful to require multiple tests for cycles which do not impact the credits. [EPA-HQ-OAR-
2010-0799-9487-A1, p.44]
Organization: Association of Global Automakers, Inc. (Global Automakers)
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 51.]
Second, the agencies should carefully consider the relationship between the creation of
incentives under the new standards and the development of alternative test procedures to assess
the incentivized technologies. Global Automakers strongly supports incentivizing technologies
whose potential benefits are not fully measured under the 1975 CAFE test procedure. Air
conditioning efficiency, off-cycle, and advanced technology incentives are justified based on
their potential long term, real world benefits. Such incentives will typically take the form of
compliance credits that are assessed using alternative test procedures. In developing incentives
for the final rule, the agencies need to carefully consider how to reconcile these incentives with
the testing procedures required by law. [EPA-HQ-OAR-2010-0799-9466-Al, p.2]
[[This comment can also be found in Outline Heading 3.2.1.]]
Organization: Ford Motor Company
Beyond the pre-defined list of off-cycle methods, Ford supports the allowance of alternative
pathways for achieving off-cycle technology benefits and the efforts the agencies have taken to
attempt to streamline the process, as compared to the previous method finalized in the 2012-2016
MY rule. We agree with the Alliance recommendations on how to further refine that process and
avoid unnecessary test burden. Related specifically to the technology demonstration pathway
using the EPA 5-cycle methodology, we believe that the proposal to demonstrate at least a three
percent off-cycle benefit in order to claim credits amounts under 40 CFR § 86.1866-12(d)(2)(iii)
is too high. EPA suggests a 3% threshold based upon historical test speed vs. time tolerance data
for chassis dynamometer testing. Given the +/- 1.5% drive cycle energy tolerances outlined in 40
CFR § 1066.425(c)(l) and described in detail in SAE J2951, future test to test variability will be
7-113
-------
EPA Response to Comments
substantially reduced. As such, a tolerance of 1.5% is recommended in lieu of the proposed
3%. [EPA-HQ-OAR-2010-0799-9463-Al,p. 17]
Organization: Hyundai America Technical Center
4) Durability Demonstration: EPA states that 'manufacturers may demonstrate in-use emissions
durability at the time of certification by submitting an engineering analysis. This demonstration
may also include component durability testing or whole vehicle aging if the manufacturer has
such data. The demonstration would be subject to EPA approval prior to credits being awarded.
Since credits are not actually generated until the final CAFE and GHG reports after the end of
the model year, Hyundai requests that EPA provide manufacturers additional time to generate the
durability data, if necessary (e.g. six months after certification). [EPA-HQ-OAR-2010-0799-
9547-A1, pp.5-6]
5) Public Notice of New Technologies: The agency proposes that credits for new off-cycle
technologies benefit from a public comment period. Hyundai supports a process to provide
transparency for the off-cycle credit approval process. However, it is unclear from the proposal
language whether the approval process will be completed and credits will be available in the
same year the automaker provides data and requests approval for new off-cycle technologies.
Hyundai recommends that the agencies create a standardized and streamlined process to ensure
that credits are available in the year requested. [EPA-HQ-OAR-2010-0799-9547-A1, p.6]
Organization: Motor & Equipment Manufacturers Association (MEMA)
Lastly, in cases where the technologies are not yet fully developed, but are expected to be in the
future, MEMA agrees that the step-by-step process the agencies outline in the NPRM is an
appropriate and transparent process. This way, future technologies can be reviewed, vetted and
considered for approval in a straight-forward and timely process. MEMA believes this is another
important component to the long-term success of the National Program, to allow for the
inclusion of and credits for yet-to-be-seen evolutions in off-cycle technologies and related
efficiency benefits. [EPA-HQ-OAR-2010-0799-9478-A1, p.7]
Organization: Toyota Motor North America
Third, EPA has proposed changes in §86.1866-12(d)(2) and (3) in order to streamline and clarify
the demonstration process to promote greater manufacturer participation and encourage greater
deployment of off-cycle technologies.[EPA-HQ-OAR-2010-0799-9586-Al, p.10]
Off-Cycle Credits: EPA 2012-2016 Model Year Regulations [EPA-HQ-OAR-2010-0799-95 86-
Al,p.lO]
For the 2012-2016 model year GHG standards, EPA's regulations provide credits for
technologies that reduce CO2 in real world operation that are not well represented on the test
procedure used to determine a vehicle's fuel economy or tailpipe GHG emissions. The 2012-
2016 model year provisions are limited to new and innovative technologies, and manufacturers
can demonstrate the benefits of such technologies using a two-tiered process. First, a
7-114
-------
Off-cycle Technology Credits
manufacturer can demonstrate benefits through EPA's 5-cycle method used for determining fuel
economy label values. If the 5-cycle method is inadequate for demonstrating benefits, the
manufacturer can work with EPA to develop a test plan customized for a specific technology.
EPA approval of both the test plan and demonstrated off-cycle benefits are made on a case-by-
case basis. In implementing the current off-cycle provisions, EPA has discovered that
manufacturers have been discouraged from applying for off-cycle credits because of the
uncertainty and potential testing burden associated with the current provisions. [EPA-HQ-OAR-
2010-0799-9586-Al,p.lO]
Revised 5-Cycle Demonstration Program [EPA-HQ-OAR-2010-0799-9586-A1, p.12]
For credits not generated by the pre-determined list, but rather through 5-cycle testing, EPA has
proposed measures to more precisely define both the manufacturer's testing requirements and
EPA's approval. The proposal involves up to three iterations of demonstration. [EPA-HQ-OAR-
2010-0799-9586-Al,p.l2]
First, a manufacturer must conduct three complete sets of 5-cycle tests, once with the technology
'off and once with the technology 'on'. If that testing shows less than three percent improvement,
two additional 5-cycle tests (with the technology 'on') are required. If at least a 3 percent
improvement still cannot be demonstrated, EPA's Vehicle Simulation Tool is used to determine
the technology's benefits. We have several concerns with this approach. Toyota anticipates that
most off-cycle technologies will individually yield emission reductions of less than three percent,
as none of the technologies on the pre-determined list alone would meet the three percent
criteria. This means the full set of five-cycle tests and the simulation analysis would essentially
become the de facto procedure. This full level of demonstration would require over 40 tests per
vehicle model. Bundling technologies could reduce test burden, but we assume those
technologies would then need to be bundled for sale, which could be prohibitively expensive.
[EPA-HQ-OAR-2010-0799-9586-Al,p.l2]
Toyota appreciates that EPA has made the 5-cycle demonstration procedure clearer. However, in
doing so, the procedure has become is too burdensome to be practical. We request the agency
consider alternatives to reduce the burden. For example, the second iteration of 5-cycle testing
seems unlikely to yield significantly different results than the initial testing and should be
eliminated. We also request EPA consider dropping components of the 5-cycle test if good
engineering practice suggests that test element is not a factor in demonstrating the benefits for a
given technology. For example, if it is clear that an active warm up technology does not affect
greenhouse gas emissions or fuel economy performance over the US06, the US06 should not be
required. Finally, EPA has not made the simulation tool available; therefore Toyota has no basis
upon which to comment on this method of verification. If simulation ultimately proves a viable
method for quantifying off-cycle credits, EPA should allow it to be used in lieu of 5-cycle
testing. [EPA-HQ-OAR-2010-0799-9586-A1, p.13]
Demonstration Not Based on 5-Cycle Testing or Simulation [EPA-HQ-OAR-2010-0799-9586-
Al,p.l3]
7-115
-------
EPA Response to Comments
EPA proposes to continue allowing manufacturers to request demonstration of off-cycle credit
levels using methods other than 5-cycle testing or EPA's simulation method. While the proposal
to establish an agency decision deadline and agency report provides more transparency in EPA's
decision making process, what constitutes an acceptable testing program still remains unclear in
the current proposal. The inherent uncertainty in manufacturer-proposed demonstration makes it
less appealing to Toyota and reiterates the need for a more inclusive pre-determined technology
list that is retroactive to the 20122016 model year standards. [EPA-HQ-OAR-2010-0799-95 86-
Al,p.l3]
Organization: United Automobile Workers (UAW)
We also applaud the EPA's recognition that other technologies not listed could prove beneficial
in the future, or that the actual reductions achieved from the listed technologies could exceed
EPA's original assessment of them, and proposing that manufacturers may gain additional
credits by supplying credible and verifiable data about improvements from any particular
technology. [EPA-HQ-OAR-2010-0799-9563-A2, p.3]
Organization: Volvo Car Corporation (VCC)
VCC supports simplifying the verification requirements for off-cycle credits. [EPA-HQ-OAR-
2010-0799-9551-A2, p. 6]
The proposal is requiring three complete sets of 5-cycle tests, with and without the technology
for CC>2 impacts of over 3% GHG reduction. For technologies with less than a 3% impact,
manufacturers are required to run five complete 5-cycle tests with and without the technology,
plus complete an analysis using EPA's Vehicle Simulation Tool. The requirement of 3% is a
large number for a CC>2 effect and most technologies will be around 0.5-1.5 %. This will mean
that extensive testing will be necessary in order to request off-cycle credits. This extensive
testing would impact smaller manufacturers disproportionately since the cost per vehicle would
be higher. [EPA-HQ-OAR-2010-0799-9551-A2, p. 7]
To encourage development, the EPA-simulation tool should not be the only permitted means of
presenting simulations; other simulation for applicable pre-confirming data should be permitted
if they are reasonably accurate. [EPA-HQ-OAR-2010-0799-9551-A2, p. 7]
To confirm the application, either the EPA Vehicle Simulation Tool or only three five-cycle tests
should be required. This would ease the burdens on manufacturers by keeping testing to a
minimum, while maintaining accuracy at a good level. [EPA-HQ-OAR-2010-0799-9551-A2, p.
7]
• The procedures for earning off-cycle credits need to be kept simple. [EPA-HQ-OAR-2010-
0799-9551-A2, p. 7]
• Once a technology has been approved by an agency it should be applicable for all agencies -
both EPA and CARB. [EPA-HQ-OAR-2010-0799-9551-A2, p. 7]
7-116
-------
Off-cycle Technology Credits
Response:
EPA received generally supportive comments regarding its proposal to adopt a
streamlined step-by-step process for credits not based on the pre-defined list. EPA received
comments that the 5-cycle testing requirements should not include additional testing or vehicle
simulation beyond the initial three sets of tests. EPA also received comments that manufacturers
should not be required to run test cycles where the off-cycle technology is known not to provide
emissions reductions. EPA concurs with these comments. In response to the points raised by
commenters, EPA will not make additional testing and vehicle simulations mandatory. Rather,
EPA will have discretion to request additional testing in cases where the agency determines that
the additional test would provide useful data in verifying credit levels. Further, EPA is not
requiring manufacturers to use the EPA simulation tool, but EPA may use the simulation tool as
a check to help verify the level of credits as part of the credit approval process. Also, EPA will
allow manufacturers to avoid unnecessary testing by instead submitting an engineering analysis
demonstrating that the technology has no effect (either positive or negative) on emissions for one
or more of the 5-cycle tests. These comments and provisions are discussed further in preamble
Section Ill.C.S.b.iii.
EPA received a mix of comments from manufacturers regarding the use of vehicle
simulations. The Alliance and Toyota opposed incorporating the EPA Vehicle Simulation Tool
into the 5-cycle approval process. Volvo supported the use of EPA's simulation tool (and others)
and suggested that it should be allowed to be use in lieu of vehicle 5-cycle testing. As noted
above, EPA is not requiring the use of the vehicle simulation tool but may use it to further
confirm test results. At this point, EPA is also not prepared to accept vehicle simulation results
from manufacturers in lieu of 5-cycle testing as the basis for credits not derived from the pre-
defined list. EPA is taking a more conservative approach of requiring 5-cycle testing and using
vehicle simulations as a tool to further confirm the appropriateness of the credit value. EPA
notes that vehicle simulations may be part of the methodology for credits based on the public
process (for credits not based on 5-cycle testing or the pre-defined list).
In response to Hyundai's concerns regarding the timing of data submittal, EPA is
clarifying these provisions as discussed in preamble sections IILC.S.b.iv and Section IILC.S.b.v.
7.6. Comments Regarding Technology Eligibility Criteria
Organizations Included in this Section
Alliance of Automobile Manufacturers
American Honda Motor Co., Inc.
Association of Global Automakers, Inc. (Global Automakers)
BMW of North America, LLC
Ferrari
Ford Motor Company
Motor & Equipment Manufacturers Association (MEMA)
Toyota Motor North America
Organization: Alliance of Automobile Manufacturers
7-117
-------
EPA Response to Comments
Finally, opportunities exist to streamline traffic flow, reduce congestion and reduce emissions
through better driving. For example, there are technologies that provide the driver or the vehicle
with information for improved routing, or that provide the driver or the vehicle with information
for more efficient vehicle operation. GPS technology can play a role in improving both driver
behavior and vehicle operation. The opportunities for improvements through these eco driving
technologies are not sufficiently defined for the Alliance to propose specific credit definitions
and criteria at this time, but the industry hopes that it can work with the agencies in the future to
create off-cycle credits for these technologies. [EPA-HQ-OAR-2010-0799-9487-A1, p. 11]
The minor proposed changes in terminology are directionally correct but do not alleviate the
overwhelming need to streamline the process by incorporating the pre-defined technology list for
MYs 2012-2016 as well as the later model years. [EPA-HQ-OAR-2010-0799-9487-A1, p. 12]
Organization: American Honda Motor Co., Inc.
Dealer-Installed Options. Furthermore, some off-cycle technologies can be installed at the
dealership. Honda proposes that off-cycle credit technologies that are installed on a vehicle prior
to its first retail sale, whether at the factory or at a dealership, can be included in the minimum
percentage calculation and in an OEM's credit calculation. For example, engine-block heaters
are sold in cold-weather states as a dealer-installed option. Engine-block heaters keep engine oil
warm, reducing friction and improving fuel economy and lowering CO2. (Honda recognizes that
an engine-block heater might not itself qualify for off-cycle credits, it is illustrative of market-
specific, dealer-installed options that could increase marketability of the kinds of technologies
EPA wants to endorse). [EPA-HQ-OAR-2010-0799-9489-A1, p. 6]
Organization: Association of Global Automakers, Inc. (Global Automakers).
(3) Credits for "integral" technologies. EPA proposes that technologies that are integral to the
basic vehicle design, including engine transmission, mass reduction, passive aerodynamic
design, and base tires, are ineligible for credits. See 76 FR 75024. In other words, the credits
would only be available for "add-on" technologies. EPA imposes this restriction based on its
belief that it would be difficult to establish the credit by making a clear comparison of the
vehicle's performance using baseline and advanced forms of the technology in question. In our
view, the difficulty of making a credible demonstration of the benefits of an off-cycle technology
should not be judged in advance of any data that might be developed by a manufacturer. It may
well be that making a credible demonstration of benefits for some of these integral technologies
will be difficult, but that is no reason to deny manufacturers the opportunity to make such a
demonstration. If EPA finds such a demonstration to lack credibility, it would of course be able
to deny the manufacturer's credit request. [EPA-HQ-OAR-2010-0799-9466-A1, p. 6]
(4) Credits for technologies that are included in the agencies' standard-setting analysis. EPA
states in the preamble to the proposal (76 FR 75023) that technologies that are included in the
agencies' standard-setting analysis may not generate off-cycle credits (with the exception of
active aerodynamic devices and engine stop-start systems). EPA states that allowing such credits
for these technologies would amount to "double-counting" of benefits. However, there may
emerge by 2025 advanced levels for current technologies that are capable of achieving greater
7-118
-------
Off-cycle Technology Credits
benefits than current systems. If a manufacturer can demonstrate that an advanced version of one
of the technologies that is included in the standard-setting analysis can achieve greater benefits
than projected by the agencies, and those benefits are not captured with the current test
procedure, there is no justification for excluding these technologies from the off-cycle credit
program. [EPA-HQ-OAR-2010-0799-9466-A1, p. 6]
Organization: BMW of North America, LLC
More specifically, we support EPA's proposal to delete the 'not significantly measureable over
the 2-cycle test' and to delete the 'new, innovative, not widespread use' as criteria. These new
approaches make the application for credits for off-cycle technologies more attractive and
therefore can be seen as a driver for innovation. [EPA-HQ-OAR-2010-0799-9579-A1, enclosure
p. 1]
Organization: Ferrari
Regarding off-cycle technologies, we agree with EPA to remove the criteria in the 2012-2016
rule that off-cycle technologies must be "new, innovative, and not widespread" because these
terms are imprecise and could create implementation issues and uncertainty in the program.
[EPA-HQ-OAR-2010-0799-9535-A2, p. 14]
Organization: Ford Motor Company
The three methods outlined in the NPRM to quantity real world fuel consumption benefits are
helpful and we anticipate they will encourage invention and introduction of new fuel saving
technologies. One important class of fuel saving technologies to consider are those that are
impossible to turn-off or disable because they are highly integrated into the system. Examples of
these technology could be advanced combustion concepts, cam-less engines, variable
compression ratio engines, air/hydraulic micro hybrids/launch assist devices, advanced
transmissions, new aftertreatment concepts and other yet to be invented concepts. The proposed
methods may not adequately cover demonstration of these technologies. As such, we encourage
the agencies to consider other alternatives, such as an optional pathway that would allow
manufacturers to demonstrate the off-cycle benefit by simply comparing the 5-cycle results to
the 2-cycle results with the new technology operating, or perhaps using other analytical methods.
We look forward to working with the agencies to develop these methodologies. [EPA-HQ-OAR-
2010-0799-9463-A1, p. 18]
Organization: Motor & Equipment Manufacturers Association (MEMA)
Also, we support the agencies' decision to remove the criteria initiated under the MY2012-2016
program ("new, innovative, not widespread use") for the reasons stated in the NPRM. MEMA
further supports the option to make eligible for credit those technologies that may only register
small reductions on the 2-cycle test, but have more significant (and verifiable) off-cycle gains.
MEMA also supports the agencies' decision not to sunset the availability of these credits during
the 2017-2025 timeframe for all of the same reasons stated in the NPRM. Again, overall MEMA
7-119
-------
EPA Response to Comments
is supportive of the direction the agencies are taking with respect to off-cycle credits. There are
some key issue areas, however, where either changes or clarifications are needed; these are
discussed below. [EPA-HQ-OAR-2010-0799-9478-A1, p.7]
MEMA further proposes any technology resulting in significant, quantifiable benefit off-cycle -
regardless of 2-cycle benefit - should receive credit reflecting the real-world benefit of such
technology. There will very likely be future technologies - in addition to Stop/Start and Active
Aerodynamics - that could result in both significant on-cycle and off-cycle benefits. MEMA
believes that these dual-benefit technologies should not be precluded from consideration. For
example, if any of the technologies that are considered in setting the standard (in other words,
baseline technologies for the Program), there could come a time when an on-cycle technology
may evolve and provide a significant off-cycle benefit. Under this scenario, would EPA preclude
it from consideration under their step-by-step approval process to be added to the approved list
of technologies? MEMA recognizes the agency's concern about potential 'double counting.'
However, we would point out that since off-cycle credits are recognized in the rule - and
particularly if they were expanded to include any technology that has both on- and off-cycle
benefit - then the potential unintended consequence of pushing "preferred technologies" and
"winners and losers" diminishes somewhat. [EPA-HQ-OAR-2010-0799-9478-A1, pp.8-9]
Organization: Toyota Motor North America
Off-Cycle Credits: New Innovative Technology Criterion [EPA-HQ-OAR-2010-0799-9586-A1,
p.10]
Toyota supports the agencies' decision to drop the requirement that off-cycle technologies must
be new, innovative, or not wide spread. We agree that this requirement is confusing and has no
relevance for technologies that deliver real world benefits regardless of when they are
implemented or how prevalent they are in the fleet. For the same reason, we support the agencies'
intent to clarify that the eligibility of approved technologies and credits generated will not sunset
in the future. [EPA-HQ-OAR-2010-0799-9586-A1, p. 10]
Response:
Commenters were supportive of EPA's proposal to eliminate the "new, innovative, and
not in widespread use" as a criteria for eligibility for off-cycle credits, and EPA is finalizing
these changes as proposed. Comments regarding potential off-cycle credits for integral
technologies or 2-cycle technologies considered in establishing the standards are discussed in
section IILC.S.b.ii of the preamble. EPA continues to believe that it would not be appropriate to
provide off-cycle credits for integral technologies or technologies projected to be used to meet
the 2-cycle standards, with the exception of stop-start and active aerodynamics which are on the
pre-defined list and whose two cycle benefits were considered in determining the stringency of
the standards.
Honda suggests that credits should be available for technologies installed at the
dealership prior to initial sale. In response, only original equipment may be approved and
eligible for credits as off-cycle credits are available only to OEMs. The manufacturer is
7-120
-------
Off-cycle Technology Credits
responsible for the emissions performance of the vehicle and also all of the tracking to ensure
that credit reporting to EPA is accurate. The standards and other program requirements apply to
manufacturers and do not apply to dealerships or other (aftermarket) parties. Installations that
might occur under some type of contractual arrangement with dealerships prior to the sale of the
vehicle would not be transparent to EPA (i.e., EPA would not be monitoring these activities).
EPA should note that there are a large number of aftermarket technologies that have a deleterious
effect on fuel economy and end up in higher GHG emissions. These might include, remote
starters, lights, powerful stereo systems, rooftop luggage racks and other devices that increase
weight, aerodynamic, rolling, friction, or electrical load. By this reasoning, EPA might then
consider taking credits away from manufacturers, for vehicles that have such technologies added.
Clearly this becomes impractical.
However, the manufacturer is solely responsible for the accurate reporting of credits in
the end of model year credit report. The manufacturer would need to be able to demonstrate,
upon request from EPA, that the credits they are claiming are based on technology installed on
the vehicles. This would likely be a much more straightforward proposition for the manufacturer
if the technology is installed during vehicle assembly. The burden of proof falls solely on the
manufacturer and EPA would expect manufacturers to be able to provide a detailed accounting
of the vehicles on which they are claiming credits so that EPA could verify the validity of the
credits. Credits that are claimed by the manufacturer and then later found not to be supported by
evidence or found to be invalid could lead to noncompliance and enforcement action against the
manufacturer.
7-121
-------
-------
Fuel Consumption Improvement Values
8. A/C, Off-Cycle, and "Game Changing" Technology Fuel Consumption
Improvement Values in CAFE Program
Organizations Included in this Section
Alliance of Automobile Manufacturers
Arkema Inc.
Association of Global Automakers, Inc. (Global Automakers)
Center for Biological Diversity
EcoMotors International, Inc.
Electric Drive Transportation Association
Environmental Defense Fund
Ferrari
Ford Motor Company
Johnson Controls, Inc.
Mazda North American Operations
Mercedes-Benz USA, LLC
Motor & Equipment Manufacturers Association (MEMA)
Porsche Cars North America, Inc. (PCNA)
Toyota Motor North America
Organization: Alliance of Automobile Manufacturers
CAFE Fuel Consumption Improvement Values for MAC Efficiency Improvements and Off-
Cycle Technologies [EPA-HQ-OAR-2010-0799-9487-A1, p. 12]
In the GHG portion of the joint rulemaking, EPA is proposing to allow manufacturers to generate
credits for improvements to MAC systems that reduce GHG emissions. EPA is also proposing to
allow manufacturers to generate credits for implementing off-cycle technologies that result in
real-world GHG reductions not fully accounted for under the existing test procedures. [EPA-HQ-
OAR-2010-0799-9487-A1, p. 12]
In the CAFE portion of the joint rulemaking, EPA, in coordination with NHTSA, is proposing to
allow fuel consumption reductions (also called "fuel consumption improvement values")
equivalent to the GHG credits allowed by EPA. These would apply for the credit menus provided
for MAC efficiency and the use of off-cycle technologies. The proposal makes it clear that in the
CAFE program manufacturers would only get credit for improvements that lead to better real-
world fuel economy; improvements that are aimed at other GHG reductions such as reducing or
eliminating MAC refrigerant leakage are not tied to fuel economy and would not qualify for
CAFE program incentives. The expected generation of these MAC credits is accounted for by
both agencies in setting the level of the overall GHG and CAFE standards they propose, but the
ability to generate off-cycle credits and fuel consumption reductions is not accounted for in the
standards. The agencies seek comment on the proposals to allow manufacturers to estimate fuel
-------
EPA Response to Comments
consumption reductions from MAC improvements and off-cycle technologies. [EPA-HQ-OAR-
2010-0799-9487-Al,p.l3]
While the Alliance has some suggestions for modifying the details of the above-described
proposals, we firmly believe that the proposals in general are both appropriate and necessary. As
noted by the agencies in the preamble to the proposed rule, President Obama's Memorandum of
May 21, 2010 requested that NHTSA and EPA work together to develop "...a coordinated
national program under the [Clean Air Act] and the [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.'9 As the President directed, and as all stakeholders
recognize, a primary benefit of the single National Program approach is that it provides for
harmonized EPA and NHTSA regulations so that manufacturers can build one fleet of vehicles
that complies with both sets of rules. In keeping with that directive, it is important for EPA and
NHTSA to include common provisions in both sets of rules to the maximum extent possible.
[EPA-HQ-OAR-2010-0799-9487-Al,p.l3]
The Alliance has already expressed its support for the inclusion of provisions allowing for MAC
credits and off-cycle credits in the context of EPA's GHG rules, and we have explained why the
inclusion of such provisions will further the goals of the program. In the interests of promoting
harmonization, it only makes sense for the agencies to include comparable provisions in the
CAFE rules. This applies to MAC and off-cycle improvements, as well as to the implementation
of "game changing-technologies" in full-size pickup trucks and other credits. Failure to do so
would only lead to increased disparities between the rules, giving rise to the possibility that
manufacturers would need to undertake different actions to comply with the GHG rule on one
hand, and the CAFE rule on the other. Of course, in developing these provisions, the agencies
must be mindful of differences in the statutes underlying the two regulatory programs. Here, the
agencies are being careful to ensure that the CAFE adjustments are limited to the demonstrated
fuel economy benefits of the MAC and off-cycle improvements, which is entirely appropriate
given the scope of the CAFE program. [EPA-HQ-OAR-2010-0799-9487-A1, p. 13]
In light of the above, the Alliance believes that the agencies should proceed to include provisions
accounting for the fuel economy benefits of MAC improvements and off-cycle technologies in
the CAFE program, providing equivalent fuel consumption and CC>2 credit values toward both
the GHG and CAFE programs. This step will help to further harmonize one of the many
remaining differences between the two regulations. [EPA-HQ-OAR-2010-0799-9487-A1, p. 14]
Organization: Arkema Inc.
The NPRM currently provides an opportunity for auto manufacturers to receive consumption
improvement values for air conditioning efficiency and off-cycle technologies. [EPA-HQ-OAR-
2010-0799-9468-A1, p.3]
Organization: Association of Global Automakers, Inc. (Global Automakers)
These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 51.]
8-2
-------
Fuel Consumption Improvement Values
We urge the agencies to consider two factors in developing compliance incentives under the
GHG and CAFE standards. First, it is important that the agencies harmonize flexibility
mechanisms between the GHG and CAFE programs to the maximum possible extent, consistent
with the goals of the National Program. This principle of harmonization does not apply,
however, to the measurement of GHG emissions that are not efficiency-related, such as air
conditioning refrigerant leakage. [EPA-HQ-OAR-2010-0799-9466-Al, p.2]
Organization: EcoMotors International, Inc.
EPA is proposing CC>2 credits for manufacturers that hybridize a significant quantity of their full-
size pickup trucks, and the agencies are also proposing that manufacturers be able to include 'fuel
consumption improvement values' equivalent to EPA CC>2 credits in the CAFE program. Access
to the incentives is conditioned on a minimum penetration of mild and strong hybrid electric
vehicle (HEV) technologies in an OEM's full-size pickup truck fleet. [This comment can also be
found in section 5 of this comment summary.] [EPA-HQ-OAR-2010-0799-9594-A2, p. 8]
Organization: Electric Drive Transportation Association
Third, EDTA opposes NHTSA's determination that it lacks authority to include a multiplier as
part of its CAFE standards under EPCA and EISA. While these statutes do provide for certain
incentives, they do not preclude NHTSA from establishing additional incentives, such as a
multiplier. Adoption of a multiplier in NHTSA's rule would promote the fundamental policy of
developing a harmonized national system in which EPA and NHTSA establish consistent
regulatory requirements. [EPA-HQ-OAR-2010-0799-9449-A1, p. 2]
Organization: Environmental Defense Fund
C. Constraints on NHTSA's Authority
In contrast to EPA's expansive authority under Section 202 of the Clean Air Act, EPCA as
amended by EISA includes limitations on NHTSA's authority to regulate fuel economy.
NHTSA's authority is focused on fuel economy and not air pollution, and as a result, NHTSA is
constrained in regulating direct discharges of N20, CH4, and HFC emissions from automobiles.
76 Fed. Reg. at 74,902. [EPA-HQ-OAR-2010-0799-9519-A1, p. 6]
Within its focus on fuel economy, EPCA contains additional, limitations on NHTSA's discretion
to establish CAFE standards including the nexus to fuel efficiency. And, of particular
importance, any proposed expansion of NHTSA's fuel economy analysis must be consistent with
EPA's statutorily-mandated procedures to test fuel economy. [EPA-HQ-OAR-2010-0799-9519-
Al,p.6]
EPCA directs the Secretary of Transportation to prescribe CAFE standards, which "shall be the
maximum feasible average fuel economy level that the Secretary decides the manufacturers can
achieve in that model year." 49 U.S.C. § 32902; see also § 32902(f) (directing the Secretary to
consider statutorily-enumerated factors in making this determination). While NHTSA has
discretion in standard setting, under EPCA, EPA alone has the authority to measure fuel
-------
EPA Response to Comments
economy and to calculate CAFE values, 49 U.S.C. § 32904(a). In doing so, EPA "shall use the
same procedures for passenger automobiles the Administrator used for model year 1975 ... or
procedures that give comparable results." Id. at 32904(c). The D.C. Circuit has concluded that, to
produce "comparable results," "[t]he critical fact is that a procedure . . . was available for
MY1975 testing, and those manufacturers, however few in number, that found it advantageous to
do so, employed that procedure." Center for Auto Safety v. EPA, 806 F.2d 1071, 1077 (D.C. Cir.
1986). [EPA-HQ-OAR-2010-0799-9519-A1, p. 6]
In a previous rulemaking, the agencies concluded that this statutory structure did not allow for
incorporation of air-conditioning efficiency improvement and off-cycle technology credits into
NHTSA's fuel economy analysis. 75 Fed. Reg. at 25,544 ("The CAFE standards and compliance
testing cannot capture all of the real world CO2 emissions, because EPCA currently requires
EPA to use the 1975 passenger car test procedures under which vehicle air conditioners are not
turned on during fuel economy testing."); 25,663 (requesting comment on including air
conditioning credits in light-truck testing requirements but emphasizing "that modernizing the
passenger car test procedures as well would not be possible under EPCA as currently
written"). [EPA-HQ-OAR-2010-0799-9519-A1, p. 6]
In this proposal, however, the agencies forward different legal rationales, id. at 74,998, which
they characterize as "major changes" from past practice, id., that would allow them to
incorporate air-conditioning efficiency and off-cycle technology improvements into NHTSA
standard setting. Both the agencies themselves, supra, and regulated industry have raised
questions regarding this conclusion. See EPA Doc. No. OAR-2009- 0472-7123.1 at 17
(Comments of Association of International Automakers on LDV Phase I) (noting that the
Association "does not support fundamentally changing the fuel economy/greenhouse gas test
procedures at this time"); see also EPA Doc. No. EPA-HQOAR- 2003-0214-0208 at 10
(Comments of the Alliance of Automobile Manufacturers) (noting that any change in test
procedures would require EPA "to develop a complex set of test procedure adjustment factors to
ensure that the new procedures 'give comparable results' to the existing ones"). [EPA-HQ-OAR-
2010-0799-9519-A1, pp. 6-7]
Organization: Ferrari
Ferrari strongly supports the proposal to allow manufacturers to generate fuel consumption
improvement values for purposes of CAFE compliance based on the use of A/C efficiency
technologies. [EPA-HQ-OAR-2010-0799-9535-A2, p. 13]
Finally, we support to allow these credits to be counted for the CAFE compliance calculations.
[EPA-HQ-OAR-2010-0799-9535-A2, p. 14]
Ferrari appreciates the proposal to gain credits for high efficiency A/C systems and offcycle
technologies to be used for fuel consumption improvement and CAFE compliance. [EPA-HQ-
OAR-2010-0799-9535-A2, p. 15]
Organization: Ford Motor Company
8-4
-------
Fuel Consumption Improvement Values
In order to provide equivalent fuel consumption benefits for these fuel saving technologies, Ford
also supports the inclusion of off-cycle credits as part of the NHTSA CAFE program. This
allowance helps to coordinate the EPA and NHTSA programs in the efforts of
harmonization. [EPA-HQ-OAR-2010-0799-9463-A1, p. 18]
NHTSA Incentives for Electric Vehicles, Plug-in Hybrids, and Fuel Cell Vehicles
NHTSA has also expressed the view that it lacks authority to establish an incentive multiplier for
EVs, PHEVs, and FCVs, comparable to the one proposed by EPA, in the fuel economy
regulations under EPCA and EISA. In this case, we disagree with NHTSA's interpretation of
EPCA and EISA. In our view, the law does not address this issue, either directly or indirectly.
Moreover, the President has directed EPA and NHTSA to coordinate and harmonize their
regulations as much as possible. Consistent with that directive, the agencies should interpret
statutes so as to optimize the degree of harmonization between the GHG program and the CAFE
program. Thus, if one agency incorporates a program flexibility into its rules, the other agency
should adopted a corresponding program flexibility unless expressly prohibited by law. We refer
the agencies to the comments of EDTA on this point, which we support and incorporate by
reference. [EPA-HQ-OAR-2010-0799-9463-Al, p. 21]
Organization: Johnson Controls, Inc.
Specifically, we support the inclusion of fuel consumption reductions resulting from air
conditioning improvements and the application of off-cycle credits and equivalent fuel
consumption improvements in NHTSA's CAFE compliance calculations. [NHTSA-2010-0131-
0253-A1, p. 2]
Organization: Mazda North American Operations
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 63-64.]
Additionally, we support providing equivalent fuel consumption and CO2 credit values towards
both the greenhouse gas and CAFE programs, helping to further harmonize one of the many
remaining differences between the two regulations.
Organization: Mercedes-Benz USA, LLC
DAG also supports the agencies' decision to provide the analogous fuel consumption
improvement credits within the CAFE program.4 As set forth in DAG's comments to the MY
2012-2016 rulemaking, EPA has broad discretion to determine how to calculate fuel economy
for purposes of the CAFE program and should utilize that discretion as necessary to harmonize
the CAFE and GHG programs. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-2]
Organization: Motor & Equipment Manufacturers Association (MEMA)
-------
EPA Response to Comments
Specifically, we support the agencies' decision to parallel the efficiency credits and fuel
consumption improvement values for compliance calculations for their respective GHG
emissions and CAFE standards programs (for example, the air conditioning and off-cycle
emissions improvements and its equivalent fuel consumption improvement). [EPA-HQ-OAR-
2010-0799-9478-A1, p.2]
Particularly, MEMA supports the agencies proposal to align EPA credits with NHTSA's CAFE
compliance by allowing manufacturers to generate fuel consumption improvement values for air
conditioning (A/C) technologies and off-cycle technologies. These technologies are not
otherwise "captured" on traditional test cycles, but they still provide contributing real-world
benefits that improve vehicle efficiencies. Therefore, rewarding various A/C and innovative off-
cycle technologies under both components of the rule will encourage faster adoption and
increase deployment into the fleet. [EPA-HQ-OAR-2010-0799-9478-A1, p.5]
In the NPRM, Tables II-l 1,11-18 and IV-117 show a 0.000778 gal/mi consumption improvement
value for engine heat recovery. We believe the agencies actually intended this to be a value of
0.0000788 as stated in the Technical Support Document on Table 5-26, page 5-75, where it was
rounded up to 0.000079. [EPA-HQ-OAR-2010-0799-9478-A1, p. 12]
Organization: Porsche Cars North America, Inc. (PCNA)
It is widely understood that GHG improvements are equivalent to fuel economy improvements.
Therefore, we believe it is appropriate to extend all credit provisions in the GHG program to
equivalent credit in the CAFE program. This additional CAFE credit would also provide
additional incentive for further advances in efficiency improvement. [EPA-HQ-OAR-2010-
0799-9264-A1, p. 6]
Organization: Toyota Motor North America
The agencies have proposed significant changes to EPA's existing off-cycle credit regulations.
First, NHTSA has proposed to adopt off-cycle credits for the 2017-2025 model years. While
EPA will continue to administer the program, NHTSA has proposed to award a corresponding
level of CAFE credit for any EPA-approved off-cycle technologies. Toyota supports NHTSA's
proposed adoption of off-cycle credits as a necessary step towards further harmonizing the
federal regulations. [EPA-HQ-OAR-2010-0799-9586-A1, p. 10]
Response:
EPA received several comments supporting EPA's inclusion of fuel economy
improvement values under CAFE testing and calculations procedures that are equivalent to EPA
credits for A/C efficiency improvements, off-cycle, and full-size pick-ups. Commenters note
that these provisions help to further harmonize the programs. EPA is finalizing fuel consumption
improvement value approach under its EPCA authority as proposed. This is discussed in more
detail in section III.B.10 of the preamble. EPA appreciates MEMA comments noting an error for
one of the fuel consumption improvement values in the proposal and EPA has corrected this
error.
8-6
-------
Fuel Consumption Improvement Values
Regarding Porsche comments that all GHG credits have a corresponding fuel
consumption improvement and should receive equivalent credits under CAFE, EPA disagrees.
A/C credits based on reduced refrigerant leakage and alternative refrigerant use are based on
reducing HFCs rather than CC>2 and therefore do not have a corresponding fuel consumption
improvement. With regard to incentives under CAFE for EVs, PHEVs, and FCVs, this involves
NHTSA's interpretation of its authority under EPCA/EISA. As noted in the NPRM (see 76 FR
74878) and discussed in NHTSA's Preamble Section IV addresses this, NHTSA currently
interprets EPCA and EISA as precluding the agency from offering additional incentives for these
vehicles except as specified by statute.
-------
-------
Certification, Compliance, and Enforcement
9. Certification, Compliance, and Enforcement
Organizations Included in this Section
Ford Motor Company
Organization: Ford Motor Company
We support NHTSA's efforts to receive and retain CAFE projections and related data in
electronic format. We recommend that NHTSA does not create a new database with new
requirements, but rather NHTSA should use a database format the same as EPA's Verify system.
Manufacturers have spent significant time and money updating our databases to conform to
EPA's new requirements commencing with the 2009 MY. (76 Fed. Reg. 75340) [EPA-HQ-
OAR-2010-0799-9463-A1, p. 25]
In fact, the government of Canada is creating a new database for their new GHG requirements,
and their system will be based on EPA's Verify format rather than retaining their current online
xml reporting system. Their previous fuel consumption database is being converted over to the
new Verify like format, recognizing the need for consistency among systems. [EPA-HQ-OAR-
2010-0799-9463-A1, p. 26]
There are no GHG reductions or benefits to be gained by manufacturers spending time and
resources reformatting complex data. An important aspect of a single, harmonized fuel economy
and greenhouse gas program is communized reporting formats. [EPA-HQ-OAR-2010-0799-
9463-A1, p. 26]
We support NHTSA's proposal to move to all electronic reporting. We support emailing data in
Excel format as long as current manufacturer format is acceptable, and support moving to xml as
long as Verify format is followed (76 Fed. Reg. 75350). [EPA-HQ-OAR-2010-0799-9463-Al, p.
26]
We do not support NHTSA's proposed change to 49 CFR § 537.7(c)(4) which moves credit
reporting to a configuration level. For example, air conditioning efficiency credits are not going
to vary by fuel economy configuration (basic engine / transmission class / IWC / transmission
configuration / axle ratio / calibration); they may only vary by vehicle line. This type of vehicle
characteristic should not be attempted as an overlay on a very specific fuel economy structure.
Manufacturers should be allowed to delineate the credit applicability specifically, as needed, but
for cases where credits apply across a much broader section of vehicles, manufacturers should be
allowed to report on that level. EPA has already developed a credit spreadsheet for tracking
credits and volumes that provides for accurate credit reporting. This spreadsheet should be
allowed by NHTSA as well. In the future, should EPA move credit reporting to their Verify
database, NHTSA's reporting requirements should be flexible enough to allow manufacturers to
fulfill data and formatting requirements for both agencies simultaneously. (76 Fed. Reg. 75351-
2) [EPA-HQ-OAR-2010-0799-9463-A1, p. 26]
9-1
-------
EPA Response to Comments
Similarly, for 49 CFR § 537.7(c)(5) requesting light truck classification data, we support
NHTSA's desire to consolidate all truck classification data to one location. We do note that
requiring cargo-carrying volumes in the truck classification section (5) and also in the
configuration information (4) is duplicitous. Requiring the same data in multiple places is either
wasteful or inviting error. We also suggest that this overload of data actually makes it more
difficult for NHTSA to use manufacturers' reports due to the unnecessary complexity and added
length. We recommend that NHTSA's reporting regulations allow manufacturers to streamline
reporting, as long as all the data required to confirm CAFE calculations, fleet classification, and
NHTSA's fleet analyses are present and easily identified. [EPA-HQ-OAR-2010-0799-9463-Al,
p. 26]
Response:
These comments are directed at the NHTSA program, and as such do not require a response from
EPA.
9.1. Base Tire Definition
Organizations Included in this Section
Alliance of Automobile Manufacturers
Association of Global Automakers, Inc. (Global Automakers)
Ford Motor Company
General Motors Company
Hyundai America Technical Center
Toyota Motor North America
Organization: Alliance of Automobile Manufacturers
Base Tire Definition [EPA-HQ-OAR-2010-0799-9487-A1, p.83]
EPA invites comment on whether changes to the base tire definition are warranted to "ensure a
more uniform application across manufacturers." The Alliance recommends that changes to the
definition of base tire be deferred. [EPA-HQ-OAR-2010-0799-9487-A1, p.83]
In 40 C.F.R. §600.002, EPA currently defines base tire as follows: [EPA-HQ-OAR-2010-0799-
9487-A1, p.83]
Base tire means the tire specified as standard equipment by the manufacturer. [EPA-HQ-OAR-
2010-0799-9487-A1, p.83]
In 49 C.F.R. §523.2, NHTSA currently defines base tire as follows: [EPA-HQ-OAR-2010-0799-
9487-Al,p.83]
9-2
-------
Certification, Compliance, and Enforcement
Base tire for passenger automobiles, light trucks and medium-duty passenger vehicles means the
tire specified as standard equipment by a manufacturer on each vehicle configuration of a model
type. [EPA-HQ-OAR-2010-0799-9487-A1, p.83]
Although EPA has not proposed specific language to replace its definition, NHTSA has proposed
to change its definition to the following: [EPA-HQ-OAR-2010-0799-9487-A1, p.83]
Base tire (for passenger automobiles, light trucks and medium duty passenger vehicles) means
the tire that has the highest production sales volume that is installed by the vehicle manufacturer
on each vehicle configuration of a model type. [EPA-HQ-OAR-2010-0799-9487-A1, p.83]
The Alliance does not support the proposed change to the NHTSA definition of base tire.
NHTSA's proposed definition of base tire ties the footprint to high sales points within the fuel
economy hierarchy. This can and does change throughout the model year based on many factors
beyond a manufacturer's control or foresight. EPA's definition allows manufacturers to retain
the direct link between footprint and the physical dimensions of the vehicles. All vehicles should
be included in the fleet average using a representative footprint based on the physical vehicle, not
a footprint based on a moving target of sales. [EPA-HQ-OAR-2010-0799-9487-A1, p.83]
Additionally, NHTSA's current definition lends to the confusion by overlaying footprint on the
fuel economy hierarchy through the inclusion of the defined fuel economy term 'configuration' in
the base tire definition. Footprint is a function of the vehicle's dimensions. This is not related to
any fuel economy 'configuration.' The footprint fuel economy target is simply a function of the
production volume and its associated footprint. [EPA-HQ-OAR-2010-0799-9487-A1, p.84]
Under the current regulations, the base tire definition has a direct effect on footprint values and
footprint has a direct effect on a manufacturer's targets. Therefore, any changes to the definition
of base tire will have an effect on the stringency of a manufacturer's CAFE and CC>2 targets. This
effect may vary from manufacturer to manufacturer. Nevertheless, each manufacturer has
analyzed many scenarios and made long-range projections regarding its own ability to meet
CAFE and CC>2 standards within a product segment. All of these projections have assumed that
the base tire and footprint definitions would remain the same and would continue into the future.
To change any of these definitions at this point in time would render any previous analyses
regarding projected CAFE and GHG capabilities null and void. [EPA-HQ-OAR-2010-0799-
9487-A1, p.84]
Therefore, we recommend that changes to any fundamental definitions that could effectively
increase the stringency of the GHG and CAFE standards be deferred to a separate, future
rulemaking and that both agencies engage in a joint dialogue with automakers to understand the
complex technical issues involved. Further, any fundamental changes that could potentially
increase the stringency of the standards should not be applied retroactively to past model years
and should only go into effect starting with a future model year. Finally, in order to avoid future
confusion and misinterpretation, we suggest that EPA and NHTSA endeavor to maintain
identical definitions wherever possible. [EPA-HQ-OAR-2010-0799-9487-A1, p.84]
9-3
-------
EPA Response to Comments
Organization: Association of Global Automakers, Inc. (Global Automakers)
NHTSA also invites comment on its proposed modification to its definition of "base tire," which
affects the determination of footprint size in determining compliance with standards. This change
is proposed due to NHTSA's concern that the current definition lacks specificity, leading to
differing interpretations by manufacturers. Global Automakers supports clarification of the
definition. We also urge that NHTSA and EPA adopt the same definitions of "base tire," in order
to increase the harmonization of standards under the national standards program. [EPA-HQ-
OAR-2010-0799-9466-A1, p. 9]
Organization: Ford Motor Company
Base Tire
Ford does not support the proposed change to the NHTSA definition of base tire. We believe that
NHTSA's current definition lends to the confusion by overlaying footprint on the fuel economy
hierarchy through the inclusion of the defined fuel economy term 'configuration' in the base tire
definition. Footprint is a function of the vehicle's dimensions. This is not related to any fuel
economy 'configuration'. The footprint fuel economy target is simply a function of the
production volume and its associated footprint. We recommend that NHTSA adopt EPA's
definition, and hence help maintain the development of a One National Program moving
forward. [EPA-HQ-OAR-2010-0799-9463-Al, p. 25]
Organization: General Motors Company
GM supports further analysis and discussion with industry, EPA and NHTSA, regarding the
complex task of defining "base tire". We recommend that changes to the definition of base tire
be deferred - and taken up potentially as part of one of the mid-term review "check-ins" - to
minimize the potential for unnecessary complications and unintended consequences. [EPA-HQ-
OAR-2010-0799-9465-A1, p. 4]
Organization: Hyundai America Technical Center
Base Tire Definition [EPA-HQ-OAR-2010-0799-9547-A1, p.7]
The agencies have asked whether the definition of base tire should be revised. We agree that
there should be a definition which would require all automakers to consistently calculate their
vehicle footprints. NHTSA has proposed the definition of'tire installed by the vehicle
manufacturer that is used on the highest production sales volume of vehicles within the
configuration'. We agree that the tires installed on the vehicle most commonly sold within a
vehicle configuration should become the basis for setting a manufacturer's fuel economy
standards. This is a fair and a workable definition. [EPA-HQ-OAR-2010-0799-9547-A1, p.7]
Organization: Toyota Motor North America
9-4
-------
Certification, Compliance, and Enforcement
Base Tire Definition [EPA-HQ-OAR-2010-0799-9586-A1, p.21]
Under existing and proposed attribute standards, base tire is used to define vehicle footprint,
which in turn determines a vehicle's fuel economy and CC>2 targets. Existing EPA and NHTSA
definitions of base tire are similar, but differ in their level of specificity.5 In the preamble for the
2017-2025 model year proposal, NHTSA expresses concern that the current definition of base
tire is insufficiently descriptive and open to interpretation. In response, NHTSA has proposed
redefining base tire to be the tire with highest sales within a vehicle configuration. EPA requests
comment on whether changes to the EPA base tire definition are warranted to 'ensure a more
uniform application across manufacturers', but does not propose a revised definition. [EPA-HQ-
OAR-2010-0799-9586-A1, p.21]
Toyota shares the concern that different interpretations of base tire could potentially lead to
different calculated attribute targets for the different vehicles that otherwise should have the
same attribute targets. This could create an un-level playing field among manufacturers. Any
change in definitions that affects vehicle footprint has the potential to impact the stringency of
the standards. The magnitude of that impact is currently unknown and could vary by
manufacturer. However, we do not believe enough analysis has been performed to date to
suggest exactly how the definition should be revised. Further, the comment period for this
rulemaking does not provide adequate time to carefully explore alternatives to address the
agencies' concerns. [EPA-HQ-OAR-2010-0799-9586-A1, p.22]
As a result, Toyota requests that NHTSA and EPA study this issue further and take appropriate
action in a future rulemaking to clarify this issue. Any change in regulatory definitions should be
adopted by both agencies to further the objective of regulatory harmonization. [EPA-HQ-OAR-
2010-0799-9586-A1, p.22]
5 - NHTSA currently defines base tire as the tire specified as standard equipment by a
manufacturer on each vehicle configuration of a model type (49 C.F.R. §600.2). EPA defines
base tire as the tire specified as standard equipment by the manufacturer (49 C.F.R. §523.2).
[EPA-HQ-OAR-2010-0799-9586-Al,p.21]
Response:
One of the factors in a manufacturer's calculation of vehicle footprint is the base tire.
Footprint is based on a vehicle's wheel base and track width, and track width in turn is "the
lateral distance between the centerlines of the base tires at ground, including the camber
angle."17 EPA's current definition of base tire is the "tire specified as standard equipment by the
manufacturer."18 NHTSA proposed a specific change to the base tire definition for the CAFE
program (see Section IV.I.S.g, and proposed 49 CFR 523.2), and EPA requested comment on
17 See 40 CFR 86.1803-01
18 See 40 CFR 86.1803-01,
marketed on a vehicle over which the purchaser can exercise no choice.
18 See 40 CFR 86.1803-01, and 40 CFR 600.002. Standard equipment means those features or equipment which are
9-5
-------
EPA Response to Comments
whether the base tire definition should be clarified to ensure a more uniform application across
manufacturers (76 FR 75088, December 1, 2011).
Vehicle manufacturers were the only parties providing comments on this issue, and they
were essentially unanimous in stating a desire for a level playing field, while reiterating that the
issue is complex. Several manufacturers pointed out that the proposed NHTSA definition, which
includes a connection to a vehicle configuration, may not be workable because the definition of a
configuration is independent of vehicle size, or footprint. Several manufacturers suggested that
EPA, NHTSA, and the auto companies should postpone action on this issue in this rule and work
together to ensure a consistent and complete understanding of the issue. Others agreed that the
definition could benefit from some clarification. After consideration of the comments, and a
recognition of the importance that the footprint calculation (and therefore all the elements that
comprise the footprint calculation) be harmonized across EPA and NHTSA, EPA is finalizing a
revised definition in this final rule, which is consistent with the definition being finalized by
NHTSA. The revised definition is as follows:
Base tire means the tire size specified as standard equipment by the manufacturer
on each unique combination of a vehicle's footprint and model type. Standard equipment
is defined in 40 CFR 86.1803-01.
This definition appropriately removes the link to vehicle configuration that was in
NHTSA's proposal, and improves upon EPA's existing definition with additional specificity that
is consistent with the goal of a footprint-based program, which, as stated by the Alliance of
Automobile Manufacturers, is that "All vehicles should be included.. .using a representative
footprint based on the physical vehicle..." EPA agrees with this broadly stated goal, and we
believe that the revised definition offers reasonable clarification that should help ensure a
consistent application of the footprint-based standards across manufacturers. This new
definition, which is harmonized with the definition being finalized by NHTSA, is also consistent
with existing regulatory language that specifies how EPA intends that footprint-based standards
be implemented. For example, EPA regulations currently state that "Each CC>2 target value,
which represents a unique combination of model type and footprint value, shall be multiplied by
the total production of that model type/footprint combination for the appropriate model year"
(see 40 CFR 86.1818-12(c)(2)).
9.2. Car-Truck Definitions
Organizations Included in this Section
Alliance of Automobile Manufacturers
Association of Global Automakers, Inc. (Global Automakers)
Ford Motor Company
Toyota Motor North America
Union of Concerned Scientists (UCS)
Organization: Alliance of Automobile Manufacturers
9-6
-------
Certification, Compliance, and Enforcement
The agencies must maintain the current car and truck vehicle classification framework. The
standards (i.e., footprint curves) that have been established, and the goals that have been placed
are all based upon the current and known set of harmonized definitions. Any changes to the
definitions during MYs 2017-2025 necessarily would require a reevaluation of the appropriate
level of stringency, cost, necessary flexibilities and final standards for any and all years in which
a change would apply. [EPA-HQ-OAR-2010-0799-9487-A1, p.4]
The Agencies Must Maintain the Current Car and Truck Vehicle Classification Framework.
[EPA-HQ-OAR-2010-0799-9487-Al,p.8]
In section IV.H. of the NPRM, NHTSA discusses the existing regulations governing the
classification of cars and trucks. The agency states, "NHTSA continues to believe that the
definitions as they currently exist are consistent with the text of [the Energy Independence and
Security Act of 2007 (EISA)] and with Congress' original intent'8 Nevertheless, NHTSA
requests comment on the possibility of changing the vehicle classification definitions, citing the
long time frame of the rulemaking. [EPA-HQ-OAR-2010-0799-9487-A1, p.8]
First, we agree with NHTSA's assessment that the existing definitions for classifying vehicles
are consistent with EISA and the original intent of Congress in EPCA. In past rulemakings,
NHTSA has made some adjustments to the classification rules and clarified its interpretation of
certain aspects of the rules. These efforts have accomplished their intended objectives by
clearing up ambiguities and leveling the playing field. The Alliance is not aware of any further
systemic problems with respect to the interpretation of the rules, and we do not believe any
further changes need to be made. [EPA-HQ-OAR-2010-0799-9487-A1, p.8]
NHTSA requests comment on whether the current definitions might create an incentive to
manufacturers to "game" vehicle designs in a way that would reduce potential fuel savings in the
future. We consider this risk to be minimal because vehicle designs are evaluated primarily
based upon an assessment of consumer acceptance. In other words, the key issue for
manufacturers is whether potential purchasers would find the design useful and appealing, not
how the vehicle would be classified under various regulatory programs. Moreover, the advent of
'Reformed CAFE' has reduced the incentives for manufacturers to attempt to reclassify vehicles
from one fleet to another, given the fact that even larger vehicles can be 'CAFE-positive' based
on their status relative to their footprint target. Finally, the existing definitions simply do not lend
themselves to gamesmanship, a testament to NHTSA's efforts over the years to improve and
refine the classification rules. [EPA-HQ-OAR-2010-0799-9487-A1, p.9]
Having developed a robust set of classification rules, NHTSA's priority should be preserving the
stability of those rules, rather than engaging in continual modification and experimentation.
Changes to the classification rules could have unintended consequences. For example, they could
create new ambiguities or open up new opportunities for gamesmanship. If the changes are
overly restrictive, they could have the effect of discouraging the production of vehicles that
American consumers want to buy. [EPA-HQ-OAR-2010-0799-9487-A1, p.9]
A decision to change the classification rules at this point would create other problems. The
classification rules represent a fundamental building block of the single National Program, and
9-7
-------
EPA Response to Comments
any attempt to change the car/truck definitions would have far-reaching consequences. All of the
analyses of the proposed standards that manufacturers have conducted to date have been based
on the assumption that the existing car/truck definitions would be retained. If the definitions
applicable to MYs 2017-2025 were changed, it would require a complete reevaluation of
virtually all other aspects of the proposed rules, including the stringency of the standards, the
cost of compliance and the adequacy of the program flexibilities. Such a reevaluation would be
essential because, as a practical matter, a change to the classification definitions can be
equivalent to a major change to the standards themselves. An amendment to the car/truck
definitions could easily mean the difference between compliance and non-compliance for many
manufacturers. Therefore, amendments to the classification rules would necessitate a brand new,
top-to-bottom reanalysis of the standards by all manufacturers as well as NHTSA and EPA. And
it is highly probable that large portions of the rulemaking package would need significant
readjustment as a result of that exercise. [EPA-HQ-OAR-2010-0799-9487-A1, p.9
In light of the above, the agencies must maintain the current car and truck vehicle classification
framework. The standards (i.e., footprint curves) that have been established and the goals that
have been placed are all based upon the current and known set of harmonized definitions. Any
changes to the definitions during MYs MY 2017-2025 necessarily would require a reevaluation
of the appropriate level of stringency, cost, necessary flexibilities and final standards for any and
all years that a change would apply. [EPA-HQ-OAR-2010-0799-9487-A1, p.9]
Organization: Association of Global Automakers, Inc. (Global Automakers)
NHTSA invites comment on the reclassification of vehicles with a third row of seats that are
currently classified as light trucks under NHTSA regulations in title 49 U.S.C. 523.5(a). Global
Automakers agrees with NHTSA's conclusion that there would be no clear energy savings
benefit from reclassifying these vehicles to be passenger automobiles, and we urge the agency to
maintain the current classification system. Shifting these vehicles into the passenger automobile
category would likely necessitate changes to the auto standards to make the standards less
stringent to accommodate these vehicles, potentially reducing fuel savings. Such a shift would
also impose significant compliance costs on manufacturers as the stringency of both the auto and
truck standards would change. We also reject the argument presented in the proposal that the
third row of seats is installed in some crossover vehicles as a gaming strategy, in order to shift
vehicles into the truck category. There are substantial cost and weight penalties associated with
the addition of third row seats, so installing these seats cannot be justified in the absence of
consumer demand for them. [EPA-HQ-OAR-2010-0799-9466-A1, pp.8-9]
Organization: Ford Motor Company
Clarification of the Interpretation of'Running Clearance'
As explained in more detail in the Alliance comments, NHTSA should not change the existing
framework for vehicle classification. However, NHTSA could assist light truck manufacturers in
the production of more fuel-efficient light trucks by providing a small clarification with respect
to the minimum running clearance criterion applicable to vehicles classified as light trucks by
virtue of their off-highway capability. [EPA-HQ-OAR-2010-0799-9463-A1, p.28]
9-8
-------
Certification, Compliance, and Enforcement
Many SUVs and some crossover vehicles are classified as light trucks because they are 'capable
of off-highway operation' as defined in 49 CFR § 523.5(b). Such vehicles need either have 4-
wheel drive or be over 6,000 pounds GVWR, and they need to meet four out of five dimensional
criteria. One of the five criteria is a running clearance of 20 cm; the others relate to approach
angle, breakover angle, departure angle, and axle clearance. The key terms used in § 523.5(b) are
defined in 49 CFR § 523.2. 'Running clearance' is defined as 'the distance from the surface on
which an automobile is standing to the lowest point on the automobile, excluding unsprung
weight.' [EPA-HQ-OAR-2010-0799-9463-A1, p.28]
Our concern has to do with the interpretation of the running clearance criterion, and its effect on
our efforts to make our light trucks as fuel-efficient as possible. As a motor vehicle is driven
down the highway, the movement of air past the wheels and tires contributes to the aerodynamic
drag of the vehicle, tending to reduce fuel economy. This aerodynamic drag can be reduced by
the installation of flexible plastic components in front of the tire and wheel. Ford calls these
components tire aero deflectors. They help to deflect oncoming air around the tire/wheel
assembly, reducing aerodynamic drag and improving fuel economy. The fuel economy benefit of
tire aero deflectors is primarily apparent in real-world highway driving. [EPA-HQ-OAR-2010-
0799-9463-A1, p.28]
The optimal design of a tire aero deflector can vary from vehicle to vehicle, depending on the
vehicle's design. For some vehicles, the bottom edge of the deflector may need to be less than 20
cm from the ground (when the vehicle is parked on a flat surface) in order to provide the desired
deflection of air around the wheels and tires. This raises the issue: if a vehicle that a
manufacturer intends to classify as a light truck needs to meet the running clearance criterion in
order to meet the '4-out-of-5' requirement in 49 CFR § 523.5(b)(2); and if the manufacturer
wishes to install a tire aero deflector that hangs below the 20 cm running clearance line; should
the installation of such a component prevent the vehicle from being classified as a light truck?
Another manufacturer raised a similar issue in its comments on the MY 2012-2016 rules. In
response, NHTSA indicated that it needed further information and would defer consideration of
the issue to another time. (75 Fed. Reg 25662) [EPA-HQ-OAR-2010-0799-9463-A1, pp.28-29]
As noted previously, the optimal design for a tire aero deflector may be such that the bottom of
the deflector may be less than 20 cm away from the road surface. A tire aero deflector is not
connected to the vehicle's suspension, so it is not considered 'unsprung weight.' Therefore, under
a literal reading of the rule, a tire aero deflector whose bottom edge is less than 20 cm from the
road surface might be considered to infringe upon the 20 cm running clearance criterion. If the
rule is interpreted in this fashion, it would mean that if a manufacturer installs tire aero deflectors
on a vehicle that does not meet the approach angle criterion of 28 degrees, the manufacturer
would be compelled to reclassify the vehicle as a passenger car because the vehicle would not be
able to meet four of the five dimensional criteria specified 49 CFR 523.5(b). [EPA-HQ-OAR-
2010-0799-9463-A1, p.29]
In reality, if tire aero deflectors whose bottom edge is less than 20 cm from the road surface are
considered to violate the running clearance criterion, manufacturers simply will not install them
on the affected light trucks. Typically, whatever fuel economy benefit the deflectors may provide
will be outweighed by the disadvantages to the manufacturer of reclassifying the vehicle as a
9-9
-------
EPA Response to Comments
passenger car. Reclassifying the vehicle as a passenger car would mean that the vehicle would
become subject to the passenger car 'curve,' resulting in a more stringent fuel economy and GHG
'target' for the vehicle. This could have the effect of hurting the manufacturer's ability to meet
both the car standards and the truck standards for a given model year. As a result, manufacturers
will leave the tire aero deflectors off of the vehicles, and the classification rules would end up
discouraging manufacturers from installing components that help to improve real-world fuel
efficiency. [EPA-HQ-OAR-2010-0799-9463-Al, p.29]
One might suggest that the interpretation issue can be avoided if the manufacturer simply
concedes the running clearance criterion and plans to meet the other four dimensional criteria in
49 CFR 523.5(b). However, it is not that simple in the real world, particularly for vehicle
manufacturers concerned with producing fuel-efficient products. One of the other five criteria for
'off-highway capable' truck classification is an approach angle of not less than 28 degrees. Many
SUVs and crossovers built today do not meet this criterion. An approach angle of 28 degrees
means that a vehicle will have a high front fascia. In general, a high front fascia tends to create
more aerodynamic drag, which is not conducive to better fuel economy and reduced GHG
emissions. A lower front fascia allows a vehicle to have better aerodynamic characteristics. In
this era of increasingly stringent CAFE and GHG standards, many manufacturers, including
Ford, disfavor vehicle designs that would feature a high front fascia. If a manufacturer elects to
design a SUV or crossover with a lower front fascia for better fuel economy, it must then plan to
meet all of the remaining four dimensional criteria for off-highway capability in 49 CFR
523.5(b)(2) in order to classify the vehicle as a light truck. This means that the vehicle would
need to have a running clearance of at least 20 cm. [EPA-HQ-OAR-2010-0799-9463-Al, p.29]
Ford designs its tire aero deflectors to be flexible enough to bend without breaking when
encountering a 20 cm high solid object at relatively low speeds (i.e., off-road driving speeds). In
our view, this is fully consistent with the spirit and intent of the off-highway-capable criteria. In
other words, even with the deflectors present, our customers would continue to be able to engage
in the same kinds of off-highway driving envisioned by the current rules, without damaging their
vehicles. [EPA-HQ-OAR-2010-0799-9463-Al, pp.29-30]
In light of the above, we believe that NHTSA can promote improved fuel economy and reduced
GHG emissions, without compromising other objectives, by issuing an interpretation clarifying
that the installation of flexible tire aero deflectors whose bottom edge is less than 20 cm from the
road surface would not compromise compliance with the running clearance criterion in 49 CFR
523.5(b)(2). We therefore requests that in the final rule, NHTSA either provide a regulatory
interpretation in the preamble to the rule, or modify the regulatory language in 49 CFR Part 523,
to provide the following clarification: [EPA-HQ-OAR-2010-0799-9463-Al, p.30]
A flexible component (or components) attached to the undercarriage of a vehicle shall not be
considered in determining compliance with the running clearance measurement found in 49 CFR
523.5(b)(2)(iv), provided as follows:
1. The component(s) is/are installed in front of, and in close proximity to, the wheels, tires, and
associated suspension components that create aerodynamic drag.
9-10
-------
Certification, Compliance, and Enforcement
2. The component(s) will flex without damage when a solid obstacle of 20 cm in height is passed
underneath the component(s) when the vehicle is parked on a flat surface. [EPA-HQ-OAR-2010-
0799-9463-A1, p.30]
Organization: Toyota Motor North America
Vehicle Classification Definitions [EPA-HQ-OAR-2010-0799-9586-A1, p.21]
NHTSA is concerned that manufacturers have an incentive to classify passenger cars as light-
duty trucks to secure an easier CAFE target. Given the 2017-2025 model year standards are
being set so far in advance, NHTSA is also concerned that the definitions could eventually lose
their relevance as the market evolves. [EPA-HQ-OAR-2010-0799-9586-A1, p.21]
Toyota believes that changes to the current vehicle classification definitions are unnecessary.
First, NHTSA itself states that the current definitions are consistent with the text of EISA and
Congress' original intent. Toyota agrees with NHTSA. Second, there has been no evidence to
substantiate speculation that §523.5(a)(5) is being 'gamed' by manufacturers through addition of
3rd row seating. Third, NHTSA's own evaluation concludes that eliminating §523.5(a)(5) may
actually be counterproductive. NHTSA reports that during the 2012-2016 model year rulemaking
it evaluated the impact of moving all two-wheel drive SUYs from the truck fleet to the passenger
car fleet and concluded that such a move would result in lower fuel savings, increased costs, and
significant disruption to the industry. In the year since the 2012-2016 model year standards were
finalized, Toyota is unaware of new information that would change this conclusion. Finally, the
proposed attribute curves are based on extensive analysis of maximum feasible target curves and
standards using current classification definitions. Any revision to the vehicle classification
definitions for standards finalized in this rulemaking would change the shape of the footprint
curves and the stringency of the proposed standards and would necessitate re-proposal of those
standards. To the extent NHTSA is concerned about whether the classification definitions can
keep pace with evolving market through the 2017-2025 model year period, we suggest the issue
be revisited during the mid-term review. [EPA-HQ-OAR-2010-0799-9586-A1, p.21]
Organization: Union of Concerned Scientists (UCS)
(b) Loss in Benefits from Increased Vehicle Size and Car/Truck Reclassification
Another helpful improvement would be to modify the definition of light trucks, adding new
criteria to better differentiate non-passenger vehicles with true off-road capability from
passenger vehicles designed to carry individuals. In addition to the current differentiating list, a
requirement to meet new criteria - a majority subset of the following 5 items: limited slip center
differential, limited slip rear differential, locking axles, skid plates, and 2-speed transfer cases -
could be added. [EPA-HQ-OAR-2010-0799-9567-A2, p. 8]
29 CARB, Initial Statement of Reasons for Proposed Rulemaking, Public Hearing to Consider
the "LEV III" Amendments to the California Greenhouse Gas and Criteria Pollutant Exhaust and
9-11
-------
EPA Response to Comments
Evaporative Emission Standards and Test Procedures and to the On-Board Diagnostic System
Requirements for Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles, and to the
Evaporative Emission Requirements for Heavy-Duty Vehicles, p. 159. [EPA-HQ-OAR-2010-
0799-9567-A2, p. 7]
30 http://www.cal-span.org/cgi-bin/media.pl?folder=CARB, January 26, 2012, at approx. time
marker 5:21. Accessed February 3, 2012. [EPA-HQ-OAR-2010-0799-9567-A2, p. 7]
Response:
These comments are generally directed at NHTSA's request in the proposed rule
regarding the definitions of "passenger automobile" and "light truck" (or "non-passenger
automobile"), and thus EPA is not responding to these comments. Although EPA's rules
incorporate the definitions used in the CAFE program (see 40 CFR 86.1818-12(b)), EPA adopted
these definitions in the MYs 2012-2016 rulemaking in order to harmonize the GHG rules with
the CAFE program. EPA did not raise the possibility of revising these definitions in the present
rulemaking, or otherwise reconsider or reassess its approach of using the harmonized definitions
in the GHG rules. Consequently, EPA is not responding to these comments here, and views
them as addressed exclusively to the CAFE program.
9.3. Compliance Data Transparency
Organizations Included in this Section
Natural Resources Defense Council (NRDC)
Union of Concerned Scientists (UCS)
Organization: Natural Resources Defense Council (NRDC)
EPA and NHTSA should create greater public transparency by annually publishing data on each
manufacturer's credit status and technology penetration, thus ensuring greater public confidence
in the program's effectiveness. [EPA-HQ-OAR-2010-0799-9472-A2, p. 3]
C. Automaker Credit Balance and Technology Application Should be Transparently Reported
Annually to Allow for Public Evaluation of Program Effectiveness
Effective public support for the National Program is dependent on transparent data that proves
that the program is working effectively. To enable the public to evaluate the effectiveness of the
program, EPA should publish an annual public report that includes at minimum the following
quantitative information on credits (in megagrams or metric tons and mpg) for each
manufacturer's car and light truck fleets: [EPA-HQ-OAR-2010-0799-9472-A2, p. 15]
The amount of cumulative credits or deficits;
The amount of credit transfers made by a manufacturer between its car and light truck fleets (if
any);
9-12
-------
Certification, Compliance, and Enforcement
The amount of credits traded between manufacturers including which manufacturers were
involved and the car/truck credit origination and destination; and [EPA-HQ-OAR-2010-0799-
9472-A2, p. 15]
The amount of credits generated, for each manufacturer's car and truck fleet, from the additional
credit opportunities including:
air conditioning related credits;
multipliers for electric vehicles, plug-in hybrid electric vehicles and fuel cell vehicles;
full-size pick-up truck hybrid and performance-based incentive credits;
CAFE credits associated with flex fuel vehicles and alternative fuel vehicles and the fuel usage
assessment that factored into CAFE and GHG calculations; and
off-cycle technology credits. [EPA-HQ-OAR-2010-0799-9472-A2, p. 16]
For each of the five additional credit opportunities above, EPA should specify the basis for
calculating the credits and indicate how many credits were awarded for each mechanism. For
example, EPA should indicate how many plug-in hybrid electric vehicles earned advanced
technology multiplier credits for a manufacturer's car fleet and how EPA calculated the credit
per vehicle type. For off-cycle technology credits, EPA should specify what technologies earned
the credit. [EPA-HQ-OAR-2010-0799-9472-A2, p. 16]
The EPA should also enhance technology descriptions to the annual Fuel Economy Trends
Report and/or Fuel Economy Guide and associated on-line database. Included in the reports
should be the following:
Footprint per model and manufacturer;
Sales per model;
Car or truck classifications by model and manufacturer; and
Penetrations of efficiency and emission reduction technologies by vehicle class and manufacturer
to understand what portions of vehicles have which technologies. [EP A-HQ-OAR-2010-0799-
9472-A2, p. 16]
Organization: Union of Concerned Scientists (UCS)
(e) Transparency and Compliance Accounting
UCS commends the agencies in general on their noticeable efforts to provide high levels of
transparency throughout the 2012-2016 and 2017-2025 rulemaking processes. All three
agencies—EPA, NHTSA, and CARB—have embraced an approach to base findings not upon
9-13
-------
EPA Response to Comments
confidential business information, but rather upon well-documented, proven, and transparent
information. [EPA-HQ-OAR-2010-0799-9567-A2, p. 11]
The agencies could further improve transparency by having a clear public accounting of credits
and program compliance. Over the years, it has been exceedingly difficult to independently
verify whether manufacturers are complaint with their CAFE obligations, and as noted in
previous comment submissions, we have concerns that the same will hold true with
manufacturers' vehicle greenhouse gas obligations. Given the numerous compliance flexibility
mechanisms being proposed by the agencies - as well as a multitude of opportunities for trading,
transferring, banking, and borrowing of credits - it is critical that manufacturers' compliance
ledgers be documented, publicly available, and sufficiently granular to assess by which measures
companies are complying with the regulations. [EPA-HQ-OAR-2010-0799-9567-A2, p. 11]
For example, for each model year, this may include (but not be limited to) each manufacturer's:
car average greenhouse gas emissions performance; light truck average greenhouse gas
emissions performance; amount of credits (on at least car and light-truck fleet average basis)
accrued through advanced technology vehicle credits, early credits, A/C credits, off-cycle
technology credits, flex fuel vehicle credits, and (in the case of MYs 2012-2016) use of
temporary lead-time allowance alternative standards; amount of total banks/debits accrued in
each year; and a running balance of banks/debits. We urge the agencies to undertake an effort to
provide clear public accounting of credits and program compliance. [EPA-HQ-OAR-2010-0799-
9567-A2, p. 11]
Further, in order for UCS and other public interest groups to effectively assess industry
compliance and behavior, we request that the agencies expand the public availability and quality
of disaggregated vehicle data. Because of the new attribute-based standards, it is critical that sub-
model level data be regularly published that includes not only fuel economy and greenhouse gas
emissions performance specifications, but at a minimum, finalized sales, vehicle footprint, and
regulatory vehicle classification. In order to improve the quality of public interest group
assessments, we request that the following data be regularly published at the sub-model
level: [EPA-HQ-OAR-2010-0799-9567-A2, p. 11]
• Model Year
• Make
• Model/Nameplate
• Engine Family
• Transmission Type
• Criteria Pollutant Emission Certification Level(s)
• Number of Cylinders
• Fuel Type
• Drive Type (Fwd/Rwd/4wd)
• Vehicle Weight (ITW, ETW, curb)
• Regulatory Vehicle Classification (Passenger Car, LDT1, LDT2, etc.)
• Horsepower
• Footprint (or wheelbase and front/rear track width)
• Test Greenhouse Gas Emissions - city, highway, and combined
9-14
-------
Certification, Compliance, and Enforcement
• Greenhouse Gas Emissions Adjusted for Upstream - city, highway, and combined
• Unadjusted (CAFE) Test Fuel Economy - city, highway, and combined
• Unadjusted (CAFE) Credited Fuel Economy - city, highway, and combined
• Window Label Fuel Economy (for vehicle identification purposes)
• Sales Volume (finalized sales) [EPA-HQ-OAR-2010-0799-9567-A2, p. 11]
• Sales Origin (domestic passenger, import passenger, non-passenger)
• Market Classification
• EPA Classification
• Identification of whether the vehicle applies under Temporary Lead-time Allowance
Alternative Standards [EPA-HQ-OAR-2010-0799-9567-A2, p. 12]
UCS requests that the data set include all makes and models covered under EPA and NHTSA
greenhouse gas and fuel economy regulations, with no exceptions. As this is a request for the
most recent complete model year of data — not projected sales, or even existing mid-year sales -
any automaker confidentiality claims on these data are unwarranted. [EPA-HQ-OAR-2010-0799-
9567-A2, p. 12]
Finally, UCS suggests that EPA expand its Light-Duty Automotive Technology, Carbon Dioxide
Emissions, and Fuel Economy Trends report to include annual assessments of car/truck
designations and vehicle size (by footprint). Doing so will allow the agencies to better track
whether manufacturers are complying with the standards by deploying clean, fuel-efficient
technologies in their fleets, or whether they are doing so by upsizing, by reclassifying cars as
light trucks, or by other regulatory gaming methods. [EPA-HQ-OAR-2010-0799-9567-A2, p. 12]
Response:
As was the case in the MYs 2012-2016 regulation, EPA received several comments about
the need for transparency in its implementation of the greenhouse gas program and specifically
about the need for public access to information about Agency compliance determinations. NRDC
argued that EPA and NHTSA should publish data on each manufacturer's credit status and
technology penetration on an annual basis. They suggested specific data that should be disclosed,
by car and truck fleets, including the amount of cumulative credits or debits, the within-
manufacturer credit transfers between car and truck fleets, air conditioning credits, use of
multipliers for EVs, PFLEVs, and FCVs, full size pick-up truck FIEV and performance-based
credits, and off-cycle technology credits. They further suggested that the Fuel Economy Trends
Report and the Fuel Economy Guide and associated online database could be enhanced to
include additional vehicle and technology information, by model and manufacturer. The Union
of Concerned Scientists (UCS) reiterated these comments, noting that EPA should have a "clear
public accounting of credits and program compliance." They specifically request that data at the
"sub-model level" be published regularly, and that such data include the following: model year,
make, model/nameplate, engine family, transmission type, criteria pollutant certification levels,
number of cylinders, fuel type, drive type, horsepower, footprint, GHG emissions and fuel
economy test results, window label fuel economy, sales volume, sales origin, market
classification, EPA classification, and whether a vehicle is using the TLAAS program standards.
Like NRDC, UCS also requested enhancements to the Light-Duty Automotive Technology,
9-15
-------
EPA Response to Comments
Carbon Dioxide Emissions, and Fuel Economy Trends report by adding information on car/truck
designations and vehicle size/footprint.
EPA remains committed to the principle of transparency and to disseminating as much
information as we are reasonably and legally able to provide. Indeed, as explained in section II.F
of the preamble, one reason the agencies have rejected off-cycle credits for crash avoidance
technologies are difficulties in quantifying GHG emissions/fuel economy improvements
attributable to the technology, which would raise issues of transparency and verifiability. Not
surprisingly, manufacturers have also commented about the need to protect confidential business
information, a practice to which we also remain committed. As stated in the MYs 2012-2016
final rule, and in section III.E of the preamble to the final rule, EPA expects that the
dissemination of GHG program data will possibly take place through the annual Fuel Economy
Trends report, the annual Compliance Report, or through other means, such as online distribution
through fueleconomy.gov or other EPA websites, new GHG-specific reports, or through some
combination of all of these. Given that the data will be released well after the conclusion of a
given model year, certain information is clearly no longer confidential business information. For
example, vehicle production volumes by model type are unlikely to be treated as confidential
given that essentially the same information can be purchased from sources like WardsAuto. But
production volumes at a finer level of detail, such as at the subconfiguration or configuration
level, could potentially be considered confidential because those volumes, which are not
available elsewhere, may potentially reveal something about a manufacturer's long-term
strategies. These are issues and questions that EPA expects to be addressing as we move forward
with publishing our compliance data.
EPA already releases a considerable amount of information regarding fuel economy,
emissions, and vehicle characteristics, both at the test level and at the model type level.19 The
downloadable model type data available at fueleconomy.gov will soon have CO2 emissions
values (adjusted label values and unadjusted values, similar to the MPG reporting) in addition to
the 127 columns of data we already provide for each model type. However, we plan to expand
what we release publicly such that more information is available regarding GHG program
compliance, For example, EPA intends to publish the applicable fleet average standards (for cars
and for trucks) and the actual fleet performance for each manufacturer, and the resulting credits
or debits (in Megagrams, or metric tons). In addition, EPA anticipates publishing the amount of
credits generated by each manufacturer (separately for each of the car and truck fleets) under the
optional credit programs, and the associated volumes of vehicles to which those credits apply.
EPA will also likely publish various credit transactions (transfers among fleets within a
manufacturer and trades between manufacturers), as well as the total credits or debits
accumulated in a model year and the resulting overall credit or debit balance, taking into account
the credit and debit carry-forward provisions. EPA anticipates that the data publication will
evolve over time, both as the program progresses and as our data systems adapt to the new
requirements and are able to manage and report data accurately and effectively. For example, our
first public release of information is likely to be a summary of the early credits generated in the
2009-2011 model years that, at least initially, may not be as comprehensive as the reporting that
19 See http://www.epa.gov/otaq/tcldata.htm and http://www.fueleconomy.gov/.
9-16
-------
Certification, Compliance, and Enforcement
90
follows the 2012 model year. EPA is currently assessing how to best release these data (both
the content and the mechanism), but expects that publication will occur later this year.
9.4. Harmonization with CAFE
Organizations Included in this Section
Alliance of Automobile Manufacturers
Ford Motor Company
Organization: Alliance of Automobile Manufacturers
The Agencies Should Insure that the NHTSA Requirements are Fully Harmonized with the EPA
Requirements. [EPA-HQ-OAR-2010-0799-9487-A1, p. 14]
EPA and NHTSA mention several times in the NPRM that they have worked to develop "strong
and coordinated" Federal GHG and CAFE standards so that manufacturers can build a single
fleet of vehicles to satisfy requirements under both programs as well as under the California
program. As the agencies explain, this helps to reduce costs and regulatory complexity while
achieving significant energy security and environmental benefits. While we appreciate the
agencies' efforts to harmonize the two programs, more work needs to be done in this area.
Specifically, NHTSA should modify its CAFE program for MY 2017-2025 to better harmonize
withEPAs GHG program. [EPA-HQ-OAR-2010-0799-9487-A1, p.14]
NHTSA's proposed CAFE standards account for many of the same factors that EPA considers in
setting its proposed GHG standards. However, the proposed CAFE program does not include all
of the program flexibilities built into the GHG program. NHTSA's program does not account for
some of the EPA flexibilities, including off-cycle technology benefits, mobile air conditioning
benefits, and benefits for hybridizing large work trucks. However, there are other important
flexibilities that are present in the GHG program, but not the CAFE program. These include the
advanced technology volume multiplier, the difference in quantification for advanced
technologies with respect to the treatment of electricity, natural gas fuel utility factors, unlimited
credit transfers between fleets and the one-time carry forward of previous credits through MY
2021. [EPA-HQ-OAR-2010-0799-10153-A2, p.l]
By MY 2025, the difference between the EPA's proposed fleet average standard and NHTSA's
proposed fleet average standard equates to about 4.9 mpg. However, this difference is not large
enough to offset the benefits of the additional flexible mechanisms included in EPA's program.
In order to bring the two programs into better alignment, NHTSA needs to either increase the
program flexibilities offered under the CAFE program or modify its curves to better reflect the
other differences between the two programs. While the impact of the program differences is
relatively small in the early years of the program, it will increase with the passage of time,
particularly as manufacturers rely more and more on vehicle electrification in order to comply
20 Reporting of these credits was due from manufacturers at the end of March, 2012, and EPA is currently evaluating
the data to ensure compliance with regulatory requirements.
9-17
-------
EPA Response to Comments
with the standards. Unless this imbalance is corrected, it will result in significant disharmony in
the middle and later years of the time period covered by this proposal. [EPA-HQ-OAR-2010-
0799-9487-Al,p.l4]
The Alliance recognizes that, with respect to program flexibilities, EPCA and EISA impose
some restraints on NHTSA that the Clean Air Act does not impose on EPA. Nevertheless, the
Alliance believes that increased harmonization between the two programs is both possible and
necessary. The Alliance strongly recommends that NHTSA undertake further study of its ability
to include additional, appropriate program flexibilities to provide for equivalent stringency
between the proposed CAFE standards and the proposed GHG standards.10 To the extent that
NHTSA cannot fully provide for equivalent stringency through the addition of program
flexibilities, NHTSA should adjust the proposed CAFE standards themselves to fully account for
the differences in the two programs. Such an adjustment is necessary to ensure that the
President's goal of coordinated, harmonized CAFE and GHG programs is realized, and to avoid
potential future problems due to disparities in the stringency of the two programs. [EPA-HQ-
OAR-2010-0799-9487-A1, pp.14-15]
10 - Please note that the term 'program flexibilities' does not refer to the enforcement provisions
of the two programs, such as the payment of fines. The agencies' harmonization efforts should
focus on achieving equivalent stringency in the CAFE and GHG standards, regardless of any
differences in the enforcement mechanisms for the two programs.
Organization: Ford Motor Company
Consistent Geographical Fleets for the CAFE and GHG Programs
As noted repeatedly by the agencies, a key objective of One National Program is harmonization
of the GHG and CAFE requirements to the greatest extent possible. In that regard, the agencies
should strive to harmonize the fleets that are used to calculate the GHG and CAFE fleet
averages, respectively. [EPA-HQ-OAR-2010-0799-9463-Al, p.26]
In its comments on the MY 2012-2016 One National Program regulations, Ford raised an issue
related to GHG-CAFE harmonization. The issue is that there is a geographical discrepancy
between vehicles covered under the CAFE program and those covered under the Clean Air Act
(CAA). Under NHTSA's regulations, CAFE compliance is based on vehicles delivered for sale in
the 50 states, the District of Columbia, and Puerto Rico. (49 CFR § 525.4(a)(5)) However, under
Section 302(d) of the CAA, the term 'State' is defined to include vehicles delivered to those
locations, plus the Virgin Islands, Guam, American Samoa, and the Commonwealth of Northern
Mariana Islands. The result is that, under the existing rules, manufacturers have to use different
databases of vehicles to calculate their CAFE fleet average and their GHG fleet average,
respectively. In Ford's case, the additional territories included under the CAA definition means
that the GHG database has about 1,000 more vehicles than the CAFE database. [EPA-HQ-OAR-
2010-0799-9463-A1, pp.26-27]
9-18
-------
Certification, Compliance, and Enforcement
Given the size of Ford's fleet, the impact of an additional 1,000 vehicles in the GHG database is
negligible from a fleet average standpoint. However, the administrative burden caused by the
need to maintain two databases, and to chase down the relevant information for the vehicles in
the additional territories covered by the CAA, is not negligible. The additional vehicles are not
easily identified on a model type, base level, configuration, or sub configuration level, and it
represents a significant effort to gather all of this information for the GHG database. In short, the
geographic discrepancy between the GHG fleet and the CAFE fleet adds administrative burden
for no real benefit. [EPA-HQ-OAR-2010-0799-9463-A1, p.27]
In our comments on the MY 2012-2016 rules, Ford suggested that EPA could amend its
regulations to clarify that, for purposes of emissions compliance reporting and fleet averaging
only, the fleet is composed of vehicles for the 50 states, the District of Columbia and Puerto
Rico. In promulgating the final MY 2012-2016 rules, EPA responded to this comment as
follows:
The comment stated that EPA has the discretion under the CAA to align the sales area location
of production vehicles for the greenhouse gas fleet with the sales area location for the CAFE
fleet and recommended that EPA amend the definitions in 40 CFR 86.1803 accordingly. This
would exclude from greenhouse gas requirements production vehicles that are introduced into
commerce in the Virgin Islands, Guam, American Samoa, and the Commonwealth of the
Northern Mariana. [EPA-HQ-OAR-2010-0799-9463-A1, p.27]
Although EPA has tried to harmonize greenhouse gas and CAFE requirements in this rule to the
extent possible, EPA believes that the approach suggested in comment would be contrary to the
requirements of the Act. EPA does not believe that the Agency has discretion under the CAA to
exclude from greenhouse gas requirements production vehicles introduced into commerce in the
Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana
Islands. In addition, this change would introduce an undesirable level of complexity into the
certification process and result in confusion due to vehicles intended for commerce in separate
geographical locations being covered under a single certificate. For these reasons, EPA will
retain the proposed greenhouse gas production vehicle sales area location as defined in the CAA.
(75 Fed. Reg. 25484) [EPA-HQ-OAR-2010-0799-9463-A1, p.27]
Based on EPA's response, it is apparent that Ford's original comment was unclear. It was never
Ford's intention to exclude vehicles delivered to the Virgin Islands, Guam, American Samoa, or
the Commonwealth of the Northern Mariana Islands from any certification requirements, or to
otherwise introduce any complexity or confusion into the certification process. Under our
concept, the certification process would not change; all vehicles delivered to those locations
would be fully certified to all applicable standards, just as they are today. The only proposed
change is that, solely for purposes of calculating and reporting a manufacturer's GHG fleet
average, the rules would give manufacturers the option not to include the vehicles delivered to
the specified locations, thereby enabling the manufacturers to harmonize their GHG fleet with
their CAFE fleet. Such a change would have no adverse environmental consequences; as noted
above, it would not alter the vehicles sent to the territories in question, and the small number of
vehicles at issue is not significant enough to affect a manufacturer's fleet average. Meanwhile,
9-19
-------
EPA Response to Comments
this change would be very beneficial from the standpoint of promoting harmonization and
reducing unnecessary administrative burdens. [EPA-HQ-OAR-2010-0799-9463-Al, pp.27-28]
There may be a number of ways to accomplish this goal through amendments to the regulatory
language, but here is our suggestion. After 40 CFR § 86.1865-12 (a)(2), add the following:
(3) As used in this section, the term 'delivered for sale' refers to new passenger automobiles and
light trucks transported to dealerships for the purpose of retail sales to consumers in the United
States (including the District of Columbia), Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Commonwealth of Northern Mariana Islands. For purposes of this section only,
manufacturers may elect not to include vehicles delivered for sale in the Virgin Islands, Guam,
American Samoa, and the Commonwealth of Northern Mariana Islands their computation of
fleet average carbon-related exhaust emissions by notifying EPA of this election in the annual
report required pursuant to subsection (l)(2)(vi) of this section. [EPA-HQ-OAR-2010-0799-
9463-A1, p.28]
This language helps to clarify the universe of vehicles subject to the fleet average carbon-related
exhaust emission calculation in subsection (h)(3)(l) of § 86.1865-12, and it also provides
manufacturers with the ability to harmonize this GHG fleet with the fleet of vehicles subject to
CAFE reporting under EPCA and EISA. We encourage EPA to adopt this amendment in the
interests of promoting harmonization and minimizing the burden on manufacturers. [EPA-HQ-
OAR-2010-0799-9463-A1, p.28]
Response:
With regard to the comment from the Alliance of Automobile Manufacturers, EPA finds
that it is directed towards the NHTSA program, and as such, no EPA response is needed.
With regard to the comment from Ford, EPA appreciates the company's willingness to
continue to certify these non-mainland vehicles. However, it would still be the case that these
vehicles are not included in the manufacturers' fleet average for the GHG standard, which is not
a desirable result. Nor does EPA understand why the associated administrative burden is so
great. Presumably Ford (and any other manufacturer) would have already identified whatever
extra-territorial vehicles it sells for purposes of CAFE. That is, manufacturers would need to
know how many and what these vehicles are in order to keep them out of their CAFE
calculations. Given that this information is already being gathered, EPA does not perceive why
applying that same already-at-hand information to determine the GHG fleet average would add
significant additional administrative burden.
9.5. Durability Procedures for Diesel Vehicles
[Organization: Alliance of Automobile Manufacturers
Treatment of Diesel-Fueled Vehicles Under Emissions Durability Demonstration Test
Procedures [EPA-HQ-OAR-2010-0799-9487-A1, p91]
9-20
-------
Certification, Compliance, and Enforcement
All technologies should be treated fairly under the exhaust emission durability demonstration
procedures at 40 CFR 86.1823-08. Within these procedures, however, diesel-fueled vehicles are
specifically disallowed from making use of bench-aging durability procedures, (40 CFR
86.1823-08(d)), adding significant and unnecessary expense to the durability demonstration for
such vehicles. Diesel technology offers a greenhouse gas and fuel consumption reduction
opportunity and should be allowed similar flexibility to other fuel technologies under the
durability demonstration procedures. Therefore, the Alliance requests that EPA work with
manufacturers to develop a bench-aging durability procedure for diesel-fueled vehicles for
proposal in a future rulemaking. [EPA-HQ-OAR-2010-0799-9487-A1, p91]
[Organization: Chrysler Group LLC
We urge the agencies to treat diesel vehicles fairly under the EPA durability
demonstration procedures, as described in depth in the comments from the Alliance.
[Organization: Mercedes-Benz USA, LLC
All technologies should be treated fairly under the exhaust emission durability demonstration
procedures at 40 CFR 86.1823-08. The procedures, however, specifically disallow the use of
bench-aging durability procedures for diesel-fueled vehicles. This adds significant and
unnecessary expense to the durability demonstration for diesel vehicles. Diesel technology offers
a greenhouse gas and fuel consumption reduction opportunity and should be allowed similar
flexibility to other fuel technologies under the durability demonstration procedures. DAG
therefore agrees with others in the industry in the request that EPA work with manufacturers to
develop a bench-aging durability procedure for diesel fueled vehicles for proposal in a future
rulemaking. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-5]
Response:
Commenters regarding this issue appear to be aware that the issue they are raising cannot be
resolved in this final rule. EPA did not propose any changes to the exhaust emission durability
demonstration provisions, and thus is not finalizing any related changes to the regulations. In
general, EPA strives for emission standards that are applied equitably across technologies, and as
such, we are willing to consider future discussions regarding this issue, and, if appropriate, a
future rulemaking action.
9.6. Other Certification and Compliance Related Comments
Organizations Included in this Section
Alliance of Automobile Manufacturers
Clean Energy
Ferrari
Manufacturers of Emission Controls Association (MECA)
NGV America
9-21
-------
EPA Response to Comments
Organization: Alliance of Automobile Manufacturers
Driver Selectable Modes [EPA-HQ-OAR-2010-0799-9487-A1, p.90]
EPA has requested comment on ".. .whether there is a need to clarify in the regulations how EPA
treats driver-selectable modes..." We believe that EPA should continue to use its current
methods for dealing with driver-selectable modes and that no additional regulatory clarification
is necessary. [EPA-HQ-OAR-2010-0799-9487-A1, p.90]
The current regulations and guidance, administered at the national level, allow common driver-
selectable modes to be dealt with in a consistent manner while still allowing flexibility in dealing
with any new and unusual modes that may develop. EPA should continue to monitor the use and
application of its driver-selectable mode policies and update or refine its guidance as necessary.
[EPA-HQ-OAR-2010-0799-9487-Al,p.90]
U.S. Production [EPA-HQ-OAR-2010-0799-9487-A1, p.90]
There are provisions in the proposed regulations that reference U.S. production as a component
of applicability or eligibility for that provision. For example, in describing the minimum sales
volume threshold for the list of predetermined off-cycle technologies, §86.1866-12(d)(l)(i) states
The manufacturer may generate a CO2/g credit... provided that each technology is applied to the
minimum percentage of the manufacturer's U.S. production of passenger automobiles ... for
which credit is claimed.' Similarly, the provisions for advanced technology vehicles in §86.1866-
12(a)(l) states, "Electric vehicles, plug-in hybrid electric vehicles, and fuel cell vehicles ... that
are certified, produced, and delivered for sale in the United States ... may use a value of zero (0)
grams/mile of CO2 ..." [EPA-HQ-OAR-2010-0799-9487-A1, p.90]
A reasonable interpretation of the provisions above could imply they are applicable only to
vehicles produced in the U.S. It is the understanding of the Alliance that the agencies do not
intend for the applicability or eligibility of the proposed regulations to depend on a vehicle's
origin. [EPA-HQ-OAR-2010-0799-9487-A1, p.90]
The Alliance requests that the agencies clarify that the eligibility and applicability of the
provisions being proposed are not contingent on a manufacturer producing vehicles in the U.S.
We suggest that where the agencies currently reference "U.S. production" in a provision, that
language be revised to instead use the term "production for U.S. sale," which is consistent with
the intent of the provisions in both the Clean Air Act and the Energy Policy and Conservation
Act of 2005, as amended by the Energy Independence and Security Act of 2007. [EPA-HQ-
OAR-2010-0799-9487-A1, p.90]
Credits for Aftermarket Sales of Alternative Fuel Systems
Organization: Clean Energy
9-22
-------
Certification, Compliance, and Enforcement
Currently only original equipment manufacturers (OEM) are required to meet fuel economy
regulations. However, a number of aftermarket conversions to natural gas continue to be
performed each year. The effect is that a significant supply of potential fuel economy credits for
dedicated and dual-fuel NGVs are lost to the OEMs. Since most aftermarket systems also are
exempt for the GHG regulations these credits are also lost to the OEMs. To address this
situation, EPA and NHTSA should establish procedures to reward the OEMs for aftermarket
conversions. [EPA-HQ-OAR-2010-0799-9511-A1, pp.4-5]
Organization: NGV America
Currently only original equipment manufacturers (OEM) are required to meet fuel economy
regulations. However, a number of aftermarket conversions to natural gas continue to be
performed each year. The effect is that a significant supply of potential fuel economy credits for
dedicated and dual-fuel NGVs are lost to the OEMs. Since most aftermarket systems also are
exempt for the GHG regulations these credits are also lost to the OEMs. To address this
situation, EPA and NHTSA should establish procedures to reward the OEMs for aftermarket
conversions. We propose that converters be able to collect and trade FE and GHG credits with
the underlying OEM. At each fuel economy reporting interval, the OEM would substitute FE
data for the base vehicle with that for the converted NGV. For example, a dedicated vehicle
achieving 18 mpg in gasoline mode would be substituted with an NGV achieving 18/0.15= 120
mpg. For purposes of compliance, the OEM would be treated as if they were the manufacturer of
record (MOR) for the converted vehicle. To facilitate this, the converter would have to report to
the OEM and NHTS A/EPA the number of vehicles sold each reporting period. [EPA-HQ-OAR-
2010-0799-9461-A1, p. 12]
Organization: Ferrari
In-use standards and durability
EPA proposes in-use CO2 standards that would apply throughout a vehicle's useful life, with the
standard determined by adding a 10 percent adjustment factor to the model-level emission
results. We agree to keep the 10% higher CO2 standards to take into account the variability
involved, such as: [EPA-HQ-OAR-2010-0799-9535-A2, p. 12]
• Normal variability in test results. [EPA-HQ-OAR-2010-0799-9535-A2, p. 12]
• Variability in the production for the same vehicle configuration. [EPA-HQ-OAR-2010-0799-
9535-A2, p. 12]
• Differences in the equipments with different optional items that can affect CO2 emissions (curb
weight, wheels, tires, engine lubricant, and state of maintenance). [EPA-HQ-OAR-2010-0799-
9535-A2, p. 12]
We agree that manufacturers may demonstrate in-use emissions durability of off-cycle
technologies at time of certification, by submitting an engineering analysis describing why the
9-23
-------
EPA Response to Comments
technology is durable and expected to last for the full useful life of the vehicle. [EPA-HQ-OAR-
2010-0799-9535-A2, p. 12]
OBD monitoring of GHG-emissions
We support EPA that is not proposing any OBD requirements regarding CO2, CH4, and N2O
emissions, because these GHG emissions should not deteriorate over the full vehicle life. We
appreciate that EPA does not propose at this time OBD monitoring for off-cycle technologies.
[EPA-HQ-OAR-2010-0799-9535-A2, pp. 12-13]
Applicability of high altitude provisions to greenhouse gases
We agree with EPA that is proposing to retain its current high altitude regulations so
manufacturers would not normally be required to submit vehicle CO2, CH4, and N2O test data
for high altitude. Instead, they would submit an engineering evaluation indicating that common
calibrations will be utilized at high altitude, and therefore the compliance is assured also in these
conditions. [EPA-HQ-OAR-2010-0799-9535-A2, p. 13]
The main benefit is to reduce the number of emissions tests to be performed (in labs located at
high altitude or with the capability to simulate such conditions) during vehicles certification,
especially relevant for small-volume manufacturers. This approach is useful to streamline the
emission certification procedure in U.S.A. [EPA-HQ-OAR-2010-0799-9535-A2, p. 13]
Civil penalties
Ferrari opposes any increase in civil penalties for CAFE because it will not result in substantial
energy conservation and could have a negative impact mainly on small businesses. Increasing the
penalty up to 10.00 $ per tenth-mpg per vehicle will increase the burden mainly on few vehicle
manufacturers (which already pay a lot of money in fines and/or penalties) which cannot change
their products because are typical and identify the uniqueness of the makes. For example, Ferrari
traditionally manufactures high-performance sports vehicles. [EPA-HQ-OAR-2010-0799-953 5-
A2,p.l5]
We believe that higher penalties are not an effective method to increase the CAFE in U.S.A.
Historically; the penalties have been paid mainly by foreign manufacturers responsible of a
relatively limited number of vehicles. [EPA-HQ-OAR-2010-0799-953 5-A2, p. 15]
Organization: Manufacturers of Emission Controls Association (MECA)
MECA believes that further reductions of hydrocarbon and NOX emissions from the existing
light-duty vehicle fleet can be achieved by revising the current EPA aftermarket converter
performance requirements. California has revised their aftermarket converter requirements for
light-duty, gasoline vehicles by requiring a higher level of emission performance and longer
durability standards. ARB's regulation eliminates the sale of older aftermarket converter
products that have modest performance standards and a limited 25,000 mile warranty, and
requires that higher performance and more durable OBD-compliant aftermarket converter
9-24
-------
Certification, Compliance, and Enforcement
products be used on both non-OBD and OBD-equipped vehicles (ARB implemented their
revised aftermarket converter requirements in January 2009). These ARB approved OBD-
compliant aftermarket converters are warranted for 50,000 miles based on the use of a more
aggressive, high temperature, accelerated engine-aging protocol compared to the vehicle
durability demonstration currently required by EPA for approved aftermarket converter products.
EPA has not updated its aftermarket converter requirements since 1986 and with more than three
million aftermarket converters sold per year across the U.S. (based on surveys completed by
MECA with aftermarket converter manufacturers), significant additional reductions of
hydrocarbon emissions, including toxic hydrocarbon emissions, and NOX emissions could be
achieved with a national aftermarket converter policy that made use of the same higher
performance OBD-compliant aftermarket converters available in California. [EPA-HQ-OAR-
2010-0799-9452-A3, p.5]
Response:
Driver-Selectable Modes
EPA requested comments on whether there is a need to clarify in the regulations how
EPA treats driver-selectable modes (such as multi-mode transmissions and other user-selectable
buttons or switches) that may impact fuel economy and GHG emissions in certification testing.
See 76 FR 75089. EPA addresses those comments here. The issue of whether user-selectable
technologies may be eligible for off-cycle credits is addressed in preamble section II.F and in
section 7 of this RTC document. Note also that this discussion pertains specifically to
implementing the testing required on the Federal Test Procedure and the Highway Fuel Economy
Test as used to generate combined City/Highway GHG and MPG values for each model type for
use in calculating fleet average GHG and MPG values. For the purpose of assigning off-cycle
credit values that may be based on a driver-selectable technology (see preamble section II.F),
where determination of an accurate real-world benefit of the technology is a fundamental goal,
the policy described here and in current EPA guidance may not be appropriate.
New technologies continue to arrive on the market, with increasing complexity and an
increasing array of ways a driver can make choices that affect the fuel economy and greenhouse
gas emissions. For example, some start-stop systems may offer the driver the option of choosing
whether or not the system is enabled. Similarly, vehicles with ride height adjustment or grill
shutters may allow drivers to override those features. Under the current regulations, EPA draws a
distinction between vehicles tested for purposes of CC>2 emissions performance and fuel
economy and vehicles tested for non-CC>2 emissions performance. When testing emission data
vehicles for certification under Part 86 for non-CC>2 emissions standards, a vehicle that has
multiple operating modes must meet the applicable emission standards in all modes, and on all
fuels. Sometimes testing may occur in all modes, but more frequently the worst-case mode is
selected for testing to represent the emission test group. For example, a vehicle that allows the
user to disengage the start-stop capability must meet the standards with and without the start-stop
system operating. Similarly, a plug-in hybrid electric vehicle is tested in charge-sustaining (i.e.,
gasoline-only) operation. Current regulations require the reporting of CC>2 emissions from
certification tests conducted under Part 86, but EPA regulations also recognize that these values,
from emission data vehicles that represent a test group, are ultimately not the values that are used
to establish in-use CO2 standards (which are established on much more detailed sub-
9-25
-------
EPA Response to Comments
configuration-specific level) or the model type CO2 and fuel economy values used for fleet
averaging under Part 600.
When EPA tests vehicles for fuel economy and CC>2 emissions performance, user-
selectable modes are treated somewhat differently, where the goals are different and where
worst-case operation may not be the appropriate choice for testing. For example, EPA does not
believe that the fuel economy and CC>2 emissions value for a PHEV should ignore the use of grid
electricity, or that other dual fuel vehicles should ignore the real-world use of alternative fuels
that reduce GHG emissions. For PHEVs and dual fuel CNG vehicles, where the consumer pays
an up-front premium for the vehicle but can recoup that investment by using a less expensive
fuel, the regulations allow the use of utility factors to weight the CC>2 performance on the
conventional fuel and the alternative fuel. Similarly, non-CC>2 emission certification testing may
be done in a transmission mode that is not likely to be the predominant mode used by consumers.
Testing under Part 600 must determine a single fuel economy value for each model type for the
CAFE program and a single CC>2 value for each model type for EPA's program. With respect to
transmissions, Part 600 refers to 40 CFR 86.128, which states the following:
"All test conditions, except as noted, shall be run according to the manufacturer's
recommendations to the ultimate purchaser, Provided, That: Such recommendations are
representative of what may reasonably be expected to be followed by the ultimate
purchaser under in-use conditions."
For multi-mode transmissions EPA relies on guidance letter CISD-09-19 (December 3,
2009) to guide the determination of what is "representative of what may reasonably be expected
to be followed by the ultimate purchaser under in-use conditions." If EPA can make a
determination that a certain mode is the "predominant" mode (meaning nearly total usage), then
testing may be done in that mode. However, if EPA cannot be convinced that a single mode is
predominant, then fuel economy and GHG results from each mode are typically averaged with
equal weighting. There are also detailed provisions that explain how a manufacturer may
conduct surveys to support a statement that a given mode is predominant. However, CISD-09-19
only addresses transmissions, and states the following regarding other technologies:
"Please contact EPA in advance to request guidance for vehicles equipped with
future technologies not covered by this document, unusual default strategies or driver
selectable features, e.g., hybrid electric vehicles where the multimode button or switch
disables or modifies any fuel saving features of the vehicle (such as the stop-start feature,
air conditioning compressor operation, electric-only operation, etc.)."
The unique operating characteristics of these technologies often requires that EPA
determine fuel economy and CC>2 testing and calculations on a case-by-case basis. Because the
CAFE and CC>2 programs require a single value to represent a model type, EPA must make a
decision regarding how to account for multiple modes of operation. When a manufacturer brings
such a technology to us for consideration, we will evaluate the technology (including possibly
requiring that the manufacturer give us a vehicle to test) and provide the manufacturer with
instructions on how to determine fuel economy and CC>2 emissions. In general we will evaluate
these technologies in the same way and following the same principles we use to evaluate
transmissions under CISD-09-19, making a determination as to whether a given operating mode
9-26
-------
Certification, Compliance, and Enforcement
is predominant or not (using the criteria for predominance described in CISD-09-19). These
instructions are provided to the manufacturer under the authority for special test procedures
described in 40 CFR 600.111-08. EPA would apply the same approach to testing for compliance
with the in-use CC>2 standard, so testing for the CC>2 fleet average and testing for compliance
with the in-use CC>2 standard would be consistent.
EPA requested comment on whether the current approach and regulatory provisions are
sufficient, or whether additional regulations or guidance should be developed to describe EPA's
process. Manufacturers, who were the only commenters on this issue, commented that the
current case-by-case approach is adequate, and EPA agrees. We recognize that no regulation can
anticipate all options, devices, and operator controls that may arrive in the future, and adequate
flexibility to address future situations is an important attribute for fuel economy and CC>2
emissions testing. We believe it would be difficult at this time to construct regulations that
adequately and generically address the use of multiple modes in GHG/MPG testing.
U.S. Production
EPA agrees that requirements are not limited to vehicles produced in the U.S., and are not
contingent on a manufacturer producing vehicles in the U.S. EPA has revised the regulatory
language where appropriate to be consistent with the commenter's suggestion.
Credits for Aftermarket Sales of Alternative Fuel Systems
EPA discusses the applicability of GHG standards to aftermarket conversions in the preamble to
the final rule in section III.E.7. One of the relevant points is that credits are generated based on
the determination of a fleet average GHG value, and fleet average standards are generally not
appropriate for aftermarket conversions. This is because the vehicles that are converted have
already been included in the fleet calculations for the OEM. It is possible that at some point
EPA and NHTSA could develop a methodology to appropriately account for the emissions
impact of aftermarket conversions, but there are a number of other issues that have to be resolved
and that EPA was not prepared to address in this rulemaking. For example, it is not immediately
clear how the agencies would account for vehicle conversions that take place mid-way through a
vehicle's useful life. Given the complexities involved, and the fact that we did not propose a
credit program for aftermarket conversions, EPA is not finalizing such a program in this action.
In-use Standards and Durability
EPA agrees with the commenter. The 10% adjustment used to create the in-use emission
standard was finalized in the MY 2012-2016 program, and EPA did not propose to change it in
this rulemaking. Thus it is being maintained for the MY 2017-2025 program.
OBD Monitoring of GHG Emissions
EPA agrees with the commenter. The MY 2012-2016 program was finalized such that OBD
monitoring is not required for CO2 ,N2O, and CFLj emissions, and EPA did not propose to change
these provisions for the 2017 and later model years. Consequently, the exclusion of these
emission constituents from OBD monitoring continues to be part of the MY 2017 and later
program.
9-27
-------
EPA Response to Comments
Applicability of High Altitude Provisions to Greenhouse Gases
EPA agrees with the commenter. Under the current program, vehicles would be required to meet
the CO2, N2O, and CH4 standards at high altitude, but would not normally be required to submit
vehicle test data at high altitude. Instead, manufacturers may submit an engineering analysis
indicating that common calibration approaches will be used at high altitude. EPA did not propose
to change these provisions for the 2017 and later model years, or otherwise reconsider or reassess
those provisions. Consequently, the provisions supported by the commenter will continue to be
part of the MY 2017 and later program.
Civil Penalties
EPA will not respond to the comments that are directed towards the civil penalties that apply
under NHTSA's CAFE program.
Aftermarket Catalysts
EPA finds that the comment from MECA regarding EPA's aftermarket catalyst program is not
relevant to the proposed program, and thus a response is not warranted.
9-28
-------
Additional EPA Program Elements
10. Additional EPA Program Elements
10.1. Average Banking and Trading
Organizations Included in this Section
American Chemistry Council (ACC)
Association of Global Automakers, Inc. (Global Automakers)
BMW of North America, LLC
Chrysler Group LLC
Eaton Corporation
Ecology Center
Ford Motor Company
General Motors Company
Hyundai America Technical Center
Johnson Controls, Inc.
Motor & Equipment Manufacturers Association (MEMA)
Northeast States for Coordinated Air Use Management (NESCAUM)
Toyota Motor North America
United Automobile Workers (UAW)
Organization: American Chemistry Council (ACC)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 264.]
We support the credit approach taken by the agencies.
Organization: Association of Global Automakers, Inc. (Global Automakers)
We also support the flexibility mechanisms and credits that the agencies propose to make
available. These provisions enhance the ability of manufacturers to meet market demand, while
maintaining the emissions and energy security benefits of the program. They also provide
another means of dealing with the uncertainty associated with the out year standards. The various
credits work in different ways, all of which are important. [EPA-HQ-OAR-2010-0799-9466-Al,
p.l]
The credit banking and trading system provides an incentive for manufacturers to implement
advanced technologies at early dates. [EPA-HQ-OAR-2010-0799-9466-Al, p. 1]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 66.]
Organization: BMW of North America, LLC
10-1
-------
EPA Response to Comments
BMW supports the proposed flexibilities such as averaging, credit banking, extended approach
for off-cycle technologies as well as retaining the approach for A/C credits. These flexibilities
are needed in order for manufacturers to achieve overall regulatory compliance in a cost effective
manner. [EPA-HQ-OAR-2010-0799-9579-A1, p.5]
BMW supports the continuation of the credit banking scheme as proposed. [EPA-HQ-OAR-
20 10-0799-9579-A1, enclosure p. 1]
Organization: Chrysler Group LLC
To provide these levels of improvement in the most cost-effective and customer acceptable
manner, manufacturers need maximum flexibility. The proposals by the agencies to continue and
improve flexibility mechanisms and to offer incentives to encourage early adoption of advanced
technologies are helpful and will be an integral part to meeting the National Program goals.
[EPA-HQ-OAR-2010-0799-9495-Al,p.2]
Organization: Eaton Corporation
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 186-187.]
Eaton believes it is vital that the rule maintains the flexibility to adapt the solutions that can be
rapidly adopted by OEMs and accepted by consumers. An example is the increased use of
supercharged and mild hybrid technologies that provide fuel savings and performance with
return on investments that is acceptable to the average consumer.
The proposed rule provides regulatory incentives that foster innovation and technology
deployment. We believe that many of the technologies needed to achieve the proposed standards
are available. Some are already in use, while others will benefit from the new paradigm these
proposed regulations will provide. Working with our OEM partners, Eaton looks forward to
providing high performance and cost-effective fuel efficient technologies.
Organization: Ecology Center
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 190.]
The Ecology Center would also like to express support for the flexibility mechanisms in the
proposed standards.
Organization: Ford Motor Company
Program Flexibilities: Finally, it is important for the rules to include program flexibilities that
provide manufacturers with compliance options, and that provide appropriate incentives for the
deployment of technologies offering real-world fuel economy and GHG benefits not reflected in
10-2
-------
Additional EPA Program Elements
the test procedures. The proposal for model years 2017 through 2025 retains and enhances the
flexibilities of the earlier rulemaking. Opportunities to acknowledge the environmental impact of
more efficient air-conditioning technologies, new refrigerants, real-world fuel economy benefits
from non-traditional technologies, and the acceleration of more advanced technologies, will
encourage the adoption and penetration of the innovations needed to achieve our aggressive
national goals. [EPA-HQ-OAR-2010-0799-9463-Al, p.2]
Ford applauds the efforts of EPA and NHTSA to incorporate a range of compliance mechanisms
into the proposed rules. These include credits for innovations such as off-cycle technologies,
improvements in air-conditioning systems designed to minimize refrigerant leakage, and the
promotion of advanced technologies that operate on a variety of alternatives to traditional
gasoline. These compliance mechanisms are fully consistent with the goals of the One National
Program, and they also provide manufacturers with needed flexibility to comply with a
demanding set of standards. The agencies have recognized that automobile manufacturers come
to these regulations with varying product line-ups, different marketing strategies, and a range of
capabilities with respect to fuel economy technologies. In this context, a one-size-fits-all
regulatory program would be very problematic. Appropriately, the proposed rule offers
manufacturers flexibility by enabling them to earn and apply credits for various actions tied to
the real-world benefit these technologies provide in regard to both fuel efficiency and
greenhouse gas reduction. [EPA-HQ-OAR-2010-0799-9463-A1, p. 10]
Organization: General Motors Company
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 36.]
Moving into my second comment, General Motors fully supports the flexibilities in this
proposal. Some may criticize them, but the flexibilities included go directly towards real CO2
reduction and the furthering of advanced technologies.
The flexibilities do provide some compliance opportunity for the manufacturers in the future, but
importantly these are already assumed in both of the agencies' assessment of the future of fuel
economy levels that are anticipated under this proposal. As a result they are absolutely necessary
for us to achieve the equivalent compliance levels anticipated.
Organization: Hyundai America Technical Center
While we believe the standards are achievable, doing so will not be easy and it will depend on
additional technology breakthroughs and consumer acceptance. Therefore, Hyundai finds the
flexibilities and incentives included in the proposal to be important. Furthermore, we prefer that
the incentives be technology-neutral and performance-based so that all OEMs have an equal
opportunity to develop technology and achieve the standards. [EPA-HQ-OAR-2010-0799-9547-
Al,p.2]
Hyundai appreciates that there are a number of flexibilities in the proposal that address
automaker's differing strategies for creating a fuel efficient fleet. For example, some
10-3
-------
EPA Response to Comments
manufacturers are focusing resources on electric vehicles and will receive credit multipliers for
expanding that market. Others will improve the fuel efficiency of cargo-carrying full-size pick-
up trucks and the agency is providing additional incentives for that improvement. Some makers
plan to focus on fuel efficiency leadership with gasoline vehicles, and CARB has adopted a
provision to allow those automakers to offset part of the zero emission vehicle mandates for a
limited time if it is possible to over-comply with these challenging GHG and CAFE standards.
Should it be possible that automakers are capable of significantly over-complying with the EPA
and NHTSA requirements; this will be important information to the agencies at the time of the
mid-term review regarding the feasibility of achieving the standards. We appreciate and support
the government's recognition of varying automaker strategies by providing a variety of
incentives to maximize performance in each area. However, we have several comments on areas
where we believe modifications to the credit methodologies could improve the program. [EPA-
HQ-OAR-2010-0799-9547-A1, pp.3-4]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 172-173.]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 22-24.]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 21-23.]
Organization: Johnson Controls, Inc.
Credits are an important tool which can be positively applied and provide the industry necessary
options to achieve future standards. [NHTSA-2010-0131-0253-A1, p. 2]
Continuing the use of credits and regulatory flexibilities, as proposed, is necessary and
appropriate, but require some revisions. [NHTSA-2010-0131-0253-A1, p. 4]
Organization: Motor & Equipment Manufacturers Association (MEMA)
Continuing the use of credits and regulatory flexibilities, as proposed, is necessary and
appropriate, but require some revisions. MEMA provides some proposals for the agencies'
consideration. [EPA-HQ-OAR-2010-0799-9478-A1, p.2]
Continuing the use of credits and regulatory flexibilities, as proposed, is necessary and
appropriate. Generally, MEMA believes that the agencies have provided adequate program
flexibilities. [EPA-HQ-OAR-2010-0799-9478-A1, p.5]
Credits are an important tool and can be positively applied and provide the industry necessary
options to achieve future standards. [EPA-HQ-OAR-2010-0799-9478-A1, p.7]
Continuing the use of credits and regulatory flexibilities is necessary and appropriate, but does
require some revisions. [EPA-HQ-OAR-2010-0799-9478-A1, p. 13]
10-4
-------
Additional EPA Program Elements
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 71-72.]
The NESCAUM states support inclusion of flexibility mechanisms in the proposed rule
providing manufacturers with pathways to compliance and a range of technologies efficient to
meet the goal of the program.
Organization: Toyota Motor North America
The agencies have proposed a variety of credit programs and compliance flexibilities, which
Toyota generally supports. These credits and flexibilities are an import aspect of the proposed
standards because they allow manufacturers to better manage technology investment and
deployment while achieving overall environmental and energy goals. Specific comments about
the programs are provided below. [EPA-HQ-OAR-2010-0799-9586-A1, p.9]
Organization: United Automobile Workers (UAW)
Fourth, the UAW appreciates and supports the proposed inclusion by EPA of program
flexibilities that will help automakers comply with the tougher standards at a lower cost. These
features of the proposal are important for their recognition of the long product cycles of the
automotive industry and the inherently "clunky" nature of technology upgrades timed to coincide
with major updates of existing models or the introduction of completely new models. [EPA-HQ-
OAR-2010-0799-9563-A2, p.2]
The UAW supports the credit averaging, trading and banking provisions proposed separately by
NHTSA and EPA, which are a continuation of the comprehensive program established for 2012-
2016. NHTSA's proposal is in line with the dictates of EISA, while EPA has taken advantage of
the provisions of the Clean Air Act to propose banking and trading provisions that allow more
flexibility but still maintain the features necessary for a harmonized common system of
regulation with NHTSA's proposed rule. The UAW believes that EPA's proposal is sensible and
recognizes the real benefits of early over-compliance by manufacturers. [EPA-HQ-OAR-2010-
0799-9563-A2, p.2]
Response:
The commenters above express support for credits programs and flexibilities in general
and EPA concurs that these are important aspects of the program. As noted by some
commenters, these provisions allow manufacturers to better manage technology deployment,
allowing for a smoother implementation of standards. In addition to comments generally
supporting flexibilities, many commenters also provided specific comments on the proposed
flexibilities, which are addressed in other sections of this Response to Comments document,
including; off-cycle credits in Section 7, incentives for EVs, PHEVs, and FCVs in Section 4, and
game changing technologies for full size pick-up trucks in Section 5. Specific comments
regarding averaging, banking, and trading are addressed in this section below.
10-5
-------
EPA Response to Comments
10.1.1. Carry-Forward and Carry-Back of Credits
Organizations Included in this Section
Center for Biological Diversity
Ferrari
Fisker Automotive, Inc.
Ford Motor Company
General Motors Company
Motor & Equipment Manufacturers Association (MEMA)
Northeast States for Coordinated Air Use Management (NESCAUM)
Toyota Motor North America
Volkswagen Group of America
Organization: Center for Biological Diversity
The credit loophole would be made even larger were the Agencies to implement their "one time"
proposal to extend the credit carry-forward provision even beyond the five-year period Congress
has permitted.66 In essence, this provision would allow manufacturers to carry forward credits
earned as early as two years ago, in 2010, all the way through 2021, or for more than a decade. It
is self-evident that allowing manufacturers to evade increasing fuel efficiency for this long is
directly contrary to Congressional intent. Nothing in the statute and nothing in the record
justifies any such extension. To the contrary, the fact that Congress specifically limited the time
period for carry-forward credits to five years plainly speaks against this industry give-away. We
request that the Agencies abandon this proposal. Similarly, the Agencies may not increase the
availability of credit transfers between the two fleets, passenger vehicles and light trucks. The
existence of statutory caps for these transfers67 is a strong indication of Congressional
disapproval of extending them further, and the Clean Air Act's silence on that issue does not
override EISA's statutory restriction. [EPA-HQ-OAR-2010-0799-9479-A1, pp. 13-14]
66 NPRM, 76 Fed. Reg. at 74,877. The "justification" for this give-away is ludicrous. Nothing is
needed to "facilitate the transition to the increasingly more stringent standards" for light trucks:
these standards are already egregiously lax and will in any event not begin until 2017. See
NPRM, 76 Fed. Reg. 74877. [EPA-HQ-OAR-2010-0799-9479-Al, p. 13]
67 49U.S.C. § 32903(g)(3). [EPA-HQ-OAR-2010-0799-9479-A1, p. 14]
Organization: Ferrari
7) Credits
Ferrari supports all the credit provisions set forth in the present EPA proposal including a one-
time carry-forward of any credits generated in MY 2010-2016 to be used anytime through
10-6
-------
Additional EPA Program Elements
MY2021. This would provide greater flexibility for manufacturers in using the credits they have
generated. [EPA-HQ-OAR-2010-0799-9535-A2, p. 13]
Organization: Fisker Automotive, Inc.
Support the proposal to carry over MY 2010-2015 credits through MY 2021. This proposal
would provide added utility to credits generated early in the program, which helps to incentivize
early adoption of fuel saving technologies. [EPA-HQ-OAR-2010-0799-9266-A1, p. 4]
Organization: Ford Motor Company
Credit Carry-forward
We support EPA's proposal to provide a one-time carry-forward of greenhouse gas reduction
credits through the 2021 model year, thus rewarding early investment and providing better
flexibility to account for market conditions that may impact year-over-year compliance. We
concur with the agency's assessment (76 Fed. Reg. 74968) that, "provisions are not expected to
change the emissions reductions achieved by the standards, but should significantly reduce the
cost of achieving those reductions." While we acknowledge that NHTSA is legislatively bound
to restrict fuel economy credit carry-forward to only 5 years, it must be noted that this is
disconnect between the two programs, and may unfortunately drive product strategies for one
program that would not otherwise be required by the other. We encourage NHTSA to consider
other alternatives that may enable the agency to offset this difference between the GHG and
CAFE programs. [EPA-HQ-OAR-2010-0799-9463-A1, p. 21]
Organization: General Motors Company
GM supports the proposed EPA provision to allow credit carry forward beyond 5 years, such that
any credits generated from model year 2010 through model year 2016 will be able to be used any
time through model year 2021. [EPA-HQ-OAR-2010-0799-9465-A1, p. 3]
Organization: Motor & Equipment Manufacturers Association (MEMA)
The NPRM clearly states the agencies will allow for carry-back/carry-forward credits, as per
their respective statutes' stated limitations. [EPA-HQ-OAR-2010-0799-9478-A1, pp.9-10]
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Flexibility Mechanisms & Credits
NESCAUM supports EPA's proposal to include flexibility mechanisms to provide manufacturers
with the means to incorporate a range of technologies to meet the requirements of the proposed
standards. Allowing credit transfers between a manufacturer's passenger car and light truck fleet
will likewise facilitate compliance without reducing the GHG benefits of the program, as do
10-7
-------
EPA Response to Comments
provisions for carry-forward and carry-back of generated credits. [EPA-HQ-OAR-2010-0799-
9476-A1, p. 2
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 72.]
Organization: Toyota Motor North America
Carry-forward and Carry-back Credits [EPA-HQ-OAR-2010-0799-9586-A1, p.9]
EPA and NHTSA propose to continue allowing credits earned by a manufacturer to be applied
for a period of up to five model years after the model year in which they were earned. Further,
the agencies propose to continue to offer the flexibility to 'borrow' credits up three years into the
future to address potential compliance shortfalls in a given model year. [EPA-HQ-OAR-2010-
0799-9586-A1, p.9]
These 5-year 'carry-forward' and 3-year 'carry-back' provisions are subject to certain adjustments
and limits which differ between NHTSA's CAFE regulations and EPA's GHG regulations.
Toyota supports the 5-year carry-forward and 3-year carry-back proposals. [EPA-HQ-OAR-
2010-0799-9586-Al,p.lO]
Organization: Volkswagen Group of America
3.3. FIVE YEAR DEBIT CARRY-BACK
Volkswagen proposes that EPA and NHTSA amend the NPRM to provide for 5 year carry back
of debits. [EPA-HQ-OAR-2010-0799-9569-A1, p. 28]
Response:
EPA is retaining the credit carry-forward and carry-back credit provisions as proposed.
Section III.B.4 of the preamble provides EPA's response to the comments regarding credit carry-
forward, including both the one-time credit carry-forward of MY 2010-2016 credit to MY 2021,
VW's comment regarding five year credit carry-back, and Center for Biological Diversity
comments regarding unlimited credit transfers in EPA's program. In addition to the discussion
in the preamble, we add the following in response to the comments of the Center for Biological
Diversity. The ABT program does not create a "credit loophole", as CBD would have it, but
provides needed flexibility and lead time allowing EPA to adopt standards which are more
stringent than otherwise would be possible, and reasonably encourages earlier introduction of
control technology into the fleet. See 76 FR 57127-129. When credits generated under that
program are carried forward to later model years, the carry forward reflects real-world emission
reductions, not perpetuation of a loophole. The commenter also argues that, because the Clean
Air Act is silent on the issue of credit carry forward, the GHG rules cannot extend that period
beyond what is allowed under EISA. The argument that EPA's Clean Air Act authority is
constrained by EPCA/EISA was rejected by the Supreme Court in State of Massachusetts v.
10-8
-------
Additional EPA Program Elements
EPA. 549 U.S. at 531-32, and more recently by the D.C. Circuit in Coalition for Responsible
Regulation v. EPA. See No. 09-1322 (D.C. Cir. June 26, 2012) slip op. pp. 41-42.
10.1.2. Credit Transfers between Cars and Trucks and Credit Trading
between Manufacturers
Organizations Included in this Section
Ferrari
Mercedes-Benz USA, LLC
Northeast States for Coordinated Air Use Management (NESCAUM)
Tesla Motors, Inc.
United Automobile Workers (UAW)
Volkswagen Group of America
Organization: Ferrari
We think that there should not be a cap in the amount of credit transferred or traded, in order to
give manufacturers the greatest flexibility to comply with the CAFE standards and to harmonize
with the corresponding EPA GHG credit provisions. [EPA-HQ-OAR-2010-0799-9535-A2, p. 15]
Organization: Mercedes-Benz USA, LLC
DAG also supports the overall structure of the attribute-based program and the provisions for
transferring and trading credits. [This comment can also be found in section 2.1 of this comment
summary.] [EPA-HQ-OAR-2010-0799-9483-A1, p. 2]
DAG supports allowing credits for Class 2b vehicles earned in the medium duty program to be
applied in the light duty truck programs as well. The medium duty category is similar in
approach to the light duty program, utilizes similar testing methodology and requires significant
achievement to reach the requirements. The similarities between the programs support allowing
for the flexibility of trading credits between them. [EPA-HQ-OAR-2010-0799-9483-A1, p. 3]
Credits for Class 2b Medium Duty Trucks and Vans
EPA and NHTSA recently established new programs aimed at reducing GHG emissions from
medium and heavy duty trucks and van. The program covers MYs 2014-2018. NHTSA's
standards are voluntary for MYs 2014-2015, but NHTSA has indicated that it will begin tracking
credits when a manufacturer opts into the program. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-
16]
The agencies purposely structured the medium/heavy duty truck and van program to be akin to
the light duty program. The program is attribute based with the standards set pursuant to a
mathematical function. While the agencies added elements to the footprint based attribute to
account for the functionality of these vehicles, the agencies also made clear that the measured
performance values for CO2 will generally be equivalent to fuel consumption. The compliance
10-9
-------
EPA Response to Comments
with the light duty and medium duty standards will be measured through similar dynamometer
testing. Indeed, the same engine and after treatment technologies that will be used to comply
with the Class 2b vehicles in the medium duty program will also be used to comply with the light
truck program. [EPA-HQ-OAR-2010-0799-9483-Al, p. A-16]
DAG considers the standards established for medium duty trucks and vans to be challenging and
aggressive. For example, as shown in the illustration below, compliance will require that many 6
cylinder diesel engines be downsized to 4 cylinder diesel engines. [EPA-HQ-OAR-2010-0799-
9483-A1, p. A-16]
There is ample legal authority to apply medium duty truck and van credits within the light duty
programs. EPA has broad discretion under the Clean Air Act to structure programs to ensure that
it promotes public health and welfare with cost-effective technology feasibly applied. The
agency has often created Average, Banking and Trading (ABT) programs as part of its emissions
regulations. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-17]
In the medium and heavy duty rule, the agencies effectively created three separate programs:
One for tractor/trailers; one for vocational vehicles; and one for medium and heavy duty trucks
and vans. The former two programs are similar and involve vehicles where emissions regulation
has in the past been focused exclusively on engines. In those programs, EPA designed a
computer model to generate data relating to the vehicle-portion of those regulations. The latter
program, on the other hand, is vehicle based -just as with the light duty GHG program - and in
fact involves vehicles in the same weight range but subject to different use. Vehicles that meet
certain criteria designed to identify 'work trucks' are placed within the medium duty truck and
van program; while vehicles meeting certain criteria designed to identify 'medium duty
passenger vehicles' are placed within the light duty program. [EPA-HQ-OAR-2010-0799-9483-
Al,p. A-17]
The agency initially proposed to restrict each ABT program to its own category within the heavy
duty rule, but in the final rule relaxed this restriction and instead defined three heavy duty
averaging sets and decided to allow credits to be used within those averaging sets. The first set of
Light Heavy Duty vehicles is comprised of trucks within Classes 2b-5. While the agency stated
in that rule that credits could be transferred across the heavy duty averaging sets but not between
the heavy duty groupings and light trucks, we believe the agency should reconsider that
statement as applied to Class 2b vehicles. [EPA-HQ-OAR-2010-0799-9483-Al, p. A-17]
Allowing credit transfers in this Class between the light duty and light heavy duty vehicle fleets
is consistent with the agency's general structure to treat like vehicles alike. The basic programs
categorize vehicles by general type, construction and use. The ABT program recognizes that
similarly weighted vehicles are likely to utilize the same engine and after-treatment technologies
to reach and exceed compliance. EPA established a system whereby similar vehicles using
similar technologies could share credits across the various programs. [EPA-HQ-OAR-2010-
0799-9483-A1, p. A-17]
The same reason allowing credits earned on Class 2b vehicles to be applied within other heavy
duty categories applies even more strongly with regard to the light duty fleet. Many vehicles
10-10
-------
Additional EPA Program Elements
within the light duty fleet are essentially the same or similar to many of the Class 2b vehicles -
they are either 'work trucks' or 'medium duty passenger vehicles' depending on their particular
configuration. The same engine, transmission and after-treatment technology will be applied to
Class 2b vehicles, whether they are in the light duty or the medium and heavy duty
program. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-17]
Nothing in the Clean Air Act prohibits the agency from using its discretion to harmonize and
promote its greenhouse gas program across similar vehicles and to promote more broadly the
application of emissions reducing technology. The agency should exercise this discretion in a
limited fashion to allow credits earned on Class 2b vehicles in the medium truck and van
program to be applied in the light duty program as well. [EPA-HQ-OAR-2010-0799-9483-A1, p.
A-17]
NHTSA also has the legal authority to apply credits developed in its Medium and Heavy Duty
Fuel Consumption Program. As noted above, although NHTSA's program is voluntary for MYs
2014-2015, the agency has made clear that it will begin to track credits beginning with a
company's decision to opt into the program. Although the legislation mandating NHTSA's
program did not expressly authorize a credit program, NHTSA nonetheless exercised its
discretion to adopt one and to remain harmonious with the EPA program. NHTSA also noted in
the medium and heavy duty fuel consumption program that it has considerably more leeway
within the medium and heavy duty program to establish flexibilities and to include consideration
of credits within its standard setting than it does under the light duty program. [EPA-HQ-OAR-
2010-0799-9483-A1, pp. A-17-A-18]
The fact that EPCA's credit provisions at 49 U.S.C. § 32903 do not expressly refer to credits
earned in the fuel consumption program promulgated under § 32022(k) does not preclude
NHTSA from exercising this authority. Applying the credits for Class 2b vehicles in the medium
duty program to the light duty program is an extension of the same discretion that led and
authorized NHTSA to develop the medium duty credit program initially. NHTSA has long
construed the EPCA provisions to be limitations on its authority rather than restrictive contours
of its authority. NHTSA should use this same authority to extend the credits in a limited fashion,
and along the same lines as EPA, to allow credits generated on Class 2b medium duty trucks and
vans to be applied in the light duty CAFE program. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-
18]
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Allowing credit transfers between a manufacturer's passenger car and light truck fleet will
likewise facilitate compliance without reducing the GHG benefits of the program [EPA-HQ-
OAR-2010-0799-9476-A1, p. 2]
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 72.]
Organization: Tesla Motors, Inc.
10-11
-------
EPA Response to Comments
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 94.]
We applaud the use of inter-tradability of credits. They support very critically the rollout of first-
generation technology.
Organization: United Automobile Workers (UAW)
The proposal also contains limits on credit trading and transfers that prohibit the use of trading
and transfers to satisfy the alternative minimum standard for domestically produced passenger
cars. This accurately and effectively implements the provisions Congress included in EISA.
[EPA-HQ-OAR-2010-0799-9563-A2, p.2]
Organization: Volkswagen Group of America
The transfer of credits is unlimited under EPA's GHG program. Volkswagen recognizes that the
transfer from trucks to cars is limited under NHTSA's CAFE program. However, there is no
limit for transfer within the truck compliance fleet, meaning unlimited transfer from larger trucks
to smaller trucks or SUVs. [EPA-HQ-OAR-2010-0799-9569-A1, p. 25]
In light of this, Volkswagen is proposing:
Any credits earned by larger trucks and full-size pick-ups due to either the reduced stringency 8
or the unique full-size truck credit program should remain available only amongst large trucks
and not be transferable or bankable for use in other segments or compliance fleets. [EPA-HQ-
OAR-2010-0799-9569-A1, p. 27]
Volkswagen expects no reasonable protest from stakeholders to limiting transferability since
according to EPA's prediction there would be no need to transfer credits away from non-
compliant or debit stricken full-size trucks. Should stakeholders protest and claim that this
somehow infringes on a flexibility that could be valuable to their future corporate compliance
strategy, Volkswagen would then suggest that EPA reconsider the expected burden on full-size
trucks. [EPA-HQ-OAR-2010-0799-9569-A1, p. 27]
An alternative would be to provide lower annual reduction percentages and 'game-changing'
credits available to a broader range of vehicles, including other trucks and even passenger cars.
[EPA-HQ-OAR-2010-0799-9569-A1, p. 27]
[See Figure 3-1 on p. 28 of Docket number EPA-HQ-OAR-2010-0799-9569-A1]
Volkswagen suggests the agency consider a broader range of vehicle capabilities which may
require additional flexibility in establishing an achievable standard such as cargo volume, seating
capacity, off-road or all-weather capability, or any other attribute which may preclude the
adoption of certain fuel saving technologies. This is equally true for trucks of all sizes, minivans,
and even some passenger cars. [EPA-HQ-OAR-2010-0799-9569-A1, p. 28]
10-12
-------
Additional EPA Program Elements
8 Credits earned from the reduced percent stringency relative to what the larger trucks target
would have been had it been subjected to the fleetwide truck percent reduction for that model
year.
Response:
While EPA agrees with DAG that transfers between heavy-duty vehicles and light-duty
vehicles is not precluded by the CAA, EPA does not agree that such trading should be allowed
at this time. Section III.B.4 of the preamble addresses DAG comments regarding the use of
heavy-duty vehicle GHG credits in the light-duty vehicle program. In addition, we note that
DAG further refined its comments in a meeting with EPA Staff on July 18, 2012. The company
further suggested that a medium heavy duty engine could generate credits which could be used in
the light duty sector if a 4 cylinder engine is used which engine is also used in light duty
applications and the total amount of credits is capped. For the reasons stated in preamble section
III.B.4, this comment still remains outside the scope of the proposal. Among other things, acting
on it would necessitate amending the heavy duty GHG standards, which allow averaging only
between specified averaging sets. There was no notice that the agencies might amend the heavy
duty GHG standards as part of this rulemaking.
EPA does not agree with VW's comments that transfers of truck credits to the passenger
car category should be restricted. VW's comments regarding truck credits are addressed in
Section II.F.3 of the preamble and also III.D.6 where the credits program is discussed in the
context of the stringency of the truck standards.
10.1.3. Over Compliance Credits for Use in the California ZEV Program
Organizations Included in this Section
Chrysler Group LLC
Hyundai America Technical Center
Mitsubishi Motors R&D of America, Inc. (MRDA)
Union of Concerned Scientists (UCS)
Organization: Chrysler Group LLC
Chrysler also provides comment on California's 2017-2021MY ZEV Program greenhouse gas
over-compliance credit provision, the sales projections utilized by the agencies for this proposed
rule, and treatment of diesel vehicles. [EPA-HQ-OAR-2010-0799-9495-A1, p.6]
The California Air Resources Board ("ARB") has approved new Zero Emission Vehicle
("ZEV") regulations for MYs 2018-2021 that, when finalized, will include a provision providing
that over-compliance with the federal GHG standards in the prior MY may be used to reduce a
manufacturer's ZEV obligation in the next MY (the "ZEV Over-Compliance Provision"). The
proposed federal GHG program does not account for or address the potential impacts of the ZEV
Over-Compliance Provision on the federal GHG standards. EPA should clarify that the ZEV
10-13
-------
EPA Response to Comments
Over-Compliance Provision interferes with the EPA standards and is preempted. [EPA-HQ-
OAR-2010-0799-9495-A1, p.20]
Section 202(a)(l) of the Clean Air Act provides EPA with general authority to establish
emissions standards for motor vehicles and engines. Section 202(a)(2) requires that the EPA
standards take effect after such period as EPA finds necessary for the development and
application of the requisite technology, considering cost of compliance within that period. [EPA-
HQ-OAR-2010-0799-9495-A1, p.20]
EPA has explained both in the MY 2012-2016 rule and the proposal for MY 2017-2025 its
approach to the statutory factors in setting standards under Section 202(a)(l). In the MY 2017-
2025 proposal, EPA identifies the relevant factors, including availability of technology, cost
(including impacts on the industry and consumers), energy impacts, and safety. See 76 Fed. Reg.
at 74,901, 74,903 and 74,905 (MY 2017- 2025 proposal preamble). In both the MY 2012-2016
final rule and the MY 2017-25 proposal, EPA expressed confidence that the standards at issue
strike a reasonable balance considering these factors. For MY 2012-16, EPA explained that it
adopted standards it considers feasible and that "there are compelling reasons not to adopt more
stringent standards, based on reasonable weight of the statutory factors, including available
technology, its cost, and the lead time necessary to permit its development and application." 75
Fed. Reg. 25,324, 25,468 (May 7, 2010). In the MY 2017-25 proposal, EPA explained that it is
"confident that the standards are an appropriate balance of the factors to consider under section
202(a)." 76 Fed. Reg. at 74,975. [EPA-HQ-OAR-2010-0799-9495-A1, p.20]
Chrysler agrees that the proposed standards strike an appropriate balance of the statutory factors
as described by EPA in the preamble to the proposal. However, California's ZEV Over-
Compliance Provision will make the national standards more difficult to achieve. This is because
National Program greenhouse gas credits used to reduce ZEV obligations would have to be
retired,33 and accordingly not be available to offset manufacturer-specific under-compliance in
the federal program.34 As a result, we would expect overall GHG emissions necessarily to be
lower (more stringent) than that which would occur absent the California ZEV Over-Compliance
Provision. Removing over-compliance credits from the federal GHG program makes those
credits unavailable in the federal GHG "emissions credit market" for automaker's use in
complying with the federal standards. This diversion of federal GHG over-compliance credits for
another purpose makes compliance more difficult because there are fewer credits to use,
effectively increasing the stringency of the federal GHG standards. As a result, California's
2018-2025 MY ZEV Program standards, as promulgated with the ZEV Over-Compliance
Provision, do impose an additional burden on manufacturers, not accounted for in the balance of
relevant statutory factors EPA struck to support the federal MY 2017-25 GHG standards. In
short, the California ZEV Over-Compliance Provision disturbs EPA's careful balance in setting
the federal standards, and indeed interferes with that balance. [EPA-HQ-OAR-2010-0799-9495-
Al, pp.20-21]
EPA should address in this rulemaking the effect of the California ZEV Over-compliance
Provision. Because the EPA standards as proposed, (which Chrysler supports, subject to the
comments herein), strike an appropriate balance of the statutory factors under Section 202(a),
EPA should explain that in doing so EPA is effectively precluding the validity of California's
10-14
-------
Additional EPA Program Elements
ZEV Over-Compliance Provision. Specifically, the California ZEV Program, as revised to add
this provision, would be preempted under Section 209(a) of the Clean Air Act unless granted a
waiver (or found to be within the scope of an existing waiver) under Section 209(b). Section
209(b) specifies that no such waiver shall be granted if California's standards "are not consistent
with section [202(a)]." The California standards, if revised in final to include the ZEV Over-
Compliance Provision, would impose an additional burden on standards that EPA already set at a
level that is appropriate based on the statutory factors under Section 202(a). Accordingly, such
California standards would interfere and be inconsistent with the federal standards. Thus, EPA
may not grant a waiver to a California program that contains this component, and the California
program with that component would remain preempted. [EPA-HQ-OAR-2010-0799-9495-A1,
P-21]
Were EPA not to conclude that the California Over-Compliance Provision is preempted, EPA
would theoretically have to relax the federal standards once California adopts its provision to
apply to the 2017- 2025 federal program, to account for the effective increase in stringency that
California's provision would cause. In this manner, EPA might theoretically take into account
the California provision in setting standards and thereby re-strikes the balance of the Section
202(a) factors. Chrysler doubts this approach would be lawful, however. In determining its
proposed standards, EPA did not identify California's ZEV Over-Compliance Provision as a
relevant statutory factor. Section 202(a) (and indeed none of the Section 202 provisions), identify
California regulations as a relevant statutory factor in setting federal standards. 35 We are not
aware of any time that EPA has set standards under Section 202(a) to account for the impact of
such a California provision that so directly affects the stringency of the federal program. EPA
should make clear that the interference that California would cause through its provision is
preempted. [EPA-HQ-OAR-2010-0799-9495-A1, p.21]
The impact of California's proposal should not be underestimated, as the ARB anticipates
manufacturers accounting for sales up to 50 percent of total California sales to utilize the ZEV
Over-Compliance Provision. Chrysler reiterates its support of a single national GHG program
and encourages the EPA to take into account the potential impact of California's ZEV over-
compliance provision and deny any waiver request made by California for its ZEV Program
insofar as it contains the ZEV Over-Compliance Provision. [EP A-HQ-OAR-2010-0799-9495-
Al,p.21]
33 In addition, by allowing manufacturers to substitute federal GHG program over-compliance
for compliance with the ZEV program, California would effectively be foregoing a portion of the
environmental benefits upon which their Clean Air Act waiver for the ZEV Program is premised.
[EPA-HQ-OAR-2010-0799-9495-A1, p.20]
34 By modeling all light-duty vehicle manufacturers as a single fleet to establish the 2017-2025
MY federal GHG standards, EPA has implicitly assumed that debits incurred by some companies
unable to meet the standards would be satisfied by credits earned by other companies that over-
comply with the standards. This implicit assumption is explicitly noted in the 2012-2016
National Program, where in describing the feasibility of the final standards EPA notes that a
10-15
-------
EPA Response to Comments
company unable to meet the standard could comply by buying credits from another
manufacturer. 75 Fed. Reg. 25463 (May 7, 2010) Similarly, EPA requires manufacturers to make
good-faith efforts to purchase credits from other manufacturers prior to qualifying for temporary
lead-time alternative standards (40 CFR 86.1818-12(e)(3)). [EPA-HQ-OAR-2010-0799-9495-
Al, p.20]
35 Chrysler further notes that if EPA were to identify the California ZEV Program as a relevant
statutory factor, the ZEV Program requirements for manufacturers to build specific volumes of
zero emission and plug-in hybrid electric vehicles would need to be included in EPA's modeling
of the technology penetration rates required to meet the National Program standards, thereby
increasing the costs associated with the National Program with no additional environmental
benefit. [EPA-HQ-OAR-2010-0799-9495-A1, p.21]
Organization: Hyundai America Technical Center
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 173.]
The California Air Resources Board is proposing to allow those OEMs to offset part of the zero
emission vehicle mandate for a limited time through over-compliance in challenging
GHG/CAFE standards.
Organization: Mitsubishi Motors R&D of America, Inc. (MRDA)
Mitsubishi Motors proposes that GHG credits should be available to those manufacturers who
over-comply with the California ZEV Mandate on a NATIONAL BASIS. Mitsubishi Motors
supports compliance with one harmonized national fuel economy and GHG program. However,
Mitsubishi Motors must also plan to comply with the ZEV mandate. National and California
programs regulating vehicle GHG emissions reflect overlapping standards upon a manufacturer's
single ZEV fleet. In recognition of these overlapping programs and OEMs' efforts to deploy
capital-intensive ZEVs, California allows manufacturers to earn ZEV credits by over-compliance
with EPA's GHG standard starting in MY 2018. Similarly, in order to be consistent with the CA
ZEV Mandate, Mitsubishi Motors recommends that EPA allow manufacturers to gain credits by
over-compliance with the California ZEV mandate nationwide starting in MY 2018. The mid-
term evaluation also offers an opportunity for EPA to consider an option to offer manufacturers,
who demonstrate plans to over-comply with the ZEV Mandate for the entire MY 2022 through
2025 timeframe, a 2 grams per mile GHG credit. This will allow manufacturers to keep their
conventional technology fleets in compliance, while introducing and selling advanced ZEV
technologies nationally. Mitsubishi Motors' proposal will contribute to reducing GHG emissions
while providing customers reasonably-priced vehicle choices. [EPA-HQ-OAR-2010-0799-9507-
Al,p.5]
Organization: Union of Concerned Scientists (UCS)
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 139.]
10-16
-------
Additional EPA Program Elements
This is why policies like California's Zero-Emission Vehicle program are an important
complement to the proposed greenhouse gas and fuel economy standards being discussed here
today. The Zero-Emission Vehicle program helps ensure that investments in research,
development and deployment of advanced vehicle technologies continue.
Response:
In response to Chrysler's comments, issues of whether a California state provision should
be preempted are not part of this proceeding, and EPA therefore declines to address this
comment here. The commenter may resubmit this comment if and when the issue should be
presented directly to EPA, potentially in a request by the State of California for a waiver
pursuant to section 209 (b) or in some other direct context. EPA disagrees with Chrysler's
assertion that the feasibility of the standards hinge on the availability of credits through banking
or trading. EPA has shown that the standards being finalized are feasible at reasonable cost
without assuming carry-forward of banked credits or credit trading between manufacturers. See
discussion in preamble III.D.6 and RIA Chapter 3 footnote 2. Further, EPA's requirement that
SVMs make a good faith effort to seek out credits as part of the MY 2012-2016 SVM exemption
eligibility provisions does not require SVMs to buy credits unless they are reasonably available
from other manufacturers. If EPA determines that the SVM has made a good faith effort to
purchase credit but that credits are not available, the SVM is exempt from meeting CO2
standards with no obligation to purchase credits.
In response to Mitsubishi's comments regarding additional credits for over-compliance
with the California ZEV program, EPA is already adopting multiplier incentives for PHEVs,
EVs and FCVs which we believe are appropriate (see preamble section III.C.2.c.ii). EPA does
not believe that it is necessary at this time to introduce an additional type of credit for these
vehicles or tie the availability of incentives for these vehicles to a manufacturer's performance in
the California ZEV program. Also, EPA did not seek comments on using over compliance with
the ZEV program as the basis for an EPA GHG credit. Mitsubishi comments that California
allows manufacturers to earn ZEV credits by over-compliance with EPA's GHG standard
starting in MY 2018, and in order to be consistent with the CA ZEV Mandate, EPA should allow
manufacturers to gain credits by over-compliance with the California ZEV mandate nationwide
starting in MY 2018. EPA does not agree that this type of credit is a matter of making the
programs consistent. The California provision to allow GHG credits to be used in the ZEV
program would presumably reduce the number of ZEVs that a manufacturer would be required to
produce. The commenter does not explain how a 2 g/mile credit for ZEV over compliance is
needed to make the two programs consistent. The commenter also does not offer a basis for why
2 g/mile is an appropriate credit. Further, the California ZEV provision is limited and only
available for essentially the same model years as the EPA multiplier incentives for these
vehicles. Manufacturers will already be effectively receiving credits under the EPA program for
the same types of vehicles covered by the ZEV program, as noted above. EPA believes the
additional credit suggested by the commenter would be redundant and is unnecessary.
10-17
-------
EPA Response to Comments
10.2. Nitrous Oxide (N20) and Methane (CH4) Standard
10.2.1. Flexibility for Compliance with N2O and CH4 Standard
Organizations Included in this Section
America's Natural Gas Alliance (ANGA) and American Gas Association (AGA)
Association of Global Automakers, Inc. (Global Automakers
BMW of North America, LLC
Ferrari
General Motors Company
Toyota Motor North America
VNG Co. (VNG)
Volkswagen Group of America
Organization: America's Natural Gas Alliance (ANGA) and American Gas Association (AGA)
C(^-Equivalent Option
AGA and ANGA support EPA's decision, first announced in the preamble to the Heavy Duty
Rule (76 FR 57123) to include the CO2 -Equivalent Option as part of the light-duty regulations
through MY 2016, to allow for the Option to be used on a test-group basis instead of having to
apply a manufacturer's entire fleet. EPA should now extend the Option through MY 2025, and
continue the policy of allowing CO2 -equivalent compliance on a test-group basis, which would
enable manufacturers who offer NGVs to avoid requiring all of their vehicles to be subject to the
CO2-Equivalent Option. [EPA-HQ-OAR-2010-0799-9548-A1, p. 8]
However, if the agency adopts its proposal to require that the Option be applied to a
manufacturer's entire fleet, we support EPA's additional proposal to include an offsetting
"equivalence option adjustment factor", so that "manufacturers do not have to offset the typical
N2O and CH4 vehicle emissions, while holding manufacturers responsible for higher than
average N2O and CH4 emissions levels." [EPA-HQ-OAR-2010-0799-9548-A1, pp. 8-9]
Organization: Association of Global Automakers, Inc. (Global Automakers)
With regard to the standards for nitrous oxide and methane, we support the credit-based
compliance option for the nitrous oxide and methane standards, as well as the new "upward
adjustment" approach to allow these emissions to be included with carbon dioxide emissions.
However, we see no need for the limitation on the use of methodologies under 40 Code of
Federal Regulations (CFR) Section 86.1818-12(f) for nitrous oxide and methane, finalized under
the MYs 2012-2016 standards and carried over for MYs 2017-2025. We would like to see an
allowance to use different compliance options for methane and/or nitrous oxide and also for
passenger car and light truck fleets in the same model year, without the need for prior EPA
approval. This restriction limits manufacturers' compliance options but with no clear
environmental benefit. We urge EPA to eliminate this restriction in the final rule. [EPA-HQ-
OAR-2010-0799-9466-A1, pp. 2-3]
10-18
-------
Additional EPA Program Elements
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 67.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 51.]
We also support the credit-based compliance option for methane and nitrous oxide standards, as
well as the new upward adjustment approach to allow these standards to be included with carbon
dioxide emissions. However, we would like to see more flexible — more flexible compliance
options and will be addressing that in more detail in our written comments.
Organization: BMW of North America, LLC
BMW supports the option to convert measured N2O and CH4 emissions that are above the
applicable standards into CO2 -equivalent emissions for compliance purposes. The calculation of
emission debits on this basis allows them to be offset by other GHG reduction measures. While
leading to the same overall GHG reduction impact, this option provides flexibility and still gives
an incentive to further work on the reduction of N2O and CH4 emissions. [EPA-HQ-OAR-2010-
0799-9579-A1, enclosure p. 4]
Organization: Ferrari
We agree with the option proposed by EPA in this rulemaking to use CC>2 credits to comply with
the CH4 and N2O standards, because this measure is consistent with the compliance option to add
these emissions to those of CO2 (instead to meet specific standards), and increases the flexibility
to comply. [EPA-HQ-OAR-2010-0799-9535-A2, p. 12]
Organization: General Motors Company
In the NPRM, EPA requests comments on "establishing an adjustment to the CC>2 - equivalent
standard for manufacturers selecting the CO2 -equivalent option established in the model year
2012-2016 rulemaking." (p. 74993). GM disagrees with establishing a blanket adjustment to the
CC>2 -equivalent standard. EPA has gone to great lengths to establish CO2 emission targets based
on individual manufacturer fleets. Using the average value of all passenger cars and light trucks
to establish an adjustment factor will inherently and unduly lessen the stringency for some
manufacturers while increasing the stringency for others. [EPA-HQ-OAR-2010-0799-9465-A1,
p. 5]
In order to appropriately incorporate a CC>2 -equivalent approach into the standard, EPA would
have to return to the baseline data and develop CC>2 target value equations based on CC>2 -
equivalent data. [EPA-HQ-OAR-2010-0799-9465-A1, p. 5]
A second approach would be to modify the CC>2 -equivalent equations instead of adjusting the
CC>2 standard. Under the current regulations, if a manufacturer meets the N2O and CH4 emission
standards, they are not required to include N2O or CH4 emissions in their carbon related exhaust
emission (CREE) calculations (i.e., the impact of N2O and CH4 emissions on the CREE value is
10-19
-------
EPA Response to Comments
zero). If a manufacturer chooses the option to use the CO2 -equivalent CREE equations, it has to
include all CH4 and N2O emissions which would result in an increase of up to approximately 3
g/mile for vehicles that would have otherwise been able to meet the N2O and CH4 emission
standards. So, in order to make the CC>2 -equivalent option more appealing, EPA would have to
modify the CC>2 -equivalent equations in such a fashion as to not penalize a manufacturer for
meeting the current CH4 and N2O emission standards while still including a mechanism that
would allow a manufacturer to account for exceedances of the standards. [EPA-HQ-OAR-2010-
0799-9465-A1, p. 5]
What follows is a suggested modified equation for EPA to consider:
Change the CREE equation from:
CREE = [(CWF/0.273)xNMHC]+(1.571xCO)+CO2 +(298xN2O)+(25xCH4)
To:
CREE = [(CWF/0.273)xNMHC]+(1.571xCO)+CO2 +[298x(N2O-0.010)]+[25x(CH4-0.030)]
And:
Include requirements that negative values for N2O or CH4 contribution shall be set to zero. (An
allowance would have to be made such that manufacturers could set N2O equal to 0.010 until a
practical and accurate method of measuring N2O is established.) [EPA-HQ-OAR-2010-0799-
9465-A1, p. 5]
By subtracting the N2O and CH4 emission standards from their respective emission values and
setting any negative result to zero, the manufacturer would be required to account for emissions
in exceedance of the standards and would not benefit from performing at levels lower than the
emission standards (does not affect the stringency of the fleet-average standard). [EPA-HQ-
OAR-2010-0799-9465-A1, p. 5]
Organization: Toyota Motor North America
Standards and Flexibility - As part of the recently completed heavy-duty GHG rulemaking, EPA
finalized provisions allowing manufacturers to use CC>2 credits, on a CCV equivalent basis, to
meet the light-duty N2O and CH4 standards. Toyota appreciates, having the option of using CC>2
credits to meet N2O and CH4 standards on a test group basis as needed for 2012-2016 model
years and supports EPA's current proposal to extend this flexibility through the 2025 model year.
[EPA-HQ-OAR-2010-0799-9586-Al,p.22]
Organization: VNG Co (VNG)
Recently-revised alternative compliance options for the methane standard are extended and made
permanent by this NPRM, which will benefit NGVs whose slightly elevated methane emissions
10-20
-------
Additional EPA Program Elements
compared to gasoline vehicles are more than outweighed by reductions in CO2 emissions. [EPA-
HQ-OAR-2010-0799-7941-A2, p. 6]
Methane Standard Compliance Flexibility
VNG strongly supports the Agencies' decision to allow automakers the same flexible options for
meeting methane (CH4) standards for light-duty vehicles as are now allowed for heavy-duty
vehicles. Under these flexible rules, automakers and conversion manufacturers may convert CO2
over-compliance into CC>2 equivalents of CH4 (or N2O) that can be used to facilitate compliance
with these standards. As it is the total global warming potential ('GWP') of all GHGs that is
important, and not the emissions of any specific pollutant, this flexibility is appropriate and in
line with EPAs regulatory goal. [EPA-HQ-OAR-2010-0799-7941-A2, p. 10]
This flexibility may be useful for manufacturers of NGVs, particularly converters that will be
important in developing the market in the early years. Because small quantities of unburned
natural gas from NGV engines may be emitted as methane, NGVs may have slightly higher
emissions of this GHG than petroleum-fueled ICE vehicles. However, due to much greater
reductions of CC>2 emissions, NGVs still yield net GHG emission reductions of approximately 24
percent. These flexible compliance rules will ensure that net GHG reductions are accounted for
properly, and automakers are not penalized so long as slight increases in methane emissions are
offset by CO2 over-compliance. [EPA-HQ-OAR-2010-0799-7941-A2, p. 10]
Organization: Volkswagen Group of America
EPA seeks comment in the NPRM regarding additional flexibility when complying with the N2O
standards. Volkswagen supports EPA's proposal to allow the option of using CO2 credits to
comply with the N2O standards and Volkswagen also supports the option of meeting these
standards on a test group basis. Furthermore, Volkswagen supports the NPRM proposal to
extend theses options through all models years of the regulation beyond 2016. Volkswagen also
supports the concept of an adjustment factor to the CO2 equivalent standard for manufacturers
selecting the CC>2 equivalent option the pathway to compliance with both CH4 and N2O.
Volkswagen pledges to work with EPA in the future to generate the proper data such that an
appropriate adjustment factor can be determined. [EPA-HQ-OAR-2010-0799-9569-A1, p. 34]
Response:
EPA received only supportive comments regarding the proposal to permanently allow
CC>2 credits to be used on a CCVequivalent basis to meet the CH4 and N2O standards and EPA is
finalizing this provision as proposed. EPA concurs that this provision provides an important
flexibility to manufacturers while not undermining the overall GHG reductions of the program.
Additional discussion regarding CO2-equivalent options and comments, including GM's
comments, is provided in preamble section III.B.9.a.
10.2.2. N2O Measurement and Compliance Statement Option
Organizations Included in this Section
10-21
-------
EPA Response to Comments
Alliance of Automobile Manufacturers
Association of Global Automakers, Inc. (Global Automakers)
Ferrari
Ford Motor Company
General Motors Company
Hyundai America Technical Center
Kia Motors
Toyota Motor North America
Volvo Car Corporation (VCC)
Organization: Alliance of Automobile Manufacturers
Additional time is needed for development of a method for measuring nitrous oxide (N2O). EPA
has recognized the difficulties and complexities of evaluating, procuring and installing the
equipment that would be needed to measure N2O. But, as our comments explain, EPA still has
not provided sufficient time for manufacturers to incorporate accurate and robust N2O
measurement capabilities into their test sites. The deadline for measuring N2O should be
extended until the N2O measurement issues are resolved, and N2O measurement capabilities
should be reevaluated during the mid-term and interim evaluations. By so doing, EPA would be
providing manufacturers with sufficient time to evaluate appropriate test equipment and would
be aligning possible N2O regulatory changes with possible subsequent changes to other light-
duty GHG regulations. [EPA-HQ-OAR-2010-0799-9487-A1, p.5]
Nitrous Oxide (N2O) Measurement [EPA-HQ-OAR-2010-0799-9487-A1, p.71]
EPA has recognized the difficulties and complexities of evaluating, procuring and installing the
equipment that would be needed to measure N2O and has proposed that manufacturers be
permitted to use compliance statements in lieu of test data through MY 2016. However, as
explained below, EPA has not provided sufficient time for manufacturers to incorporate accurate
and robust N2O measurement capabilities into their test sites. We propose that the deadline for
measuring N2O be extended until the measurement issues are resolved. The N2O measurement
capabilities should be reevaluated during both the mid-term evaluation of standards and the
"check-ins" occurring prior to the mid-term. By so doing, EPA would be providing
manufacturers sufficient time to evaluate appropriate test equipment and would be aligning
possible N2O regulatory changes with possible subsequent changes to other light duty GHG
regulations. [EPA-HQ-OAR-2010-0799-9487-A1, p.71]
The first issue with regard to N2O measurement timing is that there is currently no accurate
measurement technology available that is suitable for high-volume testing. As one example, the
gas chromatograph electron capture detector (GC-ECD) is not suitable for high-volume testing
since it includes an off-line multi-hour long analysis and has robustness issues. [EPA-HQ-OAR-
2010-0799-9487-Al,p.71]
EPA provided a technical study of the capabilities of currently available and potentially available
future measurement technologies as a separate memorandum to the docket. The study compares
instruments by analyzing ambient air and diluted vehicle exhaust samples on a number of
10-22
-------
Additional EPA Program Elements
different vehicles and schedules (FTP and HFET). The EPA technical study highlights the
continuing difficulties of the currently available measurement technologies to accurately measure
N2O. [EPA-HQ-OAR-2010-0799-9487-A1, p.71]
In the study, EPA compared the Fourier Transform Infrared Spectrometer (FTIR) to the GC-
ECD and concluded that the "FTIR compared very well to GC-ECD, which is considered the
gold standard," but the accompanying data actually demonstrates the opposite. The data shows
significant differences and variability between these two instruments on the order of
approximately -17 to +25 ppb N2O equivalent for ambient air analysis and approximately -27 to
+85 ppb N2O equivalent for vehicle exhaust testing. These differences represent a significant
error at anN2O standard level of 0.010 g/mi. [EPA-HQ-OAR-2010-0799-9487-A1, p.71]
In addition, in comparing the FTIR to the Non-Dispersive Infrared (NDIR) analyzer, the study
states "Both the NDIR and FTIR analyzers performed well, however some questions regarding
performance remain." The accompanying data, however, shows significant interferences with
both analyzers, results which are similar to those of the previously supplied Alliance Technical
Study (June 2011). [EPA-HQ-OAR-2010-0799-9487-A1, p.71]
The study also highlights a potentially promising new N2O measurement technology that is
based on laser spectroscopy and is made by a few manufacturers. However, N2O analysis is so
new that most of these instruments are still in the development stages and hence are prototypes.
Although these instruments show promise for N2O analysis, questions remain as to their
accuracy and robustness (i.e., reliability) at such lowN2O standards. [EPA-HQ-OAR-2010-
0799-9487-A1, p.72]
The study contains evaluations of two such laser instruments based on simulated exhaust gas
(water, carbon monoxide (CO), CO2 and N2O). In comparison to NDIR and FTIR, the data for
the first laser instrument shows interference errors that were typically lower, ranging from -29 to
+10 ppb N2O equivalent. Although the errors appear to be reduced, they still represent a
significant portion of the 10 mg/mi N2O standard. CO and CO2 measurements were likewise
affected by interference gases but in the opposite direction, i.e., higher levels than that observed
withN2O. [EPA-HQ-OAR-2010-0799-9487-A1, p.72]
For the first laser instrument the study concludes that the instrument "... performed very well and
does not appear to show any susceptibility to CO, CO2, or water interference..." and "Based on
CO and CO2 measurement error, we believe that the bulk of the associated N2O measurement
error is due to bag blending error." It would seem that if the N2O errors were due to gas blending
errors, then CO and CO2 would be likewise affected, but the data generally shows an
underreporting of N2O and an over reporting of CO and CO2. Looking at this limited data, the
Alliance believes that although the instrument shows promise, it still demonstrates significant
measurement errors which have not yet been accounted for. [EPA-HQ-OAR-2010-0799-9487-
Al, p.72]
The second laser instrument evaluation showed similar N2O measurement errors in the presence
of interference gases but this was attributed to ".. .the inability to properly zero/span the
instrument after the initial zero/span at the start of the testing." In the conclusions it is stated that
10-23
-------
EPA Response to Comments
"EPA intends to re-evaluate this instrument after the manufacturer has resolved issues..." [EPA-
HQ-OAR-2010-0799-9487-A1, p.72]
Suffice it to say that until more studies are conducted by multiple facilities, including correlation
vehicle testing between facilities, the true accuracy of laser based instruments is still to be
determined. [EPA-HQ-OAR-2010-0799-9487-A1, p.72]
The second issue with regard to N2O measurement is emission development and certification
timing. Taking all things into account, we estimate that it will take approximately 4.5 years to
properly install a new N2O analyzer into a single test site. Below is a graphical representation of
the estimated timeline for instrument procurement and installation. [EPA-HQ-OAR-2010-0799-
9487-A1, p.72] [For the 'graphical representation', please refer to EPA-HQ-OAR-2010-0799-
9487-A1, p.73]
Included in the above graph are the generic timelines for emission development and certification
for the individual model years. We estimate that the first test site with N2O measurement
capabilities would not be available until midway through the emission development process for
MY 2019. We estimate that the earliest that a manufacturer could certify a limited portion of its
product line with measured N2O data would be mid-MY 2019. Please note that a manufacturer's
ability to certify in MY 2019 will still be limited by the number of available test sites (i.e., it
would be impossible to certify a full-line manufacturer's entire product line in the MY 2019
utilizing only one test site). [EPA-HQ-OAR-2010-0799-9487-A1, p.74] [For the 'graph', please
refer to EPA-HQ-OAR-2010-0799-9487-A1, p.73]
N2O Data [EPA-HQ-OAR-2010-0799-9487-A1, p.74]
EPA has requested ".. .city and highway cycle N2O data on current Tier 2 vehicles..." 1
However, supplying N2O data will not be possible at this time due to lack of accurate and robust
N2O measurement instrumentation and insufficient lead time to install this instrumentation into
certification quality test laboratories. As mentioned above, it will take several years to get even
rudimentary measurement capability that is proven to be both accurate and robust. [EPA-HQ-
OAR-2010-0799-9487-A1, p.74]
N2O Certification [EPA-HQ-OAR-2010-0799-9487-A1, p.74]
In paragraphs 40 CFR §86.1823-08(m)(2)(iii) and §86.1829-0 l(b)(l)(iii)(G) of the proposed
rule, EPA proposes the extension of the use of alternative N2O deterioration factors (DF's) and
N2O compliance statements, respectively, through the MY 2016. While the Alliance appreciates
the extension of these deadlines, setting these deadlines is essentially precluding a manufacturer
from utilizing the concept of carryover which is critical to the successful implementation of
emission certification programs. Therefore, the Alliance recommends that the use of alternate
N2O DFs and compliance statements be further extended and that the requirement to measure
N2O only be applied to new emission certification programs that are implemented after the
establishment of proper N2O measurement instrumentation and procedures. [EPA-HQ-OAR-
2010-0799-9487-A1, p.74]
10-24
-------
Additional EPA Program Elements
In order to balance emission testing burden and certification workload, manufacturers routinely
"carryover" emission certification and durability data. Carryover essentially means that
representative emission data that was generated in a previous model year is re-used in the new
model year in lieu of repeating the same emission tests. Lacking certification quality N2O data in
early model years means that the emission data will not be viable for carryover into a model year
that requires actual N2O data. That means that all emission data generated during these years will
not qualify for carryover into a model year for which actual N2O data is required. Therefore,
assuming that N2O measurement capabilities are not available until the MY 2017, manufacturers
would be forced to rerun all of their emission durability and certification testing in one model
year. This would be an unnecessary and unwarranted certification burden for that particular
model year. [EPA-HQ-OAR-2010-0799-9487-A1, pp.74-75]
In-UseN2O [EPA-HQ-OAR-2010-0799-9487-A1, p.75]
Although EPA did not propose any changes to in-use testing requirements, the Alliance requests
that EPA exclude N2O measurement and reporting from in-use testing (IUVP and IUCP) for all
model years and test groups that certify to the N2O standards via a compliance statement.
Because accurate N2O measurement technology is not readily available, manufacturers have
been forced to rely on theoretical information and/or possibly inaccurate data in order to make
N2O compliance statements. EPA should not hold the manufacturers accountable for measuring
N2O utilizing a method that will have been established subsequent to certification, nor should
EPA hold a manufacturer responsible for meeting a standard for which accurate measurement
methods were not available at the time of certification. [EPA-HQ-OAR-2010-0799-9487-A1,
p.75]
Heavy Duty N2O [EPA-HQ-OAR-2010-0799-9487-A1, p.75]
Although EPA has not proposed modifications to the heavy-duty GHG regulations, the Alliance
requests that EPA also modify the heavy-duty GHG N2O measurement requirements to coincide
with the timing of the light-duty requirements. Heavy-duty chassis GHG testing will be
performed on the same test sites that are utilized by light-duty and will therefore have the same
N2O measurement issues. Providing N2O measurement relief solely for the light-duty vehicles
does not fully address the issue. [EPA-HQ-OAR-2010-0799-9487-A1, p.75]
Organization: Association of Global Automakers, Inc. (Global Automakers)
With regard to the proposed requirement for testing to measure nitrous oxide emissions
beginning in MY 2017, we urge EPA to reconsider the cost-effectiveness of this requirement.
The quantity of these emissions is quite low, and we see no indication that they will become an
important factor in climate change in the future. Testing for this substance will require expensive
new analyzers, whose performance remains to be determined. We support the comment of one
manufacturer at the Detroit public hearing, which noted that the proposed test method for nitrous
oxides is neither proven nor developed and that the Non-Dispersive Infrared Analyzer (NDIR)
and Fourier Transform Infrared (FTIR) bag analysis methods currently have repeatability,
durability and/or practicality concerns. [EPA-HQ-OAR-2010-0799-9466-A1, p. 3]
10-25
-------
EPA Response to Comments
We urge the agency to allow manufacturers to continue to demonstrate compliance using the pre-
MY 2017 analysis-based methodology in 2017 and thereafter. EPA should monitor these
emissions and the development of testing analyzers and adopt new test-based requirements in the
future should the emissions grow in significance or when the testing technology is ready. For
instance, it would be appropriate to review the testing technology as part of the mid-term review
and then determine whether testing as part of the regulations should be finalized following the
mid-term review. [EPA-HQ-OAR-2010-0799-9466-A1, p. 3]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 67-68.]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 51-52.]
Organization: Ferrari
EPA intends to extend the ability for manufacturers to use compliance statements for N2O
standard based on good engineering judgment in lieu of test data through MY 2016. [EPA-HQ-
OAR-2010-0799-9535-A2, p. 12]
It is fine, but we request EPA to delete the requirement to actually measure N2O emissions for
the following reasons: [EPA-HQ-OAR-2010-0799-9535-A2, p. 12]
The quantity of these emissions is quite low, and they should remain a minimal contribution over
the total GHG inventory in the future. [EPA-HQ-OAR-2010-0799-9535-A2, p. 12]
The related burdens (laboratory update, testing, reporting) is relevant. [EPA-HQ-OAR-2010-
0799-9535-A2, p. 12]
There are some concerns on the accuracy of the measurement. [EPA-HQ-OAR-2010-0799-953 5-
A2,p.l2]
At least small-volume manufacturers should be exempted to carry out the N2O measurement.
[EPA-HQ-OAR-2010-0799-9535-A2, p. 12]
Organization: Ford Motor Company
As noted in the NPRM and support documents, EPA understands that N2O measurement
complexity remains an important issue to be addressed for both 2012-2016 MY as well as 2017
MY and beyond. Due to these measurement difficulties, EPA has granted some flexibilities
through previous rulemakings and is now proposing to extend the timing for requiring N2O
measurement to the 2017 MY. While Ford acknowledges these allowances, we do not believe
they sufficiently address all of the concerns related to N2O. We agree with the Alliance
comments that recommend that N2O measurement requirements be delayed until those
measurement issues are fully resolved. A number of instruments have been studied with varying
levels of success. Variability remains a key concern, but we believe that some of these
10-26
-------
Additional EPA Program Elements
technologies show promise. However, much additional work remains to identify viable solutions,
conduct correlation studies, and upgrade facilities for certification level testing. Until that time,
there should be no requirement to measure N2O or comply with a standard that cannot be
accurately assessed. [EPA-HQ-OAR-2010-0799-9463-Al, p. 24]
Ford is in the process of collecting data to further evaluate the capability of N2O measurement
technologies. Once that information is available, we will review it with EPA to provide
additional basis for 2012 - 2016 MY interim containment actions and additional flexibilities on
N2O requirements. Going forward, we look forward to continued data-driven dialogue with EPA
to resolve the current manufacturer concerns with N2O compliance, beyond the allowances
outlined in the current proposal. [EPA-HQ-OAR-2010-0799-9463-Al, p. 25]
Organization: General Motors Company
GM supports the deferral for N2O measurement until MY2017. As mentioned in the Alliance
comments, since additional time and evaluation are necessary to develop accurate and repeatable
N2O measurement capabilities, we recommend that work continue expeditiously - and progress
be evaluated as part of one of the mid-term review "check-ins." [EPA-HQ-OAR-2010-0799-
9465-A1, p. 4]
Organization: Hyundai America Technical Center
Testing for N2O [EPA-HQ-OAR-2010-0799-9547-A1, p.7]
EPA has proposed a new requirement to measure N2O emissions starting in MY 2017. Based on
research we have conducted, Hyundai believes the measurement methods suggested by the
agencies are not fully proven or developed, and are very expensive as they require new
analyzers. [EPA-HQ-OAR-2010-0799-9547-A1, p.7]
Hyundai prefers a bag analysis method of measurement to minimize decreased testing
throughput. The NDIR, FTIR and GC bag analysis methods for N2O currently have repeatability
or practicality concerns. Therefore, while Hyundai supports the bag methodology for
measurement, we recommend that the testing issue be revisited at such time when there is a
proven, accurate and efficient means of measurement. [EPA-HQ-OAR-2010-0799-9547-A1, p.7]
Organization: Kia Motors
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 101.]
Sort of the technical side, based on research that we have conducted, Kia believes the methods
suggested by the agencies for nitrous oxide which must be measured starting in 2013 are not
fully proven and developed. Kia prefers the bag method analysis of measurement to minimize
reduction of testing throughout. However, the NDIR and FTIR bag analysis methods currently
have repeatability and practicality concerns. We support the measurement but recommend that it
be revisited in a time when there is improved and accurate and more efficient means available.
10-27
-------
EPA Response to Comments
Organization: Toyota Motor North America
N2O Measurement - Toyota remains concerned that EPA has not provided sufficient time for
manufacturers to incorporate accurate and robust N2O measurement capabilities into their test
sites. N2O measurement currently has no accurate measurement technology available that is
suitable for high-volume testing at this time. Toyota fully supports the comments and
recommendations submitted by the Alliance on this matter. [EPA-HQ-OAR-2010-0799-9586-
Al, p.22]
In the proposed regulation paragraphs 40 CFR §86.1823-08(m)(2)(iii) and §86.182901(
b)(I)(iii)(G), EPA proposes to extend the use of alternative N2O deterioration factors (DF's) and
N2O compliance statements, respectively, through the 2016 model year. Toyota appreciates
EPA's consideration in extending these deadlines, and supports the Alliance recommendation
that the use of alternate N2O DFs and compliance statements be further extended until the
establishment of proper N2O measurement instrumentation and procedures. Furthermore,
because accurate N2O measurement technology is not readily available, Toyota requests that
EPA extend the N2O compliance statement beyond the 2016 model year, up until the
establishment of proper N2O measurement instrumentation and procedures has been
demonstrated. [EPA-HQ-OAR-2010-0799-9586-A1, p.22]
Due to the fact that accurate N2O measurement technology is not readily available, Toyota
requests that EPA should exclude N2O measurement and reporting from in-use testing for all
model years and test groups that certify to the N2O standards via a compliance statement. We
support the Alliance comments on this matter. [EPA-HQ-OAR-2010-0799-9586-A1, p.22]
Organization: Volvo Car Corporation (VCC)
'EPA is also finalizing standards that will cap tailpipe nitrous oxide (N2O) and methane (CH/i)
emissions at 0.010 and 0.030 grams per mile, respectively. Even after adjusting for the higher
relative global warming potencies of these two compounds, nitrous oxide and methane emissions
represent less than one percent of overall vehicle greenhouse gas emissions from new vehicles.
Accordingly, the goal of these two standards is to limit any potential increases of tailpipe
emissions of these compounds in the future but not to force reductions relative to today's low
levels.' [EPA-HQ-OAR-2010-0799-9551-A2, p. 11]
In the final Rule, EPA focuses on four important aspects of N2O and CH/j:
• EPA wants a cap
• N2O and CH4 are two strong GHG emissions
• EPA wants to ensure that N2O and CH4 do not increase as a consequence of the introduction of
new technologies.
• N2O and CH4 represent less than 1% of the GHG gases from the vehicle [EPA-HQ-OAR-2010-
0799-9551-A2, p. 11]
10-28
-------
Additional EPA Program Elements
To monitor these potent greenhouse gases against a given value is reasonable when it is not
possible to predict the consequences that new technology can generate. However, it is a
significant difference, via a statement providing a declaration of compliance in accordance with
the standard instead of conducting a full certification and the subsequent protocol. [EPA-HQ-
OAR-2010-0799-9551-A2, p. 11]
It also should be considered that, as noted above, N2O and CH4 represent only 1% of the guarded
carbonaceous compounds that make up a manufacturer CREE value. [EPA-HQ-OAR-2010-
0799-9551-A2, p. 11]
Currently, there is no equipment on the market that can measure according to proper certifying
standard, using 'bag measurement' for N2O with a relevant repeatability. During 2012-2013, new
technology will be introduced to the market, but this technology is still in the research stage, and
it would be premature to commit to its use as a certification tool at this time. VCC is concerned
about technology readiness, instrument availability, measurement accuracy, and implementation
lead time, including verifying that the instrument is robust enough for certification testing. [EPA-
HQ-OAR-2010-0799-9551-A2, p. 11]
VCC would like to ask EPA, in collaboration with CARB, to consider continuing the practice
used today (fulfillment of CAP through a written statement). VCC does not think manufacturers
should have to certify N2O in accordance with procedures similar as those of Criteria Emission.
[EPA-HQ-OAR-2010-0799-9551-A2, p. 11]
The above-required instrumentation to be able to measure N2O in certification facility (bag
measurement) at the level of 10 mg/mi with a adequate accuracy, is not available on the market
today. It will probably be possible to order it during 2012. After the order is completed, the
installation process will take place somewhere in 2013 and method development will be initiated
which will require some development work for 1-2 years at least. [EPA-HQ-OAR-2010-0799-
9551-A2, pp. 11-12]
Response:
EPA is finalizing the additional lead-time for N2O testing essentially as proposed. In
response to Alliance comments, EPA is temporarily (for MYs 2017 and 2018) allowing
manufacturers to continue to use compliance statements for test groups certified using carry-over
data. EPA is also clarifying, in response to Alliance comments, that manufacturers will not be
required to conduct in-use testing for vehicle test groups certified using a compliance statement.
Section III.B.9.b of the preamble provides EPA's response to the comments received regarding
N2O measurement timing and issues.
Ferrari commented that small volume manufacturers should not be required to measure
N2O. Ferrari raises issues that are essentially the same as those raised by large volume
manufacturers, which EPA has addressed in the preamble as noted above. Ferrari does not
provide any rationale why the sales volume of a manufacturer would be relevant to the
manufacturer's ability to measure N2O with the lead time being provided. Also, EPA did not
receive similar comments from manufacturers that are currently SVMs in the GHG program.
EPA does not know of any reason, nor did Ferrari provide one, why SVMs, which are large
10-29
-------
EPA Response to Comments
companies with limited sales in the U.S., would not be able to measure N2O in the same time-
frame as the large volume manufacturers and therefore is not differentiating between large and
small volume manufacturers with regard to N2O measurement.
In response to Alliance comments regarding N2O testing for heavy-duty vehicles, EPA
did not propose or request comment on heavy-duty vehicle issues in this rulemaking and
therefore making changes to the heavy-duty vehicle requirements is beyond the scope of this
rule. However, EPA understands the issue raised by the Alliance and plans to consider heavy-
duty vehicle N2O testing as part of a future action.
10.2.3. N2O and CH4 Standards Related Comments
Organizations Included in this Section
America's Natural Gas Alliance (ANGA) and American Gas Association (AGA)
Ferrari
Manufacturers of Emission Controls Association (MECA)
Vehicle Production Group LLC (VPG)
Organization: America's Natural Gas Alliance (ANGA) and American Gas Association (AGA)
Methane Global Warming Potential
Citing the IPCC Fourth Assessment Report, EPA's uses a Global Warming Potential ("GWP")
factor of 25 for the Proposed LD Rule's methane emissions standards: "CFLj has a 100-year
GWP of 25 according to the 2007 IPCC AR4." 76 FR 74993, n.236. [EPA-HQ-OAR-2010-0799-
9548-A1, p. 9]
However, while EPA uses the 25 GWP for mobile sources, the rest of EPA's Office of Air and
Radiation uses a GWP of 21 for stationary source methane emission standards. See, e.g., the
Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, 75 FR
31519, 31522, June 3, 2010 ("CH4 has a GWP of 21"); PSD Permit Number PSD-TX-1244-
GHG, issued November 10, 2011 by EPA Region VI for the Lower Colorado River Authority
Thomas Ferguson Power Plant, p. 7 (mass-based methane emissions limits of 16.8 and 16.2 tons
per year are each multiplied by 21 to establish CO2 -equivalent emissions limits of 353.3 and
327.2 tpy; attached as Exhibit 6.) [EPA-HQ-OAR-2010-0799-9548-A1, p. 9]
In other words, the proposed LD Rule arbitrarily deems vehicle methane emissions as having
19% greater heat-trapping characteristics than the chemically identical molecules emitted from
stationary sources. Unless EPA can explain the scientific basis for this, light duty vehicle
methane emissions should be regulated with the same GWP as all other U.S. methane sources.
[EPA-HQ-OAR-2010-0799-9548-A1, p. 9]
Organization: Ferrari
10-30
-------
Additional EPA Program Elements
Ferrari supports the EPA proposal not to increase the stringency of the CFLi and N2O standards
set forth in the MYs 2012-16 GHG final rule. [EPA-HQ-OAR-2010-0799-9535-A2, p.2]
Organization: Manufacturers of Emission Controls Association (MECA)
Tightening of hydrocarbon and CC>2 emission standards over time with the parallel introduction
of more effective emission control systems have resulted in lower emissions of N2O and CFLi
from today's vehicles compared to older vehicles certified to less stringent hydrocarbon and CC>2
standards. The performance of advanced emission control technologies for advanced diesel,
gasoline, and natural gas-fueled powertrains can also be optimized to minimize N2O and CH4
emissions from future light-duty vehicles consistent with the limits EPA set for these important
greenhouse gas emissions in their first round of light-duty vehicle greenhouse gas emission
standards. [EPA-HQ-OAR-2010-0799-9452-A3, p.3]
Organization: Vehicle Production Group LLC (VPG)
Methane emissions
In order for the industry to achieve expanded use of CNG as an automotive fuel, in VPG's
opinion, the methane standard must be revisited relative to CNG fuel usage and emissions from
CNG fueled engines. We do not believe that the methane emissions standards advised in III.6.
are in line with methane emissions from vehicles running on natural gas. Table 2 details the
emissions for two dedicated CNG fueled vehicles as well as VPG's gasoline fueled MV-1 as a
reference point. [See Table 2. Methane emissions from one gasoline and two CNG certification
tests in Docket number EPA-HQ-OAR-2010-0799-7985-A2, p. 4] [EPA-HQ-OAR-2010-0799-
7985-A2, p. 3]
VPG notes that, as can be expected, gasoline emissions of methane are significantly less than the
new standard. More significantly though, VPG's MV-1 is certified as a LDT 4 light duty truck,
and has a curb weight of 5250 pounds, yet it is certified at the bin 2 level. Even at this clean
certification level, the MV- 1 is does not meet the methane standard. [EPA-HQ-OAR-2010-
0799-7985-A2, p. 4]
Additional methane emissions data do not appear to be available in certificate summary
information reports for CNG fueled vehicles accessed through the EPA Document Index System
(DIS). One of the better known OEM vehicles certified for dedicated CNG use is the Honda
Civic. The methane results for this vehicle however (test group BHNXV01.8BDT) are not
available from the DIS on the EPA website. [EPA-HQ-OAR-2010-0799-7985-A2, p. 4]
Our evidence indicates that a there are technological feasibility issues with methane standards at
the current level for CNG fueled vehicles with engines of a displacement similar to VPG's. VPG
requests a review of the CFU standard as applied to dedicated CNG fueled vehicles. [EPA-HQ-
OAR-2010-0799-7985-A2, p. 4]
Finally, VPG recommends a review of the methane emissions standards as applied to CNG
fueled vehicles. [EPA-HQ-OAR-2010-0799-7985-A2, p. 4]
10-31
-------
EPA Response to Comments
Response:
In response to AGA and ANGA comments concerning the global warming potential
(GWP of CH4, the GWPs used in this rule are consistent with the 100-year time frame values in
the 2007 Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (AR4).
These AR4 values are based on latest science from the IPCC, they are consistent with the values
used in the MYs 2012-2016 LD and MYs 2014-2018 HD rulemakings, and we consider them to
be the most appropriate values for this rule. At this time, the 100-year GWP values from the
1995 IPCC Second Assessment Report (SAR) are used in the official U.S. GHG inventory
submission to the United Nations Framework Convention on Climate Change (UNFCCC) per the
reporting requirements under that international convention. As the commenters note, some EPA
programs use SAR values since they have deemed consistency with the national GHG inventory
and other relevant programs to be appropriate for their purposes. For example, the GWP of 21
was used in a recent oil and gas rulemaking in order to maintain consistency with the SAR GWP
values used in the national GHG inventory and in the US Greenhouse Gas Reporting Program,
which collects data from emitters in that sector. The UNFCCC recently agreed on revisions to
the national GHG inventory reporting requirements, and will begin using the 100-year GWP
values from AR4 for inventory submissions in the future.
Commenters generally supported EPA's proposal not to change the CH4 standards and
supported the flexibilities discussed in section 10.2.1 above. VPG commented that the CH4
standard established in the MY 2012-2016 rule should be revisited for CNG vehicles. VPG
mentions not being able to find the CH4 data for the Honda dedicated CNG vehicle in the
certification data. In response, EPA believes that CH4 can be controlled through emissions
systems optimization and continues to believe that the CH4 standard previously established is
feasible and appropriate. As noted in comments submitted by the Manufacturers of Emission
Controls Association (MECA), the performance of advanced emission control technologies for
advanced diesel, gasoline, and natural gas-fueled powertrains can also be optimized to minimize
N2O and CH4 emissions from future light-duty vehicles consistent with the limits EPA has set.
The Honda dedicated CNG vehicle provides an example of the potential for CH4 emissions
control, with a certification value of 0.015 compared to a CH4 standard of 0.03 g/mile.21
In addition, EPA is providing the flexibility to use CC>2 credits on a C(^-equivalent basis
to address excess CH4 emissions. Several commenters from the natural gas industry commented
in support of these provisions (see 10.2.1, above). VNG Co commented that "the flexibility may
be useful for manufacturers of NGVs, particularly converters that will be important in
developing the market in the early years. Because small quantities of unburned natural gas from
NGV engines may be emitted as methane, NGVs may have slightly higher emissions of this
GHG than petroleum-fueled ICE vehicles. However, due to much greater reductions of CC>2
emissions, NGVs still yield net GHG emission reductions of approximately 24 percent. These
flexible compliance rules will ensure that net GHG reductions are accounted for properly, and
automakers are not penalized so long as slight increases in methane emissions are offset by CO2
over-compliance." America's Natural Gas Alliance (ANGA) and American Gas Association
(AGA) also commented in support of this flexibility. EPA concurs with these comments.
21 MY 2012 certification data is available at: http://www.epa.gov/otaq/crttst.htm.
10-32
-------
Additional EPA Program Elements
EPA notes further that manufacturers that are small businesses remain exempt from
meeting the N2O and CH4 standards as well as the CC>2 standards under the MY2017-2025
program, as with the MY 2012-2016 program. It is EPA's understanding that VPG currently
qualifies as a small business.
Comments regarding CH4 and N2O standards as they apply to police and emergency
vehicles are addressed in section 10.5 below.
10.3. Alternative COz Standards for Small Volume Manufacturers
with U.S. Sales below 5,000 Vehicles
Organizations Included in this Section
Association of Global Automakers, Inc. (Global Automakers)
Aston Martin Lagonda Limited, Lotus Cars Limited and McLaren Automotive
Ferrari
Ferrari & Maserati of Seattle
Ferrari of Houston, Texas and Ferrari of Austin, Texas
Miller Motorcars
Penske Corporation
Volkswagen Group of America
Wide World Ferrari, Wide World of Cars, LLC
Organization: Association of Global Automakers, Inc. (Global Automakers)
Global Automakers supports the approach proposed by EPA to establish small volume
manufacturer standards on a company-specific basis. The approach provides the compliance
flexibility that this small segment of the industry needs while also contributing to the control of
GHG emissions. This approach would be most efficiently administered if manufacturers may
petition for, and EPA grants, alternative standards for multiple model years in a single
proceeding. Such standards should be issued at least 18 months prior to the first affected model
year. We also urge EPA and NHTSA to work cooperatively to harmonize CAFE and GHG
standards for these small companies. [EPA-HQ-OAR-2010-0799-9466-A1, p. 8]
Also with regard to the issue of small volume manufacturers, Global Automakers strongly
supports including regulatory language in the final rules that would amend the existing 40 CFR
86.1838(b) regarding small volume manufacturers to include the criteria set forth in the preamble
to this regulatory package at 76 FR 74992 (middle column). These criteria would allow a
manufacturer to retain SVM status if it can demonstrate that it is 'operationally independent' from
another manufacturer that may have an ownership interest in that manufacturer. [EPA-HQ-OAR-
2010-0799-9466-A1, p. 8]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 52.]
10-33
-------
EPA Response to Comments
Additionally, Global Automakers supports the case-by-case small-volume manufacturers'
approach as well as harmonization of the definitions for small-volume manufacturers. The case-
by-case approach allows the flexibility that this small segment of the industry needs while
maintaining requirements necessary to control greenhouse emissions.
Inclusion of the criteria included in the above referenced preamble text would provide necessary
flexibility for historically independent small manufacturers, while the criteria are sufficiently
stringent (e.g., strict limits on the total vehicles sold in the US, no joint ownership of intellectual
property by the manufacturers, separate R&D, testing, and development facilities, independent
verification, etc) so that there would be virtually no ability to abuse this provision. In addition,
any manufacturer that meets the criteria set forth in the preamble would still need to comply with
the provisions applicable to all SVMs. [EPA-HQ-OAR-2010-0799-9466-A1, p. 8]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 68.]
And, finally, Global Automakers supports the case-by-case small volume manufacturers
approach. It allows the flexibility that this small segment of the industry needs while also
mandating requirements necessary to control greenhouse gases. We also support the
harmonization of the definition of small volume manufacturers.
Organization: Aston Martin Lagonda Limited, Lotus Cars Limited and McLaren Automotive
This comment is submitted on behalf of Aston Martin Lagonda Limited, Lotus Cars Limited and
McLaren Automotive Limited. Each of these companies is classified as a "small volume
manufacturer" (SVM) under EPA regulations and is a manufacturer of a very limited number of
high performance sports cars. See www.astonmartin.com; www.lotuscars.com;
www.mclarenautomotive.com. [EPA-HQ-OAR-2010-0799-5387-A2, p. 1]
We present here the viewpoint of SVMs as regards EPA's proposal to establish MY 2017-2025
GHG standards for light-duty vehicles.2 All three manufacturers understand the need to control
CC>2 and support the regulatory efforts of EPA and NHTSA. The three companies further believe
that small manufacturers must do their fair share to reduce GHGs. [EPA-HQ-OAR-2010-0799-
5387-A2, p. 1]
SVMs agree with both the rationale and goal behind the NPRM's SVM provisions and urge EPA
to promulgate the proposed mechanism to set SVM GHG standards on an SVM-by-SVM
basis. [EPA-HQ-OAR-2010-0799-5387-A2, p. 3]
As recognized by EPA, the case-by-case SVM approach is already found in the CAFE law (49
USC 32902), the EU small volume manufacturer CO2 derogation, and both the California
existing GHG provision (13 CCR 1961.1) as well as in the recently proposed Advanced Clean
Car rule. Adopting the case-by-case SVM GHG mechanism would thus align EPA's approach
with that of NHTSA, the EU, and CARB, furthering the desirable objective of
harmonization. [EPA-HQ-OAR-2010-0799-5387-A2, p. 3]
10-34
-------
Additional EPA Program Elements
EPA has requested comments on allowing SVMs to apply for a case by case standard for model
years prior to MY 2017. We fully support the idea of allowing optional application for a case-by-
case standard starting with MY 2015 (with application being made no later than July
2013). [EPA-HQ-OAR-2010-0799-5387-A2, p. 3]
CONCLUSION: The proposed case-by-case SVM mechanism is fair and equitable and also
meets the necessary goal of appropriate control of GHG. The SVM provisions should be
promulgated as proposed with optional early opt in starting in MY 2015.
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 118-
119.]
2 The three companies submitting this comment take no position on the issue of expanding the
GHG SVM rule to small manufacturers that are part of larger groups and are operationally
independent.
Organization: Ferrari
Ferrari fully supports EPA's proposal to establish a method for a vehicle manufacturer to
demonstrate "operational independence" if, under EPA regulations, the manufacturer's sales
otherwise would have to be aggregated with those of another vehicle manufacturer. Finalizing
this provision will benefit truly small, historically independent vehicle manufacturers while still
protecting the environment and minimizing vehicle greenhouse gas ("GHG") emissions. As
proposed, the proposed criteria enumerated at 76 Fed. Reg, 74,992 (middle column) are fully
sufficient to prevent vehicle manufacturers from "gaming" the system, yet still offer necessary
flexibility for individual vehicle manufacturers with unique ownership and operational
structures. [EPA-HQ-OAR-2010-0799-9535-A2, pp. 1-2]
Despite the Ownership Structure, Ferrari is Uniquely Positioned as an Operationally Independent
Vehicle Manufacturer. [EPA-HQ-OAR-2010-0799-9535-A2, p.2]
The existing 40 CFR § 86.1838(b), which governs small volume manufacturer ("SVM")
certification procedures, includes a provision regarding "aggregation" of sales which is based on
the percentage ownership of the SVM by another vehicle manufacturer. Sales of the two
manufacturers are aggregated when another manufacturer owns more than 10% of the smaller
manufacturer. At the present time Fiat SpA) owns 90i% of Ferrari SpA. Due to the transactions
that occurred in 2009 regarding Fiat, the U.S. government and Chrysler Group LLC [[EPA-HQ-
OAR-2010-0799-10037-A2]], a unit of Fiat SpA now owns more than 10% of Chrysler. As an
unintended consequence of these transactions, Ferrari could lose its status as an SVM, which it
has historically held. If that were to occur, the result would be devastating to Ferrari since it
would need to immediately change its certification, durability testing, as well as making it part of
a large volume manufacturer for purposes of the GHG rules. This consequence could severely
limit Ferrari in the U.S. market, despite aggressive efforts to reduce GHG emissions from
10-35
-------
EPA Response to Comments
vehicles sold in the U.S. It also would ignore the reality of how Ferrari and Fiat operate. For the
60 years of Ferrari's existence, the company has always operated independently of any parent
company or other ownership structure. [EPA-HQ-OAR-2010-0799-9535-A2, p.2]
Specifically, Ferrari has complete design autonomy from Fiat and every other company in the
Fiat Automobiles group, including Chrysler. Overall vehicle and powertrain design is overseen
from the Ferrari Maranello facility; no Fiat personnel are involved in any way with this
operation. Ferrari is exclusively in charge of all Ferrari research and development, with no
participation or assistance from Fiat. Ferrari's budget for R&D is set by Ferrari and is
independent of any R&D budget for Fiat. Ferrari parts design and procurement are completely
independent of Fiat Automotive's procurement operations. Ferrari engine and transmission
design, machining and production, as well as body, paint, interior and final assembly are all
performed at the Maranello facility— again, completely independent of Fiat design, machining,
production, and assembly. All Ferrari vehicle testing, evaluation, emission certification and
documentation are all performed at Maranello, completely independent of Fiat testing,
certification, and other operations. Marketing, competitive racing and other actions to promote
the Ferrari brand are all handled by exclusively by Ferrari without control by Fiat. Overall
management of Ferrari is independent from Fiat. While there are a small number of individuals
from Fiat SpA who are on Ferrari's Board of Directors, these individuals (separately or
combined) are not able to exercise exclusive management control over Ferrari or Fiat. In sum,
despite the ownership of stock, Ferrari operates on a day-to-day and model year-to-model year
basis as an entity that is entirely separate from Fiat. [EPA-HQ-OAR-2010-0799-9535-A2, p.2]
Furthermore, EPA states in the proposal: [EPA-HQ-OAR-2010-0799-9535-A2, p.3]
[A] small manufacturer under the umbrella of a large manufacturer is fundamentally different
from other SVMs because the large manufacturer has several options under the GHG program to
bring the smaller subsidiary into compliance, including the use of averaging or credit transfer
provisions, purchasing credits from another manufacturer, or providing technical and financial
assistance to the smaller subsidiary. [EPA-HQ-OAR-2010-0799-9535-A2, p.3]
While this may be true in other circumstances, the ownership structure between Fiat and Ferrari
provides Ferrari with little, if any, preferential access to any credits generated by Fiat. As
explained above, under the long-standing arrangement between the two companies, Fiat does not
provide financial or technical assistance to Ferrari. Any such transactions between the two
companies would be at arms-length and no different than if the two companies had no common
ownership. Ferrari therefore obtains no preference or benefits through its association with Fiat
that would advantage Ferrari compared to other SVMs. [EPA-HQ-OAR-2010-0799-9535-A2,
p.3]
Establishing an "Operational Independence" Option Would Be Consistent with Past EPA and
California Air Resources Board Practice. [EPA-HQ-OAR-2010-0799-9535-A2, p.3]
Over the past ten years in determinations under the existing EPA SVM regulations, the Highway
Safety Act, and the California Air Resources Board ("CARB") regulations, Ferrari has
consistently been determined to be an independent SVM. Even in the early 2000s, when General
10-36
-------
Additional EPA Program Elements
Motors owned 20% of Fiat, EPA determined under the then existing SVM regulations, which are
comparable to the current SVM certification provision that Ferrari was an independent SVM.
The National Highway Traffic Safety Administration ("NHTSA") has made similar
determinations under the Safety Act. CARB has also considered Ferrari an independent SVM for
purposes of their vehicle tailpipe emissions and on-board diagnostic ("OBD") programs. Thus,
establishing criteria by which a manufacturer can demonstrate that it is operationally independent
would be fully consistent with past EPA, NHTSA, and CARB practice. [EPA-HQ-OAR-2010-
0799-9535-A2, p.3]
The Proposed Criteria Are Stringent And Will Not Encourage "Gaming" of the System. [EPA-
HQ-OAR-2010-0799-9535-A2, p.3]
EPA requested comment on the agency's concern that some manufacturers could "change their
corporate structure to take advantage of such provisions (that is, gaming)." Ferrari supports the
proposed criteria for establishing operational independence and believes that they are sufficiently
stringent to prevent some manufacturer from attempting to "game" the system. In order to
attempt to restructure an existing corporate situation, Ferrari believes the cost of separating all,
R&D, production and testing facilities from the parent company, along with the expense of
developing completely new powertrains and platforms, would be prohibitively expensive. The
cost of purchasing any jointly-held patents also could be astronomical. Depending on the
company, separating all business, administration, legal, purchasing, sales, and marketing
functions also could be complicated and cost prohibitive. [EPA-HQ-OAR-2010-0799-9535-A2,
pp.3-4]
Finally, the "new" manufacturer would have to maintain this status for two full years prior to
applying for operational independence SVM status. During this time, the new manufacturer
presumably would have to comply with the applicable GHG emission standards without any
support from the manufacturer from which it is newly separated. The new manufacturer would
not be eligible to apply for and comply with the more flexible case-by-case SVM standards that
EPA has proposed. Given that there would be little benefit to a large manufacturer to spin off and
separate a model line that over-complies with the applicable GHG standard, the new
manufacturer would likely not be in compliance with the GHG standards during this two-year
period. Even with the credit carry-forward/carry-back options, it would be exceedingly difficult
for a new manufacturer to make up this credit deficit if and when it is deemed an operationally-
independent SVM without purchasing credits (which may be a very difficult task, given the
stringency of the proposed GHG standards for these MYs). In addition, if the newly-created
SVM applied for case-by-case standards, EPA intends to establish such standards at a
"challenging but less stringent" level; thus, the SVM would not be generating large numbers of
credits for each model year that could make up for two years of likely credit deficits. [EPA-HQ-
OAR-2010-0799-9535-A2, p.4]
Overall, there do not appear to be any scenarios where it would make financial or operating
sense for a large manufacturer to try to take advantage of the operational independence criteria to
"spin-off fewer than 5000 vehicles per year. EPA also has the authority to deny an application
for operational independent SVM status and can address any concerns about gaming during the
application and approval process. Because we believe that opportunities for gaming the system
10-37
-------
EPA Response to Comments
are minimal at best, and that EPA will be able to adequately identify such circumstances, Ferrari
recommends that EPA finalize the operational independence criteria with only one small
revision. [EPA-HQ-OAR-2010-0799-9535-A2, p.4]
In order to eliminate any confusion regarding the meaning of the requirement, Ferrari
recommends that EPA revise the proposed 40 CFR § 86.1838-01(b)(4)(a)(iii) as follows: [EPA-
HQ-OAR-2010-0799-9535-A2, p.4]
(iii) related manufacturers the applicant does not use any vehicle powertrains or platforms
developed or produced by related manufacturers. [EPA-HQ-OAR-2010-0799-9535-A2, p.4]
This minor change will clarify that the applicant for operationally independent SVM status does
not rely on other, related manufacturers for powertrains or other vehicle platforms. However, the
revision would enable the applicant to sell, consistent with (i) and (vii), parts and components to
a related manufacturer through an open market process at competitive pricing. [EPA-HQ-OAR-
2010-0799-9535-A2, pp.4-5]
An Operational Independence Option Will Have Little Overall Effect on Vehicle GHG
Emissions. [EPA-HQ-OAR-2010-0799-9535-A2, p.5]
EPA's proposal to allow an operationally-independent manufacturer to be considered an SVM
for purposes of the GHG program will have very little overall effect on vehicle GHG emissions.
As noted above, Ferrari sells approximately 1500-1800 vehicles in the U.S. each year. Under the
MY 2012-2016 rules, Ferrari would need to make the requisite showing in 40 CFR § 1801-12(k),
and under the proposal for MY 2017-2025, as an SVM, Ferrari could seek alternative, case-by-
case standards for its fleet. EPA explained in the preamble that the SVM case-by-case standards
are still intended to be challenging, will still require innovation and development of new
technologies, and will still require the SVM to do its "fair share" of reducing emissions.5 As
proposed, the process of obtaining SVM-specific standards includes a comprehensive evaluation
of all aspects of the SVM's fleet, use of technology, and projections of sales and introduction of
new models covering up to five model years. This process will enable EPA and the manufacturer
to develop SVM-specific standards that are protective of the environment and require
technological innovation while reflecting the unique characteristics of the SVM's fleet of
vehicles. Ferrari supports the approach EPA has proposed and notes that it is consistent in
concept with the system used in the European Union. [EPA-HQ-OAR-2010-0799-9535-A2, p.5]
The Provision on "Attest Engagements" Should Mirror the Provision Contained in EPA's
Regulations on Fuel and Fuel Additives. [EPA-HQ-OAR-2010-0799-9535-A2, p.5]
EPA requested comments on whether to require a manufacturer seeking operationally
independent SVM status to provide an "attest engagement" from an independent auditor,
verifying the accuracy of the information contained in the manufacturer's application. Ferrari
supports this concept and recommends that EPA adopt a provision that is comparable to the
provision in the agency's Fuel and Fuel Additive regulations in 40 C.F.R. Part 80. In those
regulations, EPA requires refiners and fuel importers subject to Subpart F of 40 C.F.R. Part 80 to
engage an outside auditor to verify information. Section 80.125 specifies that the CPA shall
10-38
-------
Additional EPA Program Elements
perform the attest engagement in accordance with the Statements on Standards for Attestation
Engagements, which is incorporated by reference, and allows the assistance of internal auditors
who are employees or agents of the regulated company, as long as such assistance is consistent
with the guidelines contained in the Statements on Standards for Attestation Engagements. This
provision further allows the attest engagement to be completed by an auditor who is an employee
of the regulated company, provided that the employee is an internal auditor certified by the
Institute of Internal Auditors and completes the internal audits in accordance with the
Codification of Standards for the Professional Practice of Internal Auditing. Adopting these
requirements into the process for demonstrating operational independence will allow some
measure of flexibility for the manufacturer while ensuring the accuracy of the information and
the independence of the auditor. Furthermore, Ferrari recommends that EPA clarify in the final
rule that the auditor performing the attest engagement does not have to be a new auditor hired
solely for the purposes of conducting this audit. Rather, EPA should allow a manufacturer to
continue to use a CPA or other auditor who has previously performed similar functions for the
company, as long as the auditor meets the requirements discussed above. Finally, since a number
of the criteria listed in the preamble involve engineering issues, Ferrari suggests that the entity
performing the Attest Engagement be allowed to use personnel from outside its organization as
necessary to assist in this effort. [EPA-HQ-OAR-2010-0799-9535-A2, pp.5-6]
EPA Should Allow a Time Period for Adjustment If a Manufacturer's Situation Changes. [EPA-
HQ-OAR-2010-0799-9535-A2, p.6]
EPA has asked for comment on what should occur in the event a manufacturer who is an SVM
has changed circumstances that would no longer make it eligible for this status. While Ferrari
does not anticipate this occurring, if its status or other SVM's status should change, EPA should
provide at least a three-year transition period to allow the manufacturer to develop the additional
testing facilities and time for durability testing, as well as for software, hardware development
and installation. Such a period will be needed, since it is highly unlikely that any SVM would be
able to immediately transition from this status to that of a full-line manufacturer. [EPA-HQ-
OAR-2010-0799-9535-A2, p.6]
Inclusion of a revision to 40 CFR § 86.1838(b) to provide for "operational independence" in this
package of rules is critically important to Ferrari. As such, Ferrari strongly supports including
such a provision in the final rule. Attached is proposed text of such a revision. [EPA-HQ-OAR-
2010-0799-9535-A2, p.6]
Ferrari agrees with many parts and principles of the proposed regulations, including the specific
provisions for small-volume manufacturers contained in the EPA GHG proposal. We deem that
the proposed approach to define specific standards for each single SVM is the best solution,
because it is possible to take into account the potential technical and economic capabilities of
each small-volume manufacturer. Moreover, this method is consistent with both the already
existing CAFE regulation that allows small manufacturers to petition NHTSA for alternative fuel
economy standards, and also the corresponding European Union Regulation 443/2009/EC on
CO2. [EPA-HQ-OAR-2010-0799-9535-A2, p. 10]
10-39
-------
EPA Response to Comments
As noted in the main comments, we strongly recommend introducing the concept of "operational
independence" for small-volume manufacturers, so that the specific standards reserved to SVMs
can also be used by this sub-category of small-volume manufacturers that operate independently
from any other companies, in spite of ownership interests. [EPA-HQ-OAR-2010-0799-953 5-A2,
p.10]
NHTSA's proposed standards will require passenger cars to meet an estimated average of 49.6
mpg in MY 2025. This represents an average annual increase of 5 percent from the 34.4 mpg
average for 2016 MY. [EPA-HQ-OAR-2010-0799-9535-A2, p. 14]
With reference to the final 2010 MY Ferrari CAFE of 18.3 mpg (the best ever so far) we would
need to increase our CAFE by approximately 108 % in MY 2017 up to 191 % in MY 2025. We
are confident to achieve remarkable improvements in the fuel economy and reductions of CC>2
emissions with new models which will benefit of further improvements and other technologies in
the future, but we cannot satisfy the proposed targets and percentages. [EPA-HQ-OAR-2010-
0799-9535-A2, p. 14]
Organization: Ferrari & Maserati of Seattle
We therefore urge EPA to finalize the criteria that would enable a very small volume
manufacturer (SVM), such as Ferrari, to demonstrate that it is operationally independent from
related manufacturers and comply with company-specific fleet average greenhouse gas (GHG)
emission standards. [EPA-HQ-OAR-2010-0799-9197-A2, p. 1]
Existing EPA regulations require sales to be aggregated when one vehicle manufacturer holds
more than a 10% interest in another manufacturer. In the proposed rule, EPA included a list of
criteria that a SVM could satisfy in order to demonstrate that it is operationally independent,
despite the ownership structure that would otherwise require sales aggregation. See pages
74,991-92 of the proposed rule. These criteria are stringent enough to prevent gaming of the
system, yet would provide a manufacturer like Ferrari with the necessary flexibility to comply
with case-by-case GHG emission standards. Given the very low number of Ferraris sold in the
U.S. each year, the proposal would have only negligible effects on overall vehicle GHG
emissions. If EPA does not finalize the operational independence criteria and Ferrari's sales must
be aggregated with sales of Fiat in the U.S., sales of Ferrari may be reduced. This would have a
devastating effect on our business and our employees. [EPA-HQ-OAR-2010-0799-9197-A2, p.
1]
Organization: Ferrari of Houston, Texas and Ferrari of Austin, Texas
In the December 2011 proposal EPA proposed criteria that would allow a vehicle manufacturer
to demonstrate that it is 'operationally independent' from other related vehicle manufacturers (see
pages 74,991-92). EPA Regulations currently require sales to be aggregated if a vehicle
manufacturer owns a 10% or greater share in another manufacturer. The operational
independence criteria would allow a qualifying manufacturer to be treated as a small volume
manufacturer (SVM) for the purposes of GHG regulations, including compliance with
challenging case-by-case emission standards instead of the fleet average standards that would
10-40
-------
Additional EPA Program Elements
otherwise apply. Ferrari of Houston and Ferrari of Austin urge EPA to finalize this option. [EPA-
HQ-OAR-2010-0799-9230-A2, p.l]
EPA's proposal would establish a rigorous process to ensure that a manufacturer applying to be
treated as an operationally-independent SVM is truly an independent entity. [EPA-HQ-OAR-
2010-0799-9230-A2, p.l]
Opportunities to game the system would be limited and, given the very small number of vehicles
that Ferrari sells each year in the U.S., the effect on the overall vehicle GHG emissions would be
miniscule. [EPA-HQ-OAR-2010-0799-9230-A2, p.2]
However, without this option, the U.S. sales of Ferrari and Fiat would have to be aggregated.
Aggregation would restrict Ferrari's ability to sell vehicles in the U.S., which would be harmful
to our business, our employees, and our vendors and suppliers. EPA should therefore finalize the
operational independence criteria and provide necessary flexibility to SVMs that can
demonstrate independence from any related manufacturers. [EPA-HQ-OAR-2010-0799-9230-
A2, p.2]
Organization: Miller Motorcars
EPA has proposed to allow a manufacturer to comply with the small volume manufacturer
(SVM) GHG emission standards if the manufacturer can show that it is 'operationally
independent' from other related manufacturers. Under current EPA regulations, sales of two
related vehicle manufacturers must be aggregated if there is common ownership of 10% or more.
The EPA proposal would suspend the aggregation requirement if specific, stringent criteria can
be satisfied. The proposal would provide needed flexibility for very small manufacturers, like
Ferrari, that are fully independent from any related companies. No environmental harm would
ensue since the SVM would have to comply with case-by-case GHG emission standards that
EPA intends to be challenging yet achievable. At the same time, EPA has proposed criteria that
are difficult to satisfy and which will prevent companies from trying to take advantage of the
provision or game the system. Without this option, Ferrari may be forced to reduce or limit U.S.
vehicle sales, which would adversely affect our business and our employees. Miller Motorcars
therefore urges EPA to finalize this option. [EPA-HQ-OAR-2010-0799-8141-A2, p. 1]
Organization: Penske Corporation
Ferrari of Scottsdale, Ferrari of Central Jersey, and Ferrari of Las Vegas support EPA's proposal
to allow a manufacturer to demonstrate that it is 'operationally independent' from the other
automobile manufacturers with which its sales would otherwise have to be aggregated under
existing EPA regulations. As a small volume manufacturer (SVM), the manufacturer would then
be able to apply for and comply with case-by-case GHG emission standards that reflect the
degree of GHG emissions reduction that is challenging but still achievable for the manufacturer's
fleet. This option would provide necessary flexibility for those small volume manufacturers that
are truly independent from other automobile manufacturers in their operations and ensure that
Ferrari's ability to sell vehicles in the U.S. is preserved. [EPA-HQ-OAR-2010-0799-9187-A2, p.
1]
10-41
-------
EPA Response to Comments
If Ferrari does not obtain SVM status and the sale of Ferraris is restricted, then our Ferrari
business could suffer greatly. Even a modest reduction in the number of vehicles that Ferrari is
able to sell in the U.S. in a given model year could have a substantial impact on these Ferrari
dealers and the number of employees we are able to sustain. [EPA-HQ-OAR-2010-0799-9187-
A2, p. 2]
Thus, Ferrari of Scottsdale, Ferrari of Central Jersey, and Ferrari of Las Vegas urge EPA to
finalize the option described on page 74,992 of the proposal to demonstrate operational
independence. EPA has proposed stringent criteria that will ensure that a manufacturer seeking to
establish operational independence is truly independent. As proposed, the criteria and application
process would make it extraordinarily difficult for a manufacturer to change its existing business
operation in order to take advantage of the flexibility granted to SVMs. The proposal also would
be protective of the environment, as the agency would set case-by-case GHG emissions
standards for a SVM that would be challenging yet achievable. [EPA-HQ-OAR-2010-0799-
9187-A2, p. 2]
Organization: Volkswagen Group of America
In the NPRM the agencies seek comment on the concept of operational independence for Small
Volume Manufacturers (SVM), whereby a captured small volume brand that is more than 10%
owned by another company could petition the agencies for SVM status based on an attestation
and demonstration of operational independence. As an operationally independent small volume
manufacturer, a company would then have the option to petition the agencies for a negotiated
CO2 and fuel economy standard. [EPA-HQ-OAR-2010-0799-9569-A1, pp. 28-29]
Volkswagen supports the concept of allowing a captured brand with less than 5,000 annual
vehicle sales to have the flexibility to petition for SVM status. However, Volkswagen is
concerned that the operational independence criteria listed in the NPRM is too prescriptive and
difficult to apply across all circumstances of captured small volume brands. For example, while
it may be common for a small volume brand to use a common platform or engine from a parent
company, in many cases these systems are altered to accommodate separate features or
performance characteristics. In addition, such major components would be part of a business
contract and not merely provided gratis to different brands within a group. As such Volkswagen
requests that EPA and NHTSA allow this flexibility for demonstration of operational
independence in the final regulation but requests that the agencies consider the operational
independence of each manufacturer on an individual basis during the petition process. As such
the degree of independence could be part of the negotiation process for setting standards for a
particular SVM. [EPA-HQ-OAR-2010-0799-9569-A1, p. 29]
Organization: Wide World Ferrari, Wide World of Cars, LLC
The proposed language would allow a manufacturer to qualify as a small volume manufacturer
(SVM) on the basis of its own sales if it can show that it is 'operationally independent' from
related manufacturers with which its sales would otherwise be aggregated (see pages 75,991-92
of the proposal). Ferrari of West Palm Beach and Wide World of Cars support EPA's proposal to
allow an operationally-independent manufacturer to be considered a SVM for purposes of the
10-42
-------
Additional EPA Program Elements
greenhouse gas (GHG) program. The proposed federal regulatory language contains stringent
criteria that would ensure strong environmental protections and minimize gaming opportunities,
while still allowing flexibility for SVMs like Ferrari that cannot offset emissions of their low
volume high performance vehicles with higher volume, lower emission vehicles in the larger
fleet. [EPA-HQ-OAR-2010-0799-8142-A2, p. 1]
The proposed language would provide flexibility for small volume manufacturers like Ferrari
that are truly independent from other automobile manufacturers in the ownership structure. It
also would preserve Ferrari's ability to sell vehicles in the U.S. Our business could suffer if
Ferrari does not obtain SVM status and the sale of Ferraris is restricted. A small change in the
number of vehicles that Ferrari is able to sell in the U.S. in a given model year could have a
substantial impact on our bottom line and number of employees. [EPA-HQ-OAR-2010-0799-
8142-A2, p. 2]
EPA's proposal would have very little overall effect on vehicle GHG emissions, because the
vehicles sold by SVMs would still have to comply with challenging case-by-case GHG emission
standards. The proposed regulatory language also contains stringent criteria and an application
process that would make it exceedingly difficult for a manufacturer to alter its existing business
in order to take advantage of the flexibility granted to SVMs. [EP A-HQ-OAR-2010-0799-8142-
Al,p.2]
Thus, Ferrari of West Palm Beach and Wide World of Cars urge EPA to finalize the option to
demonstrate operational independence. [EPA-HQ-OAR-2010-0799-8142-A2, p. 2]
Response:
EPA received only supportive comments for the proposed case-by-case alternative
standards approach for SVMs. In addition, EPA received only supportive comments on allowing
manufacturers able to demonstrate operational independence from a parent company to also be
eligible for SVM provisions under the GHG program. Responses to comments regarding the
SVM alternative standards are provided in section III.B.S.b and comments regarding operational
independence are addressed in III.B.S.e.
With regard to Ferrari's suggestion regarding regulatory text pertaining to the applicant's
use of any vehicle powertrains or platforms developed or produced by related manufacturers,
EPA concurs with the comment and the final regulatory text is consistent with Ferrari's
suggestion.
Ferrari recommends that "EPA clarify in the final rule that the auditor performing the
attest engagement does not have to be a new auditor hired solely for the purposes of conducting
this audit. Rather, EPA should allow a manufacturer to continue to use a CPA or other auditor
who has previously performed similar functions for the company, as long as the auditor meets
the requirements discussed above. Finally, since a number of the criteria listed in the preamble
involve engineering issues, Ferrari suggests that the entity performing the Attest Engagement be
allowed to use personnel from outside its organization as necessary to assist in this effort." EPA
believes these recommendations are reasonable and has adopted Ferrari's suggestions regarding
the attest engagement.
10-43
-------
EPA Response to Comments
Ferrari commented that EPA should provide at least a three-year transition period to
allow the manufacturer to develop the additional testing facilities and time for durability testing,
as well as for software, hardware development and installation. EPA is providing 2 full model
years after the model year in which a manufacturer's status as operationally independent has
changed. In total this will provide the manufacturer with 2 to 3 years to comply with the primary
program depending on the timing of the change. EPA believes that this will be sufficient as the
parent company and manufacturer would likely have some control over the timing of the change
in their status.
10.4. Exemption for Small Businesses
Organizations Included in this Section
AMP Electric Vehicles
Fisker Automotive, Inc.
Vehicle Production Group LLC (VPG)
Organization: AMP Electric Vehicles
The purpose of this letter is to state our support for the provision in the proposed 2017 Light-
Duty Vehicle Greenhouse Gas rules that allows small business the opportunity of voluntarily
opting-in to the GHG standards. Further, it is our contention that the voluntary opt-in option
should be extended to EV converters and alterers. [EPA-HQ-OAR-2010-0799-7984-A1, p. 1]
As you are aware, in the MY 2012-2016 rule regarding greenhouse gas, EPA exempted entities
from the emissions standard, "if the entity met the Small Business Administration (SBA) size
criteria of a small business as described in 13 CFR 121.201." As we researched this issue, we
learned that the intent of the exemption was to assist small OEMs that might not have the
resources necessary to address the CO2 standards in the regulation. An unintended consequence
of this small business exclusion is that start up companies, such as AMP, are not be able to
accumulate CO2 credits for converting high emitting internal combustion engine SUVs to
emission free EVs. [EPA-HQ-OAR-2010-0799-7984-A1, p. 1]
In the recently published "2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas
Emissions and Corporate Average Fuel Economy Standards Rules" an "opt-in" provision
allowing small businesses to voluntarily waive their small entity exemption to the GHG
standards is proposed. AMP Electric Vehicles unequivocally supports this proposed rule, request
that it be made effective immediately and that it be made applicable to converters and
alterers. [EPA-HQ-OAR-2010-0799-7984-A1, p. 1]
Passage of the 2017 GHG opt-in provision would allow AMP the ability to accumulate
greenhouse gas credits and market them to larger OEMs. Our intent is to exchange these credits
with large OEM's in return for distribution assistance through their dealer networks. This would
greatly enhance our ability to sell greater volumes of EVs than we would otherwise. In our
preliminary discussion with large OEMs in need of credits this concept has received favorable
consideration. [EPA-HQ-OAR-2010-0799-7984-A1, p. 1]
10-44
-------
Additional EPA Program Elements
Additionally, approval of the opt-in provision would allow AMP the opportunity to generate
greater revenue to offset our technology investments and free up capital to invest in additional
innovative automotive green technologies. [EPA-HQ-OAR-2010-0799-7984-A1, p. 1]
Further, the provision will afford larger OEM seeking credits a better opportunity to meet their
compliance obligations. [EPA-HQ-OAR-2010-0799-7984-A1, p. 2]
Finally, and very importantly, the net result of the passage of 2017 Green House Gas Small
Business Opt-In provision is that it would increase the percentage of low and emission free
vehicles on America's roads consistent with the intent of this legislation. [EPA-HQ-OAR-2010-
0799-7984-A1, p. 2]
AMP recognizes that by choosing to opt-in, our company would be subject to all of the
requirements that would otherwise be applicable under this legislation. However, the net effect
of its passage would greatly benefit our company and our goal of producing a significant
quantity of zero emission vehicles allowing us to contribute to our mutual goal of cleaning up
our country's environment. [EPA-HQ-OAR-2010-0799-7984-A1, p. 2]
Organization: Fisker Automotive, Inc.
2) Discuss modifications to the optional compliance provision for small entities
Fisker Automotive is a start-up automobile manufacturer employing fewer than 1,000 people,
which qualifies our company as a small entity under Small Business Administration guidelines.
The final rule for model years 2012-2016 exempted and excluded small entities from the fleet
greenhouse gas standards. Without the ability to opt-in to the rule, we would miss an important
opportunity to market the credits generated by this rule to other manufacturers. [EPA-HQ-OAR-
2010-0799-9266-A1, p. 2]
Fisker greatly appreciates the proposed optional compliance provision for small entities included
in the current proposed rule. We fully agree with the rationale stated in the preamble: [EPA-HQ-
OAR-2010-0799-9266-A1, p. 2]
EPA believes that there could be several benefits to this approach, as it would allow small
businesses an opportunity to generate revenue to offset their technology investments and
encourage commercialization of the innovative technology, and it would benefit any
manufacturer seeking those credits to meet their compliance obligations." [EPA-HQ-OAR-2010-
0799-9266-A1, p. 2]
As proposed, the provision would make the opt-in available starting in model year 2014. While
this provision would indeed allow Fisker to access the credits it would have generated for model
years 2012 and 2013 if it were a large manufacturer, these credits would not be accessible until
90 days after the end of model year 2014, when final compliance for the model year is
established. [EPA-HQ-OAR-2010-0799-9266-Al, p. 2]
10-45
-------
EPA Response to Comments
We view the timing required by this proposal as problematic. Fisker would not be able to
complete a transfer on its earned credits until late in calendar year 2014 at the earliest, or nearly
three years from today. This would significantly diminish the revenue generating benefit of these
credits, particularly during the critical early years of our company when they are most
beneficial. [EPA-HQ-OAR-2010-0799-9266-Al, p. 2]
For this reason, we highly encourage EPA to modify the language of this provision such that a
small entity would be allowed to fully demonstrate compliance beginning with the 2012 model
year. [EPA-HQ-OAR-2010-0799-9266-Al, p. 2]
We believe optional compliance would be feasible beginning with model year 2012 for the
following reasons: [EPA-HQ-OAR-2010-0799-9266-Al, p. 3]
1) The proposed rule is expected to go into effect by October of this year (60 days after final
publication in August). Fisker anticipates its model year 2012 to end around the same time. Final
compliance for a given model year is demonstrated with an end-of-year report due 90 days after
the end of the model year. There is sufficient time after the rule takes effect for Fisker to
demonstrate compliance with its end-of-year report for model year 2012 [EP A-HQ-OAR-2010-
0799-9266-A1, p. 3]
2) The Fisker Karma sedan is already EPA-certified for model year 2012 under Federal Tier 2
exhaust emission standards, and has been issued a certificate of conformity to this effect [EPA-
HQ-OAR-2010-0799-9266-A1, p. 3]
3) Fisker Automotive has a strong working relationship with EPA's compliance division [EPA-
HQ-OAR-2010-0799-9266-A1, p. 3]
4) Fisker is already subject to the CAFE regulation for model year 2012 [EP A-HQ-OAR-2010-
0799-9266-A1, p. 3]
5) Since the GHG program "will not impose additional timing or testing requirements on
manufacturers beyond that required by the CAFE program," the only additional work required to
comply with the GHG program would be limited to reporting [EPA-HQ-OAR-2010-0799-9266-
Al,p.3]
6) Fisker already adheres to the existing practice under Tier 2 to provide EPA with a compliance
plan; for the GHG element of this plan, Fisker's compliance is trivial since our fleet consists only
of a vehicle that significantly over-complies with its GHG standard [EPA-HQ-OAR-2010-0799-
9266-Al,p. 3]
Encourage enforcement of the requirement that manufacturers must make a good faith effort to
secure credits from other manufacturers before becoming exempt from standards or becoming
eligible for alternative standards As part of establishing eligibility for exemption from the CO2
standards under the greenhouse gas (GHG) program for MY 2012-2016, Small Volume
Manufacturers (SVMs) "must make a good faith effort to secure credits from other
manufacturers, if they are reasonably available, to cover the emissions reductions they would
10-46
-------
Additional EPA Program Elements
have otherwise had to achieve under applicable standards." Fisker Automotive strongly
encourages EPA to hold to the spirit of these provisions. As the only entity with complete
knowledge of every automaker's credits and deficits, it is incumbent upon EPA to ensure that
this provision is fairly enforced. [EPA-HQ-OAR-2010-0799-9266-A1, p. 4]
Organization: Vehicle Production Group LLC (VPG)
Limited Line Manufacturer
Among the first decisions in the development of the business model, was the powertrain
selection. The option for VPG to manufacture its own powertrain was determined not to be
practical for reasons of cost related to the development of base algorithms for engine controls
and on-board diagnostics. Following that determination, a study of powertrains which were
offered for sale was undertaken, which ultimately resulted in VPG securing a supply agreement
with Ford Motor Company through the Ford Component Sales Division for the supply of
powertrains and associated emissions equipment. Ford offered to VPG the V-8, 4.6 liter 16 valve
engine, based upon VPG's power requirements, structural architecture, CNG compatibility as
well as the production capacity of Ford's engine manufacturing operations. VPG's ability to
provide wheelchair users with a superior alternative is dependent upon the production capacity
and offerings of the engine manufacturer. [EPA-HQ-OAR-2010-0799-7985-A2, p. 1]
VPG's place in the automotive market is that we are the OEM manufacturer of vehicles which
are accessible to wheelchairs. VPG's vehicle design encompasses ADA guidelines for ingress
and egress, as well as wheelchair positioning and restraint inside the vehicle. This necessarily
puts VPG in the role of a limited line manufacturer. [EPA-HQ-OAR-2010-0799-7985-A2, p. 2]
VPG's fuel economy performance is dependent upon the use of one powertrain. While VPG does
have the benefit of offering a fueling option in CNG, the public acceptance of this fueling option
is limited and focused, mostly for reasons of infrastructure. The customer base for the CNG
option remains the fleet market, where driving patterns are routed near CNG filling stations,
although this option offers the potential to raise VPG's CAFE. [EPA-HQ-OAR-2010-0799-
7985-A2, p. 2]
As EPA advises in the NPRM, there are high risks for limited line manufacturers in
implementing new technologies. In VPG's case, access to the technologies are limited or out of
reach for reasons of market offerings, lead time, or feasibility. For example, EPA counts among
other technologies, turbocharging as a technology which can be implemented after production
decisions have been undertaken. However, such technologies are available to VPG only if the
powertrain supplier offers the technology for sale to VPG. The alternative of VPG implementing
a technology like turbocharging under the assumption it were added to the engines as a retrofit is
not feasible. From the standpoint of development of controls and diagnostics algorithms, a
limited line manufacturer such as VPG would not have the financial resources or expertise to
implement these technologies with the requisite reliability, durability and timing. [EPA-HQ-
OAR-2010-0799-7985-A2, p. 2]
10-47
-------
EPA Response to Comments
We point out that the limited line nature of manufacturers has been used in the regulatory
environment to differentiate the impact of regulations on smaller entities. Therefore, VPG
requests institution of exemption from the greenhouse gas regulations based on the limited line
manufacturer status. VPG suggests a review of the appropriate vehicle line threshold, with 3
lines or less being a reasonable place to visit this subject. [EPA-HQ-OAR-2010-0799-7985-A2,
p. 2]
VPG notes that on page 75161 of this NPRM, potentially affected small entities are discussed in
terms of three models: 1) small volume manufacturers (SVMs), 2) independent commercial
importers, (ICIs), and 3) alternative fuel vehicle converters. We believe that the limited line
manufacturer should be added to this list of types of small entities affected, and that allowances
should be made for manufacturers in this list. [EPA-HQ-OAR-2010-0799-7985-A2, p. 2]
VPG requests exemption from this GHG regulation for small entities, limited line manufacturers.
[EPA-HQ-OAR-2010-0799-7985-A2, p. 4]
Response:
EPA is finalizing its proposal to exempt small businesses from the MY 2017-2025
standards. EPA is also finalizing its proposal to allow small businesses manufacturers to waive
their small entity exemption and opt-in to the primary GHG standards. Commenters generally
supported both the exemption and the opt-in provisions. The opt-in will allow small business
manufacturers to earn CC>2 credits under the program. The small business would have to meet
the primary standard for its fleet (that is, the small business would be allowed to opt-in to the
primary program standard, but not to the small volume manufacturer standards. Fisker's
comments regarding the timing of the opt-in and credit generation are discussed in section III.B.7
of the preamble. VPGs comments regarding limited line manufacturers are also addressed in
III.B.7.
In response to AMP's comments that small business alternative fuel converters should be
allowed to generate credits, EPA does not view this as a small business issue but as an issue with
the way alternative fuel conversions are addressed under EPA's fleet average standards.
Alternative fuel converters are not required to meet fleet average standards but instead must
comply with anti-tampering regulations by demonstrating that the conversion does not increase
emissions. Fleet average standards are not generally appropriate for fuel conversion
manufacturers because the "fleet" of vehicles to which a conversion system may be applied has
already been accounted for under the OEM's fleet average standard. Alternative fuel converters
are not manufacturing new vehicles, but are converting existing vehicles that have already been
certified by the OEM. Converters must qualify for a tampering exemption under 40 CFR subpart
F and fleet average standards do not apply. CO2 credits are available to OEMs based on fleet
emissions performance compared to the fleet average standards and therefore conversions are not
eligible for these credits. A small business alternative fuel converter may opt into the GHG
program and thus be required to make a showing that they are in compliance with requirements
of 40 CFR subpart F, but these vehicles would not be subject to the fleet average standards and
therefore would remain ineligible for credits.
10-48
-------
Additional EPA Program Elements
10.5. Exemption for Emergency and Police Vehicles
Organizations Included in this Section
Alliance of Automobile Manufacturers
Ford Motor Company
General Motors Company
Pennsylvania Department of Environmental Protection
Vehicle Production Group LLC (VPG)
Organization: Alliance of Automobile Manufacturers
Police and Emergency Vehicles [EPA-HQ-OAR-2010-0799-9487-A1, p.88]
The Alliance agrees with EPA's proposal for the option to exclude police and emergency
vehicles from fleet-average CC>2 standards. 10 However, in order to harmonize with the CAFE
regulations and fully exclude any influence that emergency vehicles may have on fleet average
CO2, EPA must exempt emergency vehicles from the methane (CH4) and N2O standards as well.
[EPA-HQ-OAR-2010-0799-9487-Al,p.88]
Per the current regulations, if any vehicle were to exceed the CFLj and/or N2O standards, a
manufacturer would be required to either include the CH4 and N2O emission values for all
vehicles in its fleet average calculation or account for the exceedance(s) using CO2 credits.
Therefore, if a police or emergency vehicle were to be the only vehicle to exceed either of these
standards, the manufacturer would be incurring an increase in fleet-average CO2 or a decrease in
CO2 credits solely due to the influence of the emergency vehicle. [EPA-HQ-OAR-2010-0799-
9487-A1, p.88]
The Alliance recommends that the following paragraph be added to 40 C.F.R. §86.1818-12(f):
[EPA-HQ-OAR-2010-0799-9487-Al,p.88]
Emergency vehicles. Emergency vehicles that have been excluded from fleet average CO2
exhaust emission standards under paragraph (c)(4) of this section are exempt from the N2O and
CH4 standards of this paragraph (f). [EPA-HQ-OAR-2010-0799-9487-A1, p.88]
Organization: Ford Motor Company
Emergency Vehicles
EPA has proposed to exclude emergency vehicles, from the greenhouse gas requirement
effective with the 2012 model year, consistent with the exclusion of emergency vehicles from
CAFE standards. In our comments on the 2012-2016 rules, Ford urged EPA to exclude
emergency vehicles from the GHG regulations; we stand by those comments and incorporate
them herein by reference. Those comments are fully consistent with EPA's determination that
the exclusion of these vehicles is appropriate,
10-49
-------
EPA Response to Comments
".. .because of the unique features of vehicles designed specifically for law enforcement and
emergency purposes, which have the effect of raising their GHG emissions and calling into
question the ability of manufacturers to sufficiently reduce the emissions from these vehicles
without compromising necessary vehicle features or dropping vehicles from their fleets. (76 Fed.
Reg. 74880) [EPA-HQ-OAR-2010-0799-9463-A1, p. 25]
Section 202(a) of the CAA allows EPA to prescribe standards 'applicable to the emission of any
air pollutant from any class or classes of new motor vehicles...' The language 'class or classes'
indicates that EPA may apply its standards to particular types or categories of vehicles, and
likewise make exclude particular types or categories of vehicles when there is reason to do so.
This language gives EPA the authority to incorporate regulatory provisions excluding emergency
vehicles from the fleet average requirement. The exclusion of emergency vehicles makes sense
as a matter of policy, and it also promotes the goals of One National Program by harmonizing the
GHG and CAFE rules on this point. [EPA-HQ-OAR-2010-0799-9463-Al, p. 25]
Organization: General Motors Company
GM supports EPA's efforts to further harmonize with the NHTSA program with regard to the
exclusion of emergency and police vehicles, and joins with the Alliance in suggesting
modifications to section 40 C.F.R. §86.1818-12(f). [EPA-HQ-OAR-2010-0799-9465-A1, p. 4]
Organization: Pennsylvania Department of Environmental Protection
The Agencies Should Ensure that the Fleet Averages Reflect Real-World Conditions.
The agencies should, at minimum, include police and emergency vehicles in calculations of
GHG fleet average standards. The EPA-led advisory committee presents a good case for new
technologies to generate more horsepower. This extra horsepower can be used to downsize a
vehicle's engine. No logical reason seems to exist as to why this new technology cannot be used
for police and emergency vehicles in order to gain fuel efficiency without loss of power. Police
and emergency vehicles constitute a large fleet in the United States; not including them so they
can benefit from the same GHG-reducing technology would be unfortunate. If manufacturers are
not being tasked to develop more fuel-efficient police and emergency vehicles, then at the very
least, emissions of emergency vehicles should be included in the overall targeted standards.
Including emissions produced by emergency vehicles would lower the overall emission standard
of the proposed rulemaking, but would make for a more accurate accounting of the impact of the
program. [EPA-HQ-OAR-2010-0799-7821-A1, p. 4]
Organization: Vehicle Production Group LLC (VPG)
Vehicles Used for the Public Good
EPA advises in III.B.9. that police and emergency response vehicles will be exempted from the
regulation. This is in following with past regulations and U.S. code which have exempted
vehicles manufactured "for the public good". While that exact stipulation is generally phased
out, the spirit and intent is still a part of the regulatory backdrop. VPG suggests that a vehicle
10-50
-------
Additional EPA Program Elements
manufactured for the specific purpose of transporting wheelchair users is indeed for the public
good; and in fact VPG's vehicle is a unique and robust solution to the needs of the disabled
community as well as several legal actions relating to wheelchair accessibility of federally
funded transportation services - most notably in New York City. It is VPG's proposal to extend
this exemption beyond police and ambulance vehicles to vehicles whose intended use is for the
public good. [EPA-HQ-OAR-2010-0799-7985-A2, p. 2]
VPG also proposed that vehicles used for the public good not be subject to this regulation. [EPA-
HQ-OAR-2010-0799-7985-A2, p. 4]
Response:
EPA is finalizing its proposal to exempt police and other emergency vehicles from the
GHG standards starting in MY2012. Emergency vehicles are also exempt from the N2O and CH4
standards. Thus emergency vehicles are not included in the National Program at this time.
Comments, including those from Pennsylvania DEP and the Vehicle Production Group, are
addressed in preamble section III.B.8.
10-51
-------
-------
Gasoline Fuel Quality
11. Gasoline Fuel Quality
11.1. Need for Octane
Some commenters have advocated for a required increase in gasoline octane levels to
improve vehicle efficiency and reduce greenhouse gas emissions, particularly if it would enable
future vehicles to be designed with higher compression ratios.
Organizations contained in this section
Alliance of Automobile Manufacturers
American Fuel and Petrochemical Manufacturers (AFPM)
Boyden Gray & Associates PLLC
Clean Fuels Development Coalition (CFDC)
Ford Motor Company
Growth Energy
ICM Inc.
Pennsylvania Department of Environmental Protection
Renewable Fuels Association (RFA)
Volvo Car Corporation
Comments:
Organization: Boyden Gray & Associates PLLC
Why the industry's interest in octane? The proposed rule preamble devotes considerable
discussion to technology improvements for spark ignition engines, but the agencies do not
explain in any detail why they have requested comment on whether higher octane fuels are
needed to comply with increasingly stringent fuel economy standards. [EPA-HQ-OAR-2010-
0799-9506-A1, p. 6]
Organization: Boyden Gray & Associates PLLC
The issue of octane is worth much more than the few words provided by the agencies out of
hundreds of pages of proposed rule. Octane has a major impact on both the efficiency gains the
car companies can provide as well as the traditional pollution benefits that the agencies can
achieve. These improvements, in turn, have a significant impact on the cost-benefit ratios the
agencies must consider. [EPA-HQ-OAR-2010-0799-9506-A1, p. 6]
Organization: Pennsylvania Department of Environmental Protection
The agencies should re-evaluate the rulemaking, the Draft Joint Technical Support Document
(TSD) and the Regulatory Impact Analysis (RIA) in order to assess the future consumer demand
for higher octane gasoline that will be needed to adequately power technologies that EPA
11-1
-------
EPA Response to Comments
believes will be used to meet the GHG emission standards. [EPA-HQ-OAR-2010-0799-7821-
Al,p.3]
Organization: Pennsylvania Department of Environmental Protection
EPA predicts that the burden of meeting these standards will fall on gasoline vehicles since
diesel vehicles will not penetrate the light-duty fleet significantly and all alternative-fueled
vehicles will amount to no more than 10 percent of the fleet. EPA believes automobile
manufacturers will rely heavily on new engine designs that use eight-speed, high-compression,
turbocharged engines, but typically manufacturers recommend that engines of this type be
refueled with higher octane gasoline (91- to 93-octane) to avoid potentially damaging engine
knocking. EPA indicated that using the combination of turbocharging and other technology
improvements will eliminate the need to use high octane gas and will allow the consumer to use
87-octane gasoline. [EPA-HQ-OAR-2010-0799-7821-A1, p. 3]
Organization: Pennsylvania Department of Environmental Protection
In addition to examining the air quality effects of the factors above [see section 18.2 of this
comment summary], the increase in volatile organic compounds (VOC) emissions needs to be
estimated due to the possible increase in Reid vapor pressure in gasoline from the increased use
of higher octane gasoline. Higher emissions of VOC can lead to increased ground-level ozone
concentrations. [EPA-HQ-OAR-2010-0799-7821-A1, p. 3]
Organization: American Fuel and Petrochemical Manufacturers (AFPM)
AFPM supports the Administration's decision not to include gasoline octane rating in this
rulemaking. [EPA-HQ-OAR-2010-0799-9485-A1, p.9]
Organization: American Fuel and Petrochemical Manufacturers (AFPM)
Automakers have recommended increasing the minimum gasoline octane rating to help meet
future GHG emissions requirements (see Oct. 6, 2011 letter from the Alliance of Automobile
Manufacturers to Lisa Jackson). The cost implications of such a change are enormous and would
have serious impacts on U.S. refinery operations. Evidently, the Administration shares our belief
that an increase in gasoline octane is not necessary and is unsubstantiated. [EPA-HQ-OAR-2010-
0799-9485-A1, p.9]
Organization: Alliance of Automobile Manufacturers
These improvements will better support several technologies and allow introduction of some
options, like stratified lean burn engines, which otherwise might not be available for U.S.
consumers. Reduced sulfur will also optimize emission control systems and reduce emissions in
existing vehicles. Higher octane grades in market fuels would enable optimization of
combustion/thermal efficiency, for example in certain high compression or turbocharged
engines. Other fuel-related characteristics to assure timely compatibility with advanced
11-2
-------
Gasoline Fuel Quality
technology vehicles may also need to be addressed during the period covered by this rulemaking.
[EPA-HQ-OAR-2010-0799-9487-Al,p.85]
Organization: Ford Motor Company
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 44-47.]
Also, market fuel quality, particularly octane level, can have a significant positive impact on all
on-road vehicles and should, therefore, be a key part of our national strategy to improve energy
security.
Organization: Volvo Car Corporation (VCC)
Higher octane fuel would enable manufacturers to pursue strategies that better support
development and introduction of advance vehicle technologies, and a consequent reduction in
greenhouse gases and criteria emissions. To optimize engine fuel efficiency and minimize
emissions, transitioning to higher octane regular and premium grade market gasoline may be
necessary. VCC would support establishment of a minimum blend stock octane. In this way,
adding ethanol would raise fuel octane without risk that blenders would make corresponding
reductions in base blend stock octane, thereby undoing the octane benefit of ethanol addition. We
recommend that EPA assess the environmental benefits of higher octane gasoline. [EPA-HQ-
OAR-2010-0799-9551-A2, p.15]
Organization: Clean Fuels Development Coalition (CFDC)
THE CRITICAL IMPORTANCE OF OCTANE. For SI gasoline-powered engines, octane is an
extremely important fuel property to help the OEMs achieve both efficiency improvement and
pollution reduction. NHTSA requested comment on whether higher octane fuels "may be
necessary if certain advanced fuel economy-improving technologies are required by stringent
CAFE standards" (p. 75335). [EPA-HQ-OAR-2010-0799-9574-A3, p. 3]
Organization: Clean Fuels Development Coalition (CFDC)
In a recent letter to EPA Administrator Jackson, the Alliance of Automobile Manufacturers has
suggested increasing gasoline octane levels: "... [T]o help achieve future requirements for the
reduction of greenhouse gas emissions, we also recommend increasing the minimum market
gasoline octane rating, commensurate with increased use of ethanol." [See Attachment A in
Docket number EPA-HQ-OAR-2010-0799-9574-A4] The Auto Alliance also has recently
stressed how important it is for regulators to recognize the differences between the various
octane sources and the importance of ensuring fuel quality, in addition to controlling vehicle
hardware and calibration effects. In comments submitted in September 2010 to California EPA
on its LEV III certification fuel hearing, the Alliance noted that, "[a] Total Aromatics limit alone
in the cert fuel spec does not preclude the blending of relatively high molecular weight aromatics
that can lead to increased HC and PM emissions." [See Attachment C in Docket number EPA-
HQ-OAR-2010-0799-9574-A6] [EPA-HQ-OAR-2010-0799-9574-A3, p. 3]
11-3
-------
EPA Response to Comments
Organization: Clean Fuels Development Coalition (CFDC)
While EPA did not specifically request comment on the matter of octane, it is our understanding
that EPA assumes that the standard for SI engine fuel will be 87 octane (R + M/2), and that
engine compression will be capped at 10.5:1. We believe this assumption unnecessarily inhibits
fuel quality and engine design improvements that could be made available by both fuel providers
and the OEMs, and that it could adversely impact the nation's petroleum dependence, carbon
footprint, and health and welfare goals. Today, Aromatic Group Compounds constitute
approximately 25% of an average gallon of U.S. gasoline, which refiners synthesize from crude
oil to increase octane ratings. They are the most toxic, energy inefficient, carbon-intensive, and
costly components in gasoline, and we believe that the goals of this rulemaking cannot be fully
and efficiently met unless they are steadily reduced over time. As will be discussed further
below, it is entirely realistic to reduce Aromatic Group Compounds in the U.S. gasoline pool
while simultaneously increasing average octane levels over the life of this rulemaking. [EPA-
HQ-OAR-2010-0799-9574-A3, p. 4]
Organization: Renewable Fuels Association (RFA)
EPA/NHTSA should consider what fuel properties and characteristics, such as minimum octane
levels, will be necessary to achieve the proposed CAFE/GHG standards. EPA should be mindful
of these properties and characteristics as it considers both the final CAFE/GHG standards and the
elements of the upcoming Tier 3 rulemaking. [EPA-HQ-OAR-2010-0799-9490-A1, p.2 and 7]
Organization: Renewable Fuels Association (RFA)
Similarly, in a letter dated October 6, 2011, to EPA Administrator Jackson, the Alliance of
Automobile Manufacturers stated, ".. .to help achieve future requirements for the reduction of
greenhouse gas emissions, we also recommend increasing the minimum market gasoline octane
rating, commensurate with increased use of ethanol. Adding ethanol to gasoline increases its
octane rating" (Attachment B). We agree that EPA should consider including an increased
minimum octane rating when contemplating changes to the certification test fuel. We fully
understand that changes to fuel requirements will be primarily undertaken as part of the Tier 3
rulemaking, and not as part of the CAFE/GHG rule. However, as stated earlier, we believe the
two rules are tightly connected, and as such, the fuel properties and characteristics needed to
achieve the 2017-2025 CAFE/GHG requirements must be closely examined as both rulemakings
are advanced. [EPA-HQ-OAR-2010-0799-9490-A1, pp.7-8] [For attachment B please refer to
EPA-HQ-OAR-2010-0799-9490-A1, pp.55-57]
Organization: Pennsylvania Department of Environmental Protection
However, at this point, no mechanical approach seems to have solved the problem of engine
knock in a high compression turbocharged engine, and manufacturers are still advising owners to
use the higher octane fuel. Consumers will most likely follow a manufacturer's recommendation
or risk a forced reduction in performance, increased maintenance costs, or engine damage. We
believe that a greater volume of higher octane gasoline will be required to mix with regular high
compression engines to achieve the GHG standards. This will mean that either higher volumes of
11-4
-------
Gasoline Fuel Quality
ethanol, an oxygenate, will need to be added by gasoline distributors to boost octane levels or the
refiner will need to supply higher octane base stock gasoline. A higher octane base stock may
require additional chemical additives like alkylates to be produced and used at the refinery. The
agencies have not adequately addressed these problems in any of the documentation in the public
docket for this rulemaking. [EPA-HQ-OAR-2010-0799-7821-A1, p. 3]
Organization: Pennsylvania Department of Environmental Protection
The Agencies Should Evaluate Fuel Costs, Availability, and Impacts of Higher Octane Gasoline.
The agencies should re-evaluate the costs in the proposed rulemaking's RIA to account for the
increased cost to the consumer to purchase higher octane gasoline. The agencies should also
examine the likely future availability of ethanol or alkylates needed to meet the standards in the
proposed rulemaking and the potential for adverse environmental consequences due to increased
production of higher octane gasoline. The agencies need to examine the ability of refiners to
supply, and the ability of fuel distribution system to transport, higher octane gasoline. We ask
that the agencies expand the consideration of costs and air quality impacts. [EPA-HQ-OAR-
2010-0799-7821-A1, p. 3]
Costs and Life-Cycle Costs. The extra cost for higher octane gasoline should be used to estimate
the costs for this rulemaking. It appears that EPA used the cost of regular gasoline in their RIA
(p. 3-15) for this rulemaking. Also, the increased performance that EPA is expecting to achieve
from turbocharging and other technologies seems to be based on the vehicle using higher octane
fuel. [EPA-HQ-OAR-2010-0799-7821-A1, p. 3]
All potential costs and environmental impacts must be considered such as supply chain burdens,
transportation availability, market transition costs, capital investments for higher octane gasoline
and/or for production of additional ethanol or alkylates and the possibility of shortages in some
areas of the country. [EPA-HQ-OAR-2010-0799-7821-A1, p. 3]
Nevertheless, we are concerned that much of the nation's gasoline supply will require higher
octane levels to meet these GHG standards and that EPA has not considered the implications.
EPA either needs to address (in the face of manufacturers' current recommendations) why more
mid-grade gasoline will not be needed to run turbocharged, high-compression engines or the
implications of greater use of higher octane gasoline should be fully evaluated. [EPA-HQ-OAR-
2010-0799-7821-A1, p. 5]
Organization: ICM Inc.
Octane. Health and Environmental Impacts. [EPA-HQ-OAR-2010-0799-9541-A2, p.2]
The question was posed in the NPRM as to what other health and environmental impacts
associated with advancements in vehicle GHG reduction technologies should be considered. To
the extent that those GHG reduction strategies involve smaller but higher compression engines
that require higher octane fuels, the impacts could be considerable. [EPA-HQ-OAR-2010-0799-
9541-A2, p.2]
Organization: ICM Inc.
Octane. Health and Environmental Impacts. [EPA-HQ-OAR-2010-0799-9541-A2, p.2]
11-5
-------
EPA Response to Comments
In addition to our work in developing food and fuel technologies, ICM has been directly engaged
in cooperative research with the auto industry, and we have focused much of our effort on
maximizing the octane value of ethanol. In our ongoing work and discussions with automakers, it
has become clear there are only a few avenues available to them that would enable them to meet
the aggressive fuel economy and carbon reduction requirements of this Rule. Foremost among
them is the likelihood of downsized engines that would have higher compression and require
higher octane. These smaller engines operating on premium grade fuels can achieve significantly
greater efficiency. [EPA-HQ-OAR-2010-0799-9541-A2, p.2]
Organization: Growth Energy
As explained in Attachment 3 [pp. 22-41 of Docket number EPA-HQ-OAR-2010-0799-9505-
Al] to this letter, there are strong policy reasons for EPA to establish regulations for a new
gasoline certification fuel at 94 octane (AKI), and to provide for the general commercial
availability of such a fuel for vehicles produced in or after MY 2017, in the same manner that
"regular" gasoline at a lower octane level is now currently sold. [EPA-HQ-OAR-2010-0799-
9505-A1, p. 5]
Organization: Growth Energy
Growth Energy recommends enforceable requirements for the gasoline marketing industry in the
U.S. that will ensure the commercial availability of gasolines that have an octane value of 94, for
use in optimizing the GHG performance of new vehicles certified to the proposed GHG emission
standards. [EPA-HQ-OAR-2010-0799-9505-A1, p. 22]
Organization: Boyden Gray & Associates PLLC
In sum, 87-octane fuel is a potentially significant limitation on technology improvement.
Moreover, clean higher-octane components are lower in CO2 than the current principal source of
octane in gasoline, as well as lower in traditional pollutants. It is clear that toxic-free premium
fuel is in fact necessitated by the rule, since the rule relies on advanced technologies that can
only function on higher-octane fuel, and this fuel must be clean burning in order to avoid PM
increases. [EPA-HQ-OAR-2010-0799-9506-A1, p. 7]
Organization: Alliance of Automobile Manufacturers
Two key fuel properties of concern to Alliance members for market fuel gasoline and gasoline
blends are: (1) the need for continued reductions to minimize sulfur content, and (2) the need to
transition to higher octane grades (most likely commensurate with higher ethanol or other bio-
based fuel blend content), and related issues about renewable fuel and base gasoline
contributions. [EPA-HQ-OAR-2010-0799-9487-A1, p.84]
Organization: Boyden Gray & Associates PLLC
11-6
-------
Gasoline Fuel Quality
Another provision of the 1990 CAAA—the mobile source air toxics (MS AT) provision—
requires EPA to reduce toxics as far as technology will permit. EPA has not enforced this
section except to reduce benzene by modest amounts in 2007, notwithstanding the fact that the
U.S. is drowning in non-toxic alternatives to gasoline and diesel (i.e., all of the non-petroleum
alternatives like alcohols, natural gas, electricity, etc.). There were indications that EPA intended
to address the issue of aromatics and octane in the Tier III rulemaking, but this may apparently
longer be the case—hence the letter from the auto companies to EPA referred to above. But if
EPA is not going to address octane in Tier III, it must do so now in order to allow the car
companies more flexibility. [EPA-HQ-OAR-2010-0799-9506-A1, p. 7]
Organization: Boyden Gray & Associates PLLC
Alternative fuels all have two important characteristics in common. They are all essentially free
of air toxics, which are the principal source of unhealthy particulate matter (PM). Both air toxics
and PM are dangerous pollutants that are regulated under the CAA. Alternative fuels also have
significantly higher octane ratings, which would enable higher compression. This, as the Ricardo
study notes, allows for "increased thermodynamic efficiency" when used in connection with
some direct injection technologies." 18 Yet the review does not appear to include a simple stand-
alone compression increase as a proposed advance. The proposed rules provide no explanation
for this omission. The Ricardo study indicates that the analysis is based throughout on a 10.5:1
compression ratio, 19 and further that the octane of the fuel used for evaluating all new
technology is 87.20 If the octane available to the auto manufacturers is capped at 87, then they
cannot seek efficiency gains from compression higher than the ratio identified above. Moreover,
they may not be able to take advantage of other technologies such as direct fuel injection without
increasing tailpipe pollution.21 Finally, they will not be able to take advantage of high-octane
fuels such as alcohols and natural gas, which produce lower levels of both traditional pollutants
and CO2 than gasoline and diesel. [EPA-HQ-OAR-2010-0799-9506-A1, pp. 6-7]
Response:
As evidenced by the analysis supporting this final action, we believe that the LD GHG
standards being finalized today are entirely feasible and cost effective without the need for
increasing the octane of gasoline. . Nor do we agree that higher octane fuel will be necessary
for turbocharged and downsized engines to prevent the onset of combustion knock. EPA
assumed no change in the octane of certification or in-use gasoline within its analysis and the
effectiveness values used for the high BMEP engines reflect that fact. The current Ford
EcoBoost turbocharged GDI engines do not require the use of premium fuel, although those
engines are not operating at BMEP levels as high as those expected under our rule. Importantly,
a combination of both intake charge dilution (e.g., cooled EGR) and in-cylinder evaporative fuel
cooling (e.g., direct injection) are expected to allow higher BMEP GDI engines to operate on
regular grade gasoline. All packages at 27 bar BMEP analyzed by EPA included cooled EGR to
allow higher BMEP operation and prevent the onset of combustion knock on current certification
or in-use fuels. See Joint TSD p. 3-88 ("Use of GDI systems with turbocharged engines and air-
to-air charge air cooling also reduces the fuel octane requirements for knock limited combustion
and allows the use of higher compression ratios.") See also Joint TSD at p. 3-91 ("Use of GDI
systems with turbocharged engines and air-to-air charge air cooling also reduces the fuel octane
11-7
-------
EPA Response to Comments
requirements for knock limited combustion and allows the use of higher compression ratios.
Ford's "Ecoboost" downsized, turbocharged GDI engines introduced on MY 2010 vehicles allow
the replacement of V8 engines with V6 engines with improved in 0-60 mph acceleration and
with fuel economy improvements of up to 12 percent.")
Consequently, we do not believe any regulatory action is warranted at this time to
increase the octane level of all gasoline. Furthermore, any benefits of higher octane gasoline are
already possible. Were manufacturers to design their vehicles to take advantage of higher octane
fuel, such fuel - premium gasoline - is already available nationwide for those consumers who
purchase such vehicles, and production of higher octane gasoline could easily rise to respond to
market demand. There is not a compelling need to require consumers whose vehicles will not
benefit appreciably from higher octane gasoline to pay for it.
11.2. Aromatics
The commenters highlight a number of potential health concerns with respect to the
aromatic content of gasoline.
Organizations contained in this section
American Council on Renewable Energy (ACORE) and Biomass Coordinating Council
(BCC)
Boyden Gray & Associates PLLC
Clean Fuels Development Coalition (CFDC)
Governors' Biofuels Coalition
Growth Energy
ICM Inc.
Comments:
Organization: Clean Fuels Development Coalition (CFDC)
It is especially important to note that, in order to provide an accurate picture of the final rule's
health and welfare impacts, the Agencies cannot evaluate emissions results based only on
certification fuels and laboratory testing procedures such as the FTP and US06 methods. When
real-world fuels containing on average 25% Aromatic Group Compounds are combusted under
real-world driving conditions (e.g., stop-start, acceleration and high speeds, heavy loads, etc.),
tailpipe emissions of harmful ambient particulate matter increase significantly, as the Aromatic
Group Compounds' extraordinary resistance to complete combustion ultimately stymies the best
efforts of the vehicles' catalytic converter. Even more worrisome is the fact that some of the
more important new advanced engine technologies (e.g., gasoline direct injection) will make
these emissions even worse if fuel quality is not improved. [EPA-HQ-OAR-2010-0799-9574-A3,
p. 2]
Organization: American Council on Renewable Energy (ACORE) and Biomass Coordinating
Council (BCC)
11-8
-------
Gasoline Fuel Quality
3. Reducing the level of aromatics (BTX) in gasoline to limit emissions of highly health-
damaging particulate matter, especially ultrafme particulates. [EPA-HQ-OAR-2010-0799-9593-
A2, p. 5]
Organization: American Council on Renewable Energy (ACORE) and Biomass Coordinating
Council (BCC)
The continued use of BTX as octane enhancers represents a serious health threat according to
existing data. BTX group compounds that do not completely combust remain in the air and form
fine (known as PM2.s, or particulate matter smaller than 2.5 microns in diameter) and ultrafme
particulate matter (UFP). There is extensive evidence linking PM2.5 and UFP to numerous
diseases and conditions, including [EPA-HQ-OAR-2010-0799-9593-A2, p. 2]
Respiratory diseases such as asthma [EPA-HQ-OAR-2010-0799-9593-A2, p. 2]
• Cardiovascular illness and heart diseases [EPA-HQ-OAR-2010-0799-9593-A2, p. 3]
A wide range of cancers [EPA-HQ-OAR-2010-0799-9593-A2, p. 3]
Infant mortality and premature birth [EPA-HQ-OAR-2010-0799-9593-A2, p. 3]
Organization: ICM Inc.
Octane. Health and Environmental Impacts. [EPA-HQ-OAR-2010-0799-9541-A2, p.2]
Given the documented position of automakers as to their need for increased octane, it would be
completely consistent to the Rule if a cap on aromatics was imposed, recognizing a failure to do
so could, in fact, lead to significant increase in overall aromatic content and corresponding
adverse health impacts as previously described. [EPA-HQ-OAR-2010-0799-9541-A2, p.4]
Organization: ICM Inc.
Octane. Health and Environmental Impacts. [EPA-HQ-OAR-2010-0799-9541-A2, p.2]
Replacing petroleum derived aromatics with 'clean octane,' i.e., ethanol, achieves both a
petroleum reduction and the energy, economic, and health benefits that result from such a
reduction, as well as a carbon reduction for the purposes of greenhouse gas mitigation and
climate change. The cost of ethanol, as compared to current aromatic compounds used in
gasoline, would favor consumers. As of late January, toluene, the most popular aromatic
compound sold for octane purposes, was selling for $3.20 per gallon (Gulf Coast) while ethanol -
with a higher blending octane value—was selling for $ 2.32 (Gulf Coast). This is a historical
spread that has remained constant over several years (Fig 1). [EPA-HQ-OAR-2010-0799-9541-
A2, p.3] [For the associated figure please refer to EPA-HQ-OAR-2010-0799-9541-A2, p.3]
Organization: ICM Inc.
Octane. Health and Environmental Impacts. [EPA-HQ-OAR-2010-0799-9541-A2, p.2]
EPA needs to consider the source of that octane, given the increasing body of evidence
suggesting the relationship between octane, aromatics and particulates. The Agency has long
documented the relationship of air toxics and particulate matter to various respiratory ailments
and other health risks. As EPA is well aware from its modeling in the MSAT Rule, ethanol is an
11-9
-------
EPA Response to Comments
excellent source of octane and, of course, has considerably lower carbon content than gasoline,
even with full lifecycle penalties applied. Conversely, aromatic compounds, such as benzene,
toluene, and xylene, are classified as air toxics, and benzene is a known carcinogen. It would
appear to be in the public's best interest in terms of health and the environment to do everything
possible to limit the aromatic content in gasoline so that the public is not subjected to these
harmful compounds. Strictly from a carbon reduction standpoint, aromatic compounds can be
20% more carbon intensive than gasoline itself. Ethanol can reduce base gasoline by 20%. When
used to replace an aromatic compound, it would result in a potential total 40% carbon reduction.
[EPA-HQ-OAR-2010-0799-9541 -A2, pp.2-3]
Organization: ICM Inc.
Octane. Health and Environmental Impacts. [EP A-HQ-O AR-2010-0799-9541-A2, p.2]
We believe the critical health impacts need to be considered as a result of higher octane fuels
center around the under-regulated subset ofpmliculates which are ultra-fine particulates (UFPs).
They are produced as a result of the fuel combustion process and are not controlled via current
vehicle technology, nor are they likely to be. Long thought to be a diesel or stationary source
problem, increasing data suggests PM does have a relationship to gasoline, specifically UFPs,
which are considerably smaller than the regulatory benchmark ofPM2.5 . They may actually be
produced in the combustion process as a result of the higher aromatic content in gasoline,
according to recent research by Honda. 1 These UFPs are suspected of being a much more
significant health threat as they can essentially bypass the lungs as a filter system and enter the
bloodstream. [EP A-HQ-O AR-2010-0799-9541-A2, p.3]
Organization: ICM Inc.
1) The likelihood of increased octane needs of the auto industry resulting in higher aromatics;
[EP A-HQ-O AR-2010-0799-9541 - A2, p. 1 ]
Organization: ICM Inc.
2) The negative health and environmental impacts of increasing octane from aromatics, the
relationship of air toxics and aromatics to particulate formation, and the growing body of
evidence showing aromatics to be precursors to ultra-fine particulates; [EPA-HQ-OAR-2010-
0799-9541-A2, p. 1]
Organization: Growth Energy
Attachment 3 also explains why examination of the potential increases in emissions that EPA has
regulated for many years (more specifically, fine particulate matter) in the current rulemaking is
important even if EPA decides that it cannot take regulatory action under section 211 as the
statute currently exists. The Agencies' cost-benefit analysis of the standards in the Joint NPRM
assumes reductions in fine particulate matter. If, as explained in Attachment 3 [pp. 22-41 of
Docket number EP A-HQ-O AR-2010-0799-9505-A1], those standards would have the
unintended effect of increasing engine PM emissions, then the cost-benefit analysis mandated by
governing Executive Orders must be revised. [EP A-HQ-O AR-2010-0799-9505-A1, p. 6]
11-10
-------
Gasoline Fuel Quality
Organization: Growth Energy
Among the fuel-related mitigation methods, further regulation of the composition of gasoline
should be considered since there is evidence that the heavier components of gasoline, i.e., the
aromatics, contribute substantially to PM emissions. [EPA-HQ-OAR-2010-0799-9505-A1, p. 40]
Organization: Governors' Biofuels Coalition
Petroleum refiners produce aromatics, also known as the BTX (benzene, toluene, xylene) Group,
from crude oil. The BTX Group is the most toxic, energy inefficient, and expensive gasoline
component. As crude oil costs escalate, BTX Group costs increase the price of gasoline
disproportionately and affect the nation's economic growth. Lower cost, clean octane alternatives
to the BTX Group include the use of intermediate ethanol blends and a greater reliance on
natural gas vehicles and electric vehicles. [EPA-HQ-OAR-2010-0799-9570-A1, p. 2]
Organization: Governors' Biofuels Coalition
A final rule that fails to improve U.S. transportation fuel standards by reducing BTX Group
compounds is the wrong policy for America. On behalf of the Coalition, I respectfully urge you
to modify the proposed rule so as to provide market-based incentives and encourage the cost
effective substitution of domestic clean octane alternatives for toxic BTX Group compounds
derived largely from imported crude oil. [EPA-HQ-OAR-2010-0799-9570-A1, pp. 2-3]
Organization: Governors' Biofuels Coalition
The Wall Street Journal reported on November 8, 2011 that emerging science points to an
alarming but largely hidden trend: 'As roadways choke on traffic, researchers suspect that the
tailpipe exhaust from cars and trucks - especially tiny carbon particles already implicated in heart
disease, cancer and respiratory ailments - may also injure brain cells and synapses key to
learning.' The article specifically noted the threat to expectant mothers who live near high-traffic
areas, whose babies' DNA may be significantly harmed by 'prenatal exposure to high levels of
polycyclic aromatic hydrocarbons in exhaust.' [EPA-HQ-OAR-2010-0799-9570-A1, p. 2]
Organization: Governors' Biofuels Coalition
The Health Effects Institute has also warned that '[u]ltrafine particles' ...small size and high
surface area might make [them] especially toxic when inhaled. Many researchers have pointed to
gasoline octane enhancers - known as aromatics - as the primary source of the urban ultrafme
particles emissions and the toxic derivatives that coat them. Concern has heightened recently,
given evidence that emissions of ultrafme particles might increase with greater use of gasoline
direct-injection engines and other changes in fuels and technology.' For these reasons, European
regulators have already announced their intention to regulate not only diesel, but also spark
ignition and particle number emissions, which recent studies have shown are directly linked to
aromatics. [EPA-HQ-OAR-2010-0799-9570-A1, p. 2]
11-11
-------
EPA Response to Comments
Organization: Clean Fuels Development Coalition (CFDC)
In its 2007 MSAT Final Rule, EPA observed that "[t]here may be compelling reasons to consider
aromatics control in the future, especially regarding reduction in secondary PM2.5 emissions, to
the extent that evidence supports a role for aromatics in secondary PM2.5 emissions."20 In a 2010
study, EPA Office of Research and Development experts confirmed that anthropogenic
pollution, especially mobile source primary carbonaceous particulate matter and NOX emissions,
"facilitate transformation of naturally emitted VOCs to the particle phase." EPA's modeling
predicted that reducing mobile source emissions could help to reduce biogenic SOA emissions in
the eastern U.S. by as much as 50% or more.21 This rulemaking provides EPA an opportunity to
recognize the significant role played by gasoline exhaust, not just diesel exhaust, and the
dominant role that Aromatic Group Compounds play in gasoline emissions. A May 2010 UCLA
study noted that "several polycyclic aromatic hydrocarbons (PAHs) are toxic to living
organisms, and engine exhaust emissions constitute a major source in urban areas.. .We focus
this report on our estimates of vapor-phase naphthalene (NAP) from gasoline and diesel engines
emissions.. .taking into consideration that SI engines constitute 96% of the estimated 28 million
California vehicle fleet, and that the NAP content in regular and premium gasoline ranges from
69 up to 2,600 ppm since 1999, reduction of NAP from SI fuels may constitute an effective
means of reducing the emissions of a major SOA-forming precursor to the atmosphere of large
urban centers"22 [EPA-HQ-OAR-2010-0799-95 74-A3, pp. 5-6]
Organization: Clean Fuels Development Coalition (CFDC)
P. 75104, ULTRAFINE PARTICLES' PM AND AIR TOXIC HEALTH EFFECTS. We believe
it is critically important for the Agencies to recognize the direct connection between the UFP
fraction of PM2.5 and the deadly toxics that coat them: the polycyclic aromatic hydrocarbons +
quinones (PAHQs). Two of the nation's leading UFP authorities released a 2009 study finding
that "[u]rban UFP contain a higher content per unit mass of polycyclic aromatic hydrocarbons,
which are relevant organic constituents since they can induce oxidative stress.. .in human tissues
after conversion to quinones.. ."25 Over the past decade, advancing science and measurement
techniques have established that the PAHQs—which experts say are carcinogenic, cytotoxic, and
genotoxic—"hitchhike" on the tiny particles, which carry them to the bloodstream and
throughout the body to the organs.26 [EPA-HQ-OAR-2010-0799-9574-A3, p. 7]
Organization: Clean Fuels Development Coalition (CFDC)
P. 75112, OTHER HEALTH AND ENVIRONMENTAL IMPACTS ASSOCIATED WITH
ADVANCEMENTS IN VEHICLE GHG REDUCTION TECHNOLOGIES. We strongly urge
the Agencies to recognize the substantial body of evidence that links gasoline Aromatic Group
Compounds to increasing levels of urban PM (PM2.5, which includes the UFPs), which are
coated with highly toxic polycyclic aromatic hydrocarbons and quinones (PAHQs). Attachment
E summarizes and provides cites for just a few of the leading epidemiological and related studies
that provide alarming evidence linking gasoline Aromatic Group Compound combustion
products to premature births and infant mortality, a wide range of cancers, asthma and other
respiratory diseases, cardiovascular and heart conditions, and even brain disorders and autism.
11-12
-------
Gasoline Fuel Quality
Many of the same PAHs found in secondhand cigarette smoke are found in gasoline exhaust (see
cites 10, 11, and 12 of Attachment E), and for the tens of millions of Americans who live within
300 - 2,500 meters of congested roadways, there is no escape from the particle-bound toxics that
originate from incomplete combustion of Aromatic Group Compounds.23 [Attachment E can be
found in Docket number EPA-HQ-OAR-2010-0799-9574-A8] [EPA-HQ-OAR-2010-0799-
9574-A3, p. 7]
Organization: Clean Fuels Development Coalition (CFDC)
In short, Aromatic Group Compounds are expensive to manufacture, and their costs escalate as
crude oil prices rise. Aromatic Group Compounds would be even less cost competitive compared
to Clean Octane alternatives if appropriate actions were taken to level the playing field, and
Aromatic Group Compounds' true social costs were fully considered (under current policy, these
costs are not borne by petroleum refiners as they should be, but rather by taxpayers and other
industries in the form of higher health care spending and lost productivity, etc.). This is true even
though budgetary pressures are forcing an end to tax incentives and other forms of public sector
support for alternative fuel technologies. Examples of commercially available and cost-
competitive Clean Octane alternatives to the Aromatic Group Compounds include: [EPA-HQ-
OAR-2010-0799-9574-A3, pp. 4-5]
• Compressed natural gas (CNG), especially in centrally fueled fleets
• Biofuels, especially intermediate ethanol blends (e.g., E30+) [See Attachment B in
Docket number EPA-HQ-OAR-2010-0799-9574-A5] [EPA-HQ-OAR-2010-0799-9574-A3, p.
5]
Organization: Clean Fuels Development Coalition (CFDC)
Consider the many shortcomings of Aromatic Group Compounds:
• Gasoline and finished product yield losses at the refinery due to the energy intensive
requirements of the catalytic reformer
• High cost component which escalates as crude oil prices increase
• High carbon intensity component
• Incomplete combustion properties exacerbate wide range of tailpipe emissions
• Primary source of urban ambient particulate matter 9
• Primary source of urban polycyclic aromatic hydrocarbons (PAHs) and quinones
(oxidative derivatives of Aromatic Group Compounds) 10 that coat the UFP particles in PM2.5
• Major culprit in combustion chamber deposits , which over time reduce vehicle
efficiency and increase carbon and other harmful tailpipe emissions [EPA-HQ-OAR-2010-0799-
9574-A3, p. 4]
Organization: Clean Fuels Development Coalition (CFDC)
Congress most certainly did not intend for EPA to reduce one non-health pollutant (CO2) while
inadvertently increasing emissions of one of the nation's more dangerous health pollutants (PM
2.5). As will be demonstrated below, extensive scientific evidence provides ample basis to
"reasonably anticipate" that paniculate emissions from Aromatic Group Compounds represent a
serious health threat today, and one that is almost certain to get worse unless new fuel quality
11-13
-------
EPA Response to Comments
standards that complement new engine technologies are imposed. [EPA-HQ-OAR-2010-0799-
9574-A3, p. 3]
Organization: Clean Fuels Development Coalition (CDFC)
ESTIMATED COST AND ECONOMIC BENEFITS. As referenced in Attachment B
[see Docket number EPA-HQ-OAR-2010-0799-9574-A5], the 2008 - 2011 cost comparison of
USGC spot toluene prices (a reference marker for Aromatic Group Compound pricing in
general) and USGC ethanol prices shows that toluene prices have exceeded ethanol prices by an
average of approximately $.707 gallon over the three-year period, and more than $.80 per gallon
over the past two years. (Q3 and Q4 in 2008 saw a precipitous drop in crude oil prices, from
approximately $140 per barrel at its peak to $70+ per barrel at year-end. This global recession-
induced plunge in oil prices had a direct, and aberrational, price depression effect on Aromatic
Group Compounds.) As a March 2010 United Kingdom Department for Environment, Food, and
Rural Affairs report confirmed, world corn prices also dropped precipitously during this period,
in line with oil and other raw commodities, even though U.S. ethanol production actually
increased, a relationship that clearly refutes the much-publicized but fallacious "food vs. fuel"
attacks.30 The cost advantages of ethanol's Clean Octane compared to the Aromatic Group
Compound's Dirty Octane, while impressive enough, pales in comparison to the enormous health
benefits as well as reduced petroleum and carbon footprint benefits that would be achieved.
Attachment F [see Docket number EPA-HQ-OAR-2010-0799-9574-A10] explains the basis of
the table that extrapolates from EPA and Energy Future Coalition sources, and suggests that a
gradual phase-down in Aromatic Group Compounds could save the public and private sectors
more than $400 billion per year by 2025. [See Attachment G in Docket number EPA-HQ-OAR-
2010-0799-9574-A11] In the final rule, we strongly urge the Agencies to take all of its these
critically important cost-benefit factors into account, especially as the EPA reassesses its PM2.s
SOA apportionment due to mobile sources based upon its new CMAQ modeling results. [EPA-
HQ-OAR-2010-0799-9574-A3, pp. 8-9]
Organization: Boyden Gray & Associates PLLC
These factors suggest how EPA can avoid the impermissible side effect of this rulemaking that
will increase traditional and life endangering PM pollution as the price for reducing CO2. Rather
than relying on the uncertain possibility of finalizing a future rulemaking to impose tailpipe PM
restrictions, which may not in fact eliminate the secondary atmospheric reactions that cause most
fine particle harm, EPA should use fuel efficiency concerns that ARE the subject of this proposal
to solve this problem. This would involve the obvious step of reducing the most carbon intensive
fuel components— aromatics—which would have positive outcome of reducing CO2,
eliminating the impermissible traditional pollutant increases, and providing needed octane, all at
the same time. This could and should be done in this proceeding, which, as discussed above,
needs in any event to make available the statutory incentives for the non-petroleum alternatives
(which are also substitutes for toxic aromatics and the key to increasing clean octane—a
necessary precursor to innovation in fuel-efficient internal combustion). [EPA-HQ-OAR-2010-
0799-9506-A1, pp. 10-11]
Organization: Boyden Gray & Associates PLLC
11-14
-------
Gasoline Fuel Quality
Ozone and CC>2 itself are also implicated. Reducing aromatics reduces ozone as well as PM,
since aromatics are highly reactive photochemically even if not highly volatile. Restriction of
aromatics thus contributes more to ozone reduction than Reid vapor pressure (RVP) controls that
address only the so-called "light-ends" like butane and pentane, since these are highly volatile
but virtually unreactive.35 But EPA discourages this shift not only by blocking state VOC
regulation and capping the effects of the multiplier for purposed of curbing oil imports, but also
by penalizing ethanol and methanol by not making allowance for their air quality and other
benefits. In fact, aromatics are 20% more carbon-intensive than gasoline, meaning that direct
octane substitutes like ethanol and methanol, which are less carbon intensive, provide in fact as
much as a 50% improvement over gasoline in CC>2, in addition to the PM, ozone and mileage
improvements. [EPA-HQ-OAR-2010-0799-9506-A1, p. 10]
Organization: Boyden Gray & Associates PLLC
Finally, it is important to note that aromatics are more wasteful and, therefore, more expensive
than gasoline, ethanol and methanol. The rule of thumb is that every point of octane generated by
the reformers' production of aromatics uses 1% percent of crude. In part as a result, the BTX
group costs nearly one dollar more per gallon than regular gasoline. Therefore, EPA and DOE
are incorrect to calculate ethanol's or methanol's fuel equivalency solely on the basis of BTU
content, since upstream fuel consumption and accompanying pollution increases are relevant
factors along with the increased efficiency allowed by the high octane of ethanol, methanol, and
CNG [EPA-HQ-OAR-2010-0799-9506-A1, p. 10]
Organization: Boyden Gray & Associates PLLC
EPA's failure to address the issue of octane, aromatics and air toxics is curious in light of the
Presidential directive to do so in Section 3 of the Presidential Memorandum of September 2010.
Moreover, EPA acknowledges on page 6-32 of its DRIA that it "is important to quantify the
health and environmental impacts associated with the proposed standard, because a failure to
adequately consider these ancillary co-pollutant impacts could lead to an incorrect assessment of
their net costs and benefits." But the proposed rule itself is silent on the question. [EPA-HQ-
OAR-2010-0799-9506-A1, p. 7]
Response:
In response to comments (most from Boyden Gray and Associates) that EPA should
reduce the amount of aromatics in vehicular fuels to reduce secondary PM and photochemical
ozone formation, those issues are beyond the scope of this proceeding. Furthermore, the
innuendo that EPA is trading CO2 reduction for increases in PM and air toxics under this rule is
not correct.
The rule does not result in increases to either the PM, ozone, or air toxics inventories, but
rather to reductions. For PM, the results indicate that in 2030, a population weighted average
reduction of approximately 0.01 ug/m3 can be expected (see RIA Chapter 6.3.1). For ozone, we
11-15
-------
EPA Response to Comments
estimate that in 2030, on a population-weighted basis, there is virtually no change in ambient
concentrations in ozone.
In terms of health impacts, however, it is clear that upstream reductions in emissions
related to ambient concentrations of both direct and indirect PM outweigh the slight emission
increases associated with rebound driving (and none associated with fuel content, contrary to the
commenter's statements). In terms of PM-related health impacts, we estimate that in 2030,
emission reductions associated with the rule will result in between 110 to 280 fewer premature
mortalities across the U.S. Compared to the estimate of 1 to 3 additional ozone-related
premature mortalities associated with rebound-related emission increases, it is clear that
upstream emission reductions outweigh the slight downstream emission increases and in fact
improve health on a national basis.
EPA estimates the full range of pollution impacts from the standards, including emissions
at the tailpipe and emissions from "upstream" sources such as power plants, refineries, and fuel
transportation and distribution. Please refer to Preamble Section III.G.I and RIA Chapter 4 for a
complete description of the emissions impacts of the rulemaking and the estimation
methodology. This includes both upstream and tailpipe VOC emissions associated with the final
standards. We use these non-GHG inventories to estimate the changes in ambient concentrations
of PM, ozone, and selected air toxics. Please refer to Chapter 6 of the RIA for a description of
both the air quality modeling and health impact analyses. Taken together, the non-GHG
emission changes yield a net reduction in human health risk and contribute to the overall benefits
of the standards.
Furthermore, as ethanol use in gasoline has continued to rise in response to market forces
and RFS, the additional octane provided by ethanol has been used by refiners to reduce the
concentration of aromatics (another source of octane) in the gasoline they supply. As shown
below in figure below, there has been a 15 percent decrease in aromatics with the rise in ethanol
use over the past decade. With the increased use of ethanol, not only have the aromatic levels in
gasoline been declining, but we project that they will continue to decline. The average level of
aromatics in gasoline today is around 22 percent, although it ranges from 3 to 47 percent on a
batch basis, and 10 to 40 percent on a refinery average basis due to the wide variation in refinery
configuration, crude oil source, and available product markets.
11-16
-------
Gasoline Fuel Quality
30
25
20
1
O
I
£ 15
u
I
Ol
_c
"o
% 10
13
^•l A smsl e» *=*• Jffe —^—Avg.Corrected Aromatics. vol% (AAM)
1.3 1.3 !-6 ,,4- - - *
, ,..,,.,-•" — A- Avg.EtOH, vol%(EIA)
o
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Figure: Aromatics and Gasoline Ethanol Concentration vs. Time
11.3. Need to harmonize in-use/certification fuels with LD GHG
Organizations contained in this section
American Petroleum Institute (API)
Mercedes-Benz USA, LLC
Pennsylvania Department of Environmental Protection
Volvo Car Corporation
Comments:
Organization: American Petroleum Institute (API)
Changes to the Test Fuel Used for Emissions and Fuel Economy Certification
EPA suggests that it may in the future consider changing the property specifications of the test
fuel used to certify the emissions and fuel economy performance of new vehicles vis-a-vis the
standards, and it specifically indicates that the fuel may include some unspecified amount of
ethanol. API's fundamental position on the ethanol content of federal gasoline certification test
11-17
-------
EPA Response to Comments
fuel remains unchanged from that conveyed in earlier comments on the MY 2012-2016
CAFE/GHG rule for light-duty vehicles: "The ethanol concentration of the certification reference
fuel should match the fuel that vehicles are expected to use."20 [EPA-HQ-OAR-2010-0799-
9469-A1, p 9]
Organization: American Petroleum Institute (API)
Changes to the Test Fuel Used for Emissions and Fuel Economy Certification
EPA suggests that it may in the future consider changing the property specifications of the test
fuel used to certify the emissions and fuel economy performance of new vehicles vis-a-vis the
standards, and it specifically indicates that the fuel may include some unspecified amount of
ethanol. API's fundamental position on the ethanol content of federal gasoline certification test
fuel remains unchanged from that conveyed in earlier comments on the MY 2012-2016
CAFE/GHG rule for light-duty vehicles: "The ethanol concentration of the certification reference
fuel should match the fuel that vehicles are expected to use."20 [EPA-HQ-OAR-2010-0799-
9469-A1, p 9]
Organization: Pennsylvania Department of Environmental Protection
We believe that EPA should change the test fuel used for certifying emission standards of
passenger cars and light-duty vehicles in the laboratory. For years, EPA has been using a
gasoline for emissions testing that is never used by motorists to determine if a vehicle meets
emission standards. We believe this leads to an unrealistic estimate of emissions and fuel
efficiency. EPA needs to follow CARB's lead and use a fuel for emissions testing that is more
representative of what the nation's consumers use, such as a fuel that contains 10 percent ethanol.
A representative fuel will produce more realistic emissions testing results and promote a firmer
understanding of what emissions are produced in the mobile sector. [EPA-HQ-OAR-2010-0799-
7821-Al,p. 4]
Organization: Mercedes-Benz USA, LLC
The National Program recognizes the importance of harmonizing regulatory programs. Reducing
greenhouse gas emissions and enhancing energy independence depends upon coordinating the
regulation of tailpipe emissions with the regulation of fuels. This includes not only enhancing the
amount of renewable energy producing electricity to reduce upstream emissions associated with
electricity generation, but also ensuring the availability of ultra-low sulfur fuels.7 [EP A-HQ-
OAR-2010-0799-9483-A1, p. A-4]
Ultra low sulfur gasoline is a key enabler for the incorporation of lean bum advanced combustion
technologies that require dedicated lean NOX after-treatment hardware. Ultra low sulfur gasoline
also permits significant further fuel economy gains (8-10%) in downsized turbocharged engines
by reducing the frequency and intensity of sulfur 'bum-off cycles in exhaust after-treatment
components otherwise needed to keep those devices at peak operating efficiency. DAG believes
it to be feasible to achieve sulfur reduction in market fuels to 10 ppm. [EPA-HQ-OAR-2010-
0799-9483-A1, p. A-4]
11-18
-------
Gasoline Fuel Quality
Ultra low sulfur diesel fuel is also important. DAG, then as part of DaimlerChrysler, played a
key role in the efforts to bring ultra low sulfur diesel fuel to the United States. These efforts were
further supported when B5 biodiesel was specified as the factory fill for Jeeps equipped with the
Mercedes-Benz 3.0L common rail diesel engine. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-4]
DAG remains concerned about state efforts to promote and mandate biodiesel blends of BIO or
greater and encourages the EPA to employ a federal policy to promote B5 use nationwide. Doing
so would create a foundation for engine, exhaust after-treatment and biodiesel technologies to
mature as a system. [EPA-HQ-OAR-2010-0799-9483-A1, p. A-4]
DAG supports EPA's efforts with regard to Tier 3, and California's efforts with regard to LEV 3,
and looks forward to continuing to work with the agencies both to promote ultra low sulfur fuels
and to address remaining concerns with those regulatory programs. [EPA-HQ-OAR-2010-0799-
9483-A1, p. A-4]
7 The agencies properly take a Tank to Wheel approach to electric battery generation, applying a
factor of 0 g/m for the electric generation. Automobile manufacturers are able to apply
technology, and base their compliance, only on the vehicles they sell. Automakers have no
control over the sources of electricity generation, an area that EPA has ample authority to
regulate independent of tailpipe emissions. Emissions, moreover, should be treated the same.
Upstream emissions from the production of oil are not included; nor should those from electric
vehicles be included. Finally, any information relating to upstream emissions provided to the
public should be provided with regard to all vehicles. The agencies should not include only 'net'
upstream emissions beyond those applicable to ICE vehicles because doing so would mislead the
public into believing that only EVs involve upstream emissions.
Organization: Pennsylvania Department of Environmental Protection
We believe that EPA should change the test fuel used for certifying emission standards of
passenger cars and light-duty vehicles in the laboratory. For years, EPA has been using a
gasoline for emissions testing that is never used by motorists to determine if a vehicle meets
emission standards. We believe this leads to an unrealistic estimate of emissions and fuel
efficiency. EPA needs to follow CARB's lead and use a fuel for emissions testing that is more
representative of what the nation's consumers use, such as a fuel that contains 10 percent ethanol.
A representative fuel will produce more realistic emissions testing results and promote a firmer
understanding of what emissions are produced in the mobile sector. [EP A-HQ-OAR-2010-0799-
7821-Al,p. 4]
Organization: Volvo Car Corporation (VCC)
The same criteria that govern the need for new test procedures to measure extremely low
emissions adequately and correctly also dictate the need for low-sulfur fuel. It is essential to
avoid sacrificing environmental gains achieved by use of advanced technology by failing to
recognize the positive effect of higher quality fuel or the impact of sulfur on catalyst efficiency
11-19
-------
EPA Response to Comments
over time. Lower sulfur in fuel will also result in environmental gains for the existing fleet since
the catalyst deactivation will be minimized. [EPA-HQ-OAR-2010-0799-9551-A2, p. 15]
Response:
The LD GHG standards are based on current certification test fuel qualities and are not
dependent on any changes occurring to certification test fuel qualities. If the certification test
fuel is changed through a future rulemaking, EPA would be required to address the need for a
test procedure adjustment to preserve the level of stringency of the CAFE standards. EPA is
committed to doing so in a timely manner to ensure that any change in certification fuel will not
affect the stringency of future GHG emission standards.
11-20
-------
Technical Assessment of the Proposed CC>2 Standards
12. Technical Assessment of the Proposed COz Standards
Organizations Included in this Section
National Association of Clean Air Agencies (NACAA)
Union of Concerned Scientists (UCS)
Organization: National Association of Clean Air Agencies (NACAA)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 53.]
What we're hopeful about is that if new technologies come into vehicles are incorporated into
vehicle design and production earlier, that then it will be shown that the cost of having those
technologies in vehicles lessens the idea that, you know, you down the cost of — as you move
into production, you move down the cost in terms of implementing the technologies and the cost
drops for production.
Organization: Union of Concerned Scientists (UCS)
The agencies based this proposal on rigorous, peer-reviewed technical analysis. We appreciate
the continued commitment of the agencies to utilize independent technical analysis as well as
information collected from manufacturers. In particular, UCS acknowledges the importance of
the tear-down cost studies conducted by FEV, the technology effectiveness modeling conducted
by Ricardo Engineering, and the mass-reduction and safety potential analysis conducted by
Lotus. These studies represent the most up-to-date and highest quality work in these areas.
Studies of these kinds were recommended by the National Academies as important tools in
improving estimates of the cost and performance of new vehicle technologies. 16 [EPA-HQ-
OAR-2010-0799-9567-A2, pp. 5-6]
16 See, for example, Finding 3-3 and Finding 8-4 in the 2011 National Academies report,
Assessment of Fuel Economy Technologies for Light-Duty Vehicles. [EPA-HQ-OAR-2010-
0799-9567-A2, p. 5]
Response:
Regarding comments from NACAA, we fully expect that costs for GHG reducing
technology will drop as these technologies are introduced and their production numbers increase.
Our learning curve effect (see joint TSD 3.1.3) captures those anticipated reductions in cost.
Regarding comments from UCS, we fully agree that the many studies conducted and cited in
support of our final standards—FEV teardowns, technology effectiveness modeling by Ricardo,
12-1
-------
EPA Response to Comments
and mass reduction studies by Lotus—are extremely important pieces of our rulemaking effort
and represent the most up-to-date and highest quality work in these areas.
12.1. Baseline, Reference and Control Fleets for Evaluating Standards
Organizations Included in this Section
American Council for an Energy-Efficient Economy (ACEEE)
Chrysler Group LLC
Environmental Consultants of Michigan
Environmental Defense Fund (EDF)
International Council on Clean Transportation (ICCT)
Natural Resources Defense Council (NRDC)
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Organization: American Council for an Energy-Efficient Economy (ACEEE)
BASELINE AND OTHER SCENARIOS
The agencies' baseline scenario assumes that fuel economy remains at 2016 levels absent the
proposed new standards. However, NHTSA also "examines the impact of an alternative 'market-
driven' baseline, which allows for some increases in fuel economy due to 'voluntary
overcompliance' beyond the MY 2016 levels" (NPRM p.75167). NHTSA requests comment on
this alternative baseline. [EPA-HQ-OAR-2010-0799-9528-A2, p.2]
There is little historical basis for a scenario in which there is a sustained increase in fuel
economy in the absence of increases in standards. Public interest in fuel economy does shift with
fuel prices, but even that interest typically has followed from large, rapid changes in price and
has been short-lived. The fuel prices on which the various agency analyses are largely based are
EIA projections and do not contain dramatic increases in price. Under these conditions,
manufacturers not constrained by fuel economy standards historically have employed
technological advances to increase vehicle power and acceleration, rather than to improve fuel
economy. [EPA-HQ-OAR-2010-0799-9528-A2, p.2]
Incorrect specification of the baseline scenario will lead to an incorrect valuation of the proposed
standards. An alternative baseline such as the one considered by NHTSA will reduce
manufacturers' costs to meet the standards, because some of the added technology required to
meet the standard will already appear in the baseline. At the same time, the benefits attributable
to the standards will decline. The net effect is a reduction in the cost-effectiveness of the
standards, because the most cost-effective technologies are the ones that will appear in the
alternative baseline scenario, leaving the more expensive technologies for the rule to bring into
the market. [EPA-HQ-OAR-2010-0799-9528-A2, p.2]
The same issue arises from EIA's AEO 2012 Early Release (EIA 2012), which projects an
increase in new vehicle fuel economy after 2016 without adoption of the proposed rule, and
without major increases in fuel prices. Roughly one-quarter of the reduction in new vehicles'
12-2
-------
Technical Assessment of the Proposed CC>2 Standards
fuel consumption that would result from the proposed standards appears in the AEO 2012
Reference Case. Hence it is all the more important that NHTSA clarify that the baseline scenario
used in the NPRM should be the basis for evaluating the benefits of the final rule. [EPA-HQ-
OAR-2010-0799-9528-A2, p.2]
Recommendations
Clarify that the baseline scenario used to evaluate the benefits of the rule will not assume
"voluntary over-compliance" by manufacturers after 2016. [EPA-HQ-OAR-2010-0799-9528-A2,
p.3]
Make available on the EPA web site the OMEGA outputs for the various scenarios considered.
[EPA-HQ-OAR-2010-0799-9528-A2, p.3]
Organization: Chrysler Group LLC
The Agencies provide 2008MY and 2025MY sales projections for various manufacturers in
Table II-l of the NPRM. These projections show Chrysler with annual sales of-1.7 million
light-duty vehicles, dropping to 0.8 million light-duty vehicles in 2025; a 53% decline over 17
years. [EPA-HQ-OAR-2010-0799-9495-A1, p.21]
This negative projection of Chrysler's viability is problematic. In addition, to potentially
affecting the analyses upon which the Agencies have based the proposed standards, projections
of this type can also affect Chrysler's relations with our suppliers and customers. When suppliers
and customers see projections, supported by Federal agencies, that indicate a 53% decline in
sales, they are potentially given a highly negative view of the viability of the company. These
negative views may result in less favorable contracts with suppliers and lower sales to customers.
[EPA-HQ-OAR-2010-0799-9495-Al,p.21]
Organization: Environmental Consultants of Michigan
Advanced Technology Has Already Been Substantially Incorporated Into the Fleet [See Table 1
on p. 7 of Docket number NHTSA-2010-0131-0166-A1]
The Agency's arbitrary selection of a four year old data set is unconscionable. Manufacturers
have already implemented into their product line many of the technologies recommended by the
Agency at substantially higher costs. At a minimum the Agency must postpone promulgation of
the final rule until it completely recalibrates their models using up to date data on the cost and
benefits of new technology along with using an up to date baseline vehicle fleet. [NHTSA-2010-
0131-0166-Al,p. 7]
Organization: Environmental Defense Fund (EDF)
B. FLAT 2016 BASELINE
EDF supports EPA's proposal to assume the reference case fleet in MY 2017-2025 would have
fleet wide GHG emissions performance no better than that projected to be necessary to meet the
12-3
-------
EPA Response to Comments
MY 2016 standards. Because EPA is using AEO2011 fuel price forecasts, which project
relatively stable fuel prices over the next 15 years, it is reasonable to assume that manufacturers
will not overcomply with the 2016 standards and/or consumers will not demand fuel economy
greater than the 2016 standard. It is also reasonable to assume that fleetwide overcompliance will
not occur because any voluntary over-compliance by one company would generate credits that
could be sold to other companies to substitute for their more expensive compliance technologies.
Therefore, the ability to buy and sell credits would eliminate any over-compliance for the overall
fleet. [EPA-HQ-OAR-2010-0799-9519-A1, p. 8]
Organization: International Council on Clean Transportation (ICCT)
6) Baseline Assumption Sensitivity Case
There is a difference between how EPA and NHTSA handled the modeled Reference Fleet
Scenario. EPA projects that in the absence of the proposed GHG and CAFE standards, the
reference case fleet in MY 2017-2025 would have fleetwide GHG emissions performance no
better than that projected to be necessary to meet the MY 2016 standards. [EPA-HQ-OAR-2010-
0799-9512-A1, p. 18]
While NHTSA used the same baseline assumptions for their primary analyses, they also
conducted a sensitivity analysis with an alternative baseline, which assumed that fuel economy
would continue to increase after 2016 without regulation. NHTSA stated:
The assumption is that the market would drive manufacturers to put technologies into their
vehicles that they believe consumers would value and be willing to pay for.' [EPA-HQ-OAR-
2010-0799-9512-Al,p. 18]
Again, while sensitivity analyses can illuminate the impacts of important uncertainties, there is
little or no evidence supporting this particular case. Except during the oil crisis in the 1970s and
a brief period for passenger cars in the late 2010s, the market has never driven improvements in
vehicle fuel economy. Even these two examples are not relevant to the current situation. The
demand for higher fuel economy in the 1970s was driven primarily by fears of oil unavailability
and ongoing future increases in fuel price. The modest increase in passenger cars in the late
2010s followed 20 years of unchanging CAFE standards. Thus, NHTSA's sensitivity analysis
inappropriately calculates a lower estimate of net benefits of the rule. [EPA-HQ-OAR-2010-
0799-9512-A1, p. 18]
The proposed 2017-25 standards follow aggressive increases in standards from 2011 through
2016. Further, the change to a footprint-based standard means that all manufacturers must
increase the efficiency of their vehicles to comply, even manufacturers of primarily smaller
vehicles. Thus, the 2012-16 standards have already driven the market beyond the level of
efficiency it would have demanded in the absence of standards. [EPA-HQ-OAR-2010-0799-
9512-Al,p. 18]
The reason why efficiency standards are effective and needed is consumer discounting of
uncertain, future fuel savings, as explained above. Efficiency standards move the market from
12-4
-------
Technical Assessment of the Proposed CC>2 Standards
the level of efficiency demanded by loss averse consumers to the level of efficiency desired by
society. It will be many years after 2016 before additional technology development and lower
cost will finally fall to the level demanded by consumers from the higher level demanded by
society through efficiency standards. The historical precedent is that it took 20 years of
unchanging CAFE standards combined with high real and nominal fuel prices before the market
started to demand additional fuel economy for passenger cars in the late 2000s. [EPA-HQ-OAR-
2010-0799-9512-Al,p. 19]
ICCT recommends that the sensitivity analysis for market-driven increases in efficiency after
2016 be removed from the Final Rule. [EPA-HQ-OAR-2010-0799-9512-A1, p. 19]
Organization: Natural Resources Defense Council (NRDC)
A. Baseline Projection
NRDC supports the baseline forecast for MY 2017 and beyond that assumes manufacturers meet
but do not exceed the MY 2016 standards. Voluntary overcompliance—in which manufacturers
apply efficiency technology in excess of what is needed to meet the MY 2016 standard—is
possible but too uncertain to be incorporated in a baseline projection. Rapidly rising fuel prices
are potentially a reason for overcompliance but during periods of only modest average annual
price increases, overcompliance was not widespread. In the 1990's and early 2000's, real motor
gasoline prices rose at an average rate of 4 percent per year yet full-line manufacturers, such as
the GM, Ford and Chrysler, applied just enough technology to meet the standards. From 2017 to
2035, EIA projects motor gasoline prices that increase at a lower rate of about 1 percent per year.
With the projected low rate of annual price growth, the modification of the 2016 baseline is
unjustified.
Further, NRDC disagrees with NHTSA that a sensitivity analysis of voluntary overcompliance is
warranted, and we recommend that it be excluded from the final rule. The voluntary
overcompliance analysis is counter-productive to the goals of maximizing petroleum reductions
as required by EPCA.
If, in future rulemakings, the baseline was altered to account for voluntary overcompliance—
assuming it can be reasonably justified as highly likely—NHTSA would be inclined to set a
lower standard than what could be achieved with appropriate cost-effective technology
application. The achievement of overcompliance assumes that low-cost efficiency technologies
are applied by manufacturers first (NHTSA assumes a 1-year payback). The remaining
technologies to be driven by the standard would therefore be more expensive, increasing the
costs associated with the standards. The standards themselves would also be associated with
lower benefits because the savings from lower-cost technologies would be assigned to the market
instead of the standard. The resulting reduced benefit-to-cost ratio would be a dampening force
on efforts to maximize fuel efficient technology adoption and could push down the standard
stringency.
If, during this scenario of a weaker standard, automakers did not overcomply, U.S. petroleum
consumption would be higher and counter to the mandate of EPCA. To avoid this situation,
12-5
-------
EPA Response to Comments
NHTSA and EPA should continue to use a baseline that assumes automakers do not overcomply.
This ensures that standards are set as strong as possible, and it provides greater certainty that
needed oil consumption and GHG emission reductions will be achieved.
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
Use a flat baseline in assessing post 2016 fuel efficiency: NHTSA is taking comment on the
notion that the post-2016 baseline for vehicle standards should assume "market driven"
improvements in fuel economy absent standards and account for those improvements in the
baseline. The Knittel study, referenced above, in addition to the historic trend are evidence that
absent standards automakers will not increase gas mileage. Leading up to 2008, automakers were
not prepared for increasing fuel prices and shifting consumer preferences. The consequences to
the auto industry and the economy were devastating. [EPA-HQ-OAR-2010-0799-9549-A2, p. 7]
NHTSA's consideration that new vehicle labels that will provide consumers with more detailed
information on mileage and savings and that this will influence consumer choices is insufficient
basis for using a baseline that presumes automakers will apply technologies to meaningfully
improve gas mileage beyond 2016 absent strong final 2017-2025 standards. While some
automakers may voluntarily "over-comply" with the 2012-16 program due to market forces,
overcompliance in one segment of a fleet (cars for example) could be used to offset lower
mileage vehicles such as larger pickups and SUVs. In addition, because the compliance with the
program allows for banking, trading and carry-forward and backward credits, any presumption
that automakers will improve fuel economy after 2016 could be part of a compliance strategy
that includes the 2012-16 model years or planned compliance with these proposed standards.
Over-compliance across the entire fleet heading into the mid-term review included in the NPRM
would support strengthening the overall program. The agencies should use a flat baseline beyond
2016. [EPA-HQ-OAR-2010-0799-9549-A2, p. 7]
Organization: Volkswagen Group of America
Volkswagen recognizes that the agencies are privy to confidential product plans supplied by
manufacturers and that the agencies rely on this data to support future projections. However, the
US has been averaging a near 50/50% split between cars and trucks for many years. Even at
times of peak gasoline prices experienced during the past few years, interest in light trucks may
have waned, however not to such a drastic extent as indicated by this radical shift in future
product plans. Most disturbing is the recent trend back to light trucks even with fuel prices
stabilizing near record highs. Volkswagen sees no evidence that would suggest a near 30%
decline in truck market share from domestic OEMs. [EPA-HQ-OAR-2010-0799-9569-A1, p. 9]
Volkswagen is not privy to strategic plans by competitors, but we find it unlikely for OEMs
historically focused on truck sales to so readily abandon what has proven to be a successful and
profitable market segment. Dropping 30% truck share for a company like Ford would be
equivalent to Ford cancelling their entire line-up of F 150s, a vehicle which has remained a top, if
not the top, seller in the US for many years. In addition, the proposals preferential treatment for
12-6
-------
Technical Assessment of the Proposed CC>2 Standards
large trucks and pick-ups further makes it unlikely that manufacturers would now prefer to
market cars. [EPA-HQ-OAR-2010-0799-9569-A1, pp. 9-10]
Response:
Response to Chrysler LLC:
The agencies' projection that Chrysler's sales would steadily decline was primarily
attributable to the manufacturer- and segment-level forecasts provided in December 2009 by
CSM. The agencies thought that forecast to have been credible at the time considering economic
and industry conditions during the months before CSM provided the agencies with a long-range
forecast, when the overall light vehicle market was severely depressed and Chrysler and GM
were—with nascent federal assistance—in the process of reorganizing. We recognize that
Chrysler's production has since recovered to levels suggesting much better long-term prospects
than forecast by CSM in 2009. While the agencies are continuing to use the market forecast
developed for the NPRM (after minor corrections unrelated to Chrysler's comments), we are also
using a second market forecast we have developed for today's final rule, making use of a newer
forecast (in this case, from LMC) of manufacturer- and segment-level shares, a forecast that
shows significantly higher sales (more than double that of the earlier forecast) for Chrysler in
2025. This analysis is shown in Joint TSD Chapter 1.5 and the EPA modeling results are shown
in RIA Chapter 10. We note further that the agencies have documented the differences in
volume and characteristics of the MY 2008 based fleet and the MY 2010 based fleet, and these
differences do not justify any change in the ultimate standards. See Joint TSD section 1.5.
Likewise, EPA concluded that "these two market forecasts contain certain differences, although
as discussed in TSD Chapter 1.5, the differences are not significant enough to change the
agencies' decision as to the structure and stringency of the final standards, and indeed
corroborate the reasonableness of the final standards." See Joint TSD Chapter 1.5.
Response to Environmental Consultants of Michigan
Even though the year of publication of this rule is 2012, model year 2010 was the most
recent baseline dataset available due to the lag between the actual conclusion of a given model
year and the submission (for CAFE compliance purposes) of production volumes for that model
year. Moreover, as explained below in the joint TSD and in our respective RIAs, EPA and
NHTSA measure the costs and benefits of new standards as incremental levels beyond those that
would result from the application of technology given continuation of baseline standards (i.e.,
continuation of the standards that will be in place in MY 2016). Therefore, our analysis of
manufacturers' capabilities is informed by analysis of technology that could be applied in the
future even absent the new standards, not just technology that had been applied in 2008 or 2010.
This can be seen from the similarity in projected costs between the analyses shown in section
HID (MY 2008 based forecast) and RIA chapter 10 (MY 2010 based forecast).
Response to Environmental Defense Fund (EDF), International Council on Clean
Transportation (ICCT), Sierra Club, Environment America, Safe Climate Campaign, Natural
Resources Defense Council (NRDC), American Council for an Energy-Efficient Economy
12-7
-------
EPA Response to Comments
(ACEEE), and Clean Air Council is in Preamble section HID. 1 .a. In short, we agree with all of
the commenters addressing the issue that the assumption of a flat baseline absent post-MY 2016
GHG standards for these vehicles has full historic and empirical justification.22
Response to Volkswagen Group of America
The actual decline agencies projected was 23%, mostly due to falling sales from Chrysler
(65%). NPRM's 2008 baseline fleet was created using CSM Automotives 2009 projections
market share/model mix, and AEO 2011 sales volumes and car/truck split. The forecast from
CSM was greatly influenced by Chrysler's bankruptcy and accounts for the majority of the
decline in trucks. For the final rulemaking, the agencies created an alternative fleet using 2010
CAFE data, a future fleet projection from LMC (JD Powers) Automotives 2011 projections of
market share/model mix, and AEO 2012 sales volumes and car/truck split.
12.2. Types of Technologies Considered and Their Effectiveness
Organizations Included in this Section
Alliance of Automobile Manufacturers
BMW of North America, LLC
Center for Biological Diversity
Eaton Corporation
Honeywell Transportation Systems
International Council on Clean Transportation (ICCT)
Jackson, F.W.
Manufacturers of Emission Controls Association (MECA)
Volkswagen Group of America
Organization: Alliance of Automobile Manufacturers
Examples of anticipated battery technology breakthroughs include energy storage and
management as well as power electronics capabilities; new battery chemistries and materials;
new types of charging and faster charging; and advances in smart grid technology. Additional
anticipated breakthroughs include the emergence of new, low-global warming potential fuels;
high-efficiency transmissions; new down-weighting technologies and light-weight materials. The
agency should also evaluate the ability to meet increasingly stringent criteria pollutant standards
using new combustion technologies for advanced internal combustion engines. [EPA-HQ-OAR-
2010-0799-9487-A1, pp. 18-19]
22 See also Comments of VW p. 14: "As shown in Figure 2-4, following fuel price increases in early
2000's, there was a notable uptick in customer interest of hybrid vehicles. The fuel price spikes in 2007-2008
timeframe even brought about irrational consumer behavior in which customers traded-in large trucks to purchase
small cars, sometimes at considerable loss. However as fuel prices stabilized in the mid $3 per gallon range, sales in
larger vehicles and pick-up trucks returned. Often customers who had moved into smaller vehicles complained about
the lack in comfort and space of the smaller cars".
12-8
-------
Technical Assessment of the Proposed CC>2 Standards
Organization: BMW of North America, LLC
Many of the technologies mentioned in the draft joint TSD are already implemented in BMW
Group models or will be implemented for compliance with the standards for MYs 2012-16. This
high implementation rate of advanced conventional technologies will make it more challenging
for BMW to comply with' proposed future standards. [EPA-HQ-OAR-2010-0799-9579-A1,
enclosure p. 5]
This is confirmed by the projected electrification market share for each automaker by the US
agencies. The market share of EV, PHEV and HEV for the BMW Group and thus the application
of very cost-intensive technologies is one of the highest among all automakers. EPA confirms
that'....larger volume manufacturers have levels of advanced technologies that are below the
phase-in caps. Smaller 'luxury' volume manufacturers tend to require higher levels of these
technologies, BMW, Daimler all reach the max. penetration cap for HEVs (30%) in
2021.' [EPA-HQ-OAR-2010-0799-9579-A1, enclosure p. 5]
This appears to be a double penalty because in order to comply with the proposed standards,
those manufacturers must invest in expensive technologies and then force their higher fleet
penetration. [EPA-HQ-OAR-2010-0799-9579-A1, enclosure p. 5]
Organization: Center for Biological Diversity
2. The Agencies must set standards that are technology forcing
There is no doubt that EPCA is a technology-forcing statute. EPCA is meant to encourage
technological innovation - meaning new technologies, not simply better versions of what exists
today. As the court in Center for Auto Safety v. Thomas noted, "[t]he experience of a decade
leaves little doubt that the congressional scheme in fact induced manufacturers to achieve major
technological breakthroughs as they advanced towards the mandated goal." 19 As explained by
the court in Kennecott Greens Creek Min. Co. v. Mine Safety and Health Admin., "when a
statute is technology forcing, the agency can impose a standard which only the most
technologically advanced plants in an industry have been able to achieve - even if only in some
of their operations some of the time."20 With regard to a similar technology-forcing statute, the
Clean Air Act, legislative history indicates that the primary purpose of the Act was not "to be
limited by what is or appears to be technologically or economically feasible," which may mean
that "industries will be asked to do what seems impossible at the present time."21 [EPA-HQ-
OAR-2010-0799-9479-A1, p. 5]
Yet, instead of stressing that EPCA and EISA are technology forcing and intended to create
technological innovation, the Agencies discuss "technological feasibility" by remarking that they
are "not limited in determining the level of new standards to technology that is already being
commercially applied at the time of the rulemaking."22 This formulation of the Agencies' duties
entirely misconstrues Congressional intent. To be technology forcing, the Agencies must not
limit themselves to technology already applied at the time of the rulemaking but instead must
drive technological innovation. This mandate has become of utmost importance because the next
ten years or so constitute a critical decade in which to avert the most dangerous consequences of
12-9
-------
EPA Response to Comments
climate change, and because the Agencies have chosen to set standards over a period spanning
that entire decade and the following five years, an unprecedented time frame in the history of
CAFE. Standards that are built solely on technologies already in use today or projected to be in
use a few years from today, violate this mandate per se. [EPA-HQ-OAR-2010-0799-9479-A1, p.
5]
E. The Preferred Alternative Does Not Represent the Maximum Feasible Fuel Efficiency
Standard
The rulemaking requires insufficiently stringent technological improvements as it does not
reflect the historical speed of technological improvements in practically every industry over the
last decades, including in the automotive industry, a trend that will undoubtedly continue in the
future; as it improperly excludes the impact of technologies under development or in the research
stage; and as it does nothing to force technological innovation. The failure to take these
developments into account is especially egregious in a rulemaking spanning the next decade and
a half. If these factors were properly accounted for, the Agencies would recommend Alternative
4 rather than the preferred alternative. [EPA-HQ-OAR-2010-0799-9479-A1, p. 19]
The Agencies state that with only a few exceptions, the technologies considered here are the
same as those in the MY 2012-2016 rulemaking. This approach is completely inadequate for a
rulemaking reaching nine years beyond that date. They also state that the technologies they have
considered are limited to currently existing technologies and improvements to them that either
are or will be available within the rulemaking timeframe. In fact, they have no such thing, as they
admit that that they have only considered technologies "expected to be in production in the next
5-10 years." Since this rulemaking will extend considerably beyond that time frame, this
approach is inadequate. In addition, because the CAFE statutes are technology forcing and the
rulemaking period is extraordinarily long, the Agencies must also consider technologies in the
research phase. [EPA-HQ-OAR-2010-0799-9479-A1, p. 19]
Defending their refusal to consider research stage technologies, the Agencies point to
uncertainties involved in the availability and feasibility of implementing them with significant
penetration rates. But since the Agencies have taken it upon themselves to set standards 14 years
into the future, it is their responsibility to assess those uncertainties within reasonable ranges, and
include the clearly foreseeable impact of technological innovations rather than to disregard
research-stage technology altogether. Moreover, it is certain that the rate of innovation will
continue at least at the speed of the last decade, and that technologies now in the research stage
and many not yet conceived will be in existence in 2025 and much before then. In turning a blind
eye to research that is sure to bear results 14 years from now, the Agencies ignore their
mandate. [EPA-HQ-OAR-2010-0799-9479-Al, p. 20]
19 847 F.2d 843, 870 (D.C. Cir. 1988) (overruled on other grounds); see also Green Mt. Chrysler
Plymouth Dodge Jeep v. Crombie, 508 F. Supp. 2d 295, 358-59 (D. Vt. 2008) (discussing
technology-forcing character of EPCA and the use of increased fuel efficiency to augment
performance rather than mileage). [EPA-HQ-OAR-2010-0799-9479-Al, p. 5]
12-10
-------
Technical Assessment of the Proposed CC>2 Standards
20 476 F.3d 946, 957 (D.C. Cir. 2008). [EPA-HQ-OAR-2010-0799-9479-A1, p. 5]
21116 Cong. Rec. 32901-32902(1970), Legislative History of the Clean Air Amendments of
1970 (Committee Pring complied for the Senate Committee of Public Works by the Library of
Congress), Sr. No. 93-18, p. 227 (1974); see also Whitman v. American Trucking Associations,
531 U.S. 457, 491 (2001). [EPA-HQ-OAR-2010-0799-9479-A1, p. 5]
92NPRM, 76 Fed. Reg. 74922. [EPA-HQ-OAR-2010-0799-9479-A1, p. 19]
93 NPRM, 76 Fed. Reg. 74958. [EPA-HQ-OAR-2010-0799-9479-A1, p. 19]
94NPRM, 76 Fed. Reg. 74922. [EPA-HQ-OAR-2010-0799-9479-A1, p. 19]
95 NPRM, 76 Fed. Reg. 74922. [EPA-HQ-OAR-2010-0799-9479-A1, p. 20]
Organization: Eaton Corporation
• Allows OEM and vehicle component suppliers to provide vehicle solutions that advance fuel
economy and emissions technologies that are affordable and maintain or increase performance of
the vehicle. [EPA-HQ-OAR-2010-0799-9494-A1, p. 2]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 186.]
Eaton appreciates the agency's use of sound economic analysis and in-depth technology reviews
during the rulemaking process. We believe that the framework outlined in the NPRM is a good
step towards the final regulation that will foster innovation, foster both technology and
competition while maintaining fleet diversity and incentivizing over-achievement of emissions
and fuel economy targets. It is important that certain principles outlined in the notice are further
developed in the upcoming period.
Organization: Honeywell Transportation Systems
The agencies have recognized three levels of technology availability: (1) technologies available
in the market in the near term, (2) technologies that are not yet in production but that are under
development and that may be available for deployment within the next 5 to 10 years, and (3)
technologies that are in the initial stages of research. (Draft Joint Technical Support Document,
p. 3-1). Included within the group of technologies that are currently under development and that
may be available during the model years covered by this rulemaking are downsized and
turbocharged engines operating at combustion pressures significantly higher than today's
turbocharged engines. Id. A high-performance credit would provide an incentive to encourage
further deployment and use of these technologies. [EPA-HQ-OAR-2010-0799-9474-A1, p. 5]
Honeywell strongly supports a technology neutral approach to regulation and to incentivizing
new technology. [EPA-HQ-OAR-2010-0799-9474-A1, p.6]
12-11
-------
EPA Response to Comments
Organization: International Council on Clean Transportation (ICCT)
1. Cost-effective opportunities to reduce fuel consumption and climate change emissions in the
near term are far larger than most people realize. Thanks to computer aided design and computer
controls, the pace of technology development is accelerating and much of the underlying data in
the technology assessments is already out of date or is only representative of near term vehicles.
Meeting the standards will be easier and will cost less than assumed in the proposed rule and no
rollback of the stringency should be considered. [EPA-HQ-OAR-2010-0799-9512-A1, p. 2]
1) Technology Benefit and Cost Assessments
The ICCT supports the proposed standard stringency. However, it is important to understand that
the simulation modeling used to assess future technology benefits is actually quite conservative
and that the future technology benefits will be larger than projected and the costs lower. This is
due to rapid improvements in computer-based tools, which are opening up technology gains that
were never possible before. Computer simulations and computer-aided design are enabling vastly
improved designs and technologies. On-board computer controls provide unprecedented
integration of engine, transmission, and hybrid operation. Instead of slowing down, the pace of
technology development just keeps accelerating. [EPA-HQ-OAR-2010-0799-9512-A1, p. 4]
The sophistication of assessing technology efficiency improvements has been increasing as well.
The 2001 National Research Council report applied technologies stepwise to estimate fuel
economy improvement possible through regulations. Some manufacturers criticized this method,
claiming it could overestimate fuel economy benefits because it does not account for synergies
between technologies. This is especially important as more technologies are added to the vehicle.
The next step in sophistication is the use of'lumped parameter' models that can account for first-
order interactions between technologies. These models can assess the effects of technology in a
broad array of vehicle types and for a class of vehicles. However, this method is generally
limited to 'proven' technologies. This was fine as long as standards were set only a few years in
advance, but it is not adequate for setting standards with longer leadtimes. [EPA-HQ-OAR-2010-
0799-9512-A1, p. 5]
Full-system simulation modeling is needed to capture the physics of the vehicle and powertrain
system and assess interactions of the various components. It can also assess new technologies or
combinations of technologies when experimental data are sparse. The 2011 National Research
Council report on light-duty vehicle technologies supported the need for full-system modeling:
The committee thinks that the most accurate method of analyzing potential reductions in fuel
consumption, which considers the extent to which any of the efficiency improvements or energy
loss reductions identified above can be realized while maintaining energy balance criteria,
utilizes full system simulation (FSS).'l [EPA-HQ-OAR-2010-0799-9512-A1, p. 5]
To support development of 2025 standards, EPA contracted with Ricardo Inc. to conduct such
simulations. Ricardo is a highly respected engineering organization that does the vast majority of
its work for OEMs and suppliers. [EPA-HQ-OAR-2010-0799-9512-A1, p. 5]
12-12
-------
Technical Assessment of the Proposed CC>2 Standards
ICCT was involved with this simulation modeling from the beginning, including providing the
initial contract for Ricardo to start work, hiring independent experts to review Ricardo's hybrid
control simulations, and participating along with CARB on an advisory committee. After
intensive involvement in the simulation process for the last two years, it is clear to us that the
technologies being assessed by Ricardo are on the conservative side. In fact, this is unavoidable
due to the restriction to currently available data and engine maps. Engine technology is
improving much faster than we can keep up with and engines better than those modeled by
Ricardo are already in development. [EPA-HQ-OAR-2010-0799-9512-A1, p. 5]
• The diesel maps used by Ricardo for the US simulations are already out of date and ICCT has
contracted with Ricardo to rerun the diesel simulations for Europe using maps representative of
the latest diesel technology. [EPA-HQ-OAR-2010-0799-9512-A1, p. 5]
• The engine map used by Ricardo for the gasoline engine with boosted-EGR is similar to the
single-stage turbocharger engine map developed by the HEDGE consortium two years ago,
which is already out of date. The map used by Ricardo in the simulations for a two-stage
turbocharger is shown in Figure 2 below. Figure 3 shows a boosted-EGR engine map provided
by the HEDGE consortium in February 2010 for a single-stage turbocharger. The minimum
brake-specific fuel consumption (BSFC) for the HEDGE engine is about 4% lower than the map
used by Ricardo in the simulations. While the engine map used by Ricardo has broader BSFC
contours and better efficiency at low loads, the single-stage turbocharger could not provide
sufficient air under all conditions and was boost limited. The HEDGE consortium is already
working on a two-stage turbocharger system that will enable larger amounts of EGR, higher
compression ratio, lower minimum BSFC, and a broader range of lower fuel consumption. [See
Figure 2 on p. 6 and Figure 3 on p. 7 of Docket number EPA-HQ-OAR-2010-0799-9512-A1]
[EPA-HQ-OAR-2010-0799-9512-A1] [EPA-HQ-OAR-2010-0799-9512-A1, pp. 5-6]
This rapid technology improvement can also be seen by looking at historical data. For example,
the 2001 National Research Council report found that turbocharging and downsizing would
improve fuel economy by 5 to 7 percent. The most recent estimates in the draft RIA found that
turbocharging and downsizing alone will provide a 12 to 15 percent improvement with 33
percent downsizing and!6 to 20 percent for higher-pressure turbos with 50 percent downsizing.
This 2 to 3 times increase in the efficiency benefit of turbocharging is not due to the older
estimates being wrong, but rather to rapid improvements in combustion and turbocharging
technology over the last 10 years. In addition, adding cooled and boosted EGR, a technology that
wasn't even considered 10 years ago, is estimated to increase the benefits of turbocharging to 20
to 24 percent, or a 4 times increase. [EPA-HQ-OAR-2010-0799-9512-A1, p. 7]
This dramatic improvement in turbocharger systems also applies to cost. The estimated
manufacturing cost for a turbocharger system, including downsizing but without a reduction in
the number of cylinders, for 2017 in the proposed rule is $478. This compares with an estimated
manufacturing cost of $815 from NHTSA just three years ago for the 2011 CAFE standards.
Other costs estimates have also fallen dramatically in the last three years:
• 6-speed automatic transmission cost for 2011 CAFE standard was a $215 cost increase,
compared to a $13 cost decrease in the proposed rule.
12-13
-------
EPA Response to Comments
• Dual-clutch automated transmission was a $145 cost increase for the 2011 standard, compared
to a $205 cost decrease in the proposed rule. [EPA-HQ-OAR-2010-0799-9512-A1, p. 8]
It should also be noted that the estimated costs in the proposed rule to comply through 2020 are
less than half of the estimated costs to comply in 2025. Passenger car costs for 2020 are $885
compared to $2,023 for 2025 and light truck costs for 2020 are $688 compared to $1,578 for
2025.3 ICCT is confident that continued technology development will reduce costs in the future
and that the midterm review will find that the current estimates of compliance costs in 2025 are
greatly overstated. [EPA-HQ-OAR-2010-0799-9512-A1, p. 8]
ICCT is also paying FEV to do additional teardown cost assessments in connection with our
work in Europe. These include updating the P2 hybrid costs and new cost assessments for
advanced diesel engines, basic stop-start systems, manual transmissions, and cooled EGR
systems. P2 costs in the proposed rule are overstated, as the system size is not reduced to
maintain constant performance, cost savings from deleting the torque converter are not
subtracted from the system cost, and future hybrid batteries will be smaller and cheaper due to
new Li-ion chemistries with much higher power to energy ratios. All of the FEV results will be
shared with EPA and NHTSA as they become available. [EPA-HQ-OAR-2010-0799-9512-A1,
p. 8]
The 2025 rules are 13 years away. With the rapid improvements in technology due to computer-
enhanced development, it would be completely irrational to assume that there will be no further
technology improvements beyond what is known today. Thus, the efficiency and cost estimates
in the draft rule are quite conservative and there should be no consideration to rolling them
back. [EPA-HQ-OAR-2010-0799-9512-A1, p. 8]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 31.]
Another area where costs included in the draft are too high are those for the parallel or P2 hybrid.
The P2 systems evaluated by FEV for EPA assumed no reduction in 1C engine size, no reduction
in battery size, and did not account for the cost savings due to removing automatic transmission
torque converter. The ICCT is presently engaged in an exercise to evaluate the cost of P2
systems with these issues in mind, and we expect, at least, that the updated P2 costs will be lower
than the agency estimates. These updated costs should be included in the final rulemaking.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 193-195.]
The opportunities to improve efficiency in the near term are far larger than most people realize.
The internal combustion engine is widely perceived as century-old technology that is at the end
of its development, but the reality is exactly the opposite. Computer simulations, computer-aided
design are enabling vastly improved designs and technologies. On-board computer controls
provide unprecedented integration of engine, transmission and hybrids operation. Instead of
slowing down, the pace of technology development just keeps accelerating.
12-14
-------
Technical Assessment of the Proposed CC>2 Standards
The sophistication of assessing technology efficiency improvements has been increasing as well.
To support development of the 2025 standards EPA contracted with Ricardo to conduct full-
system simulation modeling of the latest technology developments.
ICCT has been intensively involved in the simulation modeling process for the last two years. It
is very clear to us that the technology being assessed by Ricardo are on the conservative side. In
fact, this is unavoidable due to the restriction to the currently available data and engine maps.
This rapid technology improvement can also be seen by looking at historical data. The 2001
Natural Research Council report found that turbocharging and downsizing could improve fuel
economy by 5 to 7 percent. The most recent estimates in the draft RIA found this benefit is now
two to three times higher. This is not due to the older estimates being wrong, but rather to rapid
improvements in combustion and turbocharging technology over the last 10 years.
By comparison, the 2025 rules are 13 years away. The efficiency estimates in the draft rule are
actually quite conservative and there should not be any consideration of rolling them back.
Computer simulations will especially impact lightweight material design. In the past
optimization of materials was a long, slow process of gradually changing a few parts of the time
to avoid unanticipated problems with safety, ride, noise and vibration.
1 Assessment of Technologies for Improving Light-Duty Vehicle Fuel Economy; National
Research Council, ISBN-13: 978-0-309-15607-3, 260 pages, 81/2 x 11, 2011.
3 Preamble, Tables IV-110 and IV-111.
Organization: Jackson, F.W.
5. Comparing against current 2010 poor 27 mpgge fleet is an easy target to look better against;
vs. currently on books 35.5 mpgge or better yet what other things could be done to, in addition to
or in lieu of stated EPA designs, Le., how complete and objective is the EPA analyses. While I'd
agree many of the EPA items in aggregate should improve the product mpgge significantly I also
believe there are other items not mentioned in EPA's list, see below my lists [see pp. 4-5 of
Docket number ] for Mid and Max technologies that need to be fairly considered. When all fairly
considered I believe a 2025 54.5 mpgge can be built without plug-ins and I believe even without
HEVs and with minimum ethanol! [EPA-HQ-OAR-2010-0799-8041-A1, p. 2]
Organization: Manufacturers of Emission Controls Association (MECA)
Implicit in federal and state greenhouse gas emission analyses is the ability of these advanced
powertrain options to meet the applicable criteria pollutant emission standards, such as CO,
NOx, and non-methane organic gases (NMOG). All of these advanced, light-duty powertrain
options combined with the appropriately designed and optimized emission control technologies
can meet all current and future federal and state criteria emission requirements. In this manner,
12-15
-------
EPA Response to Comments
advanced emission controls for criteria pollutants enable advanced powertrains to also be viable
options for reducing greenhouse gas emissions. A range of powertrain technologies, including
engine turbochargers, exhaust gas recirculation systems, advanced fuel systems, variable valve
actuation technology, advanced transmissions, hybrid powertrain components, and powertrain
control modules that can be applied to both light-duty gasoline and diesel powertrains to help
improve overall vehicle efficiencies, reduce fuel consumption, both of which can result in lower
CO2 exhaust emissions. In many cases, the application and optimization of advanced emission
control technologies on advanced powertrains can be achieved with minimal impacts on overall
fuel consumption. Auto manufacturers will also take advantage of synergies between advanced
emission control technologies and advanced powertrains to assist in their efforts to optimize their
performance with respect to both greenhouse gas and criteria pollutant exhaust emissions. [EPA-
HQ-OAR-2010-0799-9452-A3, p.2]
Future light-duty diesel powertrains will continue to use emission control technologies like diesel
particulate filters, NOx adsorber catalysts, and selective catalytic reduction catalysts to meet
EPA's light-duty exhaust emission standards. Emission control manufacturers are working with
their auto manufacturer partners to further optimize these emission control technologies to be
more effective at reducing criteria pollutants and play a role in reducing vehicle greenhouse gas
emissions. Advanced diesel emission control technologies like particulate filters with lower
backpressure characteristics, SCR catalysts with improved performance at lower exhaust
temperatures, and SCR catalyst coated directly on particulate filter substrates are examples of
emerging diesel emission control technologies that will allow future diesel powertrains to not
only be as clean as gasoline engines from a criteria pollutant perspective, but deliver improved
fuel consumption characteristics and lower greenhouse gas emissions. The use of diesel
particulate filters also delivers significant reductions in black carbon emissions from diesel
engines, a combustion emission that also has important climate change impacts. [EPA-HQ-OAR-
2010-0799-9452-A3, p.2]
For gasoline vehicles, direct injection technology enables gasoline engines to achieve greater
fuel efficiency and is expected to be a dominant pathway to meeting future light-duty greenhouse
gas emission standards. Again emissions controls ensure that these more fuel efficient gasoline
engines meet tough EPA or California criteria emission regulations. Under stoichiometric
conditions, three-way catalysts are used to achieve ultra-low emissions of NOx, HC and CO.
Advanced high performance, three-way catalysts are available and will continue to evolve and be
optimized to ensure that future gasoline direct injection engines will meet the toughest criteria
pollutant emissions standards with minimal impacts on overall vehicle exhaust system
backpressure and fuel consumption. [EPA-HQ-OAR-2010-0799-9452-A3, p.2]
Under lean combustion conditions, similar emission control technologies used on diesel vehicles
can be used to reduce emissions from lean, gasoline direct injection powertrains. These include
particulate filters to reduce PM emissions, and SCR and/or lean NOx adsorber catalysts to reduce
NOx emissions. Lean NOx adsorber catalyst performance has a high degree of sensitivity to fuel
sulfur levels. The current EPA fuel sulfur limits for gasoline (30 ppm average, 80 ppm cap) are
too high to allow lean NOx adsorber catalysts to be a viable NOx control strategy for fuel
efficient, gasoline lean-burn engines that employ direct fuel injection technology. MECA
believes that EPA should lower gasoline fuel sulfur limits to a 10 ppm national average to allow
12-16
-------
Technical Assessment of the Proposed CC>2 Standards
NOx adsorber catalysts to be used on such vehicles in the future in order to provide additional
options for improving the efficiency and reducing greenhouse gas emissions from gasoline
vehicles. [EPA-HQ-OAR-2010-0799-9452-A3, p.3]
Organization: Volkswagen Group of America
In order to consider the technical feasibility of the proposed standards, EPA evaluated a broad
range of technologies which an OEM could incorporate to help achieve compliance. Over the
past several years, Volkswagen held technical meetings with agency staff and provided
confidential technical details illustrating our projections for future technology:
-Cost
- Readiness
- Effectiveness
- Market Adoption
-Penetration [EPA-HQ-OAR-2010-0799-9569-A1, p. 12]
During the discussions, Volkswagen focused on several key technologies including:
- Hybrid and fully electrified vehicles
- Vehicle lightweighting
- Advanced internal combustion engines (ICE) [EPA-HQ-OAR-2010-0799-9569-A1, p. 12]
Volkswagen provided EPA and NHTSA with confidential future forecasts for technology
readiness, cost, and practicability. We appreciated the opportunity to present our positions and
were able to engage in technical dialogue to point out areas which were or were not consistent
with the agencies understandings. Certain key technologies including electrification,
lightweighting, and advanced engine technologies presented areas where there were some
inconsistencies. [EPA-HQ-OAR-2010-0799-9569-A1, p. 13]
Response:
Regarding comments from the Alliance of Automobile Manufacturers, we also anticipate
many breakthroughs and improvements in the area of energy management, transmissions, and
lightweight materials. As discussed in TSD 3, the agencies considered technologies in many
categories that manufacturers could use to improve the fuel economy and reduce CO2 emissions
of their vehicles during the MYs 2017-2025 timeframe, including technologies which may not
currently be in production, but are under development and are expected to be in production in the
next five to ten years. Over the next decade, it is possible that there will be advances in vehicle
technology that are not discussed in this assessment. For more details, please refer to the Joint
12-17
-------
EPA Response to Comments
TSD Section 3.3.3.9 regarding energy management and storage, Section 3.3.2 regarding
transmission technologies, and Section 3.3.5.5 regarding mass reduction. We also agree that
advanced combustion technologies need to be evaluated for compliance as they are developed.
Regarding comments from BMW, we do not disagree that BMW's costs are likely to be
higher than the average. In fact, our analysis shows a 2025MY cost of $1910 for BMW, or $74
higher than the average23. Our analysis also shows a 9% full EV penetration rate for BMW,
versus the average penetration rate of 3%. This does not mean that BMW is required to use such
technologies, and we thus disagree with that portion of BMW's comment ("This appears to be a
double penalty because in order to comply with the proposed standards, those manufacturers
must invest in expensive technologies and then force their higher fleet penetration "). Our
analysis seeks only to demonstrate a possible path toward compliance. It does not seek to
demonstrate the path. BMW correctly points out that many of the technologies we expect will
allow for compliance are already currently used in BMW vehicles. However, while those
technologies are used in part for fuel efficiency, they are largely tuned to provide high power in
relation to the weights of their vehicles (i.e., high power-to-weight ratios. Though the agencies
do not model such options, and have included the costs of preserving all vehicle utilities found in
the reference fleet(s), BMW has many compliance options that may prove less costly than those
EPA modeled. For example, the company could implement more off-cycle credit technologies,
use more mass reduction than EPA modeled, or reduce the acceleration performance of their
vehicles and put the resultant efficiency gains to fuel economy. Further, we note that BMW has
no high BMEP (24/27 bar) engines in their in-use US fleet today, no high efficiency gearbox, no
shift optimizer, no 12V stop-start, and no mild hybrid. So there are still many technologies that
BMW is not using that can be used in their future fleet.
Regarding comments from Center for Biological Diversity, we note that many of the
comments regarding legal authority address EPCA and EISA and are not correct with regard to
the Clean Air Act. See preamble section ID.2 (explaining, among other things, that section 202
(a) is not technology-forcing, and even if it were, that EPA retains considerable discretion in
weighing issues of technical feasibility, cost, and lead time). In any case, EPA believes that the
rule is predicated on high penetration rates of advanced technologies, and many of these go
beyond the technologies on which the MYs 2012-2016 standards are predicated. A primary
technology upon which our MYs 2017-2025 standards rely is high BMEP turbocharged and
downsized engines. These engines will operate at 24 and 27 bar BMEP, levels at which no
current production gasoline engine operates. Although such engines are beyond the single-
cylinder test-bench level of development, they are not in the marketplace and considerable work
remains to bring them to the marketplace.24 Another example is mild hybrid technology. There
23 As pointed out in the MYs 2012-2016 rulemaking, one reason these costs are higher on average is that BMW has
typically paid fines rather than complying with CAFE standards, and consequently is now required to make more
improvements than those of its competitors which did comply with CAFE. See 75 FR at 25414.
24 EPA notes that Volkswagen's comment (p. 17) documents obstacles facing development and deployment of high
BMEP turbocharged engines beyond the BMEP levels used within our analysis in the TSD ("While Volkswagen
acknowledges that high BMEP (27 - 31 BMEP) engines with cooled EGR are being researched, we caution that
additional development is necessary to overcome obstacles to these types of engines. Volkswagen views these
obstacles as significant - if not overcome the issues could preclude this type of engine as a viable greenhouse gas
reduction technology.")
12-18
-------
Technical Assessment of the Proposed CC>2 Standards
are vehicles being sold today that include mild hybrid technology but, importantly, not at the cost
levels included in our analysis. So, while that technology is in the marketplace, it is a new and
rapidly developing technology used in a very small percentage of MY 2012 sales. Reasonable
engineering judgement was used to select the technologies that will be available in the timeframe
of this rulemaking. Many of these technologies are still in the research phase and not planned to
be in production for several years and will not be broadly applicable until MY2017-2025. The
midterm review will be used to re-evaluate these technology assumptions and make appropriate
changes in the analysis.
Regarding comments from Eaton Corporation, we appreciate your comments in support
of the flexibility allowed in the rulemaking for vehicle manufacturers to meet the standards.
Regarding comments from Honeywell Transportation Systems, and Jackson, F.W., EPA
believes that the issue of technology neutrality is a much more complex issue than some
commenters suggest when they advocate for a "level playing field" and suggest that a level
playing field is best achieved by no incentives. Given that internal combustion engines and
petroleum-based fuels have dominated the U.S. light-duty vehicle market for 100 years, with
massive sunk investments, there are major barriers for new vehicle technologies and fuels to be
able to gain the opportunity to equitably compete on any type of level playing field. For
example, consider a hypothetical new vehicle/fuel technology that could be superior to
conventional technology from a consumer perspective if, and only if, the vehicles and fuels could
be produced at similar economies of scale. But, it is very possible that such a hypothetical new
technology would never get the opportunity to compete at equivalent economies of scale,
because of the very large investments that are needed, up front, to support the research and
development, parts and vehicle production facilities, and fuel infrastructure, none of which are
needed for conventional technology as these investments have been made in the past. In this
context, temporary regulatory incentives do not so much "pick winners and losers" (as an
inefficient or unattractive technology is not going to achieve long-term market success based on
temporary incentives) as to give new technologies more of an opportunity to compete with the
established technologies.
Regarding comments from International Council on Clean Transportation (ICCT) on
Computer aided modeling, the agencies assume the materials that manufacturers will use in their
BIW to reduce mass include HSS, AHSS, aluminum and limited magnesium and these materials
have all been modeled. The extent of modeling for composites is unknown. However, the use of
composites in the BIW is still being researched with applications primarily only on some limited
high end vehicles. The simulations are continuing to rapidly improve to the point where they are
starting to be used to simultaneously optimize the material composition, shape, and thickness of
every individual part, including secondary weight reductions. With respect to the diesel engine
maps used by Ricardo, it is possible that the maps could be further optimized. The maps used
were optimized by compliance with US tailpipe standards which are generally more stringent
than diesel standards in Europe. That said, if our maps are not fully optimized, it suggests we
have been conservative with respect to our effectiveness values. The EPA did not rely on diesel
engine technology as a compliance pathway in our analysis, though that does not preclude their
use in the real world (i.e. our modeled compliance pathway is not an indication of an agency
preference for any technology). When the results become available, we welcome ICCT's
12-19
-------
EPA Response to Comments
continued work with Ricardo using more optimized diesel engine maps. As for the rapid change
in cost and effectiveness estimates since the 2001 NRC report, we do not agree that the changes
from then to today suggest that our technology costs or effectiveness estimates are similarly high
or low, respectively. In fact, our estimates have been generated through a much more rigorous
process than the 2001 NRC values which we believe helps to explain why those values are so
different than values of today. We stand by our effectiveness estimates as representing the best
estimates available today. As for P2 HEV costs and future batteries being smaller and cheaper
due to new chemistries, we intend to monitor any future changes in battery chemistries and their
costs but have chosen not to make any anticipatory changes for the final analysis. Regarding
failing to include torque converter removal in our costs, we disagree with this comment where
we have included DCTs as part of the HEV package. Our DCT costs include removal of the
torque converter (see U.S. EPA, "Light-duty Technology Cost Analysis - Report on Additional
Case Studies," EPA-HQ-OAR-2009-0472-11604 and FEV, Inc., "Light-Duty Technology Cost
Analysis, Report on Additional Transmission, Mild Hybrid, and Valvetrain Technology Case
Studies", Contract No. EP-C-07-069, Work Assignment 3-3. November 2011). Where our
packages include automatic transmissions—which is the case on towing vehicle types—we have
chosen to remain conservative and assume that the torque converter will remain and therefore
there is no cost reduction association with its removal. In these cases—towing vehicles—it is
possible that the torque converter could be removed but the low end torque assist provided by the
torque converter would have to be regained from somewhere (e.g., the engine, the electric
motor), which would incur some costs on the order of the savings realized by torque converter
removal. Therefore, we believe that the best approach is simply assuming that the torque
converter will remain. (Incidentally, this is an example of how EPA's technology effectiveness
and costing methodologies preserve all utilities found in the current fleet.) Lastly, as regards our
purported failure to assume smaller engines on P2 HEVs, we point out that we have actually
assumed downsized engines (with turbocharging) on our towing P2 HEVs. We have not
assumed downsized engines on our non-towing, Atkinson engine equipped P2 HEVs and have
done this to ensure maintenance of vehicle utility. We discuss both of these points in our final
RIA Chapter 1.3. Reasonable engineering judgement was used to select the technologies that
will be available in the timeframe of this rulemaking. Many of these technologies are still in the
research phase and not planned to be in production for several years. The midterm review will
used to re-evaluate these technology assumptions and make appropriate changes in the analysis.
Regarding comments from Manufacturers of Emission Controls Association (MECA), we
agree that future vehicles will be able to comply with existing criteria emission standards in
addition to the new GHG standards and indeed will be required to do so. The comment
regarding the reduction of gasoline sulfur to enable lean-burn NOx control aftertreatment is
outside the scope of this rulemaking since we are not relying on lean-burn gasoline technology to
demonstrate compliance.
Regarding comments from Volkswagen Group of America, we thank you for your
comments and providing this additional information. We look forward to obtaining more of this
type of information to inform our future work.
12-20
-------
Technical Assessment of the Proposed CC>2 Standards
12.2.1. Engine Technologies
Organizations Included in this Section
American Petroleum Institute (API)
Center for Biological Diversity
Eaton Corporation
EcoMotors International, Inc.
Delphi Corporation
Honeywell International, Inc.
Honeywell Transportation Systems
Hyundai America Technical Center
International Council on Clean Transportation (ICCT)
Johnson Controls, Inc.
Manufacturers of Emission Controls Association (MECA)
Marz, Loren C.
Nissan North America, Inc.
Porsche Cars North America, Inc. (PCNA)
Volkswagen Group of America
Organization: American Petroleum Institute (API)
Technology Market Penetration
EPA and NHTSA chose to exclude lean burn gasoline direct injection (GDI) engine technology
in evaluating pathways towards meeting the proposed GHG and CAFE standards for MY 2017 -
MY 2025 light-duty vehicles. 17 We concur with this assessment. While EPA and NHTSA
observe that the ".. .availability of ultra-low sulfur (ULS less than 15 ppm sulfur) gasoline is a
key technical requirement for lean-burn GDI engines to meet EPA's Tier 2 NOx emissions
standards," we note that in regions of the world where 10 ppm sulfur in gasoline was mandated
(i.e., Europe and Japan), the penetration of lean-burn GDI peaked at 2% and then declined as the
real-world efficiency benefits of lean-burn GDI were found to be less than promised. A recent
assessment of the automakers' technology introduction plans concluded that the opportunity for
lean GDI in the US was limited to 0-3% market penetration over the next decade and that even a
10 ppm max sulfur limit in U.S. gasoline would not result in lean burn engine production as the
automakers would pursue other, more cost-effective technologies for regulatory compliance. 18
[EPA-HQ-OAR-2010-0799-9469-A1, p. 8]
Vehicle technology penetration estimates are unrealistic - Light-duty vehicle technologies
requiring ultra-low sulfur gasoline are not cost-effective and are unlikely to be used to meet the
proposed fuel economy and vehicle GHG standards. We note that in regions of the world where
10 ppm sulfur in gasoline was mandated (i.e., Europe and Japan) the penetration of lean-burn
GDI peaked at 2% and then declined as the real-world efficiency benefits of lean-burn GDI were
found to be less than promised. [EPA-HQ-OAR-2010-0799-9469-A2, p. 2]
12-21
-------
EPA Response to Comments
17 NHTSA, Preliminary Regulatory Impact Analysis: Corporate Average Fuel Economy for MY
2017-MY 2025 Passenger Cars and Light Trucks, November 2011, p. 341,
http://www.nhtsa.gov/staticfiles/rulemaking/pdf/cafe/2017-25_CAFE_PRIA_fmal.pdf [EPA-
HQ-OAR-2010-0799-9469-A1, p. 8]
18 McMahon, K.B., et al, The Martec Group, Lean GDI Technology Cost and Adoption
Forecast: The Impact of Ultra-Low Sulfur Gasoline Standards, Society of Automotive Engineers,
Paper # 2011-01-1226, April 2011 [EPA-HQ-OAR-2010-0799-9469-Al, p. 8]
Organization: Center for Biological Diversity
Examples of technologies improperly excluded from the rulemaking include but are not limited
to higher voltage stop-start/belt integrated starter generators; integrated motor assist/crank
integrated starter generators; 2-mode hybrids; and power split hybrids. As stated below,
providing incentive credits instead of setting standards integrating these technologies does not
comply with the statute. Among the technologies the Agencies believe are insufficiently
developed are fuel cell electric vehicles, HCCI, multi-air, and camless valve actuation and other
advanced engines currently under development. The decision to completely ignore the impact of
these highly promising technologies, all clearly far beyond the research stage and already under
development, is stunning. For example, the Agencies admit both that fuel cell electric vehicles
have "the potential of achieving more than twice the efficiency of conventional internal
combustion engines" and that "there will be some limited introduction of FCEVs into the market
place in the time frame of this rule." But, because the Agencies "expect this introduction to be
relatively small," they have completely excluded FCEVs from their modeling analysis. This
approach is clearly wrong. [EPA-HQ-OAR-2010-0799-9479-Al, p. 20]
96 NPRM, 76 Fed. Reg. 74824. Other examples can be found in the Joint Technical Assessment
Report found in the docket. We also here incorporate our comments to the Notice of Intent re:
2017 and Later Mode Year Light Duty Vehicle GHG Emissions and CAFE Standards dated
October 29, 2010, Docket No. NHTSA-2010-0131. [EPA-HQ-OAR-2010-0799-9479-A1, p. 20]
97 NPRM, 76 Fed. Reg. 74925. [EPA-HQ-OAR-2010-0799-9479-A1, p. 20]
98 Id. [EPA-HQ-OAR-2010-0799-9479-A1, p. 20]
99 Id. [EPA-HQ-OAR-2010-0799-9479-A1, p. 20]
Organization: Delphi Corporation
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17,2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 109-111.]
First, internal combustion engines, ICE's, both gasoline and diesel, will continue to improve and,
therefore, be a major propulsion source for years to come. We as an industry and you as a
government agency should be supporting efforts to improve current internal combustion engine
12-22
-------
Technical Assessment of the Proposed CC>2 Standards
technology. And we urge the EPA and NHTSA to take a careful look at the contributions that
can be made by both gasoline and diesel engines.
As I said earlier, the best potential is with improved internal combustion engine technologies.
Delphi has a strong portfolio of ICE-compatible technologies including direct injection fuel
systems and advanced fuel injectors for alternative fuels, such as E-85 ethanol and compressed
natural gas, variable valve lift and electric cam phasing to improve engine performance over the
full engine operating range and reduce pumping losses. Multi-strike emissions systems to
improve advanced high dilution combustion schemes, fuel delivery modules with brushless fuel
pumps to reduce parasitic losses, and evaporative emissions canisters with heated purge to
improve canister purge efficiencies under low conditions common with hybrid vehicles.
Organization: Eaton Corporation
Eaton believes that many of the technologies needed to achieve the proposed standards are
available. Many are already in use, while others need a path into the market. Eaton has been
developing engine system technologies that enable engine down-sizing and down-speeding that
help deliver significant fuel economy savings while maintaining or enhancing vehicle
performance. Examples of product introductions into the market in recent years include the
Variable Valve Actuation systems (Active Fuel Management) and high-efficiency supercharger
boosting systems. Several other related valve train and boosting systems developments are under
way for a range of engine configurations that will assist OEMs in meeting the proposed targets.
[EPA-HQ-OAR-2010-0799-9494-A1, p. 2]
Organization: EcoMotors International, Inc.
EcoMotors is commercializing a revolutionary internal combustion engine (ICE) in southeast
Michigan. The opoc engine is a game-changing, advanced technology offering affordable low
emissions transportation. Across many applications and vehicle classes, the opoc engine
produces fuel economy improvements superior to today's best electric hybrid vehicles at lower
cost, and without the large and expensive battery packs required by those vehicles. The engine's
unique opposed-piston opposed-cylinder architecture provides unparalleled benefits, including:
[EPA-HQ-OAR-2010-0799-9594-A2, p. 2]
• The ability to deliver 50% or greater fuel efficiency in many applications, while reducing GHG
emissions by half, with no loss in power, vehicle performance, drivability or utility;
• Low weight and a smaller profile - yielding unparalleled power density and exciting design
opportunities with no loss of power or performance;
• The ability to run on a number of fuels, including gasoline, diesel and ethanol; and
12-23
-------
EPA Response to Comments
• Functioning as a mechanical hybrid in a dual-module configuration, the opoc engine offers true
modular displacement, enabling full power when needed, and shutting down one engine module
when the power is not needed. 1 [EPA-HQ-OAR-2010-0799-9594-A2, p. 2]
The opoc engine is manufactured using conventional components, manufacturing systems and
processes. U.S. auto workers can manufacture the engine today within existing factories and
without retraining. In addition, the opoc engine has a straightforward assembly, no cylinder
heads or valve train, and 50% fewer parts than a conventional engine. The simplicity of its
design reduces materials handling costs, and increases reliability. Moreover, with 50% fewer
parts than a conventional engine, the opoc engine will cost about 20% less to manufacture.2
[EPA-HQ-OAR-2010-0799-9594-A2, p. 2]
Advanced ICE technologies, such as EcoMotors' lighter, more efficient and economical opoc
engine, have the potential to contribute dramatically to our national goals of increased fuel
economy and decreased GHG emissions from the transportation sector. Advanced ICE
technology also continues to make good economic sense for the vast majority of consumers, and
can be provided without the need for continuing subsidies or massive infrastructure investments.
[See Figure 1 on p. 3 of Docket number EPA-HQ-OAR-2010-0799-9594-A2] [EPA-HQ-OAR-
2010-0799-9594-A2, p. 2]
Thus, it remains extremely important for national policy and this rulemaking to encourage the
commercialization and deployment of non-electric vehicles using advanced ICE technologies.
Non-electric, but state-of-the-art vehicles must have the ability to compete in the market on a
level playing field with electric vehicles (EVs), plug-in hybrid vehicles (PHEVs), and fuel cell
vehicles (FCVs) and contribute to near-term GHG reductions and fuel economy improvements.
The Proposed Rule must be modified to ensure that this level playing field exists. [EPA-HQ-
OAR-2010-0799-9594-A2, p. 3]
EPA should therefore support a variety of pathways for reducing GHG emissions and achieving
higher fuel economy in the U.S. fleet, including supporting the use of such innovative, advanced
ICE technologies as mechanical hybrids, like the dual-module opoc engine. EcoMotors' opoc
engine enables coupling of multiple engine modules to meet a wide range of power needs, while
dramatically increasing the overall efficiency of the propulsion system. This modular
displacement hybrid (MDH) system features an electrically-controlled clutch housed between
two engine modules. When requirements dictate the need for both engine modules, the clutch
automatically engages to deliver power from both modules to the drivetrain. When the power of
the second module is not needed, the clutch automatically disengages, and the second engine
module is completely deactivated. This coupling and de-coupling of the engine cylinders
effectively provides on-demand functionality for the powertrain and improves fuel economy by
45%. EcoMotors' MDH system combines the best of a variable displacement engine system with
a mild EV hybrid operation to provide unparalleled improvement in vehicle fuel
economy. [EPA-HQ-OAR-2010-0799-9594-A2, p. 5]
The benefits of EcoMotors' opoc MDH system can be further extended when paired with an
electric drive system to create a tribrid system (at low speeds only the electric motor runs). Mild
hybridization (4-6 kW) provides optimal vehicle fuel economy - a 55% fuel efficiency gain -
12-24
-------
Technical Assessment of the Proposed CC>2 Standards
without compromising vehicle performance, drivability and utility. [EPA-HQ-OAR-2010-0799-
9594-A2, pp. 5-6]
The market will not accept expensive, underpowered vehicles. EcoMotors' opoc engine delivers
the high mileage and levels of performance, comfort, drivability and utility consumers want - and
as an ICE, it is technology consumers are familiar with and know how to use. The opoc engine
has 50% fewer parts than a conventional engine so it is also more economical for consumers to
maintain. Fewer engine parts means increased reliability and fewer expensive repair incidents.
EcoMotors' disruptive engine technology offers significant improvements on several attribute
fronts and will create market draw from the actual customer base. [See Figure 2 on p. 7 of
Docket number EPA-HQ-OAR-2010-0799-9594-A2] [EPA-HQ-OAR-2010-0799-9594-A2, p.
6]
A smaller, lighter engine, with a higher power density than a conventional engine, EcoMotors'
opoc engine also provides OEMs with substantial design freedom for meeting consumer
preferences. With fewer parts, the engine also costs less to manufacture than conventional
engines. Low cost and ease of manufacture will enable OEMs to produce and sell vehicles
profitably and at a price consumers can afford. Additionally, the fact that the opoc engine can be
manufactured within existing supply chains means that this engine, operating as a mechanical
hybrid in a dual-module configuration, could have a substantial impact on GHG emissions, fuel
economy and petroleum reduction today. [EPA-HQ-OAR-2010-0799-9594-A2, p. 7]
In a recent report, the Boston Consulting Group concluded that advanced ICE technologies will
be the most cost-effective way to reduce CO2 emissions on a broad scale because:
• ICE technologies cost between $70 and $140 for each percentage point reduction in CO2
emissions; and
• Though propulsion systems based partially or entirely on electricity can achieve even
greater reductions in CO2 emissions, they do so at a higher cost: $140 to $280 per
percentage point of reduction in CO2 emissions. [EPA-HQ-OAR-2010-0799-9594-A2, p.
10]
EcoMotors' opoc engine, operating as a mechanical hybrid in a dual-module configuration, offers
a cost-effective means for achieving significant reductions in emissions. As shown in the chart
below, the opoc MDH engine offers the lowest GHG emissions footprint of any other propulsion
system. With its high performance, low production costs, and resulting affordability for
consumers, this mechanical hybrid is a logical choice for OEMs to meet emissions and fuel
economy standards. [See Figure 3 on p. 11 of Docket number EPA-HQ-OAR-2010-0799-9594-
A2] [EPA-HQ-OAR-2010-0799-9594-A2, p. 10]
1 EPA has long championed this engineering concept as a means of achieving extraordinary fuel
economy and GHG reduction benefits. See EPA, 'Progress Report on Clean and Efficient
Automotive Technologies under Development at EPA, Interim Technical Report,' EPA420-R-
04-002 (January 2004), pp.20-23.
12-25
-------
EPA Response to Comments
2 In contrast, successful commercialization of other emerging vehicle technologies-such as
volume production of advanced batteries for electric vehicles-requires the establishment and
growth of entirely new industries, with supporting infrastructure and workforce retraining.
Organization: Honeywell Transportation Systems
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 257.]
We believe and continue to demonstrate that the internal combustion engine has a lot of potential
still remaining.
Particularly during the later years covered by this rulemaking, more advanced technologies are
even more likely to enable compliance with the standards. The movement towards new
powertrain technologies on the other hand is laudable but limited. The vast majority of the new
vehicle fleet during the next decade, at least, will likely remain internal combustion engines.
These are the vehicles which will contribute to the vast majority of greenhouse gas emissions
reductions achieved under these requirements. As such, it is our position that regulatory rules
should not favor new powertrains or specific technologies at the expense of technologies capable
of achieving substantial gains in the near and midterm.
Organization: Honeywell Transportation Systems
Honeywell (formerly Garrett) was the first to develop turbochargers for the automotive sector
fifty years ago when it supplied Caterpillar's first turbo engine. Honeywell has been the leader
and principal innovator of turbo technology ever since. In the 1990s, Honeywell redefined the
commercial market when it introduced Variable Nozzle Turbine technologies into turbochargers,
which enabled vehicle manufacturers to fully deploy the torque and fuel economy advantages of
direct injection diesel engines. Today, Honeywell supplies turbochargers for all sized automotive
engines from small compact vehicle engines to some of the largest commercial vehicle engines
and on diesel, gasoline and even hybrid vehicles. [EPA-HQ-OAR-2010-0799-9474-A1, p.2]
Honeywell works closely with OEMs in accordance with design specifications to manufacture
and deliver turbochargers. Turbochargers facilitate the reduction of GHG emissions by
enhancing the fuel economy of the engines in which they are used. Although turbo technologies
do not directly control or reduce emissions, they offer OEMs the ability to downsize engines or
implement other designs that lower CO2 output, all while maintaining or improving performance.
For this reason, turbochargers are traditionally considered to be an emissions-related technology
and not an emissions-control technology. [EPA-HQ-OAR-2010-0799-9474-Al, p.2]
By delivering more air to the engine, turbochargers facilitate fuel combustion, which results in a
cleaner engine. Turbocharged diesel engines available in the marketplace produce 50 percent less
NOx and CO2 emissions than conventional non-turbocharged engines. Moreover, because
turbochargers capture and recycle energy produced by engines, they are able to transform more
fuel energy into power. A turbocharged engine can generate up to seven times more power than a
naturally-aspirated (i.e., non-turbocharged) engine of equivalent displacement. As a result,
12-26
-------
Technical Assessment of the Proposed CC>2 Standards
OEMs using turbocharger technology can reduce their fleet engine sizes by 30 to 40 percent.
This reduction in engine size in turn yields significant fuel cost advantages over naturally-
aspirated engines. [EPA-HQ-OAR-2010-0799-9474-A1, p.2]
The proposed regulations account for many of the turbo advancements likely to be incorporated
into the light duty fleet during the years covered by this rulemaking. Recent and upcoming
advances in turbo technologies include:
1. High-Temperature Gasoline Turbocharger: Honeywell has committed substantial resources to
developing materials for the turbine wheel, turbine housing and turbine end seal that allow
turbochargers to function optimally and reliably under high temperature conditions. The
optimum balance of performance and fuel consumption at high speeds require turbochargers to
operate at turbine inlet temperatures of up to 1050 degrees Celsius.
2. Twin Scroll Turbine Technology: An emerging technology for energy boosting, this
technology yields improved turbine performance by delivering high pressure exhaust pulses
directly to the turbine wheel. It provides enhanced performance and fuel economy at low
speeds. [EPA-HQ-OAR-2010-0799-9474-A1, p.2]
3. Electric-Actuation: Electric actuation in a turbocharger provides more accurate control for a
wider range of operating conditions, while improving fuel consumption and economy, traction
control, and performance levels.
4. Current Generation VNT Turbochargers: This turbo platform offered by Honeywell has
spawned several high performance innovations that increase the boosting levels of previous
generation VNT technology by 30%.
5. Two-Stage Turbocharging: Dual-stage turbo technology is now being applied to passenger
cars, which can create substantially more torque, improve fuel consumption, and enhance vehicle
acceleration.
6. Ball Bearings: Ball bearing technology dramatically reduces friction losses in the bearing
system, further improves fuel consumption and transient performance, and enhances exhaust gas
recirculation. Moreover, it converts more energy into aerodynamic power, which leads to better
NOx control.
7. Rotary Electric Actuator: This turbo technology provides for the electronic control of air,
which yields faster response times compared to a conventional pneumatic vacuum system. [EPA-
HQ-OAR-2010-0799-9474-A1, p.3]
Honeywell's concern is that providing incentives exclusively focused on electric drivetrains
translates into a public policy disfavoring investment in technologies that are able to
substantially advance the emissions performance of internal combustion engines. This could
result in significant unrealized gains in emissions and fuel economy improvements for the model
years where electric vehicles are given unique and special incentives. [EPA-HQ-OAR-2010-
0799-9474-A1, p.3]
12-27
-------
EPA Response to Comments
It is well recognized that the success of electric drivetrains is uncertain and will depend on the
growth of infrastructure in the face of public and private budgetary constraints, technological
breakthroughs to make battery costs commercially viable, and consumer confidence in EV range
and safety. For example, the Boston Consulting Group projects that EVs and PHEVs could make
up only 2 percent of new light-duty vehicle sales in 2020. See The Boston Consulting Group,
Powering Autos to 2020: The Era of the Electric Car? at 18 (July 2011). Similarly, a recent
survey by Deloitte revealed significant differences between "electric vehicle realities versus
consumer expectations." Deloitte concluded that its "study suggests that only a small niche of
today's consumers would find current technology acceptable, and that small fraction of
consumers will not result in mass adoption of pure electric vehicle technology over the next
decade." See Deloitte Touche Tohmatsu Limited Global Manufacturing Industry Group,
Unplugged: Electric vehicle realities versus consumer expectations at 20 (2011). [EPA-HQ-
OAR-2010-0799-9474-A1, pp.3-4]
The suggested incentive, moreover, would not give credits for technology that has already been
taken into consideration. The proposed standards incorporate the technology application,
including the advanced turbo technologies, that the agencies believe will be cost-effective and
likely measures toward compliance. This high performance credit would be an additional
incentive that would encourage yet further technology deployment to achieve performance
significantly beyond the footprint based target on the applicable curve. [EPA-HQ-OAR-2010-
0799-9474-A1, p.5]
Honeywell encourages the agencies to adopt an incentive for high-performing ICE vehicles in
order to ensure that investment in the most prevalent vehicles in the fleet continues and that these
vehicles reach their full emissions improvement potential. [EPA-HQ-OAR-2010-0799-9474-A1,
p.6]
4 Honeywell is developing start/stop turbo technology to meet the needs of the small and micro
car segments. This technology can offer as much as 25 percent improved fuel economy over
alternative diesel engines. While micro-turbos are more prevalent in emerging markets for new
motor vehicles, with appropriate incentives micro-turbo technology can permeate through the
United States fleet. Honeywell therefore endorses the agencies' proposal to provide an off-cycle
credit for start/stop and other off-cycle technologies. [EPA-HQ-OAR-2010-0799-9474-A1, p.5]
Organization: Hyundai America Technical Center
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 23.]
Some OEMs plan to focus on fuel efficiency leadership with gasoline vehicles.
Organization: Johnson Controls, Inc.
12-28
-------
Technical Assessment of the Proposed CC>2 Standards
Retrofit of vehicles in the car pare with fuel saving Start-Stop technologies can reduce the
country's dependence on foreign oil and reduce greenhouse gas emissions. The existing U.S. car
pare exceeds 270 million vehicles and the average age of a vehicle on the road is over 10.5 years
old. Retrofitting existing vehicles on the road to provide modest improvements in fuel economy
could have a greater impact on reducing petroleum usage and greenhouse gas emissions than
dramatic increases in fuel economy of new vehicles. Increasing new vehicle fuel economy is
absolutely necessary for the longterm. However, improving the fuel economy of existing
vehicles in the car pare can accelerate the reduction of petroleum usage and greenhouse gas
emissions. Johnson Controls has calculated that over 400 million barrels of oil can be saved over
the next 10 years if a systematic process for retrofitting existing vehicles with Start-Stop battery
technology to improve fuel efficiency by 5%. This calculation assumes a retrofitting program
that would convert 50% of the existing car pare by 2022. A more aggressive approach would
yield bigger savings. To accomplish this, retrofit companies will need enablers such as a
simplified emissions certification process. Such processes already exist for certification of some
existing retrofit technologies. However, type approvals or bundling of solutions to reduce test
load and certifications cost would greatly improve the ability of Start-Stop technologies to enter
the market and keep costs affordable, thus supporting mass adoption. Clearer provisions are
needed for ensuring that OEM warranties and. emissions components warranties are honored
With the exception of any components that may be directly affected by the retrofit technology.
Johnson Controls suggests that OEMs may be favorable to these provisions if, in return, they
receive CAFE and/or CO2 credits for their vehicles which are retrofitted with fuel economy
technologies. [NHTSA-2010-0131-0253-A1, pp. 5-6]
Organization: Manufacturers of Emission Controls Association (MECA)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 180-183.]
Implicit in federal and state greenhouse gas emission analyses is the ability of these advanced
powertrain options to meet the applicable criteria pollutant emission standards. All of these
advanced light-duty powertrain options combined with the appropriately designed and optimized
emission control technologies will be able to meet all current and future federal and state criteria
emission requirements. In this manner, advanced emission controls for criteria pollutants enable
advanced powertrains to also be viable options for reducing greenhouse gas emissions. In many
cases the application and optimization of advanced emission control technologies on advanced
powertrains can be achieved with minimal impacts on overall fuel consumption. Auto
manufacturers will also take advantage of synergies between advanced emission control
technologies and advanced powertrains to assist in their efforts to optimize their performance
with respect to both greenhouse gas and criteria pollutant exhaust emissions.
For gasoline vehicles, direct injection technology enables gasoline engines to achieve fuel
efficiency and is expected to be a dominant pathway to meeting future light-duty gas emission
standards. Again, emission controls like secondary air injection systems and 3-way catalysts
ensure that these more fuel-efficient gasoline engines meet tough EPA or California criteria
emission regulations. Advanced gasoline emission controls catalysts are available and will
continue to evolve and be optimized to ensure that future gasoline direct injection engines will
12-29
-------
EPA Response to Comments
meet the toughest criteria pollutant emission standards with minimal impacts on overall vehicle
exhaust system backpressure and fuel consumption.
Under lean combustion conditions similar emission control technology used on diesel vehicles
can be used to reduce emissions from lean, gas direct injection powertrains. These include the
particulate filters to reduce PM emissions, SCR catalysts and/or lean NOx adsorber catalysts
known to reduce NOx emissions. Lean NOx adsorber catalyst performance has a high degree of
sensitivity to fuel sulfur levels. The current EPA fuel sulfur limits for gasoline are too high to
allow lean NOx adsorber catalysts to be a viable NOx control strategy for future fuel-efficient
gasoline lean burn engines that employ direct fuel injection technologies. MECA believes that
EPA should lower gasoline fuel sulfur limit to a 10 ppm national average and its pending Tier 3
light-duty vehicle emission standards proposal to allow NOx adsorber catalysts to be used on
such vehicles in the future in order to provide additional options for improving the efficiency and
reducing greenhouse gas emissions from gasoline vehicles.
The performance of advanced emission control technologies for advanced diesel gasoline and
natural gas-fueled powertrains can also be optimized to minimize nitrous oxide and methane
greenhouse gas emissions from future light-duty vehicles consistent with the limits EPA set for
these important greenhouse gas emissions in their initial round of light-duty vehicle greenhouse
gas emission standards.
Emissions controls for gasoline and diesel engines can also be used with low carbon alternative
fuels, but it's important that the specifications associated with any low carbon fuel should be
compatible with the use of available exhaust emission control technology.
Organization: Nissan North America, Inc.
I. Internal Combustion Engines
Nissan is working to raise the efficiency of internal combustion engines to the ultimate level.
Nissan is using three approaches in developing a range of technologies to raise engine
efficiency:
More efficient combustion (higher cycle efficiency)
Lower intake and exhaust resistance (less pumping loss)
Easier rotation (lower friction) [EPA-HQ-OAR-2010-0799-9471-A1, pp.5-6]
To this end, Nissan recently announced its new generation XTRONIC CVT (Continuously
Variable Transmission) for 2.0 to 3.5-liter engine vehicles. This represents an important step in
Nissan's goals to improve the fuel economy and environmental performance of internal-
combustion powered vehicles. The new generation XTRONIC CVT model achieves an
improvement in fuel economy of up to 10%2 compared to previous CVTs for comparable
vehicles. The new transmission features a world-leading ratio coverage of7.03, and friction
reduced by up to 40%. Combined with Adaptive Shift Control (which adapts shifting patterns to
12-30
-------
Technical Assessment of the Proposed CC>2 Standards
match each driver's style and the road), the new generation XTRONIC CVT delivers responsive
and powerful acceleration. These advancements, moreover, keep the engine from revving too
fast at high speeds and minimize noise. The new generation XTRONIC CVT will be introduced
in North America in 2012, then globally thereafter. Nissan also launched another next generation
CVT last year for engines below 2.0 liters. [EPA-HQ-OAR-2010-0799-9471-A1, p.6]
In addition to drivetrain improvements, Nissan is introducing innovations such as the ECO pedal
system to counteract excessive accelerator pressure and to educate drivers on their driving
behaviors. Studies have shown that effective driving behavior with ECO pedal drive assist can
potentially improve fuel efficiency in most driving conditions. Advanced safety technologies
also contribute to reducing GHG emissions. The Predictive Forward Collision Warning System
uses millimeter-wave radar to detect the deceleration of a vehicle in front of the driver and even
alerts the driver in advance of a sudden drop in speed of the vehicle two cars ahead, thereby
helping to avoid collisions, ensuring more consistent driving behavior and lowering overall GHG
emissions resulting from even vehicle speed operation. [EPA-HQ-OAR-2010-0799-9471-A1,
p.6]
Nissan has established aggressive internal goals for improving the GHG and fuel economy
performance of its internal combustion fleet. Nissan's investment in electric vehicles in no way
detracts from this commitment. While Nissan will promote electric vehicles and the growth of
infrastructure to support it, the vast majority of Nissan's fleet will remain petroleum powered.
Nissan's research and development in this area has not waned, and cannot wane given market
demands, even as Nissan continues to progress vehicle technology towards zero emissions
mobility. [EPA-HQ-OAR-2010-0799-9471-A1, p.6]
2 - According to Nissan in-house measurements using EPA's combined mode.
3 - This ratio coverage is specific to 2.0 to 2.5-liter engine vehicles.
Organization: Porsche Cars North America, Inc. (PCNA)
Diesel Technology
Many OEMs, including Porsche, plan to introduce diesel technology as a major component of
their compliance strategy. The Agency's modeling assessment of potential improvements in
GHG performance was built on assumptions which did not include diesels. It is not appropriate
to apply a model based only on gasoline and advanced technologies across a fleet that includes
significant diesel penetration. [EPA-HQ-OAR-2010-0799-9264-A1, p. 6]
Organization: Volkswagen Group of America
In the NPRM the agencies have expressed optimism in advancements in gasoline engine
technology as an important pathway towards compliance with the proposed regulation. In
particular, the agencies have forwarded the position that high BMEP engines coupled with
12-31
-------
EPA Response to Comments
cooled EGR strategies offer significant GHG reduction potential on the order of 3.5% when
compared to a 24 bar downsized, turbocharged, direct injected engine. Volkswagen cautions that
uncertainty remains with the viability of these high BMEP engines. This uncertainty in part is
what compelled Volkswagen to suggest a more moderate stringency during the 2017-2021 phase
of the regulation than the 5% average stringency proposed in the NPRM. [EPA-HQ-OAR-2010-
0799-9569-A1, p. 17]
While Volkswagen acknowledges that high BMEP (27 - 31 BMEP) engines with cooled EGR
are being researched, we caution that additional development is necessary to overcome obstacles
to these types of engines. Volkswagen views these obstacles as significant - if not overcome the
issues could preclude this type of engine as a viable greenhouse gas reduction technology.
Further, Volkswagen questions the benefit potential for this type of engine technology. [EPA-
HQ-OAR-2010-0799-9569-A1, p. 17]
Of particular concern is the thermal and mechanical loads imparted on the components of high
BMEP concepts, requiring additional cost to improve the durability of this type of engine. In
addition, a radically downsized high BMEP engine may offer benefits at peak torque but may be
compromised at part load modes of operation, where low-end torque performance may be
critical. It is Volkswagen's position that this type of engine may already need a two-stage
charger system to address low end torque performance, adding additional cost. Considering all
these factors we believe that the torque curve for future engines will be constrained over the rpm
range by charging limits, exhaust temperature, peak cylinder pressures and mechanical forces
that may limit the practicable increase in BMEP as shown in Figure 2-7. [See Figure 2-7 on p. 18
of Docket number EPA-HQ-OAR-2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1,
p. 17]
Further, Volkswagen investigation indicates that while 5-6% CC>2 benefit for a high BMEP
engine is possible for peak torque, the benefit at the engine speed and load range of typical two
cycle testing results in a potential CC>2 benefit of approximately 2.5%. This does not indicate a
high degree of additional CO2 reduction potential for high BMEP engine concepts. [EPA-HQ-
OAR-2010-0799-9569-A1, p. 18]
Response:
Regarding comments from the American Petroleum Institute (API), and MECA with
respect to gasoline sulfur and spark-ignition lean-burn combustion, lean-burn combustion
technology was considered in our analysis but was found to be less cost effective than other
available technologies and therefore not used in our vehicle packages as shown in section 1.3 of
the RIA. API's comment confirms the reasonableness of that assessment.
Regarding comments from Center for Biological Diversity, Delphi Corporation, Eaton
Corporation, EcoMotors International, Inc., Growth Energy, Honeywell International, Inc.,
Honeywell Transportation Systems, Hyundai America Technical Center, Johnson Controls Inc.,
and Porsche Cars North America, Inc. (PCNA), EPA believes that the issue of technology
neutrality is a much more complex issue than some commenters suggest when they advocate for
a "level playing field" and suggest that a level playing field is best achieved by no incentives.
Given that internal combustion engines and petroleum-based fuels have dominated the U.S.
12-32
-------
Technical Assessment of the Proposed CC>2 Standards
light-duty vehicle market for 100 years, with massive sunk investments, there are major barriers
for new vehicle technologies and fuels to be able to gain the opportunity to equitably compete on
any type of level playing field. For example, consider a hypothetical new vehicle/fuel
technology that could be superior to conventional technology from a consumer perspective if,
and only if, the vehicles and fuels could be produced at similar economies of scale. But, it is very
possible that such a hypothetical new technology would never get the opportunity to compete at
equivalent economies of scale, because of the very large investments that are needed, up front, to
support the research and development, parts and vehicle production facilities, and fuel
infrastructure, none of which are needed for conventional technology as these investments have
been made in the past. In this context, temporary regulatory incentives do not so much "pick
winners and losers" (as an inefficient or unattractive technology is not going to achieve long-
term market success based on temporary incentives) as to give new technologies more of an
opportunity to compete with the established technologies.
Regarding comments from Delphi Corporation and Nissan North America, Inc., we note
that our analysis of a potential compliance path for the company is consistent with its prediction
that most of the improvements can come from improvements to gasoline internal combustion
engines. See Tables 111-28 and 111-29 in the preamble to the final rule.
Regarding comments from Volkswagen Group of America, while we agree that higher
BMEP engine concepts exceeding 27-bar BMEP, such as the recently announced Ricardo
HyBoost project, are currently undergoing research, we limited BMEP levels to 24-bar and 27-
bar for the vehicle packages used in the OMEGA modeling for the final rule since these engines
are at a fairly advanced stage of research at those BMEP levels. Ricardo engineering took into
consideration peak cylinder pressure limits and thermal limits such as a hard limit of 950 °C
turbine inlet temperature when working with EPA to develop the 24-27 bar BMEP engine maps
used in the cycle simulation work. The high BMEP engine maps developed by Ricardo were
comparable to other 24-27 bar BMEP engine maps cited from published literature (see citations
28-31 referenced in TSD 3.2.1.2.12), with comparable broad areas of high BSFC and relatively
flat torque available from fairly low RPM, with >80% of peak BMEP available from 1500 -
4500 rpm. The VW comments regarding low-end torque are not consistent with the broad range
of rpm, including low rpm, at which high BMEP was available for the engines cited from public
literature within TSD 3.2.1.2.12. The CO2 effectiveness used by EPA and NHTSA at 24 and 27-
bar BMEP was also considerably higher than the 6% peak or 2.5% cycle efficiency cited by VW.
The CC>2 cycle (not peak) effectiveness used by the Agencies ranged from approximately 16% to
24% depending on the BMEP level and combination of technologies (see TSD 3.3.1.8). The
levels of effectiveness used by the agencies were also comparable to the 15 to 30% CC>2
effectiveness reported in published literature from AVL, Mahle, Ricardo and Lotus cited within
the TSD. Mechanical and thermal robustness at 24-27 bar BMEP were key considerations in the
cited literature from Mahle and Ricardo (citations 29 and 31 referenced in TSD 3.2.1.2.12). EPA
agrees that 2-stage turbocharging may be necessary at high BMEP levels and took the cost of
two-stage turbocharging into account in packages using 27-bar BMEP engines. EPA also took
into account additional costs when elevating engines from 18-bar turbocharged GDI to 24-bar or
27-bar BMEP. The BMEP (or torque) curves and BSFC in the Ricardo simulation modeling and
in the cited literature were representative of engines under development that are already
12-33
-------
EPA Response to Comments
constrained with respect to charge temperature limits, exhaust temperature limits, peak cylinder
pressure and mechanical forces.
12.2.2. Transmission Technologies
No comments were received on this issue.
12.2.3. Vehicle Technologies
Organizations Included in this Section
Aluminum Association's Aluminum Transportation Group
American Chemistry Council (ACC)
Delphi Corporation
SAB 1C Innovative Plastics US LLC
Society of the Plastics Industry, Inc. (SPI)United Automobile Workers (UAW)
United Steel Workers (USW)
Volkswagen Group of America
Organization: Aluminum Association's Aluminum Transportation Group
Downweighting, without downsizing, has become an increasingly more important
element in most comprehensive OEM vehicle efficiency improvement strategies. As automakers
transition towards greater use of low weight materials, the focus is increasingly toward system
cost. Aluminum is widely recognized as a cost-effective choice for reduced weight automotive
components and structures. As automakers turn to greater aluminum use, secondary weight
reduction is emerging as a major cost savings opportunity. Vehicle weight reduction with
aluminum allows a reduction in the size, weight and cost of powertrain and chassis components
(secondary weight reduction) without sacrificing performance or safety. Cost savings from
secondary weight reduction can offset a majority of the cost premium associated with conversion
to aluminum. This allows aluminum to compete successfully with other materials because of the
advantages it brings in primary and secondary weight savings, fuel savings, structural
performance and design flexibility. [NHTSA-2010-0131-0226-A1, pp. 1-2]
Since the aluminum industry provided comments on the agencies' Notice of Intent (NOI)
regarding this rulemaking in October 2010, additional studies have been completed that reinforce
the conclusion that downweighting with aluminum can be done both safely and economically.
Simply stated, aluminum offers a safe and cost-effective way to reduce fuel consumption and
reduce greenhouse gas emissions. [NHTSA-2010-0131-0226-A1, p. 2]
In this regard, we offer four new pieces of evidence: a new survey of North American
automakers conducted by Ducker Worldwide, a separate and independent survey of automakers
by DuPont, statements made by a high level Honda executive at the recent International
Automotive Body Congress, and findings of a new report on life cycle cost analysis
commissioned by the European Union, titled "Support for the Revision of Regulation (EC) No
443/2009 on CO2 Emissions from Cars." [NHTSA-2010-0131-0226-A1, p. 2]
12-34
-------
Technical Assessment of the Proposed CC>2 Standards
Ducker Worldwide Survey of North American Automakers
A 2011 Ducker Worldwide Survey found that per-vehicle aluminum content will increase by 70
percent by 2025. The survey found that as lighter vehicles achieve better fuel economy with
fewer emissions, aluminum is already the leading material in the engine, transmission,
suspension and wheel markets, and is fast-gaining share in hoods, trunks and doors. The findings
estimate that automakers will increase their use of aluminum from 327 pounds in 2009 to 550
pounds in 2025. Continued growth in overall use of aluminum reached an all-time high of 343
pounds per vehicle in 2012, up five percent from 2009. In fact, aluminum usage has increased
every year for nearly 40 years (approximately seven pounds per year, per light vehicle). Market
forces already in place are projected to push aluminum content to 400 pounds per vehicle in
2015/2016. The survey also confirms aluminum will play an increasingly important role in
design of future safe and fuel efficient vehicles. Based on the survey and other research, the ATG
believes that cars and trucks will get lighter but will not have to be made smaller or less safe. A
copy of the complete Ducker Survey is attached to these comments as Attachment A [see Docket
number NHTSA-2010-0131-0226-A4]. [NHTSA-2010-0131-0226-A1, p. 2]
DuPont Survey of Automakers and Suppliers
In a separate, independent survey of automakers released last year by DuPont, 'aluminum' was
listed above all other materials by automotive engineers and executives as the "most helpful"
material in meeting the new fuel economy standards (see page 7 of the DuPont survey,
Attachment B [see Docket number NHTSA-2010-0131-0226-A2]). Taken together, these
surveys make clear a major automotive materials shift is underway. OEM vehicle manufacturers
recognize that downweighting will complement whatever other technology, design and
powertrain changes are coming. Downweighting with aluminum will improve vehicle efficiency,
while enabling a cost-savings from downsized powertrains, without sacrificing either safety or
performance. [NHTSA-2010-0131-0226-A1, p. 2]
International Automotive Body Congress
At the recent International Automotive Body Congress held in Troy, Michigan, the senior vice
president of Honda R&D Americas stated that the automaker is planning to start phasing out
some steel in vehicle bodies. In a quote from a Ward's Auto article, Frank Paluch of Honda said:
"Based on our current understanding, we believe we're approaching the practical limits of the
application of high-strength steels." Since Honda is an industry leader in the use of advanced
high-strength steels in high-volume mainstream vehicles, that statement is significant. According
to the same article, Mr. Paluch is among a growing number of engineers who believe it will be
"increasingly difficult or impossible to meet future fuel-efficiency and carbon-dioxide emissions
requirements with vehicle bodies made from steel." [NHTSA-2010-0131-0226-A1, p. 2]
The ATG agrees with Mr. Paluch that we are fast-entering a transition stage to a more holistic
vehicle design approach. That approach is premised on the greater use of lighter, stronger and
more crash absorbent components utilizing low weight materials, including aluminum. These
lower weight components will replace higher weight iron and steel components. And, Mr.
12-35
-------
EPA Response to Comments
Paluch's statement is reflected in OEM advanced program plans and product orders from our
automotive customers. [NHTSA-2010-0131-0226-A1, p. 3]
Organization: American Chemistry Council
(2) In addition to lightweighting, plastics and related materials will also contribute to fuel
efficiency and emission reductions through more aerodynamic shaping and parts integration.
In addition to lightweighting capabilities, thermoplastics and composites can be molded into
shapes that provide superior aerodynamics. Aerodynamic drag results from the vehicle having to
move air out of its way in front, and also from the turbulence created in in back as air refills the
space voided by the vehicle. About 60 percent of engine power at highway cruising speed is used
to overcome air resistance. As a result, improved aerodynamics translates into substantial
improvements in fuel efficiency and emissions, even with vehicle size held constant. Drag
coefficients (a measurement of drag forces independent of drag area or vehicle size) have
improved significantly over the years, and an important element of that has been the design
freedom conferred by thermoplastics and related materials. Injection-molded plastics allow for
aerodynamic styling and parts integration not possible with metal or glass. Drag coefficients for
present-day vehicles range between 0.30 and 0.35, but an additional 25 percent reduction in drag
has been predicted in coming years.7Aerodynamic performance is generally captured in coast
down testing that informs the calibration of the dynamometer. [EPA-HQ-OAR-2010-0799-9517-
A2, p. 2]
(3) Lightweight plastic and plastic composite components are gaining commercial acceptance
and providing lightweighting that increases fuel efficiency and reduces emissions. Plastics,
plastic composites, and other materials will allow Original Equipment Manufacturers (OEMs) to
move toward compliance with the Corporate Average Fuel Economy/Greenhouse Gas
(CAFE/GHG) targets at a reasonable cost and independent of what power trains are chosen.
Traditional vehicles will consume less gasoline or diesel; hybrids will be able to operate further
on battery power, and pure electric vehicles (EVs) will enjoy a greater range, a factor critical to
consumer acceptance and to their penetration of the marketplace. [EPA-HQ-OAR-2010-0799-
9517-A2, pp. 2-3]
Manufacturers have already moved to the use of plastics and composites extensively in the
vehicle exoskeleton and in internal components. Recent data indicate that the average vehicle
already uses about 150 kg of plastics and plastics composites; that the automotive industry
already uses engineered polymer composites and plastics in a wide range of applications; and
that plastics are currently in use in about 50 percent of all interior automotive components,
including safety subsystems and door and seat assemblies.8 [EPA-HQ-OAR-2010-0799-9517-
A2, p. 3]
The Joint Technical Support Document (TSD) notes that "many manufacturers have already
announced proposed future products plans reducing the weight of a vehicle body through the use
of.. .composite body panels.. ."9Composites are in use by Volvo and Renault in tailgates; BMW,
Peugeot and Maybach in trunk lids; and Bentley for the spare wheel/tire well.lOPlastics and
composites are also increasingly becoming the material of choice in applications where high
performance is necessary. For example, special heat conductive plastics have been developed by
12-36
-------
Technical Assessment of the Proposed CC>2 Standards
DSM for engine bay components, in which metal particles added to the plastic transfer the heat
and, if needed, can also serve as electromagnetic interference (EMI) shield. Engineering plastics
like DSM's polyamide grade Stanyl® keep their high level of stiffness at temperatures up to
290°C. A joint study of BMW and Mitsubishi Turbochargers demonstrated the feasibility of
using plastic for the "cold" side of a turbocharger. 11 [EPA-HQ-OAR-2010-0799-9517-A2, p. 3]
Similarly, polycarbonate is now used extensively in lighting and selectively in rooflite glazing,
and is expected to make further inroads into backlites and fixed rear windows. Polycarbonate
glazing is approximately 40 percent lighter than traditional glass, and is capable of removing 25
pounds of weight reduction for a typical vehicle. Also, because it is injection molded, it can be
readily combined with other materials and features, yielding parts consolidation and reducing
assembly costs. These multiple advantages point to a substantial increase in the use of
polycarbonate in coming years. [EPA-HQ-OAR-2010-0799-9517-A2, p. 3]
The commercialization of plastic and related components into the structure of the vehicle will
also proceed during the model years covered by this rulemaking. The timeline for
commercialization of structural plastics was raised at the February 25, 2011 NHTSA workshop
on vehicle mass, size and safety, at which some commenters cited the relative merits and
commercial promise of aluminum and high strength steel. We acknowledge that the commercial
promise of structural plastics, composites and plastic/metal hybrids, is a longer-term proposition.
However, it should be noted that work is well underway to understand and pursue more
aggressive use of these materials. NHTSA's 2007 Report, A Safety Roadmap for Future Plastics
and Composites Intensive Vehicles, extensively evaluated the potential safety benefits of Plastics
and Composites Intensive Vehicles (PCIVs) to enable deployment by 2020. That document
established research priorities and called for the development of test methods and timetables that
allow for an orderly transition to a fleet making greater use of plastics, composites and related
materials, including in the vehicle structure. [EPA-HQ-OAR-2010-0799-9517-A2, p. 3]
(4) Increasing supply and production capacity of high-tech composites and hybrid materials
should be factored into agency cost estimates on an ongoing basis.
Advanced composites such as carbon fiber reinforced thermoplastics will assume a greater role
in both body and structural components in the MY 2017-2025 time frame. Surveyed automotive
engineers say it best: there is increasing commercial activity using existing composite
technologies as well as new developments taking composites to the next level, making advanced
composites the top material category poised for growth. 14 Recent data suggest that the supply of
plastic composite materials will continue to accelerate with an attendant decrease in costs as
production processes are refined and economies of scale are realized. There is also the potential
for a game-changing breakthrough that will advance commercialization, a phenomenon we have
witnessed with other advanced materials. 15 [EPA-HQ-OAR-2010-0799-9517-A2, p. 4]
Numerous producers have recently announced additional capacity or production for high-tech
automotive plastics, composites, or constituents of high-tech composites such as carbon fiber. In
March of 2011, Lanxess announced breaking ground on its first U.S.-based compounding facility
for high-tech automotive plastics in Gastonia, North Carolina, with production scheduled to
begin in mid-2012.16The Lanxess facility was announced to produce polyamide and
polybutylene terephthalate. BMW, 17 Daimler and Lamborghini 18 are all involved in joint
ventures with suppliers to develop and produce carbon fiber, while Oak Ridge in currently in the
12-37
-------
EPA Response to Comments
process of building a $35 million dollar pilot plant that will produce up to 25 tons of carbon fiber
a year." 19 In addition, a new joint venture between Dow and ASKA was formalized on
December 20, 2011 to manufacture and globally commercialize carbon fiber.20 [EPA-HQ-OAR-
2010-0799-9517-A2, p. 4]
Cost reductions are readily observable in the trade press.21 It has been reported that "carbon
fiber costs have dropped ten-fold in the last decade," observing that as new production
technologies become available, this "will bring the cost down further."22Benteler SGL in
Germany has reported reducing cycle times from 20 to 5 minutes to enable large series
production, and Styron is reported to have developed plastic resins that allow a shorter cycle time
of 2 l/2 minutes.23 Assuming 50 weeks of production during the year and 40 hours of production
during one shift in a week, this cycle time translates into 48,000 units produced a year during one
shift at a plant. While such production capability will be sufficient for a large majority of the
vehicle models produced (especially if two shifts are run at a given plant), multiple shifts and
increased plant capacity will allow for larger production numbers. Lamborghini's Sesto
Elemento concept car uses forged composites, which are predicted to be less costly than
traditional carbon fiber by 'orders of magnitude.'24 Continuing cost reductions of plastic and
plastic composites will quicken the pace of adoption in the commercial fleet. [EPA-HQ-OAR-
2010-0799-9517-A2, p. 5]
In addition to composites, plastic/metal hybrid components are expected to become
commercially significant in the structure of vehicles. A hybrid component has constituent parts
from two or more materials; an example is a hollow metal pillar filled with plastic. Hybrid parts
can exhibit the best aspects of both materials, for example, combining the load capacity of steel
with the light weight and impact resistance of plastic. As a result, hybrid components hold
promise to lower the weight of structural parts without sacrificing crashworthiness.25 [EPA-HQ-
OAR-2010-0799-9517-A2, p. 5]
7 Bandivadekar et. al, Massachusetts Institute of Technology, Laboratory for Energy and
Environment, "On the Road in 2035: Reducing Transportation's Petroleum Consumption and
GHG Emissions (July 2008), p. 24, (available online at http://web.mit.edu/sloan-auto-
Iab/research/beforeh2/otr203 5/)
8 See Dr. Michael Fisher, James Kolb, and Suzanne Cole, Enhancing Future Automotive Safety
with Plastics (2007), available at http://www-nrd.nhtsa.dot.gov/pdf/esv/esv20/07-0451-W.pdf
9 TSD at 3.4.2.4.1, p. 3-69; 3.73.
10 Jan Willem van der Wiel, Future of Automotive Design & Materials Trends and
Developments in Design and Materials, Automotive Technology Centre,
http://www.acemr.eu/fileadmin/user_upload/PDF/Trendstudy_ACEMR_Designmaterials.pdf
11 Id.
12 Available at
www.nhtsa.gov/DOT/NHTSA/NVS/Crashworthiness/Vehicle%20Aggressivity%20and%20Fleet
%20Compatibility %20Research/810863 .pdf
12-38
-------
Technical Assessment of the Proposed CC>2 Standards
14 Society of Automotive Engineers, Automotive Composites, January 4, 2012,
http://www.plasticsengineering.org/polymeric/node/5073
15 See, e.g., U.S. Department of Energy, Energy Efficiency and Renewable Energy, Vehicle
Technologies Program, "Materials Technologies: Goals, Strategies, and Top Accomplishments,"
DOE/GO-102010-3111, August 2010,
http://wwwl.eere.energy.gov/vehiclesandfuels/pdfs/materials_tech_goals.pdf; see also, Boeing,
"Coming of Age: Composites Technology in Commercial Aviation," 2010
http://www.sampecarolinas.org/boeing.pdf (describing how advanced composites has
fundamentally changed the aerospace industry)
16 http://www.gaccsouth.com/fileadmin/ahk_atlanta/Dokumente/News/Lanxess.pdf 17 See also,
Tom's Style Design & Technology, "BMW Lifts Cover From Carbon Fiber i3 Electric Car," July
30, 2011, BMW Lifts Cover From Carbon Fiber 13 Electric Car
http://www.tomsguide.com/us/BMW-i3-electric-carcarbon- fiber-passenger-shell,news-
12030.html
18 See also, Autoweek, "New Techniques Cut Cost of Carbon Fiber," July 11, 2011,
http://www.autoweek.com/article/20110711/CARNEWS/l 10719991 ("A joint venture between
Automobili Lamborghini S.p.A. and Boeing Co. has slashed the cost of carbon fiber used in a
monocoque, or unibody construction, for the Sesto Elemento concept car. In effect, Lamborghini
has become a carbon-fiber laboratory for its corporate parent, Volkswagen AG.")
19 Left Lane, "Cost of Weight-Saving Carbon Fiber to Drop," (August 1, 2011),
http://www.leftlanenews.com/costof- weight-saving-carbon-fiber-to-drop.html
20 ICIS Chemical Business, "Innovation in carbon fiber processing technology could lead to a
breakthrough in the cost competitiveness of the material and consequent growth in applications,"
January 9, 2012, http://www.icis.com/Articles/2012/01/09/9521417/dow-carbon-fiber.html
21 Automotive News, "Suppliers are cutting the cost of carbon fiber," August 1, 2011,
http://www.autonews.com/apps/pbcs.dll/article? AID=/20110801/OEM01/308019975
22 Jan Willem van der Wiel, Future of Automotive Design & Materials Trends and
Developments in Design and Materials, Automotive Technology Centre,
http://www.acemr.eu/fileadmin/user_upload/PDF/Trendstudy_ACEMR_Designmaterials.pdf
23 Id.
24 See also, Autoweek, "New Techniques Cut Cost of Carbon Fiber," July 11, 2011,
http://www.autoweek.com/article/20110711/CARNEWS/l 10719991, quoting Paolo Feraboli,
assistant professor of aerospace materials at the University of Washington and director of the
Advanced Composite Structures Laboratory.
12-39
-------
EPA Response to Comments
25 JEC Composites, "High-tech products for green mobility," January 30, 2012,
http://www.jeccomposites.com/news/composites-news/high-tech-products-green-mobility
("Lanxess estimates that such composites can reduce component weight by another 10 percent
compared to aluminum sheet hybrid designs. Nylon composite sheet hybrid technology is thus
ideal for automotive lightweighting.")
Organization: SABIC Innovative Plastics US LLC
Substantial investment is being put into materials research and development. Materials such as
carbon fiber, magnesium and other composites have the potential to transform vehicle design,
promote safety and offer considerable emissions and fuel consumption reductions. As a global
innovator in the plastics industry, SABIC-IP will continue to seek out and promote such
advances. SABIC-IP will also continue to offer robust technical evaluations to assist the
government and the industry advance public policy through the application of cost effective
product solutions. [EPA-HQ-OAR-2010-0799-9467-A1, p. 15]
Organization: Society of the Plastics Industry, Inc. (SPI)
In addition to energy management systems, the current widespread use of plastics and
composites in a multitude of applications helps auto designers reduce vehicle weight and
increase efficiency: [EPA-HQ-OAR-2010-0799-9492-A1, p.2]
"For auto manufacturers, plastics are seen as a great way to increase vehicle efficiency. This is
because... replacing steel with plastic can cut vehicles' weight. Plastic fuel tank technologies
have become the tank of choice replacing steel tanks first in Europe and Asia and now North
America. This is for weight reduction as well as design flexibility, corrosion resistance and
safety. Plastic fuel lines have also been advancing because they are lighter in weight, lower in
cost and available in various colors for tracking under the hood. Further, combinations of plastics
and steel are being developed for weight reduction but also for high load-bearing capacity and
high-energy absorption for front ends and doors. Similarly, automotive glazing, including both
side windows and windshields, promises great potential for plastics." [[EPA-HQ-OAR-2010-
0799-9492-A1, pp.2-3]
The growing potential for plastics, composites and hybrid materials pairing plastics with metal
are evident at our triennial trade show, NPE. President Obama's 2009 announcement regarding
fuel efficiency came one month before NPE 2009, at which innovative companies in the plastics
industry unveiled new fuel-saving technologies. Automotive applications highlighted in the
sustainability theme included: component weight reducing technologies (e.g., polycarbonate-
based windshields and other glazing), fast-growing application of thermoplastic elastomers, new
raw material formulations, new plastic/steel hybrid structures, separator films for batteries, and
applications for fuel tanks such as a high-density polyethylene formulation that is more resistant
to bio-diesel fuel. Nanocomposites - in which nanoscale fillers are added to standard plastics -
can add strength that results in the use of less material, and therefore helps reduce vehicle weight
while maintaining performance, in applications such as fuel tanks and fuel lines. SPI recognized
then as we do now that plastics and associated materials contribute to fuel efficiency, innovative
design, production economy, and sustainability that will help manufacturers meet their
12-40
-------
Technical Assessment of the Proposed CC>2 Standards
regulatory obligations while providing exciting options to their customers. [EPA-HQ-OAR-
2010-0799-9492-A1, p.3]
In coming years, we expect to see even greater adoption of plastics and composites in glazing,
body panels and interior parts. PC glazing is beginning to make significant inroads into the
marketplace in this country and already enjoys extensive use in Europe. There, "moulded PC is
used in nearly all auto glazing functions" and gaining in areas such as the front and rear quarter
windows, and fixed window sections on the sides and rear doors. Bioplastics are forecasted to
expand in the automotive sector, contributing to a global demand that is expected to at least triple
in the next few years. Longer term, multi-material solutions (e.g., hybrid structures) and
advanced composites (e.g., carbon-fiber reinforced thermoplastic) have the potential to extend
lightweighting into the body-in-white stage of vehicle production, achieving mass reduction
while maintaining or enhancing the structural integrity of vehicles. From electric and hybrid cars
with improved electric range, to driverless pods at airports, the automotive sector will help drive
a revolution in the use of plastics. SPI is proud that NPE has been a venue of choice for
manufacturers to unveil their new technologies, and we look forward to the advances to come.
[EPA-HQ-OAR-2010-0799-9492-Al,p.3]
Advanced Composites are Becoming a Technologically Feasible and Economically Practicable
Part of Reducing Vehicle Mass [EPA-HQ-OAR-2010-0799-9492-A1, p. 5]
SPI notes that the agencies' mid-term evaluation will allow for consideration of new and
innovative technologies that could contribute to vehicle mass reduction between now and model
years 2022 - 2025. We appreciate that this will enable advances with PCIVs to be considered for
additional credits or incentives if appropriate. [EPA-HQ-OAR-2010-0799-9492-Al, p.5]
The Increasing Use of Advanced Composites [EPA-HQ-OAR-2010-0799-9492-Al, p.5]
Advanced composites such as carbon fiber reinforced thermoplastics (CFRP) will assume a
greater role in both body and structural components in the MY 2017-2025 time frame. This is
clear from the increasing investment and commercial activity surrounding such materials. These
include joint ventures with carbon fiber producers announced by BMW, Daimler and
Lamborghini, and both a fully electric city car and a hybrid sports car exhibited last summer
which make use of CFRP to offset the weight of battery systems. Other companies are working
with advanced composites, and the development of a practical composite engine block is close if
not achieved, shedding pounds off the traditional counterpart. Natural fiber composites will have
the additional benefits of being less sharp compared to glass fiber-reinforced composites in the
event of a crash, and taking up to 60% less energy to process. [EPA-HQ-OAR-2010-0799-9492-
Al,p.5]
The commercial viability of CFRP and other advanced composites will depend upon increasing
supply and economies of scale. Here too, progress is visible. Oak Ridge is "in the process of
building a $35 million dollar pilot plant that will produce up to 25 tons of carbon fiber a year." A
new joint venture between Dow and ASKA announced in late 2011 aims to commercialize
carbon fiber globally. [EPA-HQ-OAR-2010-0799-9492-A1, p.5]
12-41
-------
EPA Response to Comments
Economic Benefits of Advanced Composites [EPA-HQ-OAR-2010-0799-9492-Al, p.6]
The aforementioned throttle valve housing that is 30 percent lighter than its metal counterpart is
also 50 percent lower in cost. This is not the case for every component, and there are instances of
higher material costs for plastics as compared to their metal and glass counterparts. However, the
Technical Document notes that both EPA and NHTSA recognize that OEMs can realize reduced
costs as they gain experience and scale with new technologies, through the "the manufacturing
learning curve" phenomenon. And like plastics, composites offer opportunities for parts
consolidation, reducing assembly costs. [EPA-HQ-OAR-2010-0799-9492-A1, p.6]
Polycarbonate Glazing is Market Ready [EPA-HQ-OAR-2010-0799-9492-Al, p.6]
PC automotive glazing for applications such as rooflites, backlites and side windows has been
available for years and holds great promise. Commercial acceptance in Europe may encourage an
increasing role in this country's automotive market. Polycarbonate provides high optical clarity
and shatter-resistance, and can be formulated to resist deterioration and hold up to weathering
conditions. Various abrasion-resistance systems allow PC glazing to be used in rooflites,
backlites, and liftgates, meeting applicable standards. PC in auto glazing applications has
demonstrated weight reductions of 40-50 percent as compared to traditional glass. [EPA-HQ-
OAR-2010-0799-9492-A1, p.6]
Beyond weight-reduction, injection molding of PC glazing permits design flexibility that can
contribute to more aerodynamic designs and increased fuel efficiency. Current drag coefficients,
ranging between 0.30 and 0.35 for a typical vehicle, are likely to improve by 25% in coming
years. Integration of parts can contribute to aerodynamics and simplify assembly without
compromising structural integrity. [EPA-HQ-OAR-2010-0799-9492-Al, p.6]
OrganizationrUnited Automobile Workers (UAW)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 23.]
This includes an exciting advance such as 8-, 9-speed automatic transmission, both dual clutch
and conventional, and engines that feature advanced valve timing and gasoline direct injection,
downsized and turbocharged engines, and vehicles that are considerably lighter than the previous
generations but retain the same size. Technology such as start/stop systems and electric-powered
steering are also making a contribution to vehicle efficiency.
Organization: United Steel Workers (USW)
USW believes advanced high-strength steel (AHSS) vehicle technologies will assist carmakers in
achieving significant reductions in both vehicle emissions and fuel consumption. [EPA-HQ-
OAR-2010-0799-9580-A2, p.2]
New steels and automotive manufacturing techniques continue to be developed by the domestic
steel industry and will enable significant increases in mass reduction, crashworthiness and fuel
12-42
-------
Technical Assessment of the Proposed CC>2 Standards
economy, while enabling reductions in total greenhouse gas emissions, during the period
specified in the NPRM. [EPA-HQ-OAR-2010-0799-9580-A2, p.3]
Organization: Volkswagen Group of America
Volkswagen provided technical descriptions and estimates to the agencies regarding vehicle
lightweight technology potential and cost. Volkswagen remains amongst the industry leaders in
applying high technology, lightweight designs within both premium and economy vehicles.
[EPA-HQ-OAR-2010-0799-9569-A1, p. 15]
To start, Volkswagen agrees with the agencies that there is a variation in the overall mass
reduction potential based on the type and market segment of vehicles. Smaller cars and economy
models have less potential for mass reduction than larger or more premium vehicles.
Volkswagen projects full vehicle weight reductions during the time period of this regulation on
average in the order of 7-10%. The NPRM predicts for large cars and some trucks upwards of
20% mass reduction potential. Volkswagen feels that this may exceed cost effective limits. With
regards to electrified vehicles, Volkswagen does agree with statements in Section 3.4.5.5 of the
TSD that electrical component may increase baseline vehicle mass by upwards of approximately
4-5% depending on battery pack capacity and/or other electric drive components. [EPA-HQ-
OAR-2010-0799-9569-A1, p. 15]
The NPRM includes a revised cost model as described in Section 3.4.5.5 of the TSD which now
properly reflects the fact that increasing levels of mass reduction results in exponentially
increasing costs. Figure 2-5 illustrates the cost function for both a 30001b and 40001b car.
Volkswagen generally agrees with the cost being represented by an exponential function.
However the function remains too conservative in its overall estimate of total price increase, i.e.
the curve is too 'shallow'. Volkswagen maintains that above 10%, costs accelerate at a faster rate
making reductions beyond this level less economically practical. [See Figure 2-5 on p. 16 of
Docket number EPA-HQ-OAR-2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1, p.
15]
Further, we contend that the price increase for smaller cars may actually be more severe than for
larger cars or trucks. Smaller cars must meet the same safety requirements and often have fewer,
more simplistic systems from which to seek weight reductions. The model included in the
NPRM reflects the opposite, that larger cars may be more challenged to reduce mass. The NPRM
indicates that a large truck or pick-up would have the most costly pathway for weight reduction,
while a low-weight passenger car would have the least costly pathway. This in turn would
indicate that a low weight passenger car could more easily further reduce weight. Volkswagen
disagrees. [EPA-HQ-OAR-2010-0799-9569-A1, p. 15]
An exponential cost function is appropriate when estimating costs related to mass reduction. In
many cases moving from a baseline material to a lighter alternative not only require the use of
more expensive material, but can also trigger significant capital investment needed to upgrade or
completely replace manufacturing infrastructure. There are periods in which a vehicle is
completely redesigned and engineers will have the opportunity for a 'clean sheet' evaluation of
component consolidation and material substitution. However even then, the ability to update
12-43
-------
EPA Response to Comments
tooling and factory systems may be limited given their longer useful life. [EP A-HQ-OAR-2010-
0799-9569-A1, p. 16]
Volkswagen is also continuing to move towards a greater degree of platform sharing which will
use common architecture to underpin a broad range of vehicles. An example is the recently
introduced MQB (Modular Transverse) platform which will be used for Volkswagens Polo,
Beetle, Golf, Scirocco, Jetta, Tiguan, Touran, Sharan, Passat and CC. In addition several other
models from various Volkswagen brands will also use the platform. A concept such as MQB
offers significant savings and standardization of manufacturing processes. However, designers
must now account for multidimensional requirements that apply to the range of vehicles using
the platform. A weight reduction technology which may be acceptable in terms of price or
performance for one model may disrupt the economics or utility of another. [See Figure 2-6 on p.
16 of Docket number EPA-HQ-OAR-2010-0799-9569-A1] [EPA-HQ-OAR-2010-0799-9569-
Al,p. 16]
The materials industry continues to offer an increasing assortment of technologies from ultra-
high strength steels, to alternative materials such as aluminum, magnesium, plastics, and carbon
fiber. Volkswagen remains at the forefront in evaluating these materials and in some cases being
first to market with exotic designs on our premium and sport vehicles. Volkswagen has had
many successes in applying advanced technologies to our economy models as prices and
complexity decrease, but this process is lengthy and risky. [EPA-HQ-OAR-2010-0799-9569-A1,
pp. 16-17]
Volkswagen remains concerned that the price estimates used by the agencies remain low and do
not fully account for the impact that incorporating weight savings may have on retail price.
Further, Volkswagen is concerned that the more stringent requirements for passenger cars will
necessitate more weight reduction technologies to these vehicles and will contribute to the
imbalance between prices for these cars compared to trucks. Trucks on the other hand with their
lower stringency and exclusive credits may not be required to incorporate the same degree of
weight reduction. [EPA-HQ-OAR-2010-0799-9569-A1, p. 17]
Response:
Regarding comments from the Aluminum Association's Aluminum Transportation Group
Innovative Plastics US LLC and Society of the Plastics Industry, Inc. (SPI), SAB 1C Innovative
Plastics US LLC and Society of the Plastics Industry, Inc. (SPI), United Steep Workers, and
American Chemistry Council (ACC), we agree that engineered lightweight materials are a
potential path to lower CO2 emissions for all classes of vehicles. Please refer to the Joint TSD
Section 3.3.5.5 for more detail on mass reduction.
Regarding comments from the United Automobile Workers (UAW), we appreciate your
comments in support of the potential for advanced transmissions to reduce the CC>2 emissions for
all classes of vehicles.
Regarding comments from Volkswagen Group of America on mass reduction costs, the
agencies' basis for estimated costs of mass reduction actually appears to be conservative. As
12-44
-------
Technical Assessment of the Proposed CC>2 Standards
shown in joint TSD section 3, the detailed studies sponsored by the agencies suggest that 20%
mass reduction is likely feasible for heavier vehicles for the rulemaking period using
lightweighting materials and manufacturing technologies that have already been adopted in high
volume vehicles. See joint TSD pp. 3-238 to 251. The accompanying detailed cost analysis in
the joint TSD indicates that the cost of reducing mass by 20% can potentially be economical.
See joint TSD section 3.3.5.5. The assumptions for mass reduction costs will be examined
during the mid-term evaluation.
The total amount of mass reduction used in the agencies' analysis for this rulemaking was
chosen based on the agencies' documented assumptions about how much mass reduction is
technologically feasible without compromising safety. Overall, technical feasibility paths for
manufacturers identified in this rulemaking include a minimal mass reduction, <5%, for the
majority of passenger vehicles due to safety constraints discussed in Sec II.G of the preamble.
Some trucks and CUV's have up to 15% to 20% mass reduction in the projected compliance
analysis which would tend to improve highway safety. As explained in preamble section II.G,
and as noted by a number of commenters (e.g. DRI, CBD), removing weight from heavier
vehicles should have a positive effect on vehicle safety.
As also described in detail in preamble section II.G, the agencies have carefully
documented potential compliance paths which are safety neutral, and thus do not depend on
significant mass reduction from vehicles weighing less than 3,106 pounds. While EPA has
shown a possible compliance pathway using one set of assumptions about the use of mass
reduction, there are many alternative pathways for compliance. As discussed in EPA RIA
section 3.5, this rulemaking is projected to decrease vehicle mass by approximately 4% (on
average) relative to the reference case. Rather than using mass reduction technology,
manufacturers could choose to use, for example, additional turbo-charging and downsizing,
hybridization, or any other available technology. No manufacturer is explicitly required by this
regulation to reduce the mass of their vehicles. Some manufacturers may choose not to reduce
mass at all. Others may choose to reduce mass by more than the levels projected here. Using the
methodology discussed in Section II.G, EPA has shown a compliance pathway that is projected
to produce no net additional fatalities.
12.2.4. Electrification, Fuel Cell, and Hybrid Technologies
Organizations Included in this Section
Alliance of Automobile Manufacturers
American Fuel and Petrochemical Manufacturers (AFPM)
Delphi Corporation
Environmental Consultants of Michigan
Honeywell Transportation Systems
International Council on Clean Transportation (ICCT)
Nissan North America, Inc.
Securing America's Future Energy (SAFE)
Tesla Motors, Inc.
Toyota Motor North America
United Automobile Workers (UAW)
12-45
-------
EPA Response to Comments
Volkswagen Group of America
Organization: Alliance of Automobile Manufacturers
Is the Needed Fueling Infrastructure Available to Enable PHEVs, BEVs and Fuel Cell Vehicles
to Penetrate the Market at the Levels Predicted? [EPA-HQ-OAR-2010-0799-9487-A1, p.22]
President Obama has set a goal to put one million plug-in electric vehicles on U.S. roads by
2015. To meet this goal, and to achieve even more ambitious targets for post-2015
electrification, the U.S. will need to invest heavily in electric charging infrastructure. The Boston
Consulting Group recently estimated that $8 billion in electric vehicle charging infrastructure
would be needed by 2020 to support the growing market for plug-in hybrid electric vehicles and
battery electric vehicles. In addition to cost, a variety of other electric mobility infrastructure
challenges remain, including development of uniform state, federal and local standards and
protocols. Last year, the Alliance and AIAM issued a paper identifying these specific barriers
and proposing a series of recommendations for addressing these challenges. Hydrogen
infrastructure is also needed to support the commercialization of fuel cell vehicles. [EPA-HQ-
OAR-2010-0799-9487-A1, p.22]
Organization: American Fuel and Petrochemical Manufacturers (AFPM)
AFPM believes that these projections of electrification are too high. This problem can be
corrected by employing smaller values for phase-in caps. In the Draft Joint Technical Support
Document EPA states that: "Ultimately, phase-in caps are determined by the agencies using
engineering judgment." 12 This engineering judgment is arbitrary and capricious. It departs from
reality and is calculated to support the proposed standards. It ignores the finding of the National
Research Council, with no explanation as to why its assumptions differ. AFPM recommends
lower values for this important parameter for the electrification technologies. The values used by
EPA and NHTSA in this proposal are unreasonably high. [EPA-HQ-OAR-2010-0799-9485-A1,
p.7]
Phase-in caps are used in EPA's Optimization Model for reducing Emissions of Greenhouse
gases from Automobiles (OMEGA) and in NHTSA's Compliance and Effects Modeling System.
Phase-in caps are a user input for individual technologies. For example, [EPA-HQ-OAR-2010-
0799-9485-A1, p.7] [There are two figures associated with this statement, please refer to EPA-
HQ-OAR-2010-0799-9485-A1, p.7]
These phase-in caps are optimistic and unrealistic. They contribute to the projected large increase
in electrification. [EPA-HQ-OAR-2010-0799-9485-A1, p.7]
The phase-in caps assumptions may look reasonable and/or small to some, but 20% of millions
of new cars and light-duty trucks represents millions of new electric cars and trucks. Given
consumers' historical rejection of these vehicles, AFPM is doubtful that this penetration will
occur in this timeframe. [EPA-HQ-OAR-2010-0799-9485-A1, p.8]
12-46
-------
Technical Assessment of the Proposed CC>2 Standards
This highlights the necessity of a good consumer choice model. The decision by EPA and
NHTSA to use poor phase-in caps based on inadequate engineering judgment leads to flawed
analyses. EPA and NHTSA should use a peer-reviewed consumer choice model and re-propose
standards for new LDVs after MY 2016. [EPA-HQ-OAR-2010-0799-9485-A1, p.8]
AFPM believes that the use of a realistic consumer choice model and appropriate assumptions
that model future behavior will lead NHTSA to promulgate lower CAFE standards based on a
lower expectation of hybrids, plug-in hybrids and all electric vehicles. EPA and NHTSA should
appreciate and understand the significance and implications of these projections, especially
consumer acceptance barriers associated with vehicle cost, limited driving range and recharging.
There is a large difference between the capability of automakers to produce vehicles with these
technologies, the ability of automakers to sell these vehicles, and the creation and dissemination
of the necessary recharging infrastructure. [EPA-HQ-OAR-2010-0799-9485-A1, p.8]
EISA requires NHTSA to increase CAFE standards for passenger and non-passenger
automobiles "to achieve a combined fuel economy average for model year 2020 of at least 35
miles per gallon" and to achieve the maximum feasible average standard for the fleet for model
years 2021-2030 (see section 102). As the discussion above on electrification shows, NHTSA's
proposal is not feasible and therefore is in conflict with its statutory authorization. The use of a
peer-reviewed consumer choice model and a new proposal would assist NHTSA's development
of a proposal that is feasible and coincides with Congress' mandate in this area. [EPA-HQ-OAR-
2010-0799-9485-A1, p.8]
12 - EPA, "Draft Joint Technical Support Document: Proposed Rulemaking for 2017-2025
Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy
Standards," EPA-420-D-11-901, November 2011, page 3-127.
Organization: Delphi Corporation
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17,2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 109-110.]
Second, vehicle electrification is shaping the future of automotive power and propulsion and will
continue to do so for many years to come as more drivers look to hybrid electric vehicles and
start/stop technology as a way to improve their efficiency and green vehicle choices. This market
is expected to grow steadily for the foreseeable future and will be affected by global government
regulations.
Organization: Environmental Consultants of Michigan
Hybrids Have Known Deficiencies Under Real World Conditions
12-47
-------
EPA Response to Comments
EPA conducted a study in 2006 confirming that hybrids operate substantially differently on the
road than they do during official testing. Based on a 2006 review of several independent studies
EPA concluded:
o Hybrid vehicles showed a slightly greater impact of aggressive driving on fuel economy than
conventional gasoline vehicles (33 percent lower fuel economy versus 29 percent lower fuel
economy for a conventional vehicle).
o Hybrid vehicles tended to show greater sensitivity to air conditioning operation than
conventional vehicles. The effect of air conditioning operation reduced hybrid fuel economy by
31 percent, compared to the 20 percent impact on conventional vehicle fuel economy.
o Overall, conventional gasoline vehicles averaged a cold temperature effect of about 11 percent
lower fuel economy, while the impact on hybrid vehicles averaged about 32 percent lower fuel
economy.
o The Cold Federal Test Procedure fuel economy with the heater/defroster on was significantly
lower than that with the heater/defroster off, ranging from 5.8 percent lower fuel economy (~1
mile per gallon lower on a non-hybrid vehicle) to 18.4 percent lower fuel economy (~8 miles per
gallon lower on a hybrid vehicle). Note the fuel economy tests used by EPA for the original fuel
economy labels were conducted with the air conditioning, heater and defrosters all switched to
the off position. [EPA-HQ-OAR-2010-0799-11760-A2, p.8]
Putting this in perspective, the 2012 gasoline powered Toyota Highlander loses about 1.3 miles
per gallon (mpg) when the air conditioning is on and loses about 0.2 mpg in cold weather with
the heater on based on EPA test data. The 2012 Highlander Hybrid on the other hand loses 15.2
mpg with the air conditioning is turned on and 10.1 mpg in cold weather with the heater on. Data
on the Prius is shown below: [EPA-HQ-OAR-2010-0799-11760-A2, p.8]
The table below shows the recent US EPA data comparing how typical driving conditions may
adversely impact a vehicle's fuel economy compared to the optimal driving conditions used in
the standard EPA laboratory test cycle. Note that the hybrid electric vehicles (HEV) did
substantially worse with the air conditioning turned on, during cold temperatures or utilizing
typical urban acceleration rates and high speed driving. [EPA-HQ-OAR-2010-0799-11760-A2,
p.9]
These differences in fuel economy equate to higher greenhouse gas emissions on the road. The
excess emissions documented in the table below demonstrate that hybrids emit more greenhouse
gases on the road under real world conditions than are counted in their compliance testing (a
negative number means lower emissions; a positive number means higher emissions). [EPA-HQ-
OAR-2010-0799-11760-A2, p.9]
Hybrids May Contain Defeat Devices
12-48
-------
Technical Assessment of the Proposed CC>2 Standards
The fact that air conditioning operation causes or contributed to lower fuel economy and higher
greenhouse gases one could argue that this is a "defeat device" which is expressly prohibited by
statute. [EPA-HQ-OAR-2010-0799- 11760-A2, p. 10]
o According to the Environmental Protection Agency, a defeat device means any device, system
or element of design which senses operation outside normal emission test conditions and reduces
emission control effectiveness. A defeat device includes any auxiliary emission control device
(AECD) that reduces the effectiveness of the emission control system under conditions which
may reasonably be expected to be encountered in normal operation and use unless such
conditions are included in the test procedure. A defeat device does not include such items that
either operate only during engine starting or are necessary to protect the engine (or equipment)
against damage or accident during its operation. See 40 CFR 89.107-96. An AECD is generally
deemed to be a defeat device if it is determined by EPA to reduce the effectiveness of an
emission control system in response to any accessory operating condition not encountered during
the Federal emission test. (EPA Advisory Circular 24). In simple terms, any time a vehicle
operates differently on the road than it operates during the official EPA test there is a potential
that this is due to what EPA defines as a defeat device.
o A classical example is the EPA decision regarding a change in engine operating conditions
when the air conditioning was turned on (A/C and the heater are turned off during official EPA
testing.) In 1995 EPA forced General Motors to recall half a million Cadillac's, GM was to pay
an $11 million fine, more than $25 million to recall and retrofit the polluting vehicles, and up to
$8.75 million on projects to offset emissions from these vehicles. These projects may include
buying back older vehicles or purchasing new school buses that burn cleaner fuels.
o EPA determined that GM relied on a computer chip to increase the engine idle speed by about
100 revolutions per minute (RPMs) which EPA thought was excessive and beyond what was
necessary to offset the additional load applied when the air conditioning or heater was turned on.
[EPA-HQ-OAR-2010-0799-11760-A2, p. 10]
So one must ask the question, why is hybrid electric vehicle technology not a defeat device?
During the official EPA testing the HEV typically operated in battery mode for a substantial
portion of the test with the engine off. During these tests, both the air conditioning and the heater
are off. When either the cabin heater or the air conditioning is turned on by the customer in real
world operation the engine turns on (or in the case of the models with electric air conditioners
the battery discharges faster which results in the engine turning on faster) thereby increasing
vehicle greenhouse gases and decreasing vehicle fuel economy. [EP A-HQ-O AR-2010-0799-
11760-A2, p. 11]
Conclusion
The bottom line is that EPA needs to reevaluate the costs and benefits of hybrid and all electric
vehicles in its rulemaking. [EP A-HQ-O AR-2010-0799-11760-A2, p.ll]
Organization: Honeywell Transportation Systems
12-49
-------
EPA Response to Comments
The long term environmental benefits of electric vehicles are also unknown once the upstream
emissions of generating electricity are accounted for. The emissions benefits of an electric
vehicle fleet are, from a well-to-wheel perspective, highly dependent on reconstituting the
nation's base energy structure to rely more exclusively on renewable energy sources and less on
fossil fuels such as coal. [EPA-HQ-OAR-2010-0799-9474-A1, p.4]
This environmental uncertainty of electric vehicles needs to be viewed against the proven
environmental and market benefits of enhancing internal combustion engines with innovations
such as turbochargers and advanced lightweight materials.3 The lead time and financial
constraints faced by OEMs require the industry to begin to choose investment now with regard to
vehicles for the model years covered by the first part of this rulemaking. Encouraging investment
towards electric vehicles at the expense of ICE vehicles places a heavy bet on an uncertain future
while potentially diminishing the more certain gains to be had through advanced ICE
technologies. The internal combustion fleet will continue to dominate for the foreseeable future,
making it a logical choice for investment with the greatest promise of return. EV mandates
requiring a singular investment approach suggest a solution which at best will be limited and at
worst wasted given market expectations. [EPA-HQ-OAR-2010-0799-9474-A1, p.4]
3 Diesel vehicles with turbo technologies offer an especially beneficial approach to securing
significant emissions gains. OEMs have invested heavily in developing diesel technologies for
the U.S. market, and there is growing demand for diesel vehicles in the U.S. Diesels offer
substantially better fuel economy over gasoline. Honeywell strongly supports any incentive that
would allow the U.S. to capture and benefit from the further deployment of diesel vehicles
during the model years covered by this regulation. [EPA-HQ-OAR-2010-0799-9474-A1, p.4]
Organization: International Council on Clean Transportation (ICCT)
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 29.]
I also applaud federal policy in identifying the positive role of electric vehicles as critical
technology to address urban and greenhouse gas pollution, fuel economy and reduced
dependence on fossil fuels. Electric drive technologies are inherently clean with zero tailpipe
emissions, and coupled with renewables, they are capable of zero well-to-wheel emissions and
will be necessary to reach 2050 greenhouse gas targets of over 80 percent.
Organization: Nissan North America, Inc.
Nissan is also committed to hybrid technologies. Nissan has developed a modular hybrid unit for
front wheel drive vehicles that can be applied to varying engine displacements. Mated to a 2.5L
supercharged 4-cylinder engine, our hybrid powertrain delivers V6-like power with improved
fuel economy. Mated to a small displacement 4cylinder engine (i.e. 2.0L), our hybrid powertrain
will deliver the power like a 2.5L engine and offer improved fuel economy. [EPA-HQ-OAR-
2010-0799-9471-A1, p.7]
12-50
-------
Technical Assessment of the Proposed CC>2 Standards
The proposed standards assume a significant market penetration of both advanced ICE
technology and hybrid technology. As set forth below, hybrid vehicle market penetration has
only recently expanded from initial purchasers of new technology, the innovators, to the early
adopters who can begin to educate and expand awareness about the new technology to a broader,
national market. Thus, widespread adoption of hybrids into the pragmatic majority of consumers
remains uncertain at this time. Only through a midterm review can the agencies have the
requisite certainty that the standards established for GHG emissions and suggested for CAFE
will in fact be technologically and economically feasible in MYs 2022-2025. [EPA-HQ-OAR-
2010-0799-9471-A1, p.7]
The proposed standards also anticipate a serious influx of transformational technology to reach
compliance. As the agencies made clear in the Second Supplemental Notice of Intent, '[i]n
achieving the level of standards described above for the 2017-2025 program, the agencies expect
automakers' use of advanced technologies to be an important element of transforming the vehicle
fleet.' See 76 Fed. Reg. 48,758, 48,760 (Aug. 9,2011). [EPA-HQ-OAR-2010-0799-9471-A1, p.7]
Nissan has led the way: (1) in investing in battery technology for the mass market, (2) in
working with the governments on every level to prepare the infrastructure, and (3) in supporting
government programs to ensure the long-term viability of low and zero emission vehicles. [EPA-
HQ-OAR-2010-0799-9471-A1, p.7]
Nissan began introducing the Nissan LEAF in the United States in December 2010 and has
already sold more than 10,000 Nissan LEAFs in the United States and over 20,000 worldwide.
The Nissan LEAF is not a niche vehicle-it is a full-service family sedan designed for range,
functionality and safety. The Nissan LEAF is a Top Safety Pick by the Insurance Institute for
Highway Safety and the first all-electric car to earn an overall 5 star safety rating from NHTSA.
The battery contains air-cooled, stacked laminated battery cells and is located below the seats
and rear foot space, keeping the center of gravity as low as possible and increasing structural
rigidity compared to a conventional five-door hatchback. [EPA-HQ-OAR-2010-0799-9471-A1,
p.7]
In addition to being an industry leader in EV technology and deployment, Nissan recently
announced its intention to introduce a PHEV model in 2015. Nissan will introduce additional
battery electric vehicles into the marketplace in the coming years. [EPA-HQ-OAR-2010-0799-
9471-Al,p.8]
Nissan also recently released its Next Generation Fuel Cell Stack (2011 Model) for FCVs.
Through improvements to the Membrane Electrode Assembly (MEA) and the separator flow
path, which make up the structure of Fuel Cell, Nissan significantly improved the power density
of Fuel Cell Stack to 2.5 times greater than its 2005 model and realized a world's best (among
auto manufacturers) 2.5 kW per liter. Integrally molding the supporting frame of the MEA
enabled stable, single-row lamination of the Fuel Cell, thereby significantly reducing its overall
size by more than half compared to conventional models. Finally, compared with the 2005
model, both the usage of platinum and parts variation has been reduced by 25%, thereby
reducing cost of the Next Generation Fuel Cell Stack to one-sixth of the 2005 model. Nissan
12-51
-------
EPA Response to Comments
continues to work on the development of practical applications of FCVs to realize a zero
emission society. [EPA-HQ-OAR-2010-0799-9471-A1, p.8]
While Nissan has taken leadership in electric vehicles throughout the world, the widespread
market adoption of the technology depends on broader industry investment and continued
government support through incentive programs. With state and local governments facing
budgetary constraints, economic uncertainties and potential market disruptions, the mid-term
review is necessary to ensure the ability for the industry to incorporate enough advanced
powertrain technology into the fleet to allow industry-wide compliance with the program in the
later years. Without such a review, the standards for the later years lack the requisite certainty to
assure that they will in fact be achievable. [EPA-HQ-OAR-2010-0799-9471-A1, p.8]
Organization: Securing America's Future Energy (SAFE)
Therefore, in addition to promoting the importance of improving fuel economy, which is of
critical importance, especially for the short- and medium-term, SAFE is promoting the
deployment of GEVs to replace petroleum powered vehicles and establish electricity as the
dominant means of powering our LDV fleet in the long-term. [EPA-HQ-OAR-2010-0799-9518-
Al,p.6]
SAFE believes that electrifying the light-duty transportation system is the best way to enhance
our national, economic, and environmental security in the long because:
1) Electrification allows our economy to reduce exposure to the global oil market;
2) Electrification promotes fuel diversity;
3) Electric vehicles will be powered by largely domestic fuels;
4) Electricity prices are generally more stable than oil prices;
5) Electrification has the potential to reduce carbon emissions. [EPA-HQ-OAR-2010-0799-9518-
Al,p.6]
Reduce Exposure to the Global Oil Market: As explained above, the United States dependence
on the global oil market imposes substantial economic and national security costs on the nation.
Using electricity to power light-duty vehicles can disconnect a portion of the fleet from the
global oil market and minimize the burdens of that dependence. [EPA-HQ-OAR-2010-0799-
9518-Al,p. 6]
Promotes Fuel Diversity: Petroleum is essentially the sole fuel for the nation's cars and trucks
and fuels 93 percent of our transportation system's energy needs. This reliance exposes the entire
transportation sector to the volatility endemic to the world oil market. Electricity, however, is
generated by a diverse set of fuels, including coal, nuclear, natural gas, hydroelectric, wind,
geothermal, solar, landfill gas, and others. An electricity-powered transportation system,
therefore, is one in which an interruption of the supply of one fuel can be made up for by others,
12-52
-------
Technical Assessment of the Proposed CC>2 Standards
and price volatility for one fuel is dampened by stability in others—a far cry from today, when a
single event on the other side of the globe can interrupt the flow of oil and dramatically increase
the cost of transportation in the United States. [EPA-HQ-OAR-2010-0799-9518-A1, pp. 6-7]
Domestic Portfolio of Fuels: While oil supplies are subject to a wide range of geopolitical risks,
the fuels that we use to generate electricity are generally sourced domestically. Satisfying our
transportation energy needs with these domestic fuels will not only reduce the economic risks
created by highly volatile oil prices, it will significantly lower the trade deficit. [EPA-HQ-OAR-
2010-0799-9518-Al,p. 7]
Reduced Price Volatility: Oil prices are highly volatile. The retail price of electricity is not.
Power prices reflect a wide range of costs. Generally, the cost of fuel represents a smaller
percentage of the overall cost of delivered electricity than the cost of crude oil represents as a
percentage of the cost of retail gasoline. This makes retail power prices less sensitive to any
volatility in fuel prices. Further, retail power prices are generally set to reflect the average cost of
wholesale prices overtime, promoting retail price stability. [EP A-HQ-OAR-2010-0799-9518-
Al,p.7]
Reduced Carbon Emissions: As EPA itself noted in the preamble to the proposed rule, EVs and
PHEVs have the potential to transform the carbon emissions profile of the light duty sector by
obtaining much or all of their power from grid electricity that could be produced from very low
GHG emission feedstocks or processes, and the potential for greater transformation if at some
point in the future there is comprehensive regulation of greenhouse gas emissions. [EPA-HQ-
OAR-2010-0799-9518-A1, p. 7]
Because of the role that GEVs can play in disconnecting the nation's economy from dependence
on global oil market, and the economic and national security consequences of that dependence,
SAFE supports a portfolio of policies intended to facilitate their penetration of the automotive
marketplace. [EPA-HQ-OAR-2010-0799-9518-A1, p. 7]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 150.]
We have been promoting plug-in vehicles for four reasons: First, the fuel that is used to power
them is domestic; second is a diverse portfolio for fuels; third, the price of power is much more
stable than the price of oil; and fourth, electricity has the potential to be much cleaner in the long
term.
In short, electricity has the potential to address a giant set of problems for our nation that no
other fuel can address. Yet, for many years, the cost of this technology is going to be more
expensive.
Organization: Tesla Motors, Inc.
12-53
-------
EPA Response to Comments
• EV technology is the most promising and cost-effective alternative to traditional internal
combustion engines. It is available now and at price points already lower than current
projections; [EPA-HQ-OAR-2010-0799-9539-A2, p. 1]
EVs are a commercially viable technology presently and are increasingly available in the current
marketplace due to innovative design and the emergence of new applications for existing
technologies. Lithium-ion batteries are a proven technology, currently utilized as the standard
power source for consumer electronics and increasingly identified for its potential in military,
aerospace and automotive applications. These batteries offer tremendous energy density, low
weight, and no memory effect. Additional research into lithium-ion batteries consistently yields
improvements in energy density, durability and intrinsic safety, while continuing to lower
costs. [EPA-HQ-OAR-2010-0799-9539-A2, pp. 4-5]
Tesla's real world experience demonstrates an EV technology cost that is highly competitive.
Again, this cost includes not only cells, but the attendant cooling, cell management and
disconnect unit as well. Specifically, battery costs for production of over 2,500 Tesla Roadsters
over the life of the program were in the range of $500/kWh. As the technology has improved and
Tesla has gained greater efficiencies, we have been able to lower the costs for Model S and X
even further to a point where battery technology is projected in the range of $350/kWh with
production of at least 20,000 units/year. By the time Tesla Motors projects high volume
production of Gen III platform at volumes of 100,000 to 200,000 units/year, we believe battery
costs will be well south of $350kWh. These cost estimates are based not in theory, but the actual
costs seen by Tesla Motors for EVs and power trains production. [EPA-HQ-OAR-2010-0799-
9539-A2, p. 5]
To this end, Tesla Motors strongly believes that EVs are a compelling proposition. Not only does
the Company believe that EVs are cost-effective from a manufacturing standpoint, but also from
the perspective of the total cost of ownership. When consideration of the cost of gasoline, oil
changes, and other routine maintenance is factored in, the cost to operate the Model S over eight
years will be $30,000 less than a comparably equipped (and priced) BMW 535i. Likewise, the
Tesla Gen III vehicle will cost approximately $17,000 less to operate than a Ford Fusion over
that same period.8 [EPA-HQ-OAR-2010-0799-9539-A2, p. 5]
Of course, while cost is a significant driver of EV adoption, so too is range and vehicle
efficiency. Tesla continues to push forward on development in these areas as well. By way of
illustrative example, if the current technology developed for Model S were installed in a Tesla
Roadster, instead of 245 miles on a single charge, the Roadster would have a range in excess of
330 miles on a single charge. Improvements are not achieved solely in terms of energy density in
the pack, but in several aspects of energy storage and power management. Tesla continues to
push forward on EV technology and predicts even higher battery pack energy density and longer
ranges as the technology continues to improve. [EPA-HQ-OAR-2010-0799-9539-A2, p. 6]
In sum, from Tesla's perspective, there is significant advancement both in the current and next
generation of EVs. Both EPA and NHTSA have a long history of successfully enacting
challenging standards that the industry can and does meet, from lead free gas and catalytic
converters, to Tier II emission standards and the existing CAFE standards. Tesla urges both EPA
12-54
-------
Technical Assessment of the Proposed CC>2 Standards
and NHTSA to continue the commendable pattern of pushing industry to drive innovation in the
area of fuel efficiency and GHG reduction. [EPA-HQ-OAR-2010-0799-9539-A2, p. 6]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 94.]
The benefits of EV technology are manifest: Zero emissions at point of use. Some of the prior
testaments have spoken to the national security implications of reduction of foreign oil. But too
little is said of the economic benefit of a transition away from the oil monopoly and
transportation, notably the fact that 300 billion a year spent on foreign oil, and this represents
about half of our trade deficit. It's worth imagining what that money would do if recycled in our
own economy. It's also a testament — EV technology, as it's currently being developed, is a
testament to how American innovation is driving a number of positive developments in national
security and economics, but also in job creation. Tesla Motors now employs just about 2,000
folks. And as we ramp up the production, we will be increasing several hundred more in this
calendar year.
8 Assumes Fusion retails for $25,000 and gets 40mpg at $3.50/gallon over 12,000 miles per year.
Tesla Gen III assumed to get 225wh/mi at $0.11/kWh and $30,000 selling price over the same
mileage.
Organization: Toyota Motor North America
Fuel Cell Readiness [EPA-HQ-OAR-2010-0799-9586-A1, p.23]
For this proposed rule, the agencies considered vehicle technologies that manufacturers could
use to improve the fuel economy and reduce GHGs in the 2017-2025 model year timeframe. In
doing so, assumptions were made about how currently available technologies could be
incorporated into vehicle product development programs to help comply with the proposed
standards. The agencies classified these as 'near-term' technologies, as many are anticipated as
potential compliance strategies for the 2012-2016 model year final rule. In addition, the agencies
evaluated other technologies that are not projected to be in production within the next 5 to 10
years. A number of these advanced technologies are categorized as being beyond the research
phase and were not considered for the purpose of evaluating the feasibility of the proposed
standards because of significant uncertainty in their development and ability penetrate the fleet in
large volumes. Fuel cell vehicles are one such technology, for which the NPRM states: [EPA-
HQ-OAR-2010-0799-9586-A1, p.22]
'While we expect there will be some limited introduction of FCEVs into the market place in the
time frame of this rule, we expect this introduction to be relatively small, and thus FCEVs are
not considered in the modeling analysis conducted for this proposal. ' [EPA-HQ-OAR-2010-
0799-9586-A1, p.22]
12-55
-------
EPA Response to Comments
We are concerned that this assessment is too cursory and could be misinterpreted. There have
been significant advances in fuel-cell stacks, dramatic reductions in system cost, and marked
improvement in system durability and cold weather operation. In addition, manufacturers have
announced vehicle introduction plans for fuel cell demonstration vehicles, beginning in 2015.
Automakers have proven the viability of fuel cell vehicles. We believe the biggest remaining
hurdle is refueling infrastructure. Toyota agrees with the agencies assessment that fuel cell
technology is one of the key future technologies for GHG reduction. We request that the
agencies' assessment of fuel cell vehicles in the final rule elaborate on the progress that has been
made to date and clarify that how infrastructure remains the primary challenge toward
commercialization. We also strongly encourage the agencies to support hydrogen infrastructure
development, in order to ensure the timely introduction of these vehicles. [EPA-HQ-OAR-2010-
0799-9586-A1, p.22]
Organization: United Automobile Workers (UAW)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 23-24.]
UAW members are also producing new technologies that may not reach large volumes for many
years but represent the long-term future of the industry. That includes hybrid transmissions,
electric drive components, lithium ion battery packs, and plug-in and pure electric vehicles.
Organization: Volkswagen Group of America
Volkswagen compared cost and effectiveness estimates for hybridization with those provided by
EPA in both the Notice of Intent (Sept-2010) and the Joint Draft Technical Support Document
(Joint TSD) which accompanied the NPRM. Volkswagen also examined HEV penetration rates
projected by EPA out to 2025. [EPA-HQ-OAR-2010-0799-9569-A1, p. 13]
Accurate projections for the cost of advanced technologies, especially vehicle electrification are
a challenge. Volkswagen believes that significant uncertainty will remain with regards to pricing
of energy storage for many years to come. Failure to drive down costs of electric storage will
directly impact the market acceptance and resulting penetration of electrified vehicles. EPA has
predicted that the NPRM will force upwards of 30% HEV technology into Volkswagen's
compliance fleet for 2021 with an additional 6% EV and 1% PHEV being required to achieve
compliance. [EPA-HQ-OAR-2010-0799-9569-A1, p. 13]
Volkswagen is concerned that the projected 30% HEV penetration rate is unrealistic and grossly
exceeds our expectations for hybrid sales rates. Volkswagen recognizes that this is only an
exercise conducted by the agency to analyze potential compliance pathways. Regardless, HEV
adoption by consumers remains challenging even when long-term fuel savings can be calculated
to outweigh the higher upfront vehicle price. US adoption of HEV vehicles remains between 2-
3% per year even in light of recent fuel price increases. [EPA-HQ-OAR-2010-0799-9569-A1, p.
13]
12-56
-------
Technical Assessment of the Proposed CC>2 Standards
EPA has projected that the industry on average will increase electrified vehicles sales to
approximately 7% in 2020 and 18% in 2025 1, the majority of which are hybrid vehicles.
Increased adoption by consumers of hybrids and other electrics to these levels remains a critical
and difficult to predict factor. Interest in HEV technologies obviously peaks during times of
escalated fuel prices. However, this is often followed by receding interest as fuel prices either
drop or stabilize. It is also important to note that HEV interest is often motivated by factors other
than fuel savings such as access to High Occupancy Vehicles lanes, premium parking, lower
property taxes, etc. Recent trends at State and local levels to eliminate some of these perks may
further deteriorate interest, e.g. California expiration of HOV access for certain hybrids. [EPA-
HQ-OAR-2010-0799-9569-A1, p. 13]
EPA's base assumption with the proposal is that consumers will react to long-term fuel savings,
even with higher upfront costs for higher efficiency vehicles, and that the savings will motivate
consumers to purchase vehicles such as hybrids. The NPRM incorporates AEO fuel price
predictions as described in Section 4.2.2 of the Joint TSD. AEO predicts gasoline prices as
shown in Table 2-6. AEO predicts average gasoline prices to remain essentially constant between
2012 and 2025. This means that consumers will face similar 'price at the pump' in real dollars
that they see now. Regardless of short-term price swings, AEO sees no significant deviation from
current pump prices. [See Table 2-6 on p. 14 of Docket number EPA-HQ-OAR-2010-0799-
9569-A1] [EPA-HQ-OAR-2010-0799-9569-A1, p. 14]
As shown in Figure 2-4, following fuel price increases in early 2000's, there was a notable uptick
in customer interest of hybrid vehicles. The fuel price spikes in 2007-2008 timeframe even
brought about irrational consumer behavior in which customers traded-in large trucks to
purchase small cars, sometimes at considerable loss. However as fuel prices stabilized in the mid
$3 per gallon range, sales in larger vehicles and pick-up trucks returned. Often customers who
had moved into smaller vehicles complained about the lack in comfort and space of the smaller
cars. [See Figure 2-4 on p. 14 of Docket number EPA-HQ-OAR-2010-0799-9569-A1] [EPA-
HQ-OAR-2010-0799-9569-Al,p. 14]
As shown in Figure 2-4, following fuel price increases in early 2000's, there was a notable uptick
in customer interest of hybrid vehicles. The fuel price spikes in 2007-2008 timeframe even
brought about irrational consumer behavior in which customers traded-in large trucks to
purchase small cars, sometimes at considerable loss. However as fuel prices stabilized in the mid
$3 per gallon range, sales in larger vehicles and pick-up trucks returned. Often customers who
had moved into smaller vehicles complained about the lack in comfort and space of the smaller
cars. [See Figure 2-4 on p. 14 of Docket number EPA-HQ-OAR-2010-0799-9569-A1] [EPA-
HQ-OAR-2010-0799-9569-A1, p. 14]
Figure 2-4 illustrates some recent market trends combined with projections within the proposal.
What is most notable is recovery in the truck sector following the late 2007-2009 drop off due
primarily to the US recession. During this time period the industry as a whole dropped
significantly from around 16 million units to 10 million units. For 2011, the truck segment has
seen accelerating recovery, once again outpacing overall car sales. Large pick-ups have seen
notable gains with the F150 and Silverado/Sierra once again taking the top two sales
positions. [EPA-HQ-OAR-2010-0799-9569-A1, p. 15]
12-57
-------
EPA Response to Comments
Hybrid penetration rates may then be challenged to move from the 2-3% range to upwards of 7%
and 18% in 2021 and 2025 respectively. Especially with gains expected to be made with
conventional engine technology, Volkswagen sees no significant motivation which would drive
customer interest in hybridization to these extremes. [EPA-HQ-OAR-2010-0799-9569-A1, p. 15]
1 Table 3.9-4 EPA RIA
Response:
The American Fuel and Petrochemical Manufacturers (AFPM) commented that our
phase-in caps for electrification are too high resulting in projections of electrification being too
high. EPA's phase-in caps are presented in Table 3-130 of the joint TSD. There we show our
caps for MYs 2016, 2021 and 2025 as 15%/30%/50% for HEVs, 6%/l 1%/15% for EVs and
5%/10%/14% for PHEVs. In the final analysis, we have lumped mild HEVs in with HEVs so
that the caps limit HEVs+mild HEVs to 15%/30%/50%. We disagree that these caps are too
high. We remind the commenter that the caps are only maximum limits placed on OMEGA (for
each manufacturer), they are not our projections for actual technology penetrations for the fleet.
AFPM suggests that we have used the purportedly high caps to support the standards, implying
that the standards can only be met with penetration rates that are higher than possible (according
to AFPM). In fact, we have projected a feasible compliance pathway which relies very little on
electrification to the strong hybrid (P2 HEV), EV or PHEV level. As shown in preamble Tables
111-26 through 111-29, our control case has essentially the same strong HEV penetration as shown
in the reference case (i.e. very little addition from 2017 through 2025 beyond what's already in
2016), and the combined EV/PHEV penetration is just 2%. In the case of mild HEVs, we have a
much more significant penetration rate of 26% but we believe that level of penetration can be
met by industry given that a sizable number of essentially the same technology is being sold
today (e.g., the GM eAssist sold on the Buick LaCrosse and Regal and the Chevrolet Malibu)
and the technology is less complex than the strong HEV or EV/PHEV technologies. As regards
the AFPM comments on consumer choice modeling, we address such issues in section 18.1 of
this Response to Comments document.
Regarding comments from Delphi Corporation, we appreciate your comments in support
of the potential for hybrid electric vehicles and start/stop technology to reduce the CO2 emissions
for all classes of vehicles.
Regarding comments from the Environmental Consultants of Michigan, EPA and
NHTSA acknowledge and discuss in detail the on-road fuel economy "gap" in secton 4.2.1 of the
TSD. This gap not only exists for strong HEVs. It also exists for vehicles with more
conventional drivetrains. Included in this section is a discussion of the gap used by the agencies
for electric drivetrains (30%) and the gap for the use of liquid fuels (20%) along with a
discussion of EPA 5-cycle and derived 5-cycle MPG versus 2-cycle MPG. EPA does not need to
reevaluate the costs and benefits of hybrid and all electric vehicles since the in-use gap for both
conventional and hybrid vehicles has been accounted for. The agencies also do not project that a
significant increase in the use of strong-HEVs will be necessary to comply with the 2017-2025
GHG standards. The commenter's remarks and specific examples were primarily with regards to
12-58
-------
Technical Assessment of the Proposed CC>2 Standards
strong HEV's like the Toyota Highlander HEV. Our analysis shows that strong HEVs will see
only a minor increase from today's levels of approximately 4% of vehicle sales to approximately
5% of vehicle sales in 2025. Our analysis projects a much larger increase in sales of mild HEVs
(approximately 30% of sales). Because the operation of mild HEV applications is limited to
start/stop and mild launch assist, the differences between 2-cycle and 5-cycle MPG and CO2
emissions would be considerably less than for strong HEVs. The comments with respect to
HEVs being defeat devices are completely without merit. Like other light-duty vehicles, HEVs
are subject to SFTP standards and to cold CO standards, and thus are tested under high
temperature conditions with AC active (SC03 test cycle), under very aggressive driving
conditions (US06 test cycle) and under cold winter conditions (Cold CO test). CO2 emissions of
more conventional vehicles also show differences during cold temperature, high temperature/AC
and aggressive driving conditions, which can be seen in the differences between 2-cycle and 5-
cycle CO2 and MPG results for these vehicles.
Regarding comments from Honeywell Transportation Systems, we thank you for your
comments and providing this additional information. We look forward to obtaining more of this
type of information to inform our future work.
Regarding comments from the International Council on Clean Transportation (ICCT),
and the United Automobile Workers (UAW), we appreciate your comments in support of the
potential for electric vehicle technology to reduce the CO2 emissions for all classes of vehicles.
Regarding comments from Nissan North America and Toyota Motor North America,
Inc., we appreciate your comments in support of the potential for electric vehicle technology to
reduce the CO2 emissions for all classes of vehicles along with your efforts to introduce fuel cell
vehicles. We agree the mid-term review will be used to evaluate the progress of the technologies
used to meet the standards.
Regarding comments from Securing America's Future Energy (SAFE), and Tesla Motors,
Inc., we appreciate your comments in support of the potential for electric vehicle technology to
reduce the CO2 emissions for all classes of vehicles while simultaneously decreasing our
dependence on unstable sources of petroleum and increasing our energy security.
Volkswagen Group of America commented that our electrification penetration rates for
VW in MY2021 were overly aggressive. In the proposal, we estimated VW's penetration rates
at 30% HEV, 6% EV and 1% PHEV. In our final analysis, we estimate VW at 15%/0%/0%
penetration of HEV/EV/PHEV in the MY2021 reference case and l%/6%/0% penetration of
HEV/EV/PHEV in the MY2021 control case along with a 29% penetration of mild HEVs.
Therefore, we are actually projecting a significant decrease in HEV penetration and an increase
of both mild HEVs and EVs compared to the analysis presented at proposal. We do not believe
this projected compliance pathway poses the issues of consumer acceptance that VW posits in its
comments. Moreover, and importantly, this represents one compliance pathway for VW, the
pathway that we consider to be the most cost effective. VW may choose a different approach
and is not constrained from doing so. . For example, VW has traditionally been a strong
supporter of diesel technology. Nothing in the final rule precludes VW from using diesel
technology to comply if VW believes that this is a more promising compliance pathway.
12-59
-------
EPA Response to Comments
12.2.4.1. ANL Battery Model
Organizations Included in this Section
International Council on Clean Transportation (ICCT)
Tesla Motors, Inc.
Organization: International Council on Clean Transportation (ICCT)
8. Many, if not most, future Li-ion batteries will use air-cooling. Future versions of the ANL
BatPac model should include an option to select either air or liquid cooling. [EPA-HQ-OAR-
2010-0799-9512-Al,p. 3]
8) Battery Cooling System Cost
The ANL report on the BatPac battery cost model 26 includes an Active Cooling System section
and briefly explains why Water-50% glycol was selected:
There are several choices of coolant that have been considered for cooling battery packs
including air from the cabin, which may be heated or cooled, water-ethylene glycol solutions and
dielectric liquids such as transformer coolants. Air is the least expensive, but it is less effective
than the liquids because of its poor conductivity, the need for large flow passages and high
pumping power. Dielectric liquids are expensive, but have the advantage of being compatible
with terminals and other parts at electrical potential. Water-50% glycol solution is inexpensive
and has good conductivity; we have selected it as the coolant for this study.' [EPA-HQ-OAR-
2010-0799-9512-Al,p. 21]
Unfortunately, the general design select for cost analysis does not allow for air cooling:
'We selected a general cell and battery design that can be adapted to all of the electric-drive
batteries from micro-HEVs packs to EV packs (section 2). This design incorporates a
hermetically sealed module closure. Unfortunately, the enclosure does not have sufficient surface
area to be cooled effectively by air.' [EPA-HQ-OAR-2010-0799-9512-A1, p. 21]
Section 5.2.3.3 Balance of Thermal Management System acknowledges that air cooled systems
are less expensive and are more likely to be used in micro HEVs and HEV-HPs. In addition, air-
cooling was studied by the authors of the BatPac report (docket item EPA-HQ-OAR-2010-0799-
1078) and presented at the Electric Vehicle Symposium in 2009 and 2010.27,28 The initial cell
design for those studies involved flat-wound cells. Flat-wound cells have more surface area and
can be effectively cooled by air. Finally, it should be noted that the Nissan Leaf battery pack
does not use liquid cooling, only a circulating fan inside a sealed battery pack. It is inappropriate
to exclude air-cooling in the modeling of battery cost. [EPA-HQ-OAR-2010-0799-9512-A1, p.
22]
12-60
-------
Technical Assessment of the Proposed CC>2 Standards
The ICCT strongly recommends that future versions of the BatPac model include an option to
select either air or liquid cooling. [EPA-HQ-OAR-2010-0799-9512-A1, p. 22]
26 ANL, 2011, Modeling the Performance and Cost of Lithium-Ion Batteries for Electric-Drive
Vehicles, Final Report prepared by Paul A. Nelson, Kevin G. Gallagher, Ira Bloom, and Dennis
W. Dees, Argon National Laboratory, Argonne, IL' Docket EPA-HQ-OAR-2010-0799-1078
27 Nelson PA, Santini D. J' Barnes J., Factors Determining the Manufacturing Costs of Lithium-
Ion Batteries for PHEVs, Electric Vehicle Symposium 24, Stavanger, Norway, May 13-16, 2009.
28 Santini D.J., Gallagher K. G., Nelson P. A., Modeling of Manufacturing Costs of Lithium-Ion
Batteries for HEVs, PHEVs, and EVs, Electric Vehicle Symposium 25, Shenzhen, China, Nov.
5-9,2010.
Organization: Tesla Motors, Inc.
The battery packs used by Tesla Motors are the result of innovative systems engineering and the
Company's continual drive to forward advances in lithium-ion cell technology. Starting with the
18650 form-factor cells, Tesla takes advantage of all aspects of cell and pack design to optimize
not only energy density, but structure and safety as well. For example, the 18650 cells used in
Tesla vehicles and power trains allow for innovative packaging while providing an incredible
level of safety not matched by any other lithium ion technology. Specifically, the unique
properties of the smaller cell size enables efficient heat transfer, allow for precise charge
management, improve reliability, and extend battery pack life. Tesla has also developed a unique
and proprietary lithium ion chemistry engineered specifically for EVs. This chemistry has
resulted in EV quality cells that have the highest energy density in the industry. [EPA-HQ-OAR-
2010-0799-9539-A2, p. 5]
As noted in the NPRM, EPA and NHTSA have relied upon the battery cost model developed by
Argonne National Laboratory for the Vehicle Technologies Program of the U.S. Department of
Energy - Office of Energy Efficiency and Renewable Energy. Tesla understands that this model
considers the vehicle application's power and energy requirements, which are two of the
fundamental parameters when designing a lithium-ion battery for an HEV, PHEV, or EV.
Though we appreciate the efforts of those at ANL and DOE, Tesla Motors supports a more
comprehensive approach to assessing the battery cost. When calculating cost values, Tesla does
not price cells alone, but factors in all the costs of the battery and attendant systems including
cell management, thermal management and the disconnect unit. Tesla believes this is a more
accurate method of cost calculation. [EPA-HQ-OAR-2010-0799-9539-A2, p. 5]
Response:
Regarding comments from Tesla Motors Inc, we agree that when analyzing the
manufacturing costs of future HEV, PHEV and EV battery packs, all of the costs of the battery
and attendant systems including cell management, thermal management and the disconnect unit
12-61
-------
EPA Response to Comments
should be included. That is why, in part, that EPA selected the ANL BatPaC model. EPA's cost
analysis in the NPRM as described in the draft TSD included cell management, thermal
management and the safety disconnect. This cost analysis was further refined for the final rule
(see Chapter 3.3.3.9 of the joint TSD) and included options for selecting either:
1. Forced cabin-air cooling of the battery pack along with the necessary redesign of cell
spacing to accommodate air cooling.
2. Liquid-cooling using glycol-water coolant and, in the case of PHEV applications, a
dedicated lower-temperature coolant loop.
EPA selected the use of air-cooling for micro-HEV and HEV applications similar to the
systems used for the Li-ion battery pack in the 2012 Hyundai Sonata HEV. EPA selected the use
of liquid cooling for PHEV and EV applications similar to the cooling systems used for the GM
Chevrolet Volt and the Ford Focus Electric. While the Agency acknowledges that air-cooled and
passively-cooled systems may be appropriate for some EV applications, we decided that a more
conservative approach was necessary to provide battery adequate pack cooling under all ambient
conditions and for a broader range of vehicle applications than what is currently available.
12.3. Cost of COz-Reducing Technologies
Organizations Included in this Section
Aluminum Association's Aluminum Transportation Group
Center for Biological Diversity
Ceres
Delphi Corporation
Environmental Consultants of Michigan
International Council on Clean Transportation (ICCT)
National Association of Clean Air Agencies (NACAA)
Natural Resources Defense Council (NRDC)
Organization: Aluminum Association's Aluminum Transportation Group
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 226-227.]
As we think about light-weighting and advanced materials, the other question that comes up after
safety is cost. Clearly strong, affordable carbon reducing materials are being used at an
increasing rate to meet down-weighting objectives now and in the future. Aluminum is widely
recognized as a cost-effective choice for reducing weight in automotive bodies, individual
components, and vehicle structures. As auto makers turn to greater use of aluminium, secondary
weight reductions are emerging as a major cost savings enabler. As we get larger and larger
weight reductions, we're able to make larger and larger reductions in vehicle support systems.
12-62
-------
Technical Assessment of the Proposed CC>2 Standards
Organization: Center for Biological Diversity
Moreover, the costs to manufacturers of adding technologies to increase their fuel efficiency are
significantly overstated. In fact, it will be easier and far less costly to comply with any of the
alternatives discussed in the NPRM than the Agencies state. The rapidity of improvements in
fuel efficiency technology and the reduction in the costs of those technologies over the last
decade has been startling. For example, as discussed in detail by comments submitted to this
rulemaking by the International Council on Clean Transportation ("ICCT"), the National
Research Counsel estimated in 2001 that turbocharging and downsizing would improve fuel
economy by 5-7%, but by 2011 these technologies were estimated to improve efficiency by 12-
20 percent, nearly three times the rate of improvement predicted, all due to accelerating
technological advances; estimated manufacturing costs for turbocharging systems have fallen
from $815 to $478 in three years; and adding 6-speed automatic transmission was estimated to
cost $215 in 2011 but now is estimated to save $13.00. Similarly, the cost of light-weighting is
significantly overstated. But the Agencies do not take either of these trends - rapid technological
improvement and significant cost reductions - into account in their cost-benefit analysis. Indeed,
instead of assuming greater cost reductions in the later years of the rulemaking, the Agencies
assume larger costs in those years. These errors must be corrected. [EPA-HQ-OAR-2010-0799-
9479-A1, p. 7]
Organization: Ceres
The analysis was also conservative as to assumptions regarding the costs and penetration of plug-
in technologies; it focused on low cost technologies, although many predict higher penetration
and decreasing costs of these technologies in 2020. Given the analysis' focus on low cost
technologies, the vast majority of improvement in fuel economy was met with improvements in
internal combustion engines. [EPA-HQ-OAR-2010-0799-9475-A1, p. 2]
Organization: Cuenca, M.
Transportation is critical to our quality of life and the EPA's regulation could increase the cost of
a new vehicle by $6,000 according to the Center for Automotive Research and $5,000 according
to the National Automobile Dealers Association. This price increase would lead to a reduction of
tens of thousands of jobs. [EPA-HQ-OAR-2010-0799-10142-A1, pp. 1-2]
Organization: Delphi Corporation
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 110.]
Finally, I recommend that the National Research Council technology cost estimates and
implementation cadence data be included in the agencies' analyses and be considered a primary
source of information. Industry reports and other analyses can also be used to provide even more
insight and sensitivity.
12-63
-------
EPA Response to Comments
Organization: Environmental Consultants of Michigan
The Agency is proposing stringent greenhouse gas standards that would fundamentally change
the light duty vehicle and truck market. A look at the 2012 model year vehicles shows seven
current models; three all electric vehicles, three hybrid electric vehicles and one hydrogen fuel
cell powered vehicle would meet the proposed standards. [EPA-HQ-OAR-2010-0799-11760-A1,
p.l]
While there is scant data on the true costs of all electric vehicles there are data on the hybrids.
Hybrid electric vehicle (HEV) propulsion systems were first introduced in the United States in
1999. Since that time over 2 million HEVs have been sold. Eighty-eight percent of these HEVs
were produced by Toyota and Honda. The Toyota Prius is the single largest selling hybrid
representing more than half the hybrids on the road today in the United States. The Honda Civic
represents 11 percent of the hybrids on the road in the United States and is the second highest
selling hybrid. Both these vehicles would meet the 2025 model year proposed standards. [EPA-
HQ-OAR-2010-0799-11760-A1, p.l]
According to two standard valuation guides for estimating the average trade-in value, even
though the Prius and the Civic carry a substantial premium initial purchase price based on
manufacturer's suggested retail price by the time they are eight years old they are actually worth
less than their gasoline counterparts. The same applies to the next two highest selling hybrids the
Camry and the Highlander. [EPA-HQ-OAR-2010-0799-11760-A1, p.l]
This raises the question, do hybrids really save consumers money? Even though a hybrid will
save on fuel costs assuming they achieve the EPA fuel economy label value, the higher financing
costs, sales tax, depreciation and insurance costs more than offset the fuel savings according to
the True Cost of Ownership calculations on the Edmunds.com website. [EPA-HQ-OAR-2010-
0799-11760-Al,p.3]
For every mile per gallon the fuel economy label is overstated, an extra $120 is added onto the
cost of ownership. Conversely, for the Prius to achieve a true cost of ownership lower than the
Camry, fuel prices would have to exceed $6.55 per gallon. For the Prius to achieve a true cost of
ownership lower than the Corolla, fuel prices would have to exceed $13.01 per gallon. [EPA-
HQ-OAR-2010-0799-11760-A1, p.4]
The Honda Civic Hybrid also has a higher true cost to own compared to the gasoline Civic.
[EPA-HQ-OAR-2010-0799-11760-A1, p.4]
For every mile per gallon the fuel economy label is overstated, an extra $154 is added onto the
cost of ownership. Conversely, for the Civic Hybrid to achieve a true cost of ownership lower
than the gasoline version, fuel prices would have to exceed $8 per gallon. [EPA-HQ-OAR-2010-
0799-11760-Al,p.5]
Looking at the third highest selling hybrid, the Toyota Camry versus the gasoline Camry, the
cost to own the hybrid is higher. [EPA-HQ-OAR-2010-0799-11760-Al, p.5]
12-64
-------
Technical Assessment of the Proposed CC>2 Standards
For every mile per gallon the fuel economy label is overstated, an extra $194 is added onto the
cost of ownership. Conversely, for the Camry Hybrid to achieve a true cost of ownership lower
than the gasoline version, fuel prices would have to exceed $10.83 per gallon. [EPA-HQ-OAR-
2010-0799-11760-Al,p.6]
Continuing the analysis to the fourth largest selling hybrid, the Toyota Highlander, the true cost
of the hybrid is higher than the gasoline hybrid. The rationale for all of these cases is the same.
[EPA-HQ-OAR-2010-0799-11760-A1, p.6]
For every mile per gallon the fuel economy label is overstated, an extra $385 is added onto the
cost of ownership. Conversely, for the Highlander Hybrid to achieve a true cost of ownership
lower than the gasoline version, fuel prices would have to exceed $9.22 per gallon. [EPA-HQ-
OAR-2010-0799-11760-A1, p.7]
The higher initial purchase price of hybrids leads to higher financing costs, higher sales taxes,
higher insurance costs and because of the added weight of the battery higher registration fees.
These added costs more than offset the lower fuel costs. All electric vehicles will have higher
financing costs, higher sales taxes, higher insurance costs and because of the added weight of the
battery higher registration fees. If the higher depreciation of hybrids is due in part to the
anticipated battery replacement cost, all electric vehicles will continue this trend of rapid
depreciation. [EPA-HQ-OAR-2010-0799-11760-Al, p.7]
Organization: International Council on Clean Transportation (ICCT)
2. The impact of computer-aided design is especially important for lightweight materials. None
of the existing studies on lightweight material costs are adequate. The results of Lotus and FEV
lightweight material studies will be far more accurate for future designs and must be used to
assess weight reduction costs for the final rule. [EPA-HQ-OAR-2010-0799-9512-A1, p. 2]
2) Lightweight Material Costs
The cost of lightweight materials in the proposed rule is roughly twice that in the TAR. It is
important to understand that computer simulations will especially impact lightweight material
design. In the past, interactions between the thousands of parts on the vehicles and their impacts
on safety, ride, noise, and vibration were impossible to predict. [EPA-HQ-OAR-2010-0799-
9512-Al,p. 8]
Optimization of materials was a long, slow process of gradually changing a few parts at a time to
avoid unanticipated problems. Secondary weight reductions were similarly difficult to achieve.
The recent development of sophisticated and accurate vehicle simulations is opening up a new
world. The initial use of these models was to improve safety design. The simulations are so
effective that 5-star crash ratings became almost universal and NHTSA had to revise their rating
criteria for the 2011 model year. The simulations are continuing to rapidly improve, to the point
where they are starting to be used to simultaneously optimize the material composition, shape,
and thickness of every individual part, including secondary weight reductions. [EPA-HQ-OAR-
2010-0799-9512-A1, p. 9]
12-65
-------
EPA Response to Comments
This shift in material design capabilities also impacts the cost to reduce vehicle weight. Previous
lightweight material cost studies did not assess part interactions and secondary weight
reductions. While they may have accurately reflected historical costs for lightweight materials,
they all overstate the cost of future vehicle weight reduction. Studies in progress by Lotus and
FEV are using highly sophisticated simulation models to optimize part materials and
design. [EPA-HQ-OAR-2010-0799-9512-A1, p. 9]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 195.]
The results of Lotus and FEV lightweight material studies will be far more accurate of future
designs and must be used to assess weight reduction costs for the final rule. [EPA-HQ-OAR-
2010-0799-9512-A1, p. 9]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 196-197.]
ICCT is also paying FEV to do additional teardown cost assessments in connection with our
work in Europe. These include updating the future hybrid costs, new cost assessments for
advanced diesel engines, basic start/stop systems, manual transmissions and cool EGR systems.
These results will be shared with EPA and NHTSA as they become available.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 29-31.]
The ICCT agrees that the best way to derive direct technology to cost estimate is to conduct real-
world tear-down studies. Not only is this likely to be more accurate than supplier and
manufacturer estimates, but the results are public, greatly increasing the transparency of the cost
information.
In our work, as well as the work conducted by the EPA and CARB, the issue of light weighting
of vehicles has proven to be one of the most exciting and fertile areas for improving fuel
economy without incurring exorbitant costs or jeopardizing safety. As Mr. German stated,
previous lightweight material cost studies did not assess part interactions and secondary weight
reductions.
Studies in progress by Lotus and FEV are using highly sophisticated simulation models to
optimize part materials and design. The results of these studies will be far more accurate for
future designs and must be used to assess weight reduction for the final rule. We believe that
these studies will be available for inclusion in the final rule. They are likely to show costs of
lightweighting to be lower than envisioned in the proposed NPRM as well as in the final 2012 to
'16 rule.
These are but two examples where we feel that the costs of the proposal are likely to be too high.
And we feel fully confident that the technology benefits representative of another 13 years of
development will result in costs much lower than $2,000.
12-66
-------
Technical Assessment of the Proposed CC>2 Standards
Organization: National Association of Clean Air Agencies (NACAA))
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 41.]
Second, EPA projects the cost of new technology will add on average about $2,000 to the price
of a vehicle.
We recognize the consumers will recoup this cost. However, if vehicles equipped with the
technologies needed to meet model years 2025 emissions are introduced earlier, then the
projected additional cost should be lower than $2000.
Organization: Natural Resources Defense Council (NRDC)
NHSTA should remove sensitivity analyses that test cost estimates that are inapplicable and
misleading for the proposed rules timeframe of 2017 and beyond, especially the near-term cost
estimates from the National Academies of Science. [EPA-HQ-OAR-2010-0799-9472-A2, p. 4]
Response:
Regarding the comment from the Aluminum Association's Aluminum Transportation
Group, we too are concerned with both safety and cost, and have performed detailed analyses on
both of these topics which are presented in Preamble HID, II.G and RIA chapters 3 and 4.
Regarding the comments from the Center for Biological diversity, that we have significantly
overstated costs, we do not agree. We have made significant effort to make the best possible
direct cost estimates. Further, we have made significant effort to include only those indirect
costs that would likely change in response to new regulations. Lastly, we have incorporated
manufacturer learning at rates used for years by EPA and that are typical for manufacturing-
heavy industries like the auto industry. As for the comments specific to mass reduction costs, we
do not disagree that we have perhaps overstated those costs. In fact, we sought to have better
cost estimates ready in time for the final rule. Unfortunately, that effort was not completed in
time for inclusion in the final rule and, as such, we were forced to use the same costs as were
presented in the proposal. As the now final report on that light weighting cost effort shows
(EPA-HQ-OAR-2010-0799 "Light Duty Vehicle Mass Reduction and Cost Analysis - Midsize
Crossover Utility Vehicle", FEV, 2012), the costs used in our proposal and our final rule could
be high. Importantly, we conducted a sensitivity on weight reduction costs in which the low side
sensitivity included costs set to 40% below the final rule values. In this case, as in the primary
analysis, OMEGA projection of the use of weight reduction technology is actually quite low (4%
mass reduction technology applied in the 2025MY reference case and 8% in the control case, for
a net of 4%). and is driven not by cost but by safety concerns. Given this safety analysis, having
lower costs for weight reduction technologies would not produce significantly lower program
costs or a different resultant standard level. Lastly, we fail to understand the comment that,
"instead of assuming greater cost reductions in the later years of the rulemaking, the Agencies
assume larger costs in those years." In no part of our analysis have we estimated increased unit
12-67
-------
EPA Response to Comments
costs for any technology. Our analysis might show higher costs for a technology in later years
due to higher application rates (i.e., 10% weight reduction costs less than 15% and 20%), but
10% weight reduction (for example) in 2025 will always cost less than in 2016 in our analysis.
As for comments from Ceres, that we have focused our analysis on low cost technology
and, as such, compliance is done largely via low cost technology, we must disagree. We have
included a very broad list of technologies ranging from low cost to high cost, from low friction
lubes to full battery electric. In our analysis, rather than focusing on low cost technologies, as
suggested by the comment, we have focused on the most cost effective technologies - those
technologies that provide the most attractive $/% improvement in GHG emissions. This is the
most likely outcome in an efficient market and a reasonable approach to regulatory cost
estimation. Lastly, our analysis should not be taken as predicting the future. Instead, our
analysis seeks to show a possible path to that future. Each manufacturer is able to use its own
preferred technologies - diesel, hybrid, plug-in hybrid, etc. - provided compliance can be
achieved. If we have, in fact, been conservative regarding our plug-in cost estimates, then
perhaps more plug-ins will be sold than our analysis suggests. Presumably, that would occur
only if plug-ins provide a more cost effective solution than the technologies they replace.
Regarding the comment from M. Cuenca, we note that the NADA estimate of $5,000 is
based on combining the costs of the MY 2011 CAFE rule, the MYs 2012-2016 CAFE/GHG rule,
and the proposed MYs 2017-2025 rule. EPA has carefully examined the costs and benefits of
this rule and has appropriately included the impacts of the MYs 2012-2016 rule in the baseline
with which those costs and benefits are compared. Thus, the cost of the earlier rule is reflected in
our analysis. In addition, the NADA estimate assumes that indirect costs for all technologies
equal the direct costs, by using a retail price equivalent multiplier of 2.0. EPA's cost estimates
take into account that indirect costs for new technologies vary with the complexity of the
technology and the time frame since the technology's adoption, a more reasonable approach.
This issue is discussed in detail in TSD Chapter 3.1.2.2.
In any case, that summation is not correct. For example, the MYs 2012-2016 rule
estimated costs of roughly $950 (2007$) in MY 2016. However, that $950 would be
considerably lower by the 2025 MY due to learning on the technologies included in that 2016
MY vehicle. Also, the MY 2011 CAFE rule used an estimate of indirect costs substantially
higher than that used by EPA in the MYs 2012-2016 and 2017-2025 rules. EPA finds that it is
inappropriate to use the costs (or benefits) from previous rulemakings to assess the impacts of
this rule. The costs (and benefits) from previous rules are used in the reference case for this rule.
In fact, Table 3.9-1 of EPA's final RIA shows that the 2025MY reference case costs for this final
rule (i.e., the costs of meeting the 2016MY standards in the 2025MY) are $719 (2010$) relative
to the 2008 baseline and includes the additional costs of compliance with 2009-2010 CAFE, and
is still far lower than the $950 (2007$) estimated to meet the 2016MY standard in the 2016MY
as estimated in the MYs 2012-2016 final rule. As a result, we would roughly estimate the cost
of meeting the 2025MY standard in the 2025MY as $1836+$719=$2555 relative to a 2025MY
7S
vehicle meeting the 2008MY standard. Clearly, our estimate is far less than NADA's. Finally,
25 The $719 value actually includes costs to meet NHTSA's MY2011 standards in MY2025. To clarify, in
the MYs 2012-2016 final rule, we estimated the cost to meet the MY2011 standard in MY2016 at $89 (2007$) (see
12-68
-------
Technical Assessment of the Proposed CC>2 Standards
as discussed in preamble section III.H.2.a, Chapter 3.1.2 of the joint TSD and below in our
response to comment 12.3.2, EPA does not agree with NADA's arguments for a markup for
indirect costs that doubles direct costs.
Regarding the suggestion from Delphi that the NRC technology cost estimates and
implementation cadence data be included in our analysis as the primary source of information,
we have not followed that suggestion. We believe that the cost teardown work conducted by
FEV for EPA and the battery pack model developed by ANL represent the most up-to-date and
best information available on the costs of technologies upon which our analysis relies. This issue
is discussed in the final section of RIA chapter 3. The comments from NRDC are also related to
the NRC report, and their comment is addressed to NHTSA.
Regarding the comment from Environmental Consultants of Michigan, the point of the
comment appears to be that hybrids have higher cost of ownership than do more traditional
internal combustion engine-only vehicles. These higher costs are claimed to result from higher
insurance costs, higher registration fees due to higher weights, higher financing costs and sales
taxes. Without addressing the merits of the metrics provided by the commenter, we wish to point
out that the MYs 2012-2016 rule and 2017-2015 rules combined include a penetration rate of
strong hybrid technology of 5% and of mild hybrid technology of 26% (which were not
addressed by the commenter). As can be seen from this analysis, we are not relying heavily on
strong hybrid technologies in projecting potential compliance paths. Further, we would expect
that, at 5% penetration, most of those hybrids will be purchased by people that want the hybrid
for reasons that may well extend beyond cost of ownership considerations (i.e., image, prestige,
etc.). Further, the weights of the strong hybrids in our analysis are not expected to be any higher
(and most are expected to be lower) than in today's vehicles. Lastly, the commenter suggests
that hybrids experience more rapid depreciation than non-hybrids due, in part, to anticipated
battery replacement costs. The commenter fails to consider the possibility that, should the
assertion be true that depreciation is more rapid on hybrids, the cause may not be due to
anticipated battery replacement costs but rather the rapid and ongoing improvement of new
hybrid technologies making new hybrids more attractive than used hybrids. This may well be in
stark contrast to the non-hybrid case where new non-hybrids are not seen as being demonstrably
better than their used counterparts. Further, our review of independent reliability data suggests
that hybrid vehicles are just as reliable, if not more so, than their non-hybrid counterparts (see
Chapter 5.2.2.2 of the final RIA).
Regarding the comments from ICCT, we agree that the Lotus and FEV lightweight
vehicle studies that were not completed in time for inclusion in the final rule analysis provide
better cost estimates than those used in the final analysis. Though this study is complete now,
unfortunately, we were not able to use those estimated costs, as stated above and in TSD 3.3.5.5.
We agree with all of the other comments provided by ICCT concerning the Lotus and FEV
lightweight material studies. We agree with ICCT that teardown studies provide better cost
estimates than do paper studies. ICCT also commented that our proposed cost estimates were
EPA-420-R-10-009, Table 4-6 at page 4-18) which would probably be on the order of $50-$70 (2010$) for meeting
the MY2011 standard in MY2025. Therefore, the $2555 value stated here is slightly high since it already includes
the costs of meeting the MY2011 standard in MY2025.
12-69
-------
EPA Response to Comments
too high and should be much lower than $2000. In fact, our final cost estimate (without using
the teardown results) is $1836, or roughly $110 lower than the cost estimate we used at proposal
and lower than $2000.
Regarding the comment from the NACAA, we assume that the claim that, if vehicles
equipped with the technologies needed to meet the MY 2025 emissions were introduced earlier
then the additional cost should be lower than $2000 is a reference to learning effects starting
earlier and resulting in lower costs by 2025. While that may be true, one cannot lose sight of the
need to introduce new technologies at a sustainable and reasonable pace. Our technology phase
in caps describe what we believe to be the maximum rate at which technologies might be
introduced. While it's possible that some manufacturers may introduce technology faster, we
believe that others may be even slower. The rate of introduction of technology is an important
aspect of the fleet that we will watch very closely in the future. There are some disadvantages to
introducing technologies sooner, and manufacturers may not even be capable of doing so
because of supplier limitations, and product redesign cycles. We have attempted to provide the
auto makers sufficient time to introduce new technologies on a pace that is consistent with our
understanding of technology availability and learning.
12.3.1. Direct Manufacturing Costs
Organizations Included in this Section
Natural Resources Defense Council (NRDC)
Porsche Cars North America, Inc. (PCNA)
Organization: Natural Resources Defense Council (NRDC)
EPA should continue its current practice of conducting tear-down cost analyses. [EPA-HQ-
OAR-2010-0799-9472-A2, p. 4]
Organization: Porsche Cars North America, Inc. (PCNA)
Battery Costs
Porsche believes that the agencies grossly underestimate the cost of battery technology. This
error inappropriately inflates the apparent cost effectiveness of the GHG program. [EPA-HQ-
OAR-2010-0799-9264-A1, p. 6]
Response:
Regarding the NRDC comment, as we move forward and identify possible future needs
for further teardown work, we fully intend to do so. We believe that the teardown studies
conducted in support of our GHG efforts provide the highest quality and most up-to-date cost
estimates for GHG reducing technologies.
12-70
-------
Technical Assessment of the Proposed CC>2 Standards
Regarding the Porsche comment, we have trouble understanding why the commenter
believes we have underestimated battery costs given the lack of detail provided in the comment.
We welcome Porsche to submit data publicly that supports their comments. Our battery costs are
based on the ANL BatPaC model, a peer reviewed model that estimates direct manufacturing
costs associated with batteries used in hybrids, plug-in hybrids and full electric vehicles. For
hybrids, we have taken those direct costs as being applicable in the 2017MY, which seems
appropriate assuming sales of 15 million vehicles and a 3% hybrid penetration rate (the costs we
used from the ANL BatPaC model assumed 450,000 units, or 3% of 15 million). We have then
applied our High 1 ICM of 1.56 to those direct costs to estimate the total costs for the batteries.
Further, we apply learning effects going forward from 2017 through 2025 to arrive at our
2025MY costs. For hybrids, we have assumed that the batteries are on the flat portion of the
learning curve by the 2017MY and continuing through 2025 making the 2025MY costs roughly
78% of the 2017MY costs. We believe this is reasonable given the nine years of learning and
cost reduction that will undoubtedly take place between 2017 and 2025.
For plug-ins and full EVs, we have taken the BatPaC direct costs as being applicable in
the 2025MY, a full 14 years from now. As such, we have applied no learning curve cost
reductions to plug-in and EV batteries for our 2025MY costs. We "reverse learn" (i.e., back out
learning effects to increase the costs) for years prior to 2025. Further, for plug-in and full EV
batteries, we have applied our High 2 ICM of 1.77 to the direct costs to estimate the total costs.
Again, we believe that these cost estimates are sound. As described in TSD 3.3.3 the BatPac
model is peer reviewed.
Lastly, we have conducted several sensitivities that serve to both increase and decrease
our battery pack cost estimates—battery pack costs, learning effects and ICMs—and for each of
these sensitivities, we see very little impact on our overall program costs and benefits. This is
largely due to the low penetration rates of battery-based technologies like strong hybrids, plug-
ins and full EVs.
12.3.2. Indirect Costs
Organizations Included in this Section
International Council on Clean Transportation (ICCT)
National Automobile Dealers Association (NADA)
Organization: International Council on Clean Transportation (ICCT)
7. RPE indiscriminately spreads all indirect costs over all components, while ICMs reflect only
those elements of indirect costs that would be expected to change in response to a regulatory-
induced technology change. The use of RPE is not appropriate and the sensitivity analyses
presented in Tables IV-88, IV-89 and IV-90 should be removed from the final rule. [EPA-HQ-
OAR-2010-0799-9512-A1, p. 3]
7) RPE and ICM
ICCT agrees with the use of indirect cost multipliers (ICM) instead of Retail Price Equivalent
(RPE) and the general approach of assigning technologies to several complexity classes for
12-71
-------
EPA Response to Comments
determining the ICM value. Trying to determine the indirect multiplier for each technology
would be extremely difficult and time consuming, but it is also important to use more appropriate
and targeted adjustments than a single, indiscriminant RPE. [EPA-HQ-OAR-2010-0799-9512-
Al,p. 19]
For this rule proposal EPA improved the original ICM factors that have been used in other
regulatory assessments in two ways. First, the original ICM factors for low and medium
technology complexity were updated; the updated ICM factors were developed following expert
panel recommendations on newer technologies (passive aero-reduction, engine downsizing and
turbocharging and 40-mile range PHEV). Second, the way ICM factors are applied was
modified, '...resulting in the warranty portion of the indirect costs being applied as a
multiplicative factor (thereby decreasing going forward as direct manufacturing costs decrease
due to learning), and the remainder of the indirect costs being applied as an additive factor
(thereby remaining constant year-over-year and not being reduced due to learning)'. In addition,
the original RPE values used by EPA were increased from 1.46 to 1.5 as a way to reflect long-
term average RPE values. Table 3 shows the evolution of ICM and the change to RPE values on
the 2017-2025 Rule (High 2, Long term). [Table 3 can be found on p. 20 of Docket number
EPA-HQ-OAR-2010-0799-9512-A1] [EPA-HQ-OAR-2010-0799-9512-A1, p. 19]
ICMs are a better methodology for indirect cost estimation than the RPE multipliers used in
previous rulemakings. The development of ICMs as a tool for indirect cost assessment has been
conducted in a most rigorous way and the study results have been peer reviewed in well known
scientific journals.24 The most critical distinction between ICMs and RPE is that ICMs have
been developed 'to reflect only those elements of indirect costs that would be expected to change
in response to a regulatory-induced technology change.' [EPA-HQ-OAR-2010-0799-9512-A1,
pp. 19-20]
However, in the Sensitivity Analysis section IV (NHTSA Proposed Rule for Passenger Car and
Light Truck CAFE Standards for Model Years 2017-2025, page 75307 of the Federal Register),
the proposal presents two sensitivity calculations that neglect the fundamental advantages of
using ICMs. The first sensitivity calculation evaluated the economic impact of technology cost
on CAFE fuel economy using RPE for indirect costs for all technologies instead of ICMs (Table
IV-88). The second sensitivity calculation (Table IV-89) involves cost values derived from a
different source, namely the National Academy of Sciences assessment on LDV fuel economy
technologies; the NAS report uses two sets of RPEs, one for non-electrification technologies and
another one for electrification technologies (Hybrids and EVS).25 [EP A-HQ-OAR-2010-0799-
9512-Al,p. 20]
The use of a single RPE of 1.5 for all technologies, instead of a technology based ICM, inflates
the costs per vehicle by 24%, from $2023 to $2509. The second method uses a RPE of 1.5 for
non-electrification technologies, which are mostly low- and medium-complexity options and
comprise the bulk of the technologies to be adopted in the future; as a result the cost per vehicle
is inflated by 39%. [EPA-HQ-OAR-2010-0799-9512-A1, p. 20]
The ICCT believes that the use of RPE for these two sensitivity analyses is inappropriate and
distorts the cost results. The problem stems from lumping indirect costs indiscriminately, as the
12-72
-------
Technical Assessment of the Proposed CC>2 Standards
RPE method does. The RPE method does not consider that new technologies will not necessarily
incur additional indirect costs. RPE spreads all indirect costs over all components, while ICMs
reflect only those elements of indirect costs that would be expected to change in response to a
regulatory-induced technology change. For example, it is appropriate to include warranty costs in
the indirect costs for new technologies, while marketing costs would not change in response to
adding many incremental technologies. Unless the technology is directly marketed to consumers,
it is inappropriate to spread existing marketing costs to the new technology. Many individual
technologies are small in scale and should reflect only a subset of RPE costs; as a result, for low
complexity technologies, the ICM should be lower than the RPE. This is not always the case, as
ICM estimates for particularly complex technologies, specifically hybrid technologies (for near
term ICMs), and plug-in hybrid battery and full electric vehicle technologies (for near term and
long term ICMs) reflect higher than average indirect costs. As a result, the ICMs for those
technologies can equal or even exceed the averaged RPE for the industry.' [EPA-HQ-OAR-2010-
0799-9512-A1, pp. 20-21]
The ICCT strongly supports the continued use of ICMs and the adjustments made for the
proposed rule. The sensitivity analyses presented in Tables IV-88, IV-89 and IV90 should be
removed from the final rule. [EPA-HQ-OAR-2010-0799-9512-A1, p. 21]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 29-30.]
The ICCT also agrees with EPA's assessment of indirect cost that specifically addresses the
factors that increase the retail price compared to the direct costs and generally — and the general
approach of assigning technologies to several complexity classes for determining the indirect
cost multipliers. The use of generic retail price equivalency markup to cover a wide range of
factors that are not consistent over different technologies often results in overestimating those
costs. And we would recommend the Agency to scrap the sensitivity analysis conducted using
the RPE markups.
24 Rogozhin, A., Gallaher, M., Helfand, G., McManus,. W., Using Indirect Cost Multipliers to
Estimate the Total Cost of Adding New Technology in the Automobile Industry, International
Journal of Production Economics 124 (2010): 360-368.
25 NAS. (2011). Assessment of Technologies for Improving Light Duty Vehicle Fuel Economy.
National Academy of Sciences, Committee on the Assessment of Technologies for Improving
Light-Duty Vehicle Fuel Economy; National Research Council. National Academies Press.
Washington, DC.
Organization: National Automobile Dealers Association (NADA)
The proposal fails to fully account for all of the up-front marginal costs prospective new vehicle
purchasers can expect to face due to the MY 2017-2025 CAFE/GHG mandates. In doing so, it
fails to appropriately recognize the potential impacts those mandates will have on light-duty
12-73
-------
EPA Response to Comments
vehicle affordability and sales. Specifically, the proposal uses a non-traditional approach to
estimating light-duty retail cost/price called the Indirect Cost Multiplier (ICM) method. [EPA-
HQ-OAR-2010-0799-9575-A1, p. 4]
The traditional approach, used for at least 30 years by NHTSA and EPA and vehicle
manufacturers to calculate the cost of regulations impacting motor vehicles, involves an
accounting method known as Retail Price Equivalent (RPE). The RPE method appropriately
estimates the ratio of indirect costs (marketing, indirect labor, etc) to the retail price for the
whole vehicle, adjusting accordingly the direct costs (engineering, manufacturing, etc.)
associated with new components. [EPA-HQ-OAR-2010-0799-9575-A1, p. 4]
The ICM method, which NHTSA and EPA first attempted to use to develop their MY 2012-2016
program, involves a somewhat arbitrary selection and allocation of indirect costs to certain
compliance-related components. Under this approach, by no means the standard accounting
method used by vehicle manufacturers, the whole cost of the vehicle rarely if ever reflects the
sum of its parts. In addition, as detailed in the attached paper comparing the use of the RPE
method to the ICM method, NHTSA and EPA use their ICM method differently for this proposal
than they did for the MY 2012-2016 rule. For these and other reasons detailed in Exhibit A,
NHTSA and EPA should recalculate average per vehicle costs for the proposal using the RPE
method of accounting. To assist with that effort, the paper in Exhibit A attempts to do so, and
even assumes NHTSA and EPA's projections of the technologies manufacturers will have to
adopt to achieve compliance with the proposed standards. [EPA-HQ-OAR-2010-0799-9575-A1,
p. 4]
Response:
Regarding the comments from ICCT that RPE indiscriminately spreads indirect costs
over all components, we agree with ICCT and that is a big part of the reason we believe that the
ICM approach is more appropriate for estimating costs in response to regulatory imposed
changes. As for removing the RPE sensitivity, that comment is directed at NHTSA's analysis
since EPA has not conducted a sensitivity using an RPE rather than ICMs.
We also agree with ICCT that our updated approach to applying ICMs (see Chapter
3.1.2.2 of the joint TSD), as first presented in the proposal and also used in the final rule—is
more appropriate than our prior approach of applying the ICM as a simple multiplier.
Regarding the NADA comments, NADA argued that the ICM approach is not valid and
should be replaced with an RPE approach. Further, it argued that the RPE factor should be 2x
rather than the 1.5x approach that is supported by filings to the Securities and Exchange
Commission. We have conducted a thorough analysis of the NADA comments on the RPE vs.
ICM approach. We disagree with NADA's arguments for both using the RPE approach and a 2x
RPE factor, for the following reasons.
NADA's objections to the ICM approach include:
1. There is no evidence that the RPE method is flawed.
12-74
-------
Technical Assessment of the Proposed CC>2 Standards
2. The ICMs do not include the total costs of complying with the standards, because it does
not include all the costs included in the RPE.
3. The ICMs use a subjective judgment to adjust indirect costs for different technologies,
while the RPE uses one value for all components and does not rely on "nearly perfect
foreknowledge."
4. The ICMs do not incorporate dealer and OEM profits.
NADA's arguments for the RPE of 2x include:
5. Several scholarly papers support the use of RPEs in the 2.0 range.
6. A case study comparison of the added content of a 1971 Chevrolet Vega and 2011 Cruze
shows that an RPE of 2.0 accounts for the change in retail price.
The discussion above provides background on the issue of RPEs and ICMs, and on the
agencies' decision to use ICMs to estimate indirect costs for this rulemaking. Our responses here
address the specific points raised by NAD A.
First, the RPE approach applies the same average indirect cost markup across all
technologies in the redesigned vehicle fleet, regardless of the source of the direct cost (i.e.
whether a technology is simple or complex; whether the source of the additional cost is a new or
a mature technology). The RPE methodology also assumes that an indirect cost is associated
with the rule, even if no relation is apparent. For instance, the RPEs (until recent union contract
changes) would have included the costs to the domestic auto companies of the health insurance
for retired auto workers. Because the rulemaking would not affect the current retiree health care
costs, (which account for about 1.5% of the RPE), they are irrelevant to the rulemaking. The
ICM approach differs in that it allows indirect costs to vary with the complexity of the
technology and the time frame. It is a reasonable assumption that simple technologies are
expected to have fewer indirect costs per dollar than complex technologies. For instance, the use
of low-rolling-resistance tires, considered by the EPA/NHTSA team to be a low-complexity
technology, adds costs, but, because they require significantly less vehicle integration effort than
for example, adding a hybrid powertrain would, the additional indirect costs per dollar of direct
manufacturing costs may be very low. In contrast, converting a conventional vehicle to a hybrid-
electric is a far more complex activity, involving increases in indirect costs such as research and
development disproportionate to its direct costs. Shortly after product introduction, indirect costs
for components such as warranty and research may be relatively high, but auto makers are
reasonably expected to be able to reduce the costs of any specific technology over time, as they
gain experience with them and, thus, redirect those expenditures to other areas of their choosing.
Second, the ICM approach excludes some costs included in the RPE when those costs are
expected not to be affected by the standards. The ICM approach, as discussed above, begins
with the RPE and includes all the relevant cost categories. ICMs reflect the indirect costs judged
by the EPA panel (see above for further explanation) to be incurred for each technology in
response to regulatory imposed changes. Any "omissions", or instances where the ICM carries
no costs for a given technology, are cases where the indirect costs are considered by the EPA
panel not to be impacted by regulation-imposed changes for that technology. For instance, the
costs of switching from a standard tire to a low-rolling-resistance tire (the example of a low-
complexity technology in Rogozhin et al. (2009)) are not expected to lead to an increase in
12-75
-------
EPA Response to Comments
transportation costs (i.e., costs for transporting finished vehicles from production site to retail
site) because it is not expected to be any more expensive to ship a new vehicle with the new tires
than with the old tires.
Third, the RPE approach relies on the assumption that applying the average RPE for the
vehicle fleet as a whole will produce a reasonable average indirect cost for all technologies in the
redesigned vehicle fleet resulting from these standards. The agencies believe that using the
professional judgment and expertise of EPA staff with extensive experience in the auto industry
provides useful insight into how a given regulation will impact indirect costs and is an
improvement over ignoring differences among technologies. The agencies have therefore based
their central analyses on the ICM method.
Fourth, it is incorrect that the ICMs do not include OEM profit. Although the initial ICM
report reviewed by NRC did not include OEM profit, the ICM approach applied in this
rulemaking does incorporate an allowance for profit, at the average corporate profit rate of 6% of
sales. The inclusion of profit for the Joint NPRM is discussed in the draft Technical Support
Document, and the agencies have included profit as an element of the indirect costs for the final
rulemaking as well. See Joint TSD section 3.1.2.2 endnote 19 and sources there cited.
Fifth, the papers cited by NADA to support the use of an RPE of 2x are only a subset of
the literature. The National Research Council (NRC) discusses the four studies that NADA's
Exhibit A cites in its support of an RPE of 2.0. The NRC also notes that NHTSA used an RPE
of 1.5 for its MY 2011 fuel economy rule; the NRC in 2002 used an RPE of 1.4, as did the
California Air Resources Board; and EPA has used a markup factor of 1.3. The NRC report then
discusses work done for the committee itself, doing a detailed analysis of a Honda Accord and a
Ford F-150 truck; the former had an RPE of "1.39 to market transaction price and 1.49 to
MSRP," and the latter had an RPE of "1.52 for market price and 1.54 for MSRP." Most
significantly, the NRC does not recommend an RPE of 2.0. Rather, the NRC recommends, for
technologies where the primary manufacturer of the technology is the automotive supply base, an
RPE of 1.5, except for hybrid powertrain components from the automotive supply base, where it
recommends an RPE of 1.3 due to the inclusion of several indirect costs in their base estimate.
Only in the case of technologies where an automotive OEM is the primary manufacturer does the
NRC recommend an RPE of 2.0. We note, without specifically commenting on the quality of
the studies, that none of the papers NADA cites in support of an RPE of 2x was published in a
peer-reviewed journal, and none of the studies claim to have been peer-reviewed. In contrast, the
research in Rogozhin et al. (2009) was peer-reviewed twice: as documented in the Peer Review
Report, and when it was submitted (and accepted) for publication in the International Journal of
Production Economics. A full reading of the literature on RPEs thus shows little support for a
value of 2x. Further support for an average RPE lower than 2.0 comes from an examination of
industry financial statements. NHTSA examined industry 10-K submissions to the Securities
and Exchange Commission from the period 1972-1997. The cost information in these
submissions represents all industry operations, including both OEM and supplier-sourced
technologies. During this period, the RPE averaged 1.5 while varying slightly, but never
dropped below 1.4 or exceeded 1.6. At no time did the average RPE approach the 2.0 value
advocated by NADA.
12-76
-------
Technical Assessment of the Proposed CC>2 Standards
Sixth, the comparison of the Vega and the Cruze uses circular logic; it assumes its
conclusion. The direct costs of the vehicles are calculated using an RPE of 2, and the NAD A
analysis then calculates a quality difference based on the change in direct costs. The magnitude
of the quality difference is then discovered to correspond to an RPE of 2, although it is also an
inevitable result of the initial assumption of an RPE of 2. The analysis provided can be
replicated with any value of RPE. This argument thus provides no evidence on the value of the
RPE.
For these reasons, we do not accept NADA's request to use an RPE of 2x, and instead
continue with our use of ICMs as the basis for our central analysis. However, the agencies
recognize that there is uncertainty regarding the impact on indirect costs of regulatorily imposed
changes. For this reason, both agencies have conducted sensitivity analyses using different
indirect cost estimates. EPA presents its sensitivities in Chapter 3.11 of its final RIA where we
show costs ranging from roughly $200 less to roughly $200 more than our primary case by
adjusting ICMs to the low side and the high side, respectively. Therefore, even with the
considerably higher indirect cost markups, the benefits of the final rule would be significantly
higher than the costs.
12.3.3. Learning
Organizations Included in this Section
Alliance of Automobile Manufacturers
Organization: Alliance of Automobile Manufacturers
Are the Costs of Advanced Technologies Declining as Predicted? [EP A-HQ-OAR-2010-0799-
9487-Al,p.l8]
Future technology costs are among the most difficult things to predict for MY 2020 and beyond.
Factors that can change significantly over time include the availability and price of materials and
parts, the number of suppliers and the rate of progress toward the production levels needed to
achieve economies of scale. [EPA-HQ-OAR-2010-0799-9487-A1, p. 18]
Recently, the National Research Council of the NAS issued its Assessment of Technologies for
Improving Light Duty Vehicle Fuel Economy ("NAS Report"). Although the NAS report
provides future cost estimates for numerous technologies, the NAS warns that data from
automobile manufacturers and Tier 1 suppliers suggests a wide range of estimated incremental
costs "that makes assessments of cost-effectiveness very approximate." The NAS characterizes
future technology costs as more difficult to predict than the impact of these technologies on fuel
consumption. In some cases, the NAS cost estimates were significantly higher than those of the
agencies. [EPA-HQ-OAR-2010-0799-9487-A1, p. 18]
The uncertainty surrounding the costs of integrating new technologies and then reaching
economies of scale is illustrated in NHTSA's discussion of how to assign markup factors for
"learning." The Preliminary Regulatory Impact Analysis describes steps that NHTSA would
12-77
-------
EPA Response to Comments
need to take to develop accurate historical "learning" costs estimates for seven new CAFE and
safety technologies. NHTSA concludes: [EPA-HQ-OAR-2010-0799-9487-A1, p. 18]
This initial analysis.. .indicates that adopting a cumulative production basis for learning
applications could produce cost estimates that are within 4-7% of those used in the NPRM by
2025, with less variation in earlier years. However, this analysis is based on a very small sample
of technologies and the data required to more precisely evaluate this issue are currently
unavailable. Further, these data may not be obtainable without an extensive research effort, if at
all. [EPA-HQ-OAR-2010-0799-9487-A1, p.18]
Response:
We agree that future technology costs are very difficult to predict. We also believe that
the effort we have made at doing so is unprecedented for EPA transportation-related rules and
that we have developed the highest quality and most up-to-date technology cost estimates
available today. EPA will also continue to monitor the costs of key technologies going forward.
That said, we have conducted several sensitivities that serve to both increase and decrease our
cost estimates—battery pack costs, learning effects, ICMs, and weight reduction costs—and for
each of these sensitivities, we see very little impact on our overall program costs and benefits.
12.3.4. Maintenance Costs
Organization: National Automobile Dealers Association (NADA)
The benefits analysis used in the proposal uses an oversimplified pay-back method that
overstates potential fuel economy savings. Instead, for purposes of calculating any "pay-back,"
real-world finance, opportunity, and additional maintenance costs should be accounted for. In
other words, the final rule should evaluate its potential impact on a vehicle's total cost of
ownership. An example of such a calculator is found at http://www.nadaguides.com/Cars/Cost-
to-Own. [EPA-HQ-OAR-2010-0799-063 9, p. 10]
Response:
We have included maintenance costs in the final analysis—in both the benefit-cost
analysis and the cost of ownership and payback analysis. We present our maintenance intervals
and costs per interval in Chapter 3.6 of the joint TSD. We present our full analysis of
maintenance costs in Chapter 5.2.2.1 of our final RIA and our cost of ownership analysis in
Chapter 5.5 of our final RIA. We also respond more fully to NADA's comments in Chapter 5.5
of the final RIA.
12.3.5. Stranded Capital
Organizations Included in this Section
Center for Biological Diversity
International Council on Clean Transportation (ICCT)
12-78
-------
Technical Assessment of the Proposed CC>2 Standards
Organization: Center for Biological Diversity
Further, the Agencies must delete from their analysis the supposed cost of "stranded capital," or
capital invested in manufacturing equipment that cannot be used when new technology is
introduced. Because this rulemaking stretches over at least two complete redesign cycles, there is
adequate lead time to amortize such costs within industry's normal business operations. In other
words, this and other relics carried over from shorter-term rulemakings that purported to take
account of concerns about inadequate lead times must be scrapped. [EPA-HQ-OAR-2010-0799-
9479-A1, p. 7]
Organization: International Council on Clean Transportation (ICCT)
9. Given the long lead times in the proposed rule, stranded capital costs will be virtually
eliminated and should be removed or greatly reduced in the cost analyses. [EPA-HQ-OAR-2010-
0799-9512-A1, p. 3]
9) Stranded Capital Costs
The agencies state that 'potential for stranded capital occurs when manufacturing equipment and
facilities cannot be used in the production of a new technology'.29 This is a valid concern, but it
applies primarily to rulemakings with shorter leadtimes. Perhaps the most important purpose of
proposing standards through 2025 is that it gives manufacturers far more certainty about the
future standards. This enables the manufacturers to plan and implement technologies and
products in an orderly manner and minimizes issues with stranded capital. Also, the standards are
not stringent enough to force technology introduction at a rate faster than normal production
cycles. [EPA-HQ-OAR-2010-0799-9512-A1, p. 22]
The ICCT recommends that stranded capital costs be eliminated to reflect the long leadtime of
the proposed standards. [EPA-HQ-OAR-2010-0799-9512-A1, p. 22]
29 section 3.2.2.3 of the TSD, Table V-24 of NHTSARIA, and Sections 3.8.7
Response:
We believe that it is difficult to quantify accurately any capital stranding associated with
new technology phase-ins, especially given the projected and unprecedented deployment of
technologies in the rulemaking timeframe. The FEV analysis that looked at potential stranded
capital attempted to define the possible stranded capital costs for a select set of technologies.
Since the direct manufacturing costs developed by FEV assumed a 10 year production life (i.e.,
capital costs amortized over 10 years) we applied the FEV derived stranded capital costs
whenever technologies were replaced prior to being utilized for the full 10 years. The other
option would have been to assume a 5 year product life (i.e., capital costs amortized over 5
years), which would have increased the direct manufacturing costs. We have accounted for
12-79
-------
EPA Response to Comments
stranded capital costs in the instances where our fleet modeling replaced technologies before the
capital costs were fully amortized. While there is uncertainty about the possible stranded capital
costs (i.e.., understated or overstated), their impact would not call into question the overall results
of our cost analysis or otherwise affect the stringency of the standards, since costs of stranded
capital are a relatively minor component of the total estimated costs of the rules. Table 5.1-5 of
the final RIA presents the stranded capital costs used in our analysis; this table is copied below.
As shown by this table, the stranded capital costs are relatively low so, even if we have
overestimated these costs, their impacts are minor.
Table 12-1 Interpolated Estimates of Stranded Capital Costs (2010$)
Company
Aston Martin
BMW
Chrysler/Fiat
Daimler
Ferrari
Ford
Geely
GM
Honda
Hyundai
Kia
Lotus
Mazda
Mitsubishi
Nissan
Porsche
Spyker
Subaru
Suzuki
Tata-JLR
Tesla
Toyota
Volkswagen
Fleet
2017
$60
$16
$53
$18
$9
$16
$16
$18
$12
$7
$14
$26
$17
$15
$12
$19
$36
$8
$28
$17
$1
$5
$14
$14
2018
$54
$20
$45
$19
$16
$17
$20
$18
$12
$8
$21
$23
$22
$21
$12
$21
$30
$10
$25
$18
$1
$9
$17
$16
2019
$48
$23
$38
$20
$24
$19
$23
$18
$13
$8
$28
$20
$28
$27
$13
$23
$25
$11
$21
$19
$1
$12
$19
$17
2020
$41
$27
$31
$21
$32
$20
$26
$18
$13
$8
$36
$16
$33
$33
$13
$25
$20
$13
$18
$20
$0
$16
$22
$18
2021
$35
$31
$24
$22
$40
$21
$30
$18
$13
$9
$43
$13
$38
$39
$13
$27
$14
$15
$14
$21
$0
$19
$25
$20
2022
$31
$26
$22
$19
$35
$18
$25
$17
$15
$11
$38
$12
$o *•>
32
$32
$14
$24
$14
$12
$14
$21
$0
$21
$20
$19
2023
$26
$21
$20
$16
$31
$15
$21
$16
$17
$12
$34
$11
$26
$26
$14
$21
$15
$10
$13
$20
$0
$22
$15
$18
2024
$21
$16
$18
$13
$26
$12
$16
$15
$19
$14
$29
$11
$20
$19
$14
$18
$15
$7
$12
$20
$0
$24
$10
$17
2025
$17
$11
$16
$10
$22
$9
$12
$14
$21
$15
$25
$10
$13
$13
$14
$15
$15
$5
$11
$20
$0
$25
$5
$16
Note: Results correspond to the 2008 baseline fleet.
12.4. Technology Packages, Projected Manufacturer Compliance
Costs, Technology Penetration, and OMEGA/VOLPE
Organizations Included in this Section
American Council for an Energy-Efficient Economy (ACEEE)
Center for Biological Diversity
Jackson, F.W.
Smith, Frank Houston
12-80
-------
Technical Assessment of the Proposed CC>2 Standards
Organization: American Council for an Energy-Efficient Economy (ACEEE)
The agencies state: "Because both input and output sheets from our modeling are public,
stakeholders can verify and check EPA's and NHTSA's modeling, and perform their own
analyses with these datasets." (NPRM p.74904). We were unable to find the relevant OMEGA
output sheets, however. These should be made available. [EPA-HQ-OAR-2010-0799-9528-A2,
p.2]
Make available on the EPA web site the OMEGA outputs for the various scenarios considered.
[EPA-HQ-OAR-2010-0799-9528-A2, p.3]
Organization: Jackson, F.W.
My definitions of Mid and Max technologies: [EPA-HQ-OAR-2010-0799-8041-A1, p. 4]
InitialMidPkg: half, or less, cylinders 4 plug/cylFlatEng (1.5 & up Dia/StrokeRatio), later
Ignition, increase cr/egrs/fpm, Fast Warmup, FIEV-many more improved & optimized, No Plug-
ins, more supercharge & Atkinson cycle, polish (tbr), MinCornEthanol, Wt Red,
consumer/driverEd, traffic controls, adequate but not excess power/size/wt, update CAFE
continuous + exclude subsidized, more Transmission speeds & some Auto Manual Tran. some
EPA & NHTSA items, some NG, Efficient AC, HighMileage/yr Special Attention/Preference,
Scrub Features/costs[EPA-HQ-OAR-2010-0799-8041-A1, pp. 4-5]
Final Mid Pkg: Purge, FRed, Ring, reduced drags (aero, rolling, etc.) and more initial Mid.
Adv Max Ultimate Pkg: more of above with all possibilities seriously considered [EPA-HQ-
OAR-2010-0799-8041-A1, p. 5]
Organization: Smith, Frank Houston
It is my hope that the two attachments
1. Proposed 2017 - 2025 CAFE, A personal study, The ICE POSSIBILITIES and
OPPORTUNITIES - COSTS, FUEL ECONOMIES, and Concerns 2/7/2012
2. Supplement Proposed 2017 - 2025 CAFE, A personal study, The ICE POSSIBILITIES and
OPPORTUNITIES - COSTS, FUEL ECONOMIES, and Concerns 2/13/2012
offer a positive and constructive technical and economic contributions toward this US effort to
address future fuel consumption rates and CO2 emissions reduction. [NHTSA-2010-0131-0240,
pp.1-2]
Opportunities, and Conclusions
12-81
-------
EPA Response to Comments
If these 335 (343?) vehicles were available in the US today, there is a high probability almost
23% of new US offerings would provide user experience mpg averages approaching, if not
exceeding, the currently proposed NOMINAL of 54.4 mpg for 2025 CAFE ... today ... for the
light-footed US drivers using these fuel frugal small displacement, generally under 2 Liters,
diesel models, many already seen on the US roads using their significantly less fuel frugal
gasoline powertrains, see Table 1 or Table 3 Largest Models ?60 mpg(Imp) combined for some
of the model configurations studied. [NHTSA-2010-0131-0240- A2, p.4]
Of course there are questions of correlation between EPA and NEDC ratings as well as USER
experience. The US VW/Audi diesels "Shared MPG Estimates" suggest viable correlations exist
with NEDC. And, 'Predicting Individual Fuel Economy' by Lin, Z., and Greene, D. address other
related US issues. [NHTSA-2010-0131-0240-A2, p.5]
Almost all of these fuel frugal vehicles are small displacement diesels, raising issues of
emissions. Euro Step V should have resolved issues with particulates leaving the NOx concerns
since ? 180 mg NOx/km is the current EU requirement. Most of these vehicles are currently
certified between 110 and 150 mgNOx/km. [NHTSA-2010-0131-0240-A2, p.5]
Starting 4Q 2014 (32 months) Euro Step VI requires ? 80 mg NOx/km for all new certifications
of these vehicles. That is ? 37 mg/km worst case outside the current US requirement of roughly ?
43 mgNOx/km. [NHTSA-2010-0131-0240-A2, p.5]
Could some compromise regarding mg NOx/km levels be allowed as long as annual sales
volumes for these very fuel frugal vehicles remain below, for sake of discussion, 1 (or 0.5)
million units/year? That would be an average of ?20k vehicles for each State annually. [NHTSA-
2010-0131-0240-A2, p.5]
Would that level of market penetration pose an unacceptable risk to man and/or environment
versus the benefits? The 2011 US clean diesel sales were ?100K, roughly 70% relatively fuel
frugal from VW/Audi. [NHTSA-2010-0131-0240-A2, p.5]
Could this be allowed as a temporary legislative regulatory waiver until volumes exceed 1A
million annually or 2016, whichever comes first, before enforcement of full US emissions
standards, as a quick, low cost, low risk strategy to educate the US consumer and test market for
determination of consumer acceptance ... and preferences? [NHTSA-2010-0131-0240-A2, p.5]
This would reduce OEMs' costs and risks (as well as objections) to introducing this relatively
lower cost fuel conserving technology without Federal or State funding as a bridge to future
technologies. [NHTSA-2010-0131-0240-A2, p.5]
This could offer a quick, very low cost, low risk path to saving 400-500 gallons of gasoline
(about 24 barrels of crude) per vehicle year for the life of the vehicle when compared to the 2011
US fleet average of 22.2 mpg. And, achievable at a lower cost than most proposals currently
under public consideration. [NHTSA-2010-0131-0240-A2, p.5]
12-82
-------
Technical Assessment of the Proposed CC>2 Standards
IF, assembled in the US and reasonably priced, this should expand the current US auto market
demand, increasing domestic production ... creating NEW US industrial jobs simply by
changing the current US powertrains to existing fuel frugal European small displacement (? 2
Liter) turbo diesel technology. [NHTSA-2010-0131-0240-A2, p.5]
Based on Table 1: Relative UK Cost and Fuel Economy BENEFIT Analysis (gasoline versus
diesel), these fuel economies can, on average, be achieved with an average ? USD $2k
technology cost premium per vehicle, IF ... we, as a Nation, are determined ... and the OEMs do
offer AND deliver to the US consumer these types of fuel frugal machines with comparable EU
diesel powertrain pricing differentials. [NHTSA-2010-0131-0240-A2, p.5]
Unfortunately, if Det3 US are not at parity with world fuel economy and CC>2 emissions by post
2015, they will be under constant threat from "foreign" OEMs like Kia, Hyundai, Mazda, &
Volvo for importation of fuel frugal choices already offered in the EU and Asia resulting in
subsequent loss of US market share & US JOBS.
References:
http ://carfueldata. direct, gov.uk/
http://vanfueldata.dft.gov.uk/Default.aspx pickups/vans, 30 mpg(US) average Sprinter 2500 in
US 2013?
http://www.autocar.co.uk/SpecsPrices/SpecsAndPrices.aspx
http://www.fueleconomy.gov/feg/powerSearch.jsp
http://www.fueleconomy.gov/mpg/MPG.do?action=browseList "Predicting Individual Fuel
Economy' by Lin, Z., and Greene, D. SAE Technical Papers #2011-01-0618 © 2011 [NHTSA-
2010-0131-0240-A2, p.5]
It is very important to understand that FUEL FRUGAL small displacement (? 2 Liters) Euro type
turbo diesels are a potentially viable near term interim bridge solution to allow time for
ADVANCED transport technologies, whether plug-in, fuel cell, or other yet to be found
technology, to evolve and mature (cost, reliability, durability, and economies of scale) necessary
for the broader based US (and WORLD) markets, not just the elite/wealthy ... in order to
maintain/improve standards of living. [NHTSA-2010-0131-0240-A2, p.6]
Does the US want/NEED fuel conserving vehicles NOW? IF, yes, what should WE do to get
there? This is oneway. [NHTSA-2010-0131-0240-A2, p.6]
Response:
Regarding the ACEEE comment about our output sheets, these were made available in
the public docket at document ID EPA-HQ-OAR-2010-0799-1105.
12-83
-------
EPA Response to Comments
Regarding comments from F.W. Jackson and Frank Houston Smith, we appreciate your
comments and your interest in our proposal. Regarding relaxing NOx standards to allow for
diesels to more easily meet US emission standards and, therefore, play a larger role in the US
auto market, we disagree with this idea. We have set stringent, fuel neutral emission standards
for purposes of public health and do not believe it is appropriate or necessary to compromise
public health by relaxing the standards for diesel-fueled vehicles (see 65 FR 6698). We believe
that diesels can meet our stringent standards, and we welcome diesels as part of the light-duty
technology mix. The lack of significant diesel penetration in our analysis simply means that we
do not believe that it provides for the most cost effective path to compliance. It should not be
interpreted as a condemnation of the technology or a prohibition of it as auto makers are free to
use whatever technology they choose provided they can comply with applicable standards.
12-84
-------
Vehicle Safety
13. Vehicle Safety
13.1. General Comments on Vehicle Safety
Organizations Included in this Section
Consumer Reports
Consumers Union
Haroldson, C.
Institute for Energy Research (IER)
Institute for Policy Integrity, New York University School of Law
International Council on Clean Transportation (ICCT)
Marshall, C.
Rafter, M.
Ross, D.
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Steyn, R.
Organization: Consumer Reports
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 168.]
Importantly, proposed targets will unlikely compromise vehicle safety. Cars have been getting
safe as fuel economy has improved. And this trend will continue.
The safety of future vehicles will be dominated by vehicle design, not size and weight. Advanced
materials can decouple size from mass and therefore give economy, safety and functionality that
people require.
Organization: Consumers Union
Importantly, the proposed standards are unlikely to compromise vehicle safety. Cars have been
getting safer as fuel economy has improved, and this trend is likely to continue. The safety of
future vehicles will be dominated by vehicle design, not size or weight. Advanced materials can
decouple size from mass (weight), creating important new possibilities for simultaneously
improving both fuel economy and safety without compromising functionality. [EPA-HQ-OAR-
2010-0799-9454-A2, pp.2-3]
Organization: Haroldson, C
vehicles will necessarily become too small to be safe to drive. [EPA-HQ-OAR-2010-0799-
11137-Al,p. 1]
13-1
-------
EPA Response to Comments
Organization: Institute for Energy Research (IER)
One of the most obvious effects of higher fuel efficiency is a lighter vehicle, which (other things
equal) means a vehicle that provides less safety for its occupants in the event of a crash.
Anecdotally, it is typical to hear a father explain his vehicle purchase for a daughter going off to
college in terms of its safety, rather than couching the decision in terms of how much money she
will save in fuel expenditures. [EPA-HQ-OAR-2010-0799-9573-A1, p. 14]
Scholarly studies have attempted to quantify the extra motorist deaths attributable to the CAFE
standards first put into place in the 1970s. Depending on the particular assumptions and the time
frame chosen, the estimates range from 41,600 to 124,800 deaths. A 2002 National Academy of
Sciences study found that the downsizing effect of CAFE led to 1,300 to 2,600 deaths in a single
year and ten times that many serious injuries. Also, weight in vehicles still matters and one way
to get better fuel efficiency is through weight reductions. A study from the Insurance Institute for
Highway Safety recently found that "strong relationship between vehicle weight and occupant
safety." In fact, they found that "Hybrids on average are approximately 10 percent heavier than
their conventional counterparts and have lower injury rates in a crash. . . the odds of sustaining
an injury in a hybrid were about 25 percent lower than in a lighter non-hybrid vehicle." [EPA-
HQ-OAR-2010-0799-9573-A1, pp. 14-15]
It is important to note that even if the EPA's analysis is correct to assume that vehicle consumers
do not correctly calculate the lifetime savings from higher fuel efficiency, then by the same token
we must allow for the possibility that vehicle consumers may not correctly estimate the higher
probability of injury or death from driving a car that is lighter or has less space between the
steering wheel and driver's seat, etc. In order to achieve its findings of a pure boon to consumers,
the EPA analysis assumes that the higher mileage standards are achieved through holding all else
constant, and increasing the final price of vehicles. But in reality, in the new equilibrium the
"irrational" and "myopic" consumers may buy vehicles that achieve the new efficiency mandates
through a combination of less safety and only slightly higher prices. To the extent that this
calculation is "irrational" and "myopic," the regulations may reduce one type of inefficiency (i.e.
excessive fuel consumption) while increasing another one (i.e. excessive crash deaths). EPA
certainly has offered no argument showing that fuel consumption is a more serious social
problem than traffic fatalities.37 [EPA-HQ-OAR-2010-0799-9573-A1, p. 15]
37 To be clear, the text refers to traffic fatalities that result from consumers incorrectly
estimating the tradeoff between vehicle price and safety. The EPA analysis does incorporate
costs from traffic accidents, but these appear to include only the accidents due to extra driving,
not to consumer "irrationality" regarding vehicle safety.
Organization: Institute for Policy Integrity, New York University School of Law
More importantly, the relationship between size and safety is neither simple nor unidirectional.
To the extent smaller cars fare worse in crashes with bigger cars, increasing size may improve an
individual driver's safety; but it may simultaneously impose a negative safety externality on
13-2
-------
Vehicle Safety
other drivers, whose cars are now relatively smaller compared to the growing average fleet size.
Decreasing size may have similarly opposing impacts on safety. Therefore, maintaining or
increasing the average size of the entire fleet does not guarantee the safest outcome, and
decreasing the fleet's average size in response to a fuel economy rule might have no overall
change in safety levels (though at some point, reducing the size or changing attributes could
affect the vehicle's intrinsic safety, as distinct from its relative safety). As Wenzel, a leading
researcher on this subject, has explained, "a fuel economy standard that discourages vehicles
with smaller footprint, or lower weight, will not necessarily reduce casualties. . . .Details of
vehicle design, which can be improved through direct safety regulations, will have a greater
effect on occupant safety than fuel economy standards that are structured to maintain vehicle size
or weight." [This comment can also be found in section 2.1 of this comment summary.] [EPA-
HQ-OAR-2010-0799-9480-A1, p. 14]
Organization: International Council on Clean Transportation (ICCT)
Even more important, all of the historical analyses of the impacts of weight on fatalities are
based upon vehicles primarily using conventional steel. This means that the results implicitly
assume that the materials in the vehicle will not change. However, high strength steel (HSS) and
aluminum both have better crash properties than standard steel. Thus, reducing weight of small
cars using better materials will reduce fatalities. Aluminum provides more uniform management
of crash forces. High-strength steel helps prevent intrusion and better absorbs crash forces, which
is one of the primary reasons for its rapidly increased market penetration in recent years. For
example, Honda has moved aggressively towards using HSS in small cars in part because of the
safety benefits: [EPA-HQ-OAR-2010-0799-9512-A1, p. 12]
The extensive use of high-strength steel in the Advance Compatibility Engineering (ACE) body
structure creates a new-generation platform that is safer and stronger, enhancing the vehicle's
ability to deal with crash energy during impact.'6 [EPA-HQ-OAR-2010-0799-9512-A1, p. 12]
'A new body design with the ACE Body Structure and extensive use of high strength steel create
a new generation platform that is safer and stronger.' 7 [EPA-HQ-OAR-2010-0799-9512-A1, p.
12]
In addition, fatalities are linked more strongly to intrusion into the passenger compartment than
to vehicle mass. Safety experts in Japan and Europe raised this issue previously. Their research
suggests the main cause of serious injuries and deaths is intrusion due to the failure of load-
bearing elements to properly protect occupants in a severe crash: [EPA-HQ-OAR-2010-0799-
9512-Al,p. 12]
The results from this project have overturned the original views about compatibility, which
thought that mass and the mass ratio were the dominant factors.'8 [EPA-HQ-OAR-2010-0799-
9512-Al,p. 12]
'moreover, if mass appears to be the main parameter linked to aggressivity of cars, it is because
this is the easiest and universal parameter that is collected in all accident databases.'9 [EPA-HQ-
OAR-2010-0799-9512-Al,p. 12]
13-3
-------
EPA Response to Comments
The scientific community now agrees that mass does not playa direct role in
compatibility.'10 [EPA-HQ-OAR-2010-0799-9512-A1, p. 12]
Reducing vehicle weight while maintaining size helps to reduce intrusion, as the lower weight
reduces crash forces while maintaining size preserves crush space. This also supports that size-
based standards that encourage the use of lightweight materials should reduce intrusion and,
hence, fatalities. [EPA-HQ-OAR-2010-0799-9512-A1, pp. 12-13]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 195-196.]
The recent development of sophisticated and accurate vehicle simulations is opening up a new
world. The initial use of these models was to improve safety design. The simulations were so
effective that 5 star crash ratings became almost universal and NHTSA had to revise their rating
criteria. The simulations are continuing to rapidly improve to the point where they are starting to
be used to simultaneously optimize the material composition, shape and thickness of every
individual part, including secondary weight reductions.
Organization: Marshall, C.
Historically, there have been two topics of pushback by those who would oppose this standard.
[EPA-HQ-OAR-2010-0799-5917-A2, p. 1]
Regarding highway safety, same-size cars for improving mileage can be made with lighter more
energy-absorbing materials without increasing risks on the highways. [EPA-HQ-OAR-2010-
0799-5917-A2, p. 2]
Organization: Rafter, M
Car makers have made cars less safe to meet the standards that the government keeps imposing.
[EPA-HQ-OAR-2010-0799-11587-A1, p. 1]
Organization: Ross, D.
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 242-243.]
Are fuel-efficient vehicles unsafe? Critics anticipate that weight reduction will be a major
strategy to achieve greater fuel economy in a cost-effective manner, and that this will increase
the likelihood of injury or death from vehicle collisions.
They point to the 50 percent increase in fatalities resulting from accidents involving passenger
cars and light-truck SUVs experienced between 1979 and 1999.
But it wasn't so much the decrease in weight of passenger cars as the dramatic increase in the
light-truck SUV share of all vehicles on the road that drove that statistic.
13-4
-------
Vehicle Safety
The proposed standard limits any further worsening in vehicle weight disparities by linking fuel
economy standards to vehicle footprint.
If fuel economy gains are concentrated in high-end vehicles through new materials or increasing
reliance on hybrid technology, then fleet weight disparities may even diminish.
In my view, critics have failed to refute the reasonable NHTSA projections of a modest increase
in safety under the 2017-25 standards.
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
Smart fuel economy improvements deliver safety, as well as better mileage and lower emissions:
Advanced high strength and light weight materials and other recent technological and design
breakthroughs—along with well-engineered weight reduction—give us the ability to travel safely
and save money in cars that cut the emission of global warming pollution by 5% and, at 54.5
mpg, ease our oil addiction. [EPA-HQ-OAR-2010-0799-9549-A2, p. 10]
The improved safety record of crossover vehicles compared to truck-based SUVs, stemming
from improved technology, teaches us that manufacturers are capable of designing vehicles that
are lighter, more efficient and safer as well. [EPA-HQ-OAR-2010-0799-9549-A2, p. 10]
Technology is the key to better mileage and safer cars. With strong, lightweight materials, we
can have both. Better engines, transmissions and aerodynamics improve fuel economy; airbags,
high-strength lightweight steel and better roofs improve safety. And reducing the throw weight
of vehicles improves the safety of everyone on the road. [EPA-HQ-OAR-2010-0799-9549-A2, p.
11]
Organization: Steyn, R.
The new rule also will lead to a significant increase in the number of driving-related deaths and
injuries because it can be met only by reducing the size and weight of passenger vehicles. [EPA-
HQ-OAR-2010-0799-8724-A1, p. 2]
Response:
Several commenters maintained that decreased vehicle weight could lead to decreased
vehicle safety. Others commented that vehicle safety is chiefly related to vehicle design, rather
than to vehicle size or weight. Comments on these issues are addressed principally in section
II. G of the preamble to the final rule. We add certain supplemental responses below.
The commenters who state that the standards could lead to a decrease in vehicle safety
assert that the standards will be met by mass reduction, or in some cases, downsizing, and that
either strategy carries with it associated safety risks. EIR points to the 1970's experience as
evidence that manufacturers' use of downsizing as a compliance strategy for the flat (i.e.
universal) CAFE standards can result in increased vehicle fatalities. EPA disagrees with
13-5
-------
EPA Response to Comments
commenter's analogy to the current rule. As the agencies explain in preamble section II.G,
historic field crash data is not necessarily a predictor of safety of the current or future light duty
vehicle fleets. EPA also notes that three important factors differentiate the rulemaking today
from the 1970's: 1) the footprint approach to standards, 2) the presence of crash safety standards
which were not in existence in the 1970's, and 3) the advancements in design tools and
techniques that have occurred over the past few decades.
Footprint-based standards
After the first CAFE standards were introduced in the 1970's, manufacturers achieved
compliance in part by reducing vehicle size. The use of the footprint attribute for this
rulemaking largely eliminates any incentive for manufacturers to downsize vehicles as a
compliance strategy, since doing so simply makes their overall fleet average target more
numerically stringent, as described in section II.C of the preamble. Indeed, this was a prime
motivator to adopt so-called reformed CAFE, whereby standards would no longer be flat.
Furthermore, unlike a weight-based standard, a footprint based standard does not create
disincentives for manufacturers to apply weight-efficient materials and designs. From the
engineering and statistical safety analyses reviewed by the agencies NHTSA concluded, and
EPA agrees, that the societal effect of mass reduction while maintaining footprint, if any, is small
(see section II.G.3 of the preamble).
Crash safety standards
The commenters did not address the role of federal safety standards, including crash
standards, to which the current and future vehicle fleet are subject. NHTSA began frontal crash
testing in 1978 and adopted the five star rating in 1993, adopted the side impact crash test in
1996 and the rollover test in 2000 with an overhaul of the program in 2008. In addition, there
are other tests including those by the Insurance Institute for Highway Safety tests (IIHS) and
other countries, including Europe and Japan, which must be met in order to sell vehicles in those
countries. This continued advancement in safety standards is reflected in the steady decline in
fatality rates. As shown in the figure in Section 3.3.5.5 of the Joint TSD, the motor vehicle crash
deaths per billion miles traveled in the late 1970's were 3 times that of those in 2009 (11.3 per
billion in 2009). Another figure in the same chapter shows the Light duty fleet weight trends:
1975-2011. The figure shows that vehicles have increased in weight over the past 30+ years
since the late 1970's and while vehicle designs today and in the future may be of similar weights,
the manufacturers are accountable to safety standards today. Safety standards will stay in place,
so that it is not possible for auto makers to reduce safety below those requirements in order to
improve fuel economy.
Advancements in design tools and techniques
EPA agrees with commenters who observed that design plays an important role in safety
(Consumers Union, D. Ross, Sierra Club). The design tools that are available today are
significantly more advanced than when fuel economy standards were first established, and
manufacturers now routinely utilize CAE/CAD tools to simulate crashes prior to a prototype
build. This allows them to design the vehicle to reduce passenger compartment intrusion and
distribute crash loads more efficiently, as well as evaluate dummy injury criteria. If all design
13-6
-------
Vehicle Safety
concepts were held constant to the early 2000s then lighter cars could possibly mean higher
dummy accelerations. However, vehicle designs are changing. For example, the more optimal
management of crash energy in crush zones and design of multiple load paths can minimize
acceleration pulses experienced in the passenger compartment of the vehicle. In addition, there
has been continued advancement of restraint system technology, such as air bags that provide
more complete coverage of the passenger compartment, and restraints that respond according to
the specific occupant and crash conditions.
EPA notes that uncertainty still exists about whether this rule will affect how consumers
evaluate fuel savings or safety. Still, EPA does not believe, as EIR suggests, that this rule will
cause consumers to value safety less than they do currently. If consumer buying strategies do
not change, as is very possible, then the rule will not affect how consumers evaluate these issues.
It is also possible that fleet-wide efficiency increases will reduce the emphasis consumers place
on fuel economy as a distinguishing attribute, and place greater emphasis on safety features,
rather than less, as IER argues. Information on vehicle safety, and crashworthiness in particular,
is readily available to vehicle purchasers. We note that NHTSA assigns crash ratings to each
vehicle design based on the results of these tests, and this information is commonly part of the
consumer's decision process in vehicle choice. Even if consumers seek a less expensive vehicle
in response to the increased costs, all vehicles will continue to meet the applicable federal safety
standards.
13.2. Comments on NHTSA/EPA's Engineering Analysis of Vehicle
Safety Including Light Weight Materials
Organizations Included in this Section
Alliance of Automobile Manufacturers
Aluminum Association's Aluminum Transportation Group
American Chemistry Council (ACC)
American Iron and Steel Institute (AISI)
Bayer Material Science
Center for Biological Diversity
Consumers Union
Insurance Institute for Highway Safety (IMS)
International Council on Clean Transportation (ICCT)
Nissan North America, Inc.
SAB 1C Innovative Plastics US LLC
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Society of the Plastics Industry, Inc. (SPI)
Volkswagen Group of America
Volvo Car Corporation (VCC)
Organization: Alliance of Automobile Manufacturers
Automakers, in conjunction with NHTSA and others, continue to work toward a common goal of
reducing the annual number of fatalities and injuries that occur in motor vehicle crashes. The
13-7
-------
EPA Response to Comments
Alliance supports a CAFE and GHG rule structured to allow automakers to balance competing
requirements in a manner that furthers this progress. [EPA-HQ-OAR-2010-0799-9487-A1, p.20]
Alliance members recognize that highway traffic safety is a shared responsibility and strive to do
their part through the continuous improvement of the safety performance of their vehicles.
NHTSA recently announced that the 2010 road fatality rate reached an historic low of 1.10
fatalities per 100 million vehicle miles traveled. Fatalities declined in most categories in 2010,
including for occupants of passenger cars, SUVs, minivans and pickup trucks. 7 We take pride in
our contributions toward this historic achievement and continue to work toward future progress
by developing additional crashworthiness enhancements and introducing crash avoidance
technologies. As breakthroughs in advanced material and powertrain technologies become
available and their associated costs meet customer thresholds for affordability, consumers will
benefit through an increase in vehicle fuel efficiency and a decrease in greenhouse gas
emissions. However, the Alliance is mindful that such improvements must be implemented in a
manner that does not compromise the rate of safety improvement that has been achieved to date.
[EPA-HQ-OAR-2010-0799-9487-Al,p.21]
Achieving the proposed CAFE and GHG standards will rely on the availability of commercially
viable emerging technologies for manufacturers to adopt. Should these technologies fail to
mature as anticipated, greater reliance on mass reduction and downsizing in order to achieve
these standards could occur. The Alliance supports the proposed mid-term evaluation and urges
EPA and NHTSA to continuously update the safety analysis as part of this review. [EPA-HQ-
OAR-2010-0799-9487-A1, p.21]
Even though the current rulemaking extends well into the future, there is a possibility that many
of the advanced technology and mass reduction projections may not be realized in the proposed
timeframe. Thus, when the agencies conduct their mid-term evaluation, it is critical that the
safety analysis is updated to reflect the most recent crash data and revised projections regarding
mass reduction scenarios. [EPA-HQ-OAR-2010-0799-9487-A1, p.21]
The Alliance supports NHTSA's intention to examine safety from the perspective of both the
historical field crash data and the engineering analysis of potential future Advanced Materials
Concept vehicles. NHTSA's planned analysis rightly looks backward and forward. However,
with respect to looking ahead and the evaluation of concept vehicles, the Alliance recognizes that
it is not sufficient to only consider regulatory and consumer information crash tests. A
comprehensive evaluation of vehicle safety must also take into account real-world impact
scenarios and the special requirements of vulnerable populations (e.g., children and elderly).
These must also be adequately accounted for in any agency policy decisions. [EPA-HQ-OAR-
2010-0799-9487-Al,p.21]
Analysis of the Lotus and FutureSteel Vehicle concepts indicates that although these concept
vehicles can be designed in a virtual world to perform well in virtual Federal Motor Vehicle
Safety Standards and virtual Insurance Institute for Highway Safety tests, there remain concerns
that these concepts yield aggressively stiffer crash pulses that may be detrimental to rear seat
occupants, vulnerable occupants and potential crash partners. Given the Computer-Aided
Engineering (CAE) crash modeling uncertainties with respect to advanced materials that may
13-8
-------
Vehicle Safety
possibly be available for mass production in the MY 2017-2025 time-frame, it is possible that the
real-world crash behavior of these concepts may not match that predicted in those studies. [EPA-
HQ-OAR-2010-0799-9487-A1, pp.21 -22]
Further, significant uncertainties exist with respect to both manufacturing and CAE crash
analysis of potential future advanced materials. CAE capabilities for some potential advanced
materials that manufacturers are researching are far less mature than for materials currently in
common use. Progress in these areas is highly competitive and therefore varies throughout the
industry. As such, it will take considerable time and investment for each manufacturer to develop
this knowledge and experience. Because agency projections fail to adequately take into account
the timing and cost for the introduction of advanced materials, these projections are likely overly
optimistic. [EPA-HQ-OAR-2010-0799-9487-A1, p.22]
Organization: Aluminum Association's Aluminum Transportation Group
The aluminum industry shares and supports the agencies' priority for continuous improvement in
vehicle safety. We congratulate NHTSA for the thorough, thoughtful and professional approach
taken in analyzing the relationships between vehicle design attributes and safety performance.
Mass reduction has been identified as an important part of a comprehensive vehicle fuel
economy improvement initiative, and must be implemented in a manner that preserves, or
enhances vehicle safety. Developing an appropriate assessment of potential vehicle weight
reduction opportunities requires understanding the independent influence of mass, size, design
and safety features. Limitations of available historical data and currently available safety
modeling make reliable assessment of individual safety technologies difficult. It is even more
difficult to reliably anticipate the potential impact of future advancements in vehicle safety
engineering or deployment of advanced safety enhancing technologies. [NHTSA-2010-0131-
0226-A1, pp. 3-4]
Considering the uncertainties involved, we believe the agency's position on vehicle weight
reduction is based on an objective and well reasoned assessment of all available information and
is appropriately conservative. Recent NHTSA studies, and the NPRM indicate downweighting of
large and mid-size vehicles will have a "neutral or positive" impact on overall fleet safety while
improving fuel efficiency. In this vehicle segment automakers are using low weight, high-
strength materials now and will increase use of these materials in the future. With respect to
smaller vehicles, data clearly identifying independent impact of mass, size, design and advanced
safety technologies is not available today. Due to uncertainty about the influence of mass, design
and size on safety of smaller vehicles, the NPRM does not anticipate significant mass reduction
in vehicles below 3,000 pounds. Analytical safety studies conducted by the ATG and others
suggest vehicle size, not weight, has the largest impact on vehicle safety performance. We
believe advanced small vehicle designs will be developed using aluminum body and structural
components that will achieve significant weight reduction while preserving vehicle size and
improving safety performance. [NHTSA-2010-0131-0226-A1, p. 4]
The ATG also serves on the steering committee for the Center for Automotive Research's (CAR)
recently formed Coalition of Automotive Lightweighting Materials (CALM), which supports
efforts by auto manufacturers to aggressively downweight vehicles to improve performance, fuel
13-9
-------
EPA Response to Comments
economy and safety. CALM's purpose is to support the cost-effective integration of mixed
materials to achieve significant reductions in weight through the collaborative efforts of
technology providers with the auto manufacturers. Through individual company efforts and
through the new CALM partnership, the aluminum industry is committed to working with our
customers and other suppliers to further accelerate and ease the adoption of advanced materials
options (Attachment E [see Docket number NHTSA-2010-0131-0226-A5]). [NHTSA-2010-
0131-0226-Al,p. 4]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 223-227.]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 227-228.]
So in conclusion, we see that weight reduction, weight optimized future vehicles and
components will take maximum advantage of available engineering materials. These materials
are continually being improved to further enhance the ability of auto designers to design efficient
vehicles. Materials including aluminum, high-strength steel, magnesium and Aluminum offers a
unique combination of composites will all find use in the vehicles of the future, they'll work —
live together in more efficient vehicle structures.
Aluminum offers a unique combination of attributes including low weight, high strength,
excellent energy absorption capability, natural corrosion resistance at a reasonable cost. For
those reasons, we believe aluminum will play an increasing role in the optimized vehicle of the
future.
Organization: American Chemistry Council (ACC)
The agencies have stated their intention to achieve lightweighting of the fleet in a manner that
does not compromise vehicle safety. The agencies have chosen to "provide an incentive to use
lightweight materials and structures," rather than "reductions in size," by adopting a footprint
approach to emission reductions. We support the agencies' adoption of the footprint approach,
and our members are committed to bringing to market materials and technologies that help
achieve that goal. As an industry that makes modern innovative materials, we have a proud
history of our many contributions to automotive safety. Plastics are integral to airbags, seat belts,
shatter resistant sunroofs, and so many more features. We strongly believe that vehicle mass
reduction and overall fleet safety can be achieved hand-in-hand, and support the agencies'
approach. [EPA-HQ-OAR-2010-0799-9517-A2, p. 1]
The Notice of Proposed Rule Making (NRPM) also observes that ongoing research may help
refine our understanding of mass, vehicle size, and safety, particularly in connection with
improved design and material use. Supporting research on safety is important to us, and the ACC
Plastics Division's Auto Team has worked closely with the National Highway Traffic Safety
Administration (NHTSA) on several initiatives to address automotive safety issues. For example,
ACC and several member companies are participating in several NHTSA research projects on
the safety of lightweight vehicles, including the Lotus Engineering and the George Washington
13-10
-------
Vehicle Safety
University studies, which seek to refine understanding of mass and crashworthiness.3 The latter
study, scheduled to conclude in July, 2012, has been highlighted by Secretary LaHood and
NHTSA as one of the tools they are using to ensure safety while promoting vehicle mass
reduction. [EPA-HQ-OAR-2010-0799-9517-A2, p. 1]
Through another effort with NHTSA, in November 2005, the American Plastics Council (now
ACC's Plastics Division), in cooperation with NHTSA, sponsored a Technology Integration
Workshop on "Enhancing Future Automotive Safety With Plastics." Findings from the workshop
were published in a Technology Integration Report in May 2006, noting the major opportunities
and challenges for enhancing the safety of next generation vehicles using advanced plastics and
composite materials in structural and safety applications. In 2005, Congress directed NHTSA to
explore the potential safety benefits of lightweight, fuel efficient Plastics and Composites
Intensive Vehicles (PCIVs),4 and develop the foundation for research in cooperation with the
Department of Energy, industry, universities and other safety stakeholders. [EPA-HQ-OAR-
2010-0799-9517-A2, pp. 1-2]
Significant progress has been made in this effort. NHTSA tasked the Volpe Center to assess the
current state of knowledge and emerging safety technology opportunities to enhance the crash
safety of PCIVs by 2020. In November 2007, NHTSA published A Safety Roadmap for Future
Plastics and Composites Intensive Vehicles, and the agency is in the process of implementing the
Roadmap.5 In August 2008, NHTSA hosted a workshop entitled, The Safety Characterization of
Future Plastic and Composites Intensive Vehicles.6 NHTSA has already moved much closer
towards its goal of facilitating development and deployment of next generation safe and fuel
efficient PCIVs by 2020; we encourage and support NHTSA, in coordination with the private
sector, to complete its work implementing the roadmap, and integrate relevant findings into this
rule as appropriate. [EPA-HQ-OAR-2010-0799-9517-A2, p. 2]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11786, pp. 265-266.]
Why is this important? The proposed rule makes clear the relationship between fuel savings and
lightweight of the vehicle. The proposal acknowledges that mass reductions of vehicle can be
achieved in many ways, including material substitution, design optimization and part
consolidation. We agree. PCIV research amply documents the technological feasibility of
designing and building vehicles with 30% or more plastic and plastic composites, and in our
view, the agencies' application of mass reduction of up to 20% relative to model year 2008 levels
is appropriate and achievable.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11786, pp. 266-267.]
But there's more. Plastics are about more than just light-weighting of vehicles, plastics and
polymer composites have enabled some of the most significant vehicle safety innovations in the
past several decades including seat belts, airbags, child safety seats, and the same sources of
these innovations still hold significant untapped potential to further enhance vehicle safety.
13-11
-------
EPA Response to Comments
We agree with the agencies that it is important that the CAFE standards be set in a way that does
not encourage manufacturers to respond by selling vehicles that are in any way less safe. In
particular, we agree with and support the standard applied in assessing compliance strategies,
and this is articulated as no adverse effect on overall fleet safety.
In the last five years the plastics industry has worked aggressively to better understand how
plastics can be used to enhance safety in automobiles and we will continue to do so. Congress
recognized the importance of enhanced automobile safety by investing nearly $2 million over a
four-year period and to building an ongoing partnership between the plastics industry and
NHTSA, and through this partnership, NHTSA has initiated and is currently implementing a
safety roadmap for future plastics and plastic composites intensive for vehicles.
This project is already yielding fruit, as ongoing research is helping to improve the performance
of plastic and composite material components. We support NHTS AS sustained work to
implement the safety roadmap.
3 See transcript of NHTSA Mass Size Safety Symposium, February 25, 2011,
http://www.nhtsa.gov/staticfiles/rulemaking/pdf/MSS/MSSworkshop transcript.pdf
4 See Plastic and Composite Intensive Vehicles (PCIVs): An Innovation Platform for Achieving
National Priorities, September 8, 2009, http://www.plastics-car.com/pcivs
5 A Safety Roadmap for Future Plastics and Composites Intensive Vehicles, sponsored by the
National Highway Traffic Safety Administration, DOT HS 8110 863, November 2007,
www.nhtsa.gov/DOT/NHTSA/NVS/Crashworthiness/Vehicle%20Aggressivity%20and%20Fleet
%20Compatibility %20Research/810863 .pdf
6 "The Safety Characterization of Future Plastic and Composites Intensive Vehicles (PCIVs),"
August 2008: a) Workshop prospectus, agenda, and presentations posted at
www.volpe.dot.gov/safety/pciv/index.html;
http://www.volpe.dot.gov/safety/pciv/docs/summary_pciv_workshop.pdf
Organization: American Iron and Steel Institute (AISI)
Use of Steel in Future Vehicles [Federal Register Vol. 76, No. 231, Pg 74921 et seq.]
New steels and automotive manufacturing techniques continue to be developed by the steel
industry and will enable significant increases in mass reduction, crashworthiness and fuel
economy, while enabling reductions in total greenhouse gas emissions, during the period
specified in the NPRM. [EPA-HQ-OAR-2010-0799-9477-A1, p. 8]
13-12
-------
Vehicle Safety
The new regulations will influence car companies to consider mass reduction as a high priority.
The steel industry in collaboration with its automotive customers has a long history of providing
mass reduction solutions for light-duty vehicles, most recently by developing an evolving
portfolio of advanced high-strength steel (AHSS) grades over the past two decades. These steels
possess tremendously improved strength over conventional steel and enable parts to be made
thinner and lighter while still carrying the required loads. At the May 18, 2011, Great Designs in
Steel Seminar, Ducker Worldwide9 reported that AHSS is now the fastest growing automotive
material in today's new cars and trucks. From this report and from the reports of individual car
companies on specific vehicles, many examples of the effectiveness of AHSS grades in
achieving affordable mass reduction for carmakers are available today. DuckerlO also forecasted
accelerated growth of AHSS between now and 2025 due to the proposed regulations. This fact
emphasizes that, while the growth of AHSS in new vehicles has been significant and averages
around 17% of the body mass today, more growth is expected in the future and, according to
Ducker, can possibly triple by 2025. [EPA-HQ-OAR-2010-0799-9477-A1, pp. 8-9]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 87-88.]
Much work was necessary to increase AHSS content from essentially zero to the 17% level
reported above. It was first made possible because of the global steel industry's ultra-light steel
studies, called ULSAB (Ultra Light Steel Auto Body) which were completed in 2002 with the
release of the final project, ULSAB-AVC (advanced vehicle concepts)! 1. [EPA-HQ-OAR-2010-
0799-9477-A1, p. 9]
This transition from mild steel to AHSS since 2002 in vehicle structures was also facilitated by
joint engineering projects with the Auto/Steel Partnership through support by the U. S.
Department of Energy (DOE) and the U. S. Advanced Materials Partnership (USAMP).
Important projects including Lightweight Front-end Structured and Future Generation
Passenger Compartment 13 helped to accelerate use of AHSS. Simultaneously, North American
steel companies invested in the technologies to manufacture these AHSS grades. [EPA-HQ-
OAR-2010-0799-9477-A1, p. 9]
To prepare for anticipated automobile design requirements for 2017- 2025, AISI together with
World Auto Steel has again conducted a major engineering project, called FutureSteelVehiclel4.
This study examined the most efficient structures for electrified powertrain vehicles like battery-
electric vehicles and plug-in hybrids. Twenty new grades of AHSS were developed, with many
of the newest AHSS grades having strengths in the gigapascal range, over 1000 MPa. That's at
least 5 times stronger than conventional steels. [EPA-HQ-OAR-2010-0799-9477-A1, p. 9]
FutureSteelVehicle (FSV) results were published in May 2011 and showed mass reduction levels
of about 35% in body/structural applications. Such high mass reductions with steel are now
possible because of new extremely high-strength grades, new manufacturing processes like tailor
rolling or hot stamping, and new design optimization CAE (computer-aided engineering) tools.
The FSV results reinforce the forecast by Ducker that AHSS growth in vehicles should continue
well past 2020. FSV is an important milestone on the development path of automotive steels—it
is not the endpoint. [EPA-HQ-OAR-2010-0799-9477-Al, p. 9]
13-13
-------
EPA Response to Comments
Technological breakthroughs going forward are sure to enable further advances just as they have
over the past two decades. [EPA-HQ-OAR-2010-0799-9477-Al, p. 10]
The results of the FSV study have been shared with North American carmakers. Importantly, it
shows that significantly more mass reduction is possible using steels remains. Equally important,
this study also evaluates the cost and the carbon emissions consequences of mass reduction
solutions. It is significant that AHSS mass reduction solutions are often both the least expensive
and the lowest carbon solutions, based on a calculation of life-cycle greenhouse gas emissions.
More details on this subject of life-cycle emissions are covered in the first section above. [EPA-
HQ-OAR-2010-0799-9477-A1, p. 10]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 89-90.]
Collision Injury Severity [Federal Register vol. 76, No. 231 Pg. 74949 et seq.]
AISI, WorldAutoSteel, and the Auto/Steel Partnership have conducted many studies on the
effectiveness of AHSS steels in reducing mass while achieving equal or improved
crashworthiness versus established steel architectures. The most notable published studies on this
subject are ULSAB-AVC11 (2002), the Auto/Steel Partnership studies on front-end structured
(2004) and on passenger compartment mass reduction 13 (2006), and FutureSteelVehicle 14
(2011). All of these studies make use of established vehicle FEA (finite element analysis)
models, and computer aided engineering (CAE) crash simulation software. In addition, an actual
vehicle crash test was conducted to validate the Auto/Steel Partnership front-end structure
project and verify that the AHSS 25% reduced-mass front end behaved equivalently to the
original design. [EPA-HQ-OAR-2010-0799-9477-A1, p. 10]
The scope of these steel industry-sponsored studies relied on achieving equivalent or better crash
simulation performance with criteria based on limits for intrusion (into the passenger
compartment) and management of the intensity of the crash pulse. Our experience in mass
reduction is that vehicles can indeed be engineered to achieve equivalent performance at reduced
mass against the required battery of crash tests including full frontal impact, offset frontal, rear
impact, side impact, roof crush, and others. The properties of AHSS are particularly well suited
for this task because of steel's high strength, high work hardening during deformation and strain-
rate hardening during impact loading rates. [EPA-HQ-OAR-2010-0799-9477-A1, pp. 10-11]
9 Future Growth of AHSS, Abey Abraham, Ducker Worldwide, May 18, 2011, Great Designs in
Steel Seminar, Livonia MI http://www.autosteel.org/Resources.aspx (available on request from
Ducker, see www.ducker.com and call 248-644-0086)
10 Light Vehicle Steel Content, Ducker Executive Summary Report, March 2011, (download
from www.autosteel.org)
11 ULSAB-AVC Engineering Report (download from
http ://www. autosteel. org/en/Programs/ULS AB-AVC. aspx)
13-14
-------
Vehicle Safety
12 Light-weight Front-end Structure Report, Auto/Steel Partnership Final Report October 2005
(download from http://www.a-sp.org/publications.htm )
13 Future Generation Steel Passenger Compartment, Auto/Steel Partnership Final Report, June
2007 (download from http://www.a-sp.org/publications.htm )
14 Future Steel Vehicle Engineering Report, May 17, 2011, (download from
http://www.autosteel.org/Programs/Future%20Steel%20Vehicle.aspx )
15 Technical Report on Fatality Risk, Mass, and Footprint of Model Year 2000-2007 Passenger
Cars and LTVs - Preliminary Report, Charles J. Kahane, NHTSA, Docket No. NHTSA-2010-
0152-0023, www.regulations.gov
Organization: Bayer Material Science
We support the agencies' decision to consider only net weight reduction of vehicles that will not
compromise overall fleet safety. As a supplier of innovative materials such as polycarbonate for
vehicle applications such as headlamps, interior consoles and body panels Bayer Material Science
has a rich history of contributing to automotive safety standards. [EP A-HQ-OAR-2010-0799-
9198-A2, p. 1]
Bayer Material Science has a rich history for contributing to automotive safety standards and is
dedicated to developing innovative, high-performance materials giving automakers a choice of
materials when it comes to meeting the CAFE requirements.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11786, pp. 270-271.]
Organization: Center for Biological Diversity
3. The Agencies must decrease weight across all vehicles to improve fuel efficiency
The Agencies correctly identify passenger safety as a factor to be considered in setting fuel
efficiency standards. However, less weight does not equate to less safety. The assumption that
the safest cars have been heavy and large, and that cars suffering the highest fatality-crash rates
have been light and small, has led to incorrect conclusions about reducing vehicle weight. In fact,
the evidence shows that weight reductions in all cars will not affect safety, though it significantly
improves gas mileage. We urge the Agencies to reexamine their rulemaking and to require
greater weight reductions over its effective period. [EPA-HQ-OAR-2010-0799-9479-A1, p. 5]
The Agencies themselves now agree that reducing more mass from heavier vehicles reduces
safety concerns for smaller vehicles. They also note that reports they previously relied upon
require updating and data correction; accordingly, the Agencies must take updated studies that
will be available before the final MY 2017-2025 rulemaking into account in that final
rulemaking.24 The Agencies also note the consistency among reported studies that "reducing the
overall ranges of masses and mass ratios seems to reduce overall societal harm."25 Indeed, we
13-15
-------
EPA Response to Comments
believe the updated evidence will show that mass can safely be reduced in both light trucks and
passenger vehicles as long as wheelbase and track width are maintained.26 Because light weight
material can improve vehicle efficiency by 20%, its use must be encouraged. [EPA-HQ-OAR-
2010-0799-9479-A1, p. 6]
The erroneous belief that heavier vehicles increase overall safety has contributed to a large
increase in the weight of the American vehicle fleet over the last decades - leading to the loss of
what could have been highly significant efficiency improvements.27 One study has concluded
that from 1984 to 2004, the average weight of light trucks increased by 26 percent and that, if
weight, horsepower, and torque had been held at their 1990 levels, fuel economy for both
passenger cars and light trucks could have increased by nearly 60 percent from 1980 to 2006.28
The Agencies themselves concede that "MY 2000-2007 vehicles of all types are heavier and
larger than their MY 1991-1999 counterparts. The average mass of passenger cars increased by 5
percent from 2000 to 2007 and the average mass of pickup trucks increased by 19 percent." We
note that CAFE rulemakings were in effect during all of the referenced period. A correct
assessment of the relationship between weight, fuel efficiency and safety must reverse this
perverse trend, which is directly contrary to energy conservation. Because of its large impact on
fuel efficiency, we urge the Agencies to require significant weight reduction among the vehicle
fleet as part of its standards; failure to implement light-weighting across the fleet because of
alleged safety concerns would be contrary to the evidence and arbitrary and capricious. These
revisions must not simply lead to corrections in the text of the final rule, but also to significant
increases in fuel efficiency standards in the final rulemaking. [EP A-HQ-OAR-2010-0799-9479-
Al,p.6]
24 The relevant reports include the updated studies from the University of Michigan
Transportation Research Institute and Dynamic Research, Inc., referenced at 76 Fed. Reg. at
74,948. See also ICCT Comments in Response to the NPRM, submitted in this docket (Feb. 13,
2012) ("ICCT Comments") at 9-13. [EPA-HQ-OAR-2010-0799-9479-A1, p. 6]
25 NPRM, 76 Fed. Reg. at 74,949. See also the studies referenced at 76 Fed. Reg. at 76,957-
58. [EPA-HQ-OAR-2010-0799-9479-A1, p. 6]
26 NPRM, 76 Fed. Reg. at 74,950; see report by Dynamic Research, Inc. available in the
docket. [EPA-HQ-OAR-2010-0799-9479-A1, p. 6]
27 The lower stringency targets assigned to light trucks is the other driving force of this
development, as discussed below. [EPA-HQ-OAR-2010-0799-9479-A1, p. 6]
28 Christopher Knittel, Automobiles on Steroids; Product Attribute Trade-Offs and
Technological Progress in the Automobile Sector, AMERICAN ECONOMIC REVIEW 2012 at
3369 (Dec 2011), available athttp://www.aeaweb.org/articles.php?doi=10.1257/aer.l01.7.3368.
The Agencies themselves observe that MY 2000-2007. [EPA-HQ-OAR-2010-0799-9479-A1, p.
6]
13-16
-------
Vehicle Safety
Organization: Consumers Union
In fact, reducing vehicle weight will be essential in improving fuel economy. For example, a
contemporary family sedan such as the Hyundai Sonata Limited weighs 3,450 pounds and still
achieves a Top Safety Pick by the IMS. The new Toyota Camry XLE V6 is even lighter at 3,375
pounds. These vehicles achieve 25 and 26 overall mpg in CR's testing. By contrast, a similarly
equipped Chrysler 200 Limited V6 weighs 3,590 pounds (also a Top-Safety Pick), but with no
performance or interior room advantage and partially because of the extra weight only achieves
21 mpg. The new Honda Civic at 2,810 pounds also received a Top Safety Pick and weighs 400
pounds (about 9%) less than the Chevrolet Cruze, a direct competitor, and again achieves 20%
better fuel economy partially because of the lower weight. Consumer Reports is confident that
lighter vehicles will not necessarily compromise vehicle safety—all vehicles will still need to
conform to improving vehicle safety standards. [EPA-HQ-OAR-2010-0799-9454-A2, p.3]
Organization: Insurance Institute for Highway Safety (IMS)
From a safety standpoint, IMS is supportive of the proposed CAFE standards put forth by
NHTSA in this proposed rule. The continued use of a size-based system will help increase fuel
economy while keeping manufacturers from significantly downweighting or downsizing
vehicles, and thus will mitigate the safety costs that might otherwise occur as fuel economy
increases are required by the federal government. [NHTSA-2010-0131-0222-A1, p. 1]
Organization: International Council on Clean Transportation (ICCT)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 195-196.]
The shift in material design capabilities also impacts the cost to reduce vehicle weight. The
studies in progress by Lotus and FEV are using highly sophisticated simulation models to
optimize part material and design. The results of these studies will be far more accurate of future
designs and they must be used to assess the costs of weight reduction for the final rule.
Organization: Nissan North America, Inc.
Nissan will continue to provide a full range of vehicles, and to incorporate continuous
improvements throughout its vehicle fleets. This includes advances in internal combustion
engines (ICEs) as well as the continued deployment of electric drivetrains. Nissan also continues
to explore appropriate opportunities for mass reduction. A comprehensive mid-term evaluation
is critical to determining the extent to which the market accepts the additional costs associated
with more advanced internal combustion vehicles, as well as the extent to which the advanced
powertrain market develops. In addition, government regulatory programs involving both fuels
and safety requirements will directly affect future feasibility and must be considered in any
future review. [EPA-HQ-OAR-2010-0799-9471-A1, p.5]
Organization: SABIC Innovative Plastics US LLC
13-17
-------
EPA Response to Comments
SABIC-IP has been actively engaged in developing solutions to advance fuel economy and
reduce greenhouse gas (GHG) emissions. In particular, automotive products made from our
polymer resins are used to reduce vehicle mass while providing strong structural integrity.
SABIC-IP has also developed an advanced coating solution allowing polycarbonate (PC) glazing
to withstand long-term weathering and abrasion conditions. With such coating solutions, PC
glazing may be used in areas specified for Item 2 glazing behind the windshield. [EPA-HQ-
OAR-2010-0799-9467-A1, p.l]
The agencies are well aware of the emissions and fuel consumption benefits associated with
vehicle mass reduction. SABIC-IP supports the inclusion of weight reduction as an available
technology, as well as the agencies' ongoing research efforts to quantify better the implications
of weight reduction for societal safety measures as lighter and smaller vehicles penetrate into the
fleet. SABIC-IP has actively participated in this research, contributing a number of lightweight
components, including plastic fenders, plastic front-end modules, polycarbonate glazing for roof
and backlight applications, and composite liftgates for evaluation and consideration. Many of
these lightweight solutions also offer component-level safety benefits, offering the capability, for
example, of mitigating ejections or protecting pedestrians. [EPA-HQ-OAR-2010-0799-9467-A1,
p.13]
SABIC-IP verified the traditional estimates that a 10% weight reduction produces a 6-7%
increase in fuel economy. In 2008, SABIC-IP arranged for vehicles to be tested at the Mercedes-
Benz Research and Development North America, Inc. facility in Ann Arbor, Michigan with two
configurations - a vehicle with PC glazing and a vehicle with added weight to simulate the glass
penalty due to glass having a mass density about twice that of PC. The data, which SABIC-IP
initially presented in our comments to the MY 2012-2016 rulemaking, confirmed these
estimates: [EPA-HQ-OAR-2010-0799-9467-A1, p. 14] [For the associated table, please refer to
EPA-HQ-OAR-2010-0799-9467-A1, p. 14]
An additional benefit offered by engineering thermoplastics is the ability to offer enhanced
aerodynamics that can be used to design more front and rear ends with a lower coefficient of
drag. Drag coefficients for present day vehicles range between 0.30 and 0.35, but an additional
25% reduction in drag has been predicted in coming years. Part of this progress will derive from
advances in material science. Injection-molded plastics allow for aerodynamic styling and parts
integration not possible with metal or glass. Specific applications where drag coefficient
reductions have been or can be achieved include spoilers, fascias, undertrays, grilles, mirrors,
and lighting. [EPA-HQ-OAR-2010-0799-9467-A1, p. 14]
In fact, engineering thermoplastics can be utilized in the entire front six inches and most of the
rear six inches of the vehicle. In the front, these components include lighting (polycarbonate),
grills (PC blends), fasciae (polypropylene), bumpers and energy absorbers (PC blends), grill
opening reinforcements (polypropylene) and reflectors (polyetherimide). In the rear, the
components include structural reinforcements (polypropylene), rear lighting bezels (PC blends),
spoilers (PC blends), glazing (polycarbonate), liftgates (polyphenylene ether resin (PPO) and PC
blends) and bumpers and energy absorbers. The aerodynamic benefits available through
integrated, molded plastic components are likely to contribute substantially as new vehicles are
13-18
-------
Vehicle Safety
designed with an increasing attention to employing aerodynamics to reduce greenhouse gas
emissions and fuel consumption. [EPA-HQ-OAR-2010-0799-9467-Al, p. 14]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 286-287.]
In addition to polycarbonate glazing technology, SABIC Innovative Plastics offers a number of
other lightweight products that can advance the goals of this rulemaking. In fact, our various
plastic products can comprise the entire front six inches and most of the rear six inches of a
vehicle, including lights, grills, fasciae, bumpers, energy absorbers, structural reinforcements,
liftgates and more. In addition to these familiar mature parts of the car, we have developed
products such as the plastic steering wheel which will provide future weight benefits as they're
incorporated into vehicle designs. We are also developing composite materials that can reduce
vehicle mass and enhance design.
We believe that the technology of lightweight materials will advance substantially in the years
covered by this regulation, as will our understanding of the benefits these materials can provide.
We look forward to working with our OEM and our Tier customers to determine the most cost-
effective and safest ways to incorporate advanced lightweight components and structural
elements into the vehicles and components they manufacture.
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
A driver in a 2,600-pound Honda Civic has greater chances of surviving an accident a driver in a
5,100-pound Ford F-150 pickup. Most fatal car crashes are single vehicle accidents where weight
can be a disadvantage. In fact, the Ford's driver per fatality rate is 65 deaths per million
registered vehicle years versus 55 for the 50% lighter Civic. The 3,200 pound Honda Accord is
far safer than the F-150 with a driver death rate of only 19. Indeed, the mid-size Accord is safer
than any standard large sedan on the road which shows that engineering, not weight, builds
safety into a vehicle.35 [EPA-HQ-OAR-2010-0799-9549-A2, p. 10]
With these standards it is important recognize additional steps that will improve safety: [EPA-
HQ-OAR-2010-0799-9549-A2, p. 10]
. Future vehicles will comply with new standards for electronic stability (ESC), roof crush
resistance, and control of occupant ejection. These standards will substantially reduce the
potential for single vehicle crashes (including rollovers) and for injuries in such crashes. [EPA-
HQ-OAR-2010-0799-9549-A2, p. 11]
. New applications of high strength steels, laser welding, advanced adhesives, and nonferrous
materials (aluminum and plastics) will result in major improvements in structural performance -
occupant compartment integrity and crash energy management - with reduced vehicle
weight. [EPA-HQ-OAR-2010-0799-9549-A2, p. 11]
13-19
-------
EPA Response to Comments
Advances in electronics will lead to increased crash avoidance and better crashworthiness as
electronic sensors can apply controls to prevent crashes and tune the vehicle for maximum
crashworthiness by adjusting seats, head restraints, seat belts and airbags for better occupant
protection when a crash is inevitable. Vehicle to vehicle communication systems can send
signals to avoid intersection crashes such as when a vehicle runs a traffic light. [EPA-HQ-OAR-
2010-0799-9549-A2, p. 11]
A major consequence of the new safety standards will be a dramatic reduction in rollover
casualties. Until recently, NHTSA had no significant standards affecting rollover safety.
Rollover fatalities increased dramatically as light trucks were increasingly used as substitutes for
passenger cars in the 1980s and 1990s. Rollover fatalities will be reduced from the current level
of more than 10,000 per year to fewer than 5,000 as a consequence of the new standards. [EPA-
HQ-OAR-2010-0799-9549-A2, p. 11]
35 Insurance Institute for Highway Safety, June 9, 2011. [EPA-HQ-OAR-2010-0799-9549-A2,
p. 10]
Organization: Society of the Plastics Industry, Inc. (SPI)
Plastics have extensive innovative automotive applications - including bumpers and energy
absorbers, consoles, door components, engine covers, housings, instrument panels, lighting,
grilles, side impact protection, structural reinforcement and sunroofs - that are critical to safe,
lighter weight and more fuel efficient vehicles. [EPA-HQ-OAR-2010-0799-9492-A1, p.2]
From airbags to seatbelts, a wide range of plastics materials and processing methods have played
a role in automotive safety. For example, composites can be produced with different levels of
reinforcement for specific components to achieve improved mechanical properties that result in
enhanced safety. In the event of a crash, backrests and headrests are designed to absorb and
distribute energy, and highly elastic films help provide protection from glass. [EPA-HQ-OAR-
2010-0799-9492-A1, p.2]
SPI strongly supports the agencies' commitment and approach to consider only vehicle mass
reduction that would not have an adverse effect on overall fleet safety. The NPRM notes the
historical data suggesting an inverse relationship between vehicle mass and crashworthiness, but
also points out that the adoption of advanced lightweight materials has the potential to "mitigate
some of the potential decrease in safety from mass reduction through improved distribution of
crash pulse energy." The agencies have wisely supported continuing research into the
relationship between vehicle mass and crashworthiness at research institutions like George
Washington University. [EPA-HQ-OAR-2010-0799-9492-A1, p.4]
Such advances certainly require evaluation for safety. Congress' investment in enhanced
automobile safety, through an ongoing partnership between the plastics industry and NHTSA,
has led to the initiation and implementation by NHTSA of a Safety Roadmap for Future Plastics
and Composites Intensive Vehicles. The 2007 report "summarizes the approach, activities, and
13-20
-------
Vehicle Safety
results of a study to evaluate the potential safety benefits of Plastics and Composites Intensive
Vehicles (PCIVs), to enable their deployment by 2020." The ACC has acknowledged that the
commercial viability of PCIVs is a longer term proposition, but research is underway, including
the improvement of predictive tools for reliably modeling component performance. We likewise
support NHTSA's ongoing work with the Safety Roadmap and industry's research on PCIVs.
[EPA-HQ-OAR-2010-0799-9492-Al,p.4]
The plastics industry is proud of its innovations that contribute to vehicle weight reduction,
reduced emissions and safety improvements, such as the benefits provided by PC glazing. [EPA-
HQ-OAR-2010-0799-9492-A1, p.8]
Organization: Volkswagen Group of America
To start, Volkswagen agrees with the agencies that there is a variation in the overall mass
reduction potential based on the type and market segment of vehicles. Smaller cars and economy
models have less potential for mass reduction than larger or more premium vehicles.
Volkswagen projects full vehicle weight reductions during the time period of this regulation on
average in the order of 7-10%. The NPRM predicts for large cars and some trucks upwards of
20% mass reduction potential. Volkswagen feels that this may exceed cost effective limits.
With regards to electrified vehicles, Volkswagen does agree with statement sin Section 3.4.5.5.
of the TSD that electrical component may increase baseline vehicle mass by upwards of
approximately 4-5% depending on battery pack capacity and/or other electric drive components.
[EPA-HQ-OAR-2010-0799-9569-A1, p. 15]
Organization: Volvo Car Corporation (VCC)
During the last 30 years, major breakthroughs have been made in the engineering and
development of advanced safety technologies. The development, market introduction and
penetration of more efficient safety technologies, both with respect to occupant protection and
with respect to cost, is expected to continue, with increased intensity. During the next decade,
technologies aimed at avoiding or mitigating crashes will be introduced and will achieve
widespread implementation in the vehicle fleet. [EPA-HQ-OAR-2010-0799-9551-A2, p. 4]
Regardless of the anticipated development of technologies for improving both the
crashworthiness and crash avoidance of vehicles towards the year 2025, the basic laws of physics
still apply for incompatibilities in crashes between vehicles of different sizes and different
weights. The projection of the effects of the new active safety crash technologies, even though
raising a lot of future expectations, is not that crashes will be completely avoided, but that the
frequency and impact of many of these crashes will be reduced. The assumptions of necessary
weight and footprint reductions for meeting the fuel economy requirements will raise the
question: what will be the outcome in a crash between a newer smaller vehicle that meets the
requirements with an older larger heavier vehicle? [EPA-HQ-OAR-2010-0799-9551-A2, p. 4]
A smaller and lighter vehicle will be subjected to larger change of velocity than the larger
heavier vehicle and, consequently, this will be reflected in the pulse that the smaller vehicle will
be subjected to. This is then in turn reflected in the pulse transferred to the vehicle occupants.
13-21
-------
EPA Response to Comments
Many researchers have been trying to assess the relative injury and fatality risk of occupants in
two-vehicle crashes in relation to the differences in mass between the vehicles. Everything else
being equal, several of the studies presented indicate a significant increase, up to a factor ten, in
the fatality risk for the occupants in the lighter vehicle for a two-to-one weight ratio between the
colliding vehicles in a head-on crash. [EPA-HQ-OAR-2010-0799-9551-A2, pp. 4-5]
When trying to assess the consequences of meeting the requirements on reducing the greenhouse
gases and the resulting expected changes in the size and mass of the vehicle fleet, a number of
uncertainties will arise that make this task very difficult and open for speculation. Will the whole
vehicle population move towards lower weight and smaller size or will this only apply to certain
segments? What will be the effect on size and weight of new alternative drive trains, e.g. hybrids
and electrical vehicles? What will be the technical development of new safety technologies and
what will be the market penetration of these systems? What will be the rate of the vehicle turn-
over and how many older vehicles, pre 2017, will remain in the vehicle fleet by 2025? [EPA-
HQ-OAR-2010-0799-9551-A2, p. 5]
One possible scenario presents a shift of the larger vehicle population towards a mid-segment of
the population. This would then result in an overall more compatible passenger vehicle fleet and
thus, reduce the negative aspects of the present fleet that has a large spread in weight and size.
However, the weight ratio between larger motor vehicles, such as trucks and buses, and
passenger cars will most likely increase and this incompatibility will have the opposite effect, i.e.
resulting in a higher fatality risk for the car occupants. [EPA-HQ-OAR-2010-0799-9551-A2, p.
5]
Other policy actions may also have consequences on the incompatibilities of the vehicle fleet.
For example, changes in crash protection requirements may result in stiffer front structures
which in turn will affect the vehicle fleet compatibility. [EPA-HQ-OAR-2010-0799-9551-A2, p.
5]
VCC believes that the development of weight and size compatibilities/incompatibilities should
be closely monitored and this should be linked to the development of the number of fatalities and
injuries. VCC highly recommends that the midterm review evaluate safety in order to assure that
the trend is not in an unfavorable direction and that no other measures are warranted. [EPA-HQ-
OAR-2010-0799-9551-A2, p. 5]
Many of the negative consequences, as discussed above, can be avoided or mitigated by efficient
active safety technologies. The potential of these systems is to effectively eliminate fatalities and
serious injuries in traffic. The development of these systems needs, however, to be gradual and
follow a step-wise approach linking technological advances with field experiences from real-life
traffic. In order to acquire this knowledge, the penetration of the systems into the vehicle fleet is
a key parameter. Some of the technologies have added costs due to advanced hardware and
software developments. For customers who are unaware of the benefits of the systems, this
added cost will not be attractive and will negatively affect the decision when buying a new
car. [EPA-HQ-OAR-2010-0799-9551-A2, p. 5]
13-22
-------
Vehicle Safety
It is therefore essential that customers are informed about these benefits. Consumer information,
e.g. NCAP (New Car Assessment Program) and the 'Buying a Safer Car' guide should include
assessments of the systems and clear statements of the benefits. It should also be reflected on the
'Stars on Cars' statement on the Monroney label. The number of systems included in the
assessments and protocols should gradually increase following the technical development. [EPA-
HQ-OAR-2010-0799-9551-A2, pp. 5-6]
Response:
As explained in section II. G of the Preamble to the final rule, each agency has outlined a
technically feasible compliance path available at reasonable cost and cost-effectiveness which is
safety neutral. The total amount of mass reduction used in the agencies' analysis for this
rulemaking was chosen based on the agencies' documented assumptions about how much mass
reduction is technologically feasible without compromising safety. Overall, technical feasibility
paths for manufacturers identified in this rulemaking include a minimal mass reduction, <5%, for
the majority of passenger vehicles due to safety restraints identified by NHTSA. Some trucks
and CUV's have up to 15% to 20% mass reduction in the projected compliance path which
would lessen the impact of crash with these vehicle types. As explained in preamble section
II.G, and as noted by a number of commenters (e.g. DRI, CBD), removing weight from heavier
vehicles should have a positive effect on vehicle safety.
While EPA has shown a possible compliance pathway using one set of assumptions about
the use of mass reduction, there are many alternative pathways for compliance. As discussed in
EPA RIA section 3.5, this rulemaking is projected to decrease vehicle mass by approximately
4% (on average) relative to the reference case. Rather than using mass reduction technology,
manufacturers could choose to use, for example, additional turbo-charging and downsizing,
hybridization, or any other available technology. No manufacturer is explicitly required by this
regulation to reduce the mass of their vehicles. Some manufacturers may choose not to reduce
mass at all. Others may choose to reduce mass by more than the levels projected here. Using the
NHTSA methodology discussed in Section II.G, EPA has shown a compliance pathway that is
projected to produce no net additional fatalities.
EPA acknowledges the concerns by the Alliance of Automobile Manufacturers (the
Alliance), Nissan North America, Inc., and Volvo Car Corporation regarding the mid-term
evaluation areas of focus. The Alliance states their concern over the availability of commercially
viable emerging technologies that have been assumed as part of the compliance package for this
rulemaking. The Alliance supports the proposed mid-term evaluation and urges EPA and
NHTSA to review the technology availabilities as well as continuously update the safety analysis
as part of this review, including updating the most recent crash data and revised projections
regarding mass reduction scenarios. The Alliance also expressed concerns over the Lotus and
Future Steel Vehicle concepts. While these concepts do redesign body in whites in aluminum
(Lotus- Toyota Venza) and AHSS (Future Steel Vehicle), EPA is releasing a new mass
reduction/cost analyses which applies mass reduction ideas and materials already proven in high
volume production vehicles to a Toyota Venza. The information contained in this project may
address concerns by the Alliance in regards to CAE modeling with respect to advanced material
simulations and material production readiness and applicability. Nissan stated that a midterm
evaluation is critical to determine the extent to which the market accepts the additional costs
13-23
-------
EPA Response to Comments
associated with more advanced internal combustion vehicles. This issue will be part of the mid-
term evaluation. Volvo highly recommends that the midterm review evaluate safety in order to
assure that the trend (of weight and size compatibilities/incompatibilities) is not in an
unfavorable direction and that no other measures are warranted. The midterm review will
consider these issues.
Volkswagen stated that the NPRM predicts for large cars and some trucks upwards of
20% mass reduction potential. Volkswagen feels that this may exceed cost effective limits. The
agencies' basis for estimated costs of mass reduction actually appears to be conservative. As
shown in joint TSD section 3, the detailed studies sponsored by the agencies suggest that 20%
mass reduction is likely feasible for the rulemaking period using lightweighting materials and
manufacturing technologies that have already been adopted in high volume vehicles. See joint
TSD pp. 3-238 to 251. The accompanying detailed cost analysis in the joint TSD indicates that
the cost of reducing mass by 20% can potentially be economical. See joint TSD section 3.3.5.5.
The assumptions for mass reduction costs will be examined during the mid-term evaluation.
The Alliance stated that "it is not sufficient to only consider regulatory and consumer
information crash tests. A comprehensive evaluation of vehicle safety must also take into
account real-world impact scenarios and the special requirements of vulnerable populations (e.g.,
children and elderly). These must also be adequately accounted for in any agency policy
decisions." Preamble II.G.S.c. states "With respect to NHTSA's looking-ahead approach1 in
assessing the feasible amount of mass reduction and the evaluation of concept vehicles, NHTS A
does its best in the fleet simulation study to consider as many real world crash scenarios as
possible. In the fleet simulation study, NHTSA is including risk functions for different
populations. All of the crash results are weighted for their actual occurrence rates. As stated in
NHTS A's 2011-2013 research and rulemaking priority plan,1 the agency currently has programs
looking into the areas of safety for vulnerable occupants. NHTSA will monitor the performance
of these vulnerable occupants in the context of the changing fleet in response to the fuel
economy program."
The Alliance of Automobile Manufacturers expressed some concerns over how safety
can be understood through CAE crash modeling due to modeling limitations compared to actual
vehicle crash data. The mass reduction study funded by EPA (FEV/EDAG/Munro) showed the
ability to achieve mass reduction through the vast majority use of production proven steel in the
BIW, which is the main load bearing unit evaluated in the crash models. Discussion with FEV
and EDAG revealed that there are differences between the CAE model and the actual vehicle
crash results. However the differences are similar to those within vehicle to vehicle
manufacturing differences. EDAG stated that the limitations from CAE modeling include
material differences not modeled such as when metal is bent or cross thicknesses that may
thinned in production, such as in sheet processing.
The Alliance continues to express concern over the modeling of potential future advanced
materials in that "Further, significant uncertainties exist with respect to both manufacturing and
CAE crash analysis of potential future advanced materials. CAE capabilities for some potential
advanced materials that manufacturers are researching are far less mature than for materials
currently in common use. Progress in these areas is highly competitive and therefore varies
throughout the industry. As such, it will take considerable time and investment for each
13-24
-------
Vehicle Safety
manufacturer to develop this knowledge and experience. Because agency projections fail to
adequately take into account the timing and cost for the introduction of advanced materials, these
projections are likely overly optimistic." [EPA-HQ-OAR-2010-0799-9487-A1, p.22] The
materials to which the Alliance is referring in their comment in regards to CAE modeling are not
stated. The agencies assume the materials that manufacturers will use in their BIW to reduce
mass include HSS, AHSS, aluminum and limited magnesium and these materials have all been
modeled. The extent of modeling for composites is unknown, however the use of composites in
the BIW is still being researched with applications primarily only on some limited high end
vehicles.
As stated at Preamble II.G. 4, "The agencies continue to believe that reasonable
conclusions regarding the safety implication of mass reduction can be drawn from CAE
simulations. As ICCT stated in their comments, CAE simulations are powerful tools that have
improved rapidly over the years in terms of their ability to optimize vehicle designs and predict
material and vehicle behavior in real life. Use of these highly sophisticated CAE tools has
become standard industry practice in helping to verify and validate designs before real parts and
vehicles are built. As the Alliance stated, however, CAE capabilities for conventional materials,
such as steel and aluminum, are more mature than those of advanced materials, such as
magnesium and composites. Steel and aluminum are the major materials used in some of the
studies, such as EPA's and NHTSA's light-weighting studies that determined that a baseline
vehicle's mass could be reduced by approximately 20 percent while maintaining safety
comparable to the baseline vehicle." In addition, "even though CAE tools are used heavily, the
agencies acknowledge the concerns the Alliance raised in its comments about CAE capabilities
for some potential advanced materials for crashworthiness, and have been mindful of this issue
in developing our studies."
The Center for Biological Diversity expressed the opinion that "the agencies to require
significant weight reduction among the vehicle fleet as part of its standards; failure to implement
light-weighting across the fleet because of alleged safety concerns would be contrary to the
evidence and arbitrary and capricious. These revisions must not simply lead to corrections in the
text of the final rule, but also to significant increases in fuel efficiency standards in the final
rulemaking." Of course, the standards do not require use of any particular technology.
Manufacturers are left to choose their own compliance paths (meeting all applicable federal
safety standards in doing so). So the agencies cannot "require" manufacturers to adopt any
particular compliance path. As described in detail in preamble section II.G, the agencies have
carefully documented potential compliance paths which are safety neutral, and thus do not
depend on significant mass reduction from vehicles weighing less than 3,106 pounds.
The International Council on Clean Transportation (ICCT) commented that "the results
of these studies (Lotus and FEV) will be far more accurate of future designs and they must be
used to assess the costs of weight reduction for the final rule." EPA would have considered the
use of the results of these studies if they were completed at the time of the analyses for the final
rulemaking. Unfortunately only the draft reports were complete and the peer review responses
had not yet been addressed nor the final report completed in time for inclusion of the results into
the final rulemaking. These reports will be utilized in the midterm review for this rulemaking to
consider the cost curve for mass reduction.
13-25
-------
EPA Response to Comments
A number of comments were received from companies and associations with information
on light weight materials for use in automobiles. Commenters included the Aluminum
Association, the American Chemistry Council, Bayer Material Science, SABIC Innovative
Plastics, and the Society of the Plastics Industry, Inc. These commenters provide information to
support the expectations that plastics and other materials being designed today can be used to
make a car lighter in weight, now and in the future. Plastics can be used for the closures, such
as the tailgate, and various passenger compartment items such as dash boards and venting piping.
The areas containing plastic that are exposed to loads typically have an underlying structure
which is load bearing - such as in doors and dash boards. Composites are being designed in high
end sports vehicles and are currently too expensive for a high production vehicle. The
Aluminum Association states that they believe small vehicle designs will be developed using
aluminum body and structural components that will achieve significant weight reduction while
preserving vehicle size and improving safety performance. EPA agrees with the commenters
that significant advancements have been made in lightweight material technologies, and these
developments are likely to continue in the future. As discussed in chapter 3 of the Joint TSD, the
agencies believe that manufacturers will be able to meet the MY2017-2025 GHG standards
through a combination of efficiency technologies, without relying on a level of mass reduction
that requires a dramatic shift to exotic light-weighting materials. Section 14 of the RTC
addresses comments urging the agencies to adopt a life-cycle approach whereby manufacturing
emissions would be considered along with tailpipe emissions to account for reduced GHG
emissions from using advanced materials
13.3. Comments on NHTSA/EPA's Statistical Analysis of Vehicle Safety
Organizations Included in this Section
Alliance of Automobile Manufacturers
American Iron and Steel Institute (AISI)
International Council on Clean Transportation (ICCT)
DRI (filed its study: "Updated Analysis of the Effects of Passenger Vehicle Size and Weight
on Safety " as the comments to the NPRM)
Wenzel, T.
Organization: Alliance of Automobile Manufacturers
The Alliance supports NHTSA's intention to examine safety from the perspective of both the
historical field crash data and the engineering analysis of potential future Advanced Materials
Concept vehicles. NHTSA's planned analysis rightly looks backward and forward. However,
with respect to looking ahead and the evaluation of concept vehicles, the Alliance recognizes that
it is not sufficient to only consider regulatory and consumer information crash tests. A
comprehensive evaluation of vehicle safety must also take into account real-world impact
scenarios and the special requirements of vulnerable populations (e.g., children and elderly).
These must also be adequately accounted for in any agency policy decisions. [EPA-HQ-OAR-
2010-0799-9487-Al,p.21]
13-26
-------
Vehicle Safety
Organization: American Iron and Steel Institute (AISI)
Collision Injury Severity [Federal Register vol. 76, No. 231 Pg. 74949 et seq.]
However, the effects of mass reduction on a fleet basis, considering collisions of vehicles of
unequal mass and of unequal footprint, have not been studied by AISI. We have examined the
most recent study by C. J. KahanelS (NHTSA), published in November 2011. The Kahane
findings put a high value on maintaining vehicle footprint. Essentially, the Kahane report
suggests that it would be more effective regarding injury performance to improve fuel economy
throughout the fleet by reducing mass while maintaining vehicle size, or footprint. In our
experience, this is understandable since vehicle collision performance is primarily influenced by
crush space, the working distance between the point of impact and the passenger space. Steel
structures are particularly effective in absorbing energy during a collision over the engineered
crush space (or crumple zone). Preserving crush space in the design of crashworthy vehicles is
therefore consistent with our findings in cases where AHSS structures are engineered into
equivalent spaces previously occupied by heavier steel structures. [EPA-HQ-OAR-2010-0799-
9477-Al,p. 11]
If the Kahane findings on the importance of footprint prove to be true, new AHSS technology
has already demonstrated its ability to reduce mass and maintain or improve test crashworthiness
performance all within the same vehicle footprint. AISI notes the Kahane study does not dispute
or overturn the inherent advantage of heavier vehicles in collisions of vehicles of the same or
differing footprints. The study only suggests that if a change is made in a vehicle in order to
achieve higher fuel economy, it is better to reduce mass for the same footprint rather than
making the vehicle smaller. [EPA-HQ-OAR-2010-0799-9477-A1, p. 11]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11786, pp. 103-104.]
I think in general with regard to safety, we have done quite a bit of research over the last 10 or 15
years in the steel industry. We have proven beyond a doubt that it's very possible to use lighter
structures and achieve equivalent test performance on safety.
I think that the new Kahane report is very interesting — we're still analyzing it, by the way — and
the vehicle-to-vehicle situation is a different story. But I think that in general we don't have any
objections to the initial conclusions that were drawn in that study, which really points out the
importance of the footprint methodology in defining, you know, your basic vehicle structure.
So, again, steel provides with its high strength varieties the opportunity to reduce the mass in a
given footprint, which I think is critically important as suggested in that Kahane study as being
probably the primary factor in determining how effectively we can design vehicles to be safe in
collisions within the fleet among different size vehicles.
13-27
-------
EPA Response to Comments
So without changing the laws of physics, I think that this regulation should not have a serious
impact on the progress that we're making now on the safety of vehicles on the road.
Organization: International Council on Clean Transportation (ICCT)
3. The use of advanced lightweight materials in smaller cars - or in any vehicle - will not
increase fatalities. Analyses by DRI suggest Kahane's results are not robust, likely due to
improperly controlled driver, vehicle, environment or accident factors. [EPA-HQ-OAR-2010-
0799-9512-A1, p. 2]
Once these factors are appropriately controlled, the effect of weight reduction on fatalities may
not be statistically significant. More importantly, high-strength steel and aluminum have better
crash properties than the conventional steel used in most vehicles in the historical analysis and
their use will reduce fatalities. [EPA-HQ-OAR-2010-0799-9512-A1, p. 3]
3) Safety
The ICCT appreciates the much improved modeling of safety by NHTSA, in particular the
separation of the impacts of size and weight and the inclusion of non-sporty 2-door cars in the
analyses. This has addressed many of our comments on safety in response to the 20122016
proposed rule. [EPA-HQ-OAR-2010-0799-9512-A1, p. 9]
Despite the improvements, the latest Kahane study, referenced in the proposed rule, still finds
that reducing the weight of smaller cars leads to increased fatalities. This issue is important, as
the proposed rule assumed that small cars will have zero weight reduction due to the concern
with potential fatality increases. The ICCT believes that this increase in fatalities is an artifact of
the methodology used by Kahane and that weight reduction using lightweight materials and
better vehicle design will reduce fatalities for vehicles of all sizes. [EPA-HQ-OAR-2010-0799-
9512-Al,p. 9]
Dynamic Research Inc. (DRI) recently completed a Phase 2 report 4 focused on replicating
Kahane's results with the updated 2000-2007 data. They were able to match Kahane's results
very closely, indicating that they were able to closely duplicate Kahane's methods and data. The
Phase 2 report also conducted analyses using DRI's two-stage method, which separates the
fatality impacts into the number of accidents per exposure and the number of fatalities per
accident. The two-stage results for lighter passenger vehicles, included in Table 1, below,
indicate that the increase in fatalities for lighter vehicles is entirely due to an increase in the
number of accidents per exposure. The crashworthiness and crash compatibility of the smaller
cars did not contribute to the fatality increase. [Table 1 can be found on p. 10 of Docket
number EPA-HQ-OAR-2010-0799-9512-A1] [EPA-HQ-OAR-2010-0799-9512-A1, pp. 9-10]
These counter-intuitive results strong suggest that Kahane's methodology has some driver,
vehicle, environment or accident factors that have not been controlled for in the current analyses.
13-28
-------
Vehicle Safety
Lighter vehicles have theoretical advantages in handling and braking and should be involved in
slightly few accidents, not more accidents. From a theoretical view, any increase in fatalities
should be due to compatibility issues in crashes with larger vehicles, yet the results do not show
any increase in the rate of fatalities once a crash occurs. [EPA-HQ-OAR-2010-0799-9512-A1, p.
10]
DRI also issued a supplemental report,5 which discussed in further detail two key assumptions
used in the Kahane report and two alternative assumptions. First, Kahane assumed that the
effects of vehicle weight and size can be best modeled using curb weight and footprint. DRI
believes it is more appropriate to model weight and size using curb weight, wheelbase, and track
width. Wheelbase and track width have different effects on vehicle crashworthiness, crash
compatibility, and crash avoidance. These effects are confounded when a single 'footprint' index
is used. DRI also found that using footprint and weight had more multi-collinearly than using
wheelbase, track width, and weight. As indicated in Table 2, below, the use of wheelbase and
track width reduced the number of fatalities associated with weight reduction and the coefficients
for all of the vehicle classes are not statistically significant. [Table 2 can be found on p. 11 of
Docket number EPA-HQ-OAR-2010-0799-9512-A1] [EPA-HQ-OAR-2010-0799-9512-A1, p.
10]
Second, Kahane assumed that the crash exposure is best represented by non-culpable vehicle
induced-exposure data. While there are valid reasons supporting the use of non-culpable vehicle
induced-exposure data, the DRI report discussed the reasons why it may be better to represent
crash exposure using stopped vehicle induced-exposure data: [EP A-HQ-OAR-2010-0799-9512-
Al,pp. 10-11]
'Non-culpable vehicle induced-exposure data can include crashes where the nonculpable vehicle
was moving prior to the crash. Therefore some drivers may be more likely to be involved in
these crashes than other drivers, even if the driver is not culpable in the crash. This is because
some drivers may be better able to avoid a crash in which they are not culpable than are other
drivers, due to driver skill, driver alertness and/or ability to properly react in time to avoid a
collision. Therefore this under-representation in the non-culpable induced-exposure data of good
drivers, and over representation of bad drivers, is undesirable and may introduce a numerical bias
in the results.' [EPA-HQ-OAR-2010-0799-9512-A1, p. 11]
While the necessary data for evaluating the impacts of wheelbase and track width are in the
updated 2000-2007 database, DRI does not yet have stopped-vehicle induced exposure data for
the new dataset. Thus, DRI's supplemental report provides a rough evaluation based on the
differences that DRI observed in the Phase I regression results using the older data. Assuming
that the correlation in the induced exposure estimates in the new dataset will be similar to the
correlation in the older data, Table 2 also shows that use of stopped vehicles for induced-
exposure data creates a statistically significant reduction in fatalities for weight reduction in
larger light trucks and an insignificant increase for the other vehicle classes using footprint and
an insignificant decrease in fatalities for the other vehicle classes using wheelbase and track
width. [Table 2 can be found on p. 11 of Docket number EP A-HQ-OAR-2010-0799-9512-
Al] [EPA-HQ-OAR-2010-0799-9512-A1, p. 11]
13-29
-------
EPA Response to Comments
DRI's results strongly indicate that the fatality increase seen on smaller cars in Kahane's analysis
is not robust and is likely due to improperly controlled driver, vehicle, environment or accident
factors. [EPA-HQ-OAR-2010-0799-9512-Al,p. 11]
Further improvements in Kahane's methodology would likely correct the artificial increase in
fatalities for reducing the weight of smaller cars and, in any case, high-strength steel and
aluminum have better crash properties than the conventional steel used in most vehicles in the
historical analysis. Thus, there is no basis to support the idea that using advanced lightweight
materials in smaller cars - indeed in any vehicle - will increase fatalities. [EPA-HQ-OAR-2010-
0799-9512-A1, p. 13]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 195-196.]
I will just make two quick observations. First, every time Kahane reanalyzes the impact of mass
reduction on fatalities, the fatality increase goes down. More importantly, the coefficients in
Kahane's modeling reflects the material composition in historical vehicles. This is dominated by
conventional steel. This modeling implicitly assumes that lighter vehicles do not change material
composition. However, future weight reduction will be accomplished primarily with use of high-
strength steel and aluminum, both of which have better crash properties than the standard steel.
Their use will improve vehicle crash performance and reduce fatalities, even in small cars. In
fact, Honda has moved aggressively towards the use of high strength steel in small cars, in part
due to the safety benefits.
4 DRI, UPDATED ANALYSIS OF THE EFFECTS OF PASSENGER VEHICLE SIZE AND
WEIGHT ON SAFETY, PHASE II: PRELIMINARY ANALYSIS BASED ON 2002 TO 2008
CALENDAR YEAR DATA FOR 2000 TO 2007 MODEL YEAR LIGHT PASSENGER
VEHICLES, Volume I: Technical Report DRI-TR-12-01, R. M. Van Auken J. W. Zellner,
January 2012 [This footnote refers to Docket number EPA-HQ-OAR-2010-0799-9364-A1]
5 Updated Analysis of the Effects of Passenger Vehicle Size and Weight on Safety:
Supplemental Results on the Sensitivity of the Estimates for 2002 to 2008 Calendar Year Data
for 2000 to 2007 Model Year Light Passenger Vehicles to Induced-Exposure Data and Vehicle
Size Variables. DRI-TM-12-09. R. M. Van Auken J. W. Zellner. February 2012 [This footnote
refers to Docket number EPA-HQ-OAR-2010-0799-9365-A2]
6 'Honda Civic Captures AISI Great Designs in Steel Automotive Excellence Award',
http ://www.theautochannel. com/news/2008/04/09/083 742.html
7 2006 Honda Civic Body, Advanced Personal Compact with ACE Body Structure, 2006 Honda
Civic Press Information.
8 Edwards, M., Happian-Smith, J., Davies, H., Byard, N., and Hobbs, A., The Essential
Requirements for Compatible Cars in Frontal Collisions (158)', Proceedings of the 17th
13-30
-------
Vehicle Safety
International Technical Conference on the Enhanced Safety of Vehicles, Amsterdam, the
Netherlands, 2001.
9 Faerber, E., 'EEVC Research in the Filed of Improvement of Crash Compatibility between
Passenger Cars (444)', Proceedings ofthe 17th International Technical Conference on the
Enhanced Safety of Vehicles, Amsterdam, the Netherlands, 2001.
10 Delannoy, P. and Faure, J., 'Compatibility Assessment Proposal Close from Real Life
Accident (94)', Proceedings ofthe 18th International Technical Conference on the Enhanced
Safety of Vehicles, Nagoya, Japan, 2003.
Organization: Wenzel, T.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 193-197.]
I'm a Research Scientist at Lawrence Berkeley National Laboratory. I appreciate the opportunity
to provide comments on the NPRM for this joint rulemaking today. My comments today are
mine alone, and I do not represent the views ofthe U.S. Department of Energy, the Berkeley
Lab, or the University of California.
For the last two years I have been under contract with DOE to assist NHTSA and EPA in their
analysis ofthe effect of vehicle mass reduction on safety.
My work has resulted in two studies: an assessment of NHTSA's 2011 regression analysis of
U.S. fatality risk per vehicle mile traveled (or VMT), and my own regression analysis of casualty
risk per police-reported crash. All three of these studies are available in the public docket with
this rulemaking.
My studies agree with NHTSA's conclusion, that the effect of mass reduction on U.S. fatality
risk is small and is statistically significant only for lighter-than-average cars.
For lighter-than-average cars, the regression models suggest that a 100-pound reduction in mass
would increase U.S. fatalities per vehicle mile traveled by less than 2%.
These results are much smaller than those NHTSA estimated in earlier studies in 1998 and 2003.
Other variables that NHTSA included in their regression models have a larger effect on fatality
risk than a reduction in vehicle mass.
My analysis by vehicle model indicates that on average, U.S. fatality risk does tend to increase as
vehicle mass decreases, except for full-size pickups; societal risk actually decreases as full-size
pickups get heavier. This is because ofthe high risk that full-size pickups impose on drivers of
other vehicles.
13-31
-------
EPA Response to Comments
Although risk increases as mass decreases for other types of vehicles, there is very little
correlation between risk and mass for individual vehicle models, even after accounting for
differences in other vehicle attributes, driver age and gender, and crash times and locations.
Police-reported crashes can be used to estimate four types of risk: fatality and casualty risk,
either per vehicle mile traveled or per crash. Casualty risk includes fatalities plus serious or
incapacitating injuries.
My analysis found comparable results in terms of casualty risk per crash to those from NHTSA's
analysis of fatality risk per VMT; in most cases, mass reduction resulted in an even lower effect
on risk in my analysis than in NHTSA's analysis.
I isolated the two components of fatality risk per VMT: the number of crashes per VMT (or
crash frequency), and fatality risk per crash (or crashworthiness).
Crash frequency consistently increases as vehicles get lighter for all types of vehicles. However,
mass reduction has only a small effect on fatality risk once a crash has occurred.
In conclusion, the three new analyses suggest the effect of mass reduction on risk is much
smaller than NHTSA previously estimated and statistically significant only for lighter-than-
average cars.
The agencies should keep in mind that the regression models in the three analyses are not exactly
estimating the effect of mass reduction on risk; rather, they are estimating the recent historic
relationship between mass and risk after accounting for most measurable differences between
vehicles, drivers, and crash times.
In essence, the models are comparing the risk of a 2600-pound Dodge Neon with that of a 2500-
pound Honda Civic after attempting to account for all other differences between the two
vehicles. The models are not estimating the effect of literally removing 100 pounds from the
Neon.
Reduced mass does not inherently decrease vehicle safety; it all depends on where and how the
mass is reduced; in short, how mass production is incorporated into the overall vehicle design.
Finally, the agencies should recognize that the results of the three new studies are based on
relationship of vehicle mass and footprint on risk for recent vehicle designs. These relationships
may or may not continue into the future as manufacturers utilize new vehicle designs and
incorporate new technologies, such as more extensive use of strong, lightweight materials and
specific safety technologies.
Response:
The principal response to these comments is found in section II.G.2 and 3 of the
preamble to the final rule. We supplement those responses briefly here. These comments are
from (1) Alliance of Automobile Manufacturers, (2) American Iron and Steel Institute, (3) DRI,
13-32
-------
Vehicle Safety
(4) ICCT, (5) Wenzel, T., DRI and Wenzel's comments are discussed in detail in II. G. 3. h & g
of the preamble.
More specifically, ICCT questioned NHTSA's estimated fatality increase for the weight
reduction on small cars. ICCT believes that this increase in fatalities is an artifact of the
methodology used by Kahane and that weight reduction using lightweight materials and better
vehicle design will reduce fatalities for vehicles of all sizes. EPA has looked closely at the
issues, and discerns a historical relationship between vehicle mass, size, and safety, including
small cars, by most recent safety statistical analysis of historical crash data presented at Preamble
II.G.3. As stated in the preamble (II G.3.i), "the agencies expect that the attribute-based
standards will likely facilitate the design of vehicles such that manufacturers may reduce mass
while maintaining footprint. Therefore, it is possible that the analysis for MYs 2000-2007
vehicles may not be fully representative of the vehicles that will be on the road in 2017 and
beyond."
As also stated at the preamble, "we recognize that statistical analysis of historical crash
data may not be the only way to think about the future relationship between vehicle mass and
safety. However, we recognize that other assessment methods are also subject to uncertainties,
which makes statistical analysis of historical data an important starting point if employed
mindfully and recognized for how it can be useful and what its limitations may be."
In addition, we believe that we should assess the safety effect on weight reduction by
two approaches. One is the statistical analyses approach on historical data to assess societal
safety effects. Another is the engineering study approach to assess the ability of individual
designs and new material to comply with the FMVSS, and perform well on NCAP and IIHS
tests.
DRI filed its new study: "UPDATED ANALYSIS OF THE EFFECTS OF PASSENGER
VEHICLE SIZE AND WEIGHT ON SAFETY" as comments to the NPRM. Results of DRI
study have been briefly summarized at Preamble II.G.3.g. In the Supplemental report, DRI
discussed in further detail two previous key assumptions that were used in the Kahane (2011),
Wenzel (201 Ib), and DRI (2012b) reports, and describes two alternative assumptions. The
previous key assumptions were that the effects of vehicle weight and size can be best modeled by
curb weight and footprint; and that the crash exposure is best represented by non-culpable
vehicle induced-exposure data. The alternative assumptions are that the weight and size can be
best modeled by curb weight, wheelbase, and track width; and that the crash exposure is best
represented by stopped-vehicle induced-exposure data (because non-culpable vehicle data may
under-represent vehicles and drivers that are better at avoiding crashes, even if they would have
been non-culpable in those crashes). With alternative assumptions, DRI found that estimated
fatality risk due to weight reduction is much smaller than NHTSA's results. The agencies
acknowledge these recommendations, and we believe that significant difference between the
studies should be closely examined. EPA facilitated technical communications between DRI and
NHTSA. In response to the comments, NHTSA has implemented additional sensitivity analysis.
The general results of the sensitivity analysis are presented at Preamble II.G. 3. h. The agencies
concluded that the difference by DRI's recommendation was within the range of the confidence
interval of the estimates, and NHTSA's primary results should be used for the relationship
between mass and safety.
13-33
-------
EPA Response to Comments
In his comment, Wenzel points out that although his study agrees with NHTSA's
conclusion, "there is very little correlation between risk and mass for individual vehicle models,
even after accounting for differences in other vehicle attributes, driver age and gender, and crash
time and location". In more detail, Wenzel's Phase 1 and Phase 2 reports show that when
fatality or casualty rates are aggregated at the make-model level, differences between the models
"overwhelm" the effect of mass. Likewise, in the basic regression analyses, the effects of many
control variables are much stronger than the effect of mass. EPA acknowledges Wenzel's results
and believes that Wenzel's findings are important, and it provides a relative comparison in
evaluating risk factors between mass and other variables used in the regression. NHTSA
indicates it does not dispute the validity of these analyses or disagree with these findings.
However, as it stated at Preamble II G. 3.h, NHTSA believes these results must not be
misinterpreted. Specifically, it would be wrong to conclude that the effect of mass reduction
should not be estimated at all because other ambient effects are considerably stronger.
13-34
-------
Treatment of Life Cycle Emissions Related to Vehicle Manufacturing
14. Treatment of Life-Cycle Emissions Related to Vehicle
Manufacturing
Organizations Included in this Section
Aluminum Association's Aluminum Transportation Group
American Chemistry Council (ACC)
American Iron and Steel Institute (AISI)
Center for Sustainable Systems, University of Michigan
Kendall, A.
Society of the Plastics Industry, Inc. (SPI)
United States Steel Corporation
United Steel Workers (USW)
World Resources Institute (WRI)
World Steel Association
WorldAutoSteel
Organization: Aluminum Association's Aluminum Transportation Group
Support for the Revision of Regulation (EC) No. 443/2009 on CC>2 Emissions from Cars
In our comments to the NOI on this rulemaking in October 2010, we noted the agencies' attempt
to examine the life cycle costs of owning and operating a vehicle in conjunction with the costs
and benefits of increasing CAFE standards. Since that time, a new life cycle analysis
commissioned by the European Union has concluded that improvements in the use phase of
vehicles are found to more than outweigh additional emissions from the manufacturing phase.
More specifically: [NHTSA-2010-0131-0226-A1, p. 3]
"Changes in vehicle technologies not only affect the CO2 emissions in the use phase, but many
also lead to changes in the GHG emissions occurring in other stages of the vehicle's life cycle,
specifically the manufacturing of materials and components, vehicle manufacturing and vehicle
disposal and recycling. [NHTSA-2010-0131-0226-A1, p. 3]
For the CO2-reducing technologies that are expected to be applied to conventional vehicles in
response to CO2 legislation the emission improvements in the use phase are found to more than
outweigh additional emissions from the manufacturing phase. Application of light weight
materials is found not to increase CO2 emissions from vehicle production." [NHTSA-2010-0131-
0226-A1, p. 3]
A copy of this quoted portion of the analysis is attached as Attachment C [see Docket
number NHTSA-2010-0131-0226-A3]. [NHTSA-2010-0131-0226-A1, p. 3]
Life Cycle Assessment Study - Magnesium Front End Research Development
14-1
-------
EPA Response to Comments
A 2010 life cycle CC>2 study by the Magnesium Front End Research Development (MFRED)
project found that aluminum has the smallest overall carbon footprint for total life cycle
emissions compared to competing materials including steel. A copy of the complete MFRED
project is attached to these comments as D [see Docket number NHTSA-2010-0131-0226-A6].
[NHTSA-2010-0131-0226-A1, p. 3]
We obviously were pleased to see in the agencies' Draft Environmental Impact Statement that
the agencies agree with the above conclusions, as evidenced in the statement from the
conclusions section of that document: [NHTSA-2010-0131-0226-A1, p. 3]
"Aluminum and high-strength steel material substitution are both effective at reducing life-cycle
energy use and GHG Emissions (i.e. the increased energy use and GHG emissions at the vehicle
production stage are offset by the use-phase savings over the vehicle life)." [NHTSA-2010-0131-
0226-A1, p. 3]
Organization: American Chemistry Council (ACC)
(6) The focus of the rulemaking is properly on tailpipe emissions during vehicle use phase.
ACC strongly supports the use and evaluation of well-developed, comprehensive, and complete
life cycle analysis tools for materials and products consistent with International Organization for
Standardization (ISO) Life Cycle Assessment standards. That said, the primary purpose of this
rulemaking is directed at federal greenhouse gas and fuel economy standards, and NHTSA must
develop its standards in accordance with Energy Policy and Conservation Act (EPCA) criteria.
These criteria do not directly include life cycle considerations of the materials used in
automobile construction. [EPA-HQ-OAR-2010-0799-9517-A2, p.6]
We believe the agencies' focus in this rulemaking - on increasing vehicle fuel economy and
tailpipe emissions as a source of greenhouse gas emissions - is well supported by statutory
imperatives, and also prudent. As the Environmental Protection Agency (EPA) notes, mobile
sources emitted (through tailpipe emissions) 31 percent of all U.S. GHG emissions in 2007 and
have been the fastest-growing source of U.S. greenhouse gas emissions since 1990.27 Certainly
other phases of the product life of an automobile contribute GHG emissions, from materials
manufacture, to employees commuting to the auto manufacturing job site, to container, rail and
road shipment of vehicles after their manufacture, and so forth. But emissions during these other
phases are nonetheless a fraction of GHG emissions during the operational or use phase of a
vehicle,28 and the use phase of the vehicle is responsible for emissions of 80-90 percent of life
cycle GHGs.29 LCA data consistently demonstrates that GHG savings in the use phase from
using plastics to reduce weight in transportation (e.g., reducing shipping weight of goods, or
weight of the vehicle used to transport people or goods) significantly outweigh GHG creation in
other phases of the life cycle. A report comparing two LCA approaches and considering both a
plastic fuel tank and a steel fuel tank, for example, confirms the fundamental observation
relevant to automobiles - that "use phase impacts dominate total life-cycle energy use and life-
cycle conventional pollutant emissions."30 [EPA-HQ-OAR-2010-0799-9517-A2, pp.6-7]
14-2
-------
Treatment of Life Cycle Emissions Related to Vehicle Manufacturing
Regulatory measures addressing reduction of emissions during vehicle use phase are thus the
most effective way to reduce GHGs.31 Some have argued that material-based Life Cycle
Analysis (LCA) should be considered, but it does not factor into the rulemaking here. Further,
this type of rulemaking is not an appropriate place to apply LCA because of the lack of
consensus regarding how to calculate inputs and outputs in an LCA evaluation at this time. With
respect to any future policy changes, the use of LCA can play a role, but should be evaluated
carefully. LCA is very useful tool, but it cannot itself be dispositive of public policy, a
fundamental point for future consideration, in part because it may inadequately address human
preferences and behavior (e.g., auto selection, operation, length of ownership, and other factors);
costs, job creation, and other issues important to sound policy development. [EPA-HQ-OAR-
2010-0799-9517-A2, p.7]
28 See, e.g., C. Samara and K. Meisterling, "Life Cycle Assessment of Greenhouse Gas
Emissions from Plug-in Hybrid Vehicles: Implications for Policy," Environ. Sci. Technol., 2008,
42 (9), 3170-3176, available at
http://solar.gwu.edu/index_files/Resources_files/LCA_for_PHEVs.pdf ("The majority of vehicle
life cycle energy use and GHG emissions result from powering the vehicle with liquid fuel or
electricity.")
29 World Auto Steel, Life Cycle Greenhouse Gas Emission Assessments of Automotive
Materials: The Example of Mild Steel, Advanced High Strength Steel and Aluminum in Body in
White Applications, December 7, 2007, http://www.worldautosteel.org/Proj ects/LCA-
Studv/UCSB-LCA-Studv.aspx
30 S. Joshi, "Product Environmental Life-Cycle Assessment Using Input-Output Techniques," 3
Journal of Industrial Ecology 2&3, 2000, https://www.msu.edu/~satisJIE%20article-ioshi-
published.pdf
31 See M. V. Chester and A. Horvath, Department of Civil and Environmental Engineering,
University of California, "Environmental assessment of passenger transportation should include
infrastructure and supply chains," Environ. Res. Lett. 4 (2009), ("The dominant contributions to
energy consumption and GHG emissions for onroad and air modes are from operational
components. This suggests that technological advancements to improve fuel economy and
switches to lower fossil carbon fuels are the most effective for improving environmental
performance.")
Organization: American Iron and Steel Institute (AISI)
Requested Action
AISI argues below, based on referenced studies from around the world, that future vehicle
regulations should be based on life-cycle emissions in order to ensure a net reduction in
emissions from light-duty vehicles. To accomplish this, considerable collaboration is necessary
among car companies, regulators and suppliers to establish the methodology for fairly
14-3
-------
EPA Response to Comments
accounting for life cycle emissions in vehicle regulations. [EPA-HQ-OAR-2010-0799-9477-Al,
p. 1]
The steel industry recommends the formation of an advisory committee among EPA, NHTSA,
automakers and suppliers to address this important challenge in time for the 2018 mid-term
review with the goal of incorporating life cycle emissions into vehicle regulations for model
years 2022-2025. [EPA-HQ-OAR-2010-0799-9477-A1, p. 2]
Accordingly, we suggest 40 CFR sec 86.1818-12 be amended as follows: [EPA-HQ-OAR-2010-
0799-9477-A1, p. 2]
(1) Strike "and" in clause (h)(l)(vii) and insert after clause (h)(l)(vii) the following: "(viii) The
Life-cycle Assessment Report required in paragraph (i) of this subsection; and"
(2) Strike "and" in clause (h)(2)(iii) and insert after clause (h)(2)(iii) the following: "(iv) The
Life-cycle Assessment Report required in paragraph (i) of this subsection; and"
(3) Insert after subparagraph (h)(3) the following:
"(4) No later than November 15, 2017, the Administrator shall issue a draft assessment of the
Life-cycle Assessment Report addressing all issues relevant to the inclusion of a materials life-
cycle metric in standards for the 2022 through 2025 model years."
(4) Insert after paragraph (h) the following new paragraph:
"(i) Life-cycle Assessment Report. "No later than 1 year following the publication of this
regulation in the Federal Register, the Administrator shall establish an advisory committee to
evaluate current scientific and technical information regarding life-cycle assessment of the
greenhouse gas emissions of materials used in the construction of motor vehicles. The advisory
committee shall consist of representatives from the Environmental Protection Agency, the
National Highway Traffic Safety Administration, automakers, suppliers to automakers and other
qualified individuals with expertise in life-cycle assessment and materials used in motor
vehicles. The advisory committee shall be required to issue a report by December 31, 2016. The
report shall:
"(1) Address how the life-cycle greenhouse gas emissions of various materials used or planned
for use in the construction of motor vehicles can be practically quantified.
"(2) Describe appropriate calculations and data sources that can be used to determine the life-
cycle greenhouse gas emissions of various materials; and
"(3) Propose how a materials life-cycle metric can be incorporated within standards for motor
vehicles in model years 2022-2025."
Life-cycle Greenhouse Gas Emissions
14-4
-------
Treatment of Life Cycle Emissions Related to Vehicle Manufacturing
Studies at many universities including research by Roland Geyer at the University of California
at Santa Barbaral (UCSB) and by Gregory Keoleian at the University of Michigan! have
validated the use life cycle assessment (LCA) principles in determining the true impact of
vehicles on total greenhouse gas emissions. [EPA-HQ-OAR-2010-0799-9477-A1, p. 4]
Building on this base, further LCA case studies compiled by Geyer at UCSB (Sun to Wheels
StudyS) and Ricardo (Preparing for a Life Cycle CC>2 Measure4) show that such materials and
manufacturing-related emissions are likely to grow from 15% of total emissions (today) to 50%
or more by 2020 as vehicles become more fuel efficient. A tailpipe-only rule which ignores 15%
of total emissions (today's situation) is much less problematic than one that ignores 50%. [EPA-
HQ-OAR-2010-0799-9477-A1, p. 4]
This scenario was specifically examined by Alissa Kendall at University of California at DavisS
(UC-Davis). Dr. Kendall examined the consequences of continuing to apply tailpipe-only (that
is, driving cycle only) regulations and excluding some of the critical other sources of GHG
emissions such as occur during materials manufacturing. [EPA-HQ-OAR-2010-0799-9477-Al,
p. 4]
A specific example given in the UC Davis study shows the potential consequences of continuing
tailpipe-only regulations, i.e., that total vehicle emissions may increase. Kendall's evaluation of a
modeled future Toyota Venza6 showed how emissions from the use of low density materials, as
labeled in Figure 1 [See Figure 1, Comparison by Kendall of Vehicle Life cycle GHG Emissions
from Lotus Study of Toyota Venza, at docket number EPA-HQ-OAR-2010-0799-9477-A1, p.
5.], can account for about 40% (17.3 mt CC>2 eq 743.8 mt CC>2 eq) of total emissions (lowest bar,
11 year life, in Figure 1). Also, it is clear that total emissions for the AHSS version for both 11
year and 16 year life spans are lowest. In this example, differences in materials emissions
outweigh differences in driving emissions. [EPA-HQ-OAR-2010-0799-9477-A1, p. 4]
While the importance of life-cycle emissions in future vehicles has been clear in AISI case
studies, UC Davis examples, and other academic research, it is important to note other
organizations, such as Ricardo, mentioned above, Toyota7, Mercedes and domestic original
equipment manufacturers (OEMs) are using LCA as an important tool to understand and manage
all aspects of vehicle-related emissions. [EPA-HQ-OAR-2010-0799-9477-A1, p. 5]
One objection often raised regarding the use of life cycle principles in regulations is the
perceived complexity. This is a concern to car manufacturers because of the large number of
parts used to manufacture vehicles and the large number of suppliers in the supply chain. While
specific details must be worked out, research by Kendall suggests that a bill-of-materials (BOM)
approach, much like that used by MercedesS in its LCA calculations and development of
Environmental Certificates for its vehicles, represents a simple approach. [EPA-HQ-OAR-2010-
0799-9477-A1, p. 5] [EPA-HQ-OAR-2010-0799-9477-A1, p. 5]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 90-92.]
14-5
-------
EPA Response to Comments
A schematic of the process for using the BOM for LCA calculations in a vehicle is provided in
Figure 2. [See Figure 2 at docket number EPA-HQ-OAR-2010-0799-9477-A1, p. 6]
The flow diagram in Figure 2 could establish a life cycle emissions reference point based on
vehicle footprint by: [EPA-HQ-OAR-2010-0799-9477-A1, p. 6]
1. Starting with 2018 vehicles of specific footprints and determining use-phase emissions in the
current, tailpipe method, then expanding the approach by acquiring BOM data for the same
vehicles.
2. Translating the BOM into life cycle emissions using Argonne National Lab's GREET model,
or equivalent and using Oak Ridge National Lab's "Transportation Energy Data Book," or
equivalent, for vehicle lifetime miles, a critical input to the GREET life cycle emissions
calculation.
3. Using known CO2e equations to establish a footprint-based reference for 2022 vehicles by
adding the materials-related life cycle emissions to the use-phase emissions, creating a realistic
total emissions limit. This is shown in Figure 3. [See Figure 3 at docket number EPA-HQ-OAR-
2010-0799-9477-A1, p. 7]
In the example above, the line entitled "2022 LCA reference" represents a "shift up" of the car
curves to account for life cycle emissions using existing BOM data. Please note this is one
approach and is intended to show only the feasibility of life cycle based regulations. It is likely
that other methods may be possible. [EPA-HQ-OAR-2010-0799-9477-Al, p. 7]
LCA methods are the most straightforward way to account for total emissions. Life cycle
emission data exist today for automotive materials as do models for calculating life cycle
emissions of vehicles; this is vitally important as materials will carry with them their emissions
factors just as they do their strength, density, thickness, etc. The important task is to consider
how these data and models can be used in future regulations and to use the time available
between now and the proposed 2018 mid-term review to prepare regulations which will ensure a
net reduction in emissions from light-duty vehicles. [EPA-HQ-OAR-2010-0799-9477-A1, p. 7]
In summary, AISI emphasizes the following points.
1. As vehicles become more fuel efficient, materials manufacturing emissions will become an
increasingly larger contributor to total life cycle emissions to the point they cannot be ignored.
Many studies indicate this will begin to occur around 2020.
2. A continued focus on tailpipe-only regulations may lead to an increase in total emissions from
light-duty vehicles
3. LCA principles and materials life cycle data are well known and should allow regulators to
introduce life-cycle emissions-based regulations by the time such regulations are needed, around
2022. [EPA-HQ-OAR-2010-0799-9477-A1, p. 8]
14-6
-------
Treatment of Life Cycle Emissions Related to Vehicle Manufacturing
1 Comparative LCA Model, Roland Geyer, UCSB (download from
http://www.worldautosteel.org/Proj ects/LCA-Study/2010-UCSB-model.aspx )
2 Various reports on use of LCA methodology, University of Michigan, Center for Sustainable
Systems, Greg Keoleian,( download from http://css.snre.umich.edu/publications/all)
3 Photovoltaics Offer Low-Carbon Sun-to-Wheels Transportation without Energy Sprawl,
Roland Geyer and David Stoms (UCSB Bren School) and James Kallos (Norwegian University
of Science and Technology, November 4, 2010, (download from
http://lcacenter.org/lcax/presentations-fmal/172.pdf)
4 Preparing for a Life Cycle CC>2 Measure, A Ricardo Engineering Report released by Low
Carbon Vehicle Partnership, August 25, 2011 (download from http://www.lowcvp.org.uk
5 Life Cycle Greenhouse Gas Emissions Standards for Passenger Vehicles - The Policy Context,
Alissa Kendall, Ph. D., and Lindsay Price, University of California, Davis, December 30, 2011
6 An Assessment of Mass Reduction Opportunities for a 2017-2020 Model Year Vehicle
Program, Lotus Engineering Inc., The International Council on Clean Transportation. (2010)
7 Steps Towards Sustainable Mobility, Bill Reinert, Toyota Motor Sales, May 7, 2007,
(download from http://www.discovery.org/scripts/viewDB/filesDBdownload.
php?command=download&id=1345.
8 Environmental Certificate Mercedes Benz C-Class http://www.daimler.com/dccom/0-5-
1312394-l-1312442-l-0-0-0-0-0-16158-0-0-0-0-0-0-0-0.html
Organization: Center for Sustainable Systems, University of Michigan
Due to the various sources of GHG emissions from electrified vehicles, we feel that a life-cycle
approach should be considered in order to best evaluate and set standards for all vehicle
technologies. This is particularly important for EVs since the GHG emissions are upstream,
while the majority of the emissions for CVs is due to combustion of fuel during vehicle
operation. A life-cycle approach, to evaluating vehicle emissions, would fully account for
emission sources due to upstream, vehicle operation and vehicle production life-cycle phases.
Furthermore, lifecycle analysis would allow for analogous comparisons between vehicle
technologies to ensure that the overall light-duty vehicle GHG emission reductions are realized.
[EPA-HQ-OAR-2010-0799-9493-Al,p.2]
Regional variation in GHG intensity of electricity, as pointed out in Section III-C-2 of the
proposed 2017-2025 rule, is also an important consideration which should be addressed in
vehicle standards. As part of the U.S.-China Clean Energy Research Center for Clean Vehicles,
we have conducted research on the total life-cycle GHG emissions from conventional and
electrified vehicles using a total vehicle life-cycle (or cradle-to-grave) approach, the results of
14-7
-------
EPA Response to Comments
which are currently in review.3 Our analysis of a representative midsize plug-in hybrid vehicle
has shown that there is over a 100 gram per mile GHG emissions variation between vehicles
charged in the lowest and highest GHG intensive North American Electric Reliability Council
(NERC) regions (based on an assumption of 63.5% utilization of electric mode). Our analysis
showed that the Midwest Reliability Council and Southwest Power Pool North American
Reliability Council (NERC) regions showed higher life-cycle GHG emissions in electric mode
than for gasoline mode. Our results further showed that this difference is even greater for a
representative battery electric vehicle, with a difference of over 150 life-cycle GHG grams per
mile. These results highlight the importance of a life-cycle approach. [EPA-HQ-OAR-2010-
0799-9493-A1, p.2]
We recognize the difficulty in instituting a life-cycle framework into the proposed GHG
standards since this type of analysis has not been applied to vehicle standards in past rules. To
account for the difficulty in incorporating all vehicle life-cycle stages in the standards we
recommend incorporating life-cycle stages as reliable data and methodology becomes available.
For instance, data on the upstream GHG emissions from electric power plants is available from
sources such as EPA's eGrid database.4 Vehicle production life-cycle data for specific vehicles
is less established, although frameworks such as Argonne National Laboratory's GREET Vehicle
Cycle model, do exist.5 By adding in these other emission sources, which result from a
significant portion of vehicle emissions shifting upstream, an inclusive approach will result in a
more complete and robust standard. [EPA-HQ-OAR-2010-0799-9493-Al, p.2]
Since the contribution of GHG emissions to climate change is the same regardless of the source
location, we feel that only a complete vehicle life-cycle regulatory approach will result in the
necessary emissions reductions from the U.S. vehicle fleet. We would be pleased to provide
more detail regarding our recent analysis of life-cycle GHG emissions for electrified vehicles.
Please contact Dr. Keoleian by email at gregak@umich.edu or by phone at 734-764-3194. [EPA-
HQ-OAR-2010-0799-9493-A1, pp.2-3]
3 - MacPherson, N. D., Keoleian, G. A., Kelly, J. C. (2012). 'Fuel Economy and Greenhouse Gas
Emissions Labeling for Plug in Hybrid Vehicles from a Life Cycle Perspective.' Journal of
Industrial Ecology. In review.
4 - EPA. (2011). "eGRID 2010." EPA.
5 - Wang, M. (2007). GREET 2, Version 2.7, Argonne National Laboratory.
Organization: Kendall, A.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 166-170.]
14-8
-------
Treatment of Life Cycle Emissions Related to Vehicle Manufacturing
I hope my comments today will demonstrate that the EPA should continue advancing research by
extending its scope of analysis from the tailpipes to the life cycle, including upstream impacts of
materials and vehicle technology.
Previous life cycle assessments of passenger vehicles estimated use-phase emissions constitute
85 to 95 percent of life cycle greenhouse gas emissions. So standards that address fossil fuel
consumption through fuel economy standards or CC>2 from the tailpipe have functioned to
successfully limit or reduce life cycle emissions and will probably do so in the near future as
well.
However, two trends suggest that tailpipe-only standards could miss important tradeoffs in
technology and design decisions in the future. The first trend is that many technologies that
reduce greenhouse gas emissions during operation increase emissions during production. This
has been shown for advanced materials used in mass production and also electric power train.
The second trend is that when we use reduced greenhouse gas emissions during vehicle use, the
relative importance of production-related emissions increases. These trends have been
highlighted previously including in the NHTSA draft Environmental Impact Statement and a
recent CARB report for their advanced Clean Cars program.
EPA's greenhouse gas emission standards andNHTSA'S CAFE standard are performance-based,
allowing for flexibility in how vehicle producers achieve compliance. They can select from an
enormous range of technologies and innovations, each of which have unique upstream burdens
associated with them. This means that among future vehicles, there may be significant
differences in upstream emissions. And if upstream emissions are significant enough, there's a
potential for vehicles with lower tailpipe emissions but higher life cycle emissions to be favored.
We undertook research to address these issues. The research was funded by the AISI and the
World Auto Steel organization and with additional support from U.C. Davis, the U.C. Davis
Institute of Transportation Studies. A summary of our research and findings is currently
undergoing peer review in a scholarly journal.
Using a case study approach, we undertook a streamlined LCA for a future vehicle and tested
whether tailpipe-only standards could result in the preference for vehicles with lower use-phase
emissions but higher life cycle emissions. We used a vehicle designed - developed in Lotus
Engineering 2010 report, a model year 2020 [sic] Toyota Venza. Lotus redesigned the Venza for
improved fuel economy while meeting predefined cost constraints and targets for equivalent
consumer performance. They did this through light-weighting and power train actions such as
hybridization. The high-development vehicle described in Lotus's report was the basis for our
model.
To perform the LCA, we connected the bill of materials generated by computer-aided
engineering software to life cycle inventory data. Life cycle inventories characterize the
upstream emissions associated with material production and forming processes. Using this
approach, we found the use phase responsible for 71 to 76 percent of life cycle emissions, which
aligns with many previous studies of advanced power train vehicles.
14-9
-------
EPA Response to Comments
We also performed a variation on the analysis where we altered Lotus's high-development
vehicle by replacing the lightweight body structure with one that was 100 kilograms heavier.
This was referred to as the low-development structure in the Lotus report. This heavier body
structure eliminated some carbon-intensive lightweight materials, primarily magnesium and
some aluminum. These materials were replaced with mild and advanced high-strength steel. The
change in vehicle weight led to a decrease in fuel economy of 3 miles per gallon, which in turn
increased CO2 emissions during operation. Despite these increased emissions during vehicle use,
the new design reduced total life cycle emissions by a significant amount, which approximated to
10 to 20 grams of CC>2 equivalent per mile, depending on vehicle service life.
To put this in perspective, the difference in emissions between the two designs is greater than
any of the off-cycle credit provisions and similar in magnitude to many of the air-conditioning
credits that the EPA has already considered in its rulemaking.
Our research process also demonstrated that by using the detailed bill of materials generated in
computer-aided engineering software, we could produce a streamlined LCA quite efficiently.
Since computer-aided engineering tools are widespread in the automotive industry, conducting
LCAs may be less burdensome than anticipated.
To summarize, our analysis suggests that there is a potential for a tailpipe-only CC>2 standard to
favor vehicles with higher life cycle emissions over those with lower life cycle emissions,
shifting greenhouse gas emissions from the tailpipe to production sites. Continued research in
tracking of upstream emissions for future vehicles may help manage the risk of selecting vehicle
design and technologies where upstream emissions overwhelm use-phase savings. In addition,
including upstream emissions in the standard could provide vehicle producers with an additional
degree of flexibility to achieve CO2 production.
Organization: Society of the Plastics Industry, Inc. (SPI)
Life Cycle Analyses of Plastics Demonstrate Favorable Environmental Performance [EPA-HQ-
OAR-2010-0799-9492-A1, p.7]
SPI recognizes that the criteria contained in the Energy Policy and Conservation Act (EPCA), by
which NHTSA must develop its standards, do not directly address life cycle considerations of the
materials used in automotive vehicles. As a result, information on energy use during production
of plastics and their chemical feedstocks, along with data on recyclability, are not directly
relevant to this rulemaking. However, available information provides support for the life-cycle
performance of plastics and related materials. [EPA-HQ-OAR-2010-0799-9492-A1, pp.7-8]
Compared to their alternatives, many plastic products require less energy for production,
especially for use in automotive parts. Given that the use phase of a vehicle accounts for 80-90%
of the life cycle GHG emissions, it would seem that regulatory measures that aim to reduce
emissions during this phase where technologically feasible would be the most effective way to
reduce vehicle GHG emissions. This is further supported by LCA data which demonstrates a net
savings in GHG emissions when the weight reduction in the use phase is compared to the
creation of GHGs elsewhere in the life cycle for the plastic components used, such as with fuel
14-10
-------
Treatment of Life Cycle Emissions Related to Vehicle Manufacturing
tanks. However, while it is an informative and useful tool, we share the caution and concern
expressed by the ACC with the use of LCA in public policy applications given the inherent
subjectivity and limitations. [EPA-HQ-OAR-2010-0799-9492-A1, p.8]
Organization: United States Steel Corporation
CAFE was initiated in 1975 in the wake of the 1973 Oil Embargo with the objective reducing
dependence on foreign oil. That program adopted miles per gallon, measured in equivalent
tailpipe grams of CO2 per mile, as the metric to achieve reductions in oil consumption. It was the
right approach to achieve the stated objective. [NHTSA-2010-0131-0256-A1, p. 1]
However, extending that same metric toward the new objectives of reduction of energy use and
greenhouse gas emissions associated with vehicles will not achieve the intended outcome, but in
contrast will result in increased total energy use and CO2 emissions. In fact, the magnitude of
these unintended consequences will increase as the fuel economy and grams of CO2 per mile
become more stringent between now and 2025. [NHTSA-2010-0131-0256-A1, p. 1]
These comments requests the EPA and NHTSA to accomplish a technical assessment of the
feasibility of incorporating Life Cycle principles into regulation in support of the anticipated
2018 mid-term evaluation that will lead to an informed final agency action. Attachment 1
provides a more detailed analysis of this argument as well as the sources of references supporting
documents. [NHTSA-2010-0131-0256-A1, p. 1]
To explain, a vehicle consumes energy and emits CO2 during all phases of its life which includes
manufacturing, driving, and end of life disposal. Considering all phases of a vehicle's life
accurately measures its true carbon footprint. [NHTSA-2010-0131-0256-A1, p. 2]
In today's vehicles, the driving phase CO2 emissions represent 85 percent of a vehicle's total
carbon footprint arguably justifies allowing regulators to ignore the other phases of impact.
However, as the fuel economy requirements double from 27.5 mpg today to 54.5 mpg in 2025,
the driving phase emissions will be cut in half, thus increasing the importance of other vehicle
life phases. Also, consider that many of the technologies (and materials) necessary to achieve
these fuel economy improvements are energy and CO2 intensive in the manufacturing phase and
will increase the vehicle manufacturing phase CO2 emissions, altering end-of-life impact in both
relative and absolute measures. [NHTSA-2010-0131-0256-A1, p. 2]
Several recent studies demonstrate that vehicles aiming to achieve the future fuel economy and
tailpipe emissions targets will have a 50-50 split between CO2 emissions associated with the
driving phase and other phases. Under the proposed regulations 50 percent or more of the total
CO2 emissions associated with these future vehicles will fall outside of the regulation. [NHTSA-
2010-0131-0256-Al,p. 2]
Many of the technologies required to achieve the proposed 54.5 miles per gallon target have high
manufacturing emissions. Examples of this are materials that compete with steel, such as
aluminum, magnesium, and carbon fiber, which are six to twenty times more energy and carbon
intensive to produce on a pound per pound basis than steel. While these materials may improve
14-11
-------
EPA Response to Comments
fuel economy and tailpipe CC>2 emissions in the driving phase, those improvements are not
sufficient to offset the upstream CC>2 emissions associated with producing these
materials. [NHTSA-2010-0131-0256-A1, p. 2]
To address these unintended consequences and achieve optimal environmental resource
allocations, future regulations should evaluate the CC>2 emissions associated with all of the
vehicle's life. This will ensure that technologies are not deployed that improve driving phase
emissions while increasing a vehicle's overall carbon footprint. In this regard, we have been
working with the EPA and NHTSA over the past several years to consider a more appropriate
methodology which resulted in the section III.G.5 of the NPRM requesting additional
information on this topic, for which U. S. Steel would like to thank and commend the EPA and
NHTSA for their open mindedness on this issue. [NHTSA-2010-0131-0256-A1, p. 2]
There are other advantages to a vehicle CO2 regulatory approach that incorporates life cycle
principles over the current tailpipe emissions approach beyond the obvious advantage of actually
achieving the intended outcome of reduced energy use and CO2 emissions. [NHTSA-2010-0131-
0256-A1, p. 2]
First, such an approach can enable vehicle makers with increased design flexibility in complying
with the regulations which will result in lower cost vehicles and improved environmental
performance. Vehicle makers have provided examples where the lowest life cycle CC>2
technology solution is also the low cost solution. In contrast, these examples also demonstrate
that selection of the technology to improve fuel economy and tail pipe emissions alone would
have resulted in increase manufacturing costs while increasing the carbon footprint of the
vehicle. Regulations that drive vehicle makers toward solutions that increase cost and total
carbon emissions do not make sense. Regulation that incorporates life cycle thinking will address
such unintended consequences. [NHTSA-2010-0131-0256-A1, pp. 2-3]
A second advantage is that it would drive the vehicle supply chain to reduce the carbon intensity
of their products because of the commercial advantage it would provide them. That is low carbon
suppliers would provide a competitive advantage to their customer, the vehicle manufacturer, in
complying with the regulations. Regulations, properly executed, would result in a race to the
CO2 bottom as manufactures competed to be the low carbon supplier. [NHTSA-2010-0131-
0256-A1, p. 3]
A study sponsored by the steel industry and conducted by the University of California Davis
proposes a methodology for CAFE regulation that incorporates life cycle thinking while
maintaining the simple grams of CC>2 per mile metric on current EPA-DOT vehicle stickers
today and that will dovetail into the existing CAFE regulations. This methodology addresses the
unintended consequences and results in real carbon reduction associated with vehicles using
information readily available to and easily executed by the vehicle makers. [NHTSA-2010-0131-
0256-A1, p. 3]
This proposed life cycle methodology still needs further development in order to be incorporated
into regulations, but great strides are being made and should be ready for trial in the coming
14-12
-------
Treatment of Life Cycle Emissions Related to Vehicle Manufacturing
years. Already, several automakers are utilizing life cycle tools during vehicle design. [NHTSA-
2010-0131-0256-Al,p. 3]
The steel industry is building a consortium of stakeholders to further develop this life cycle
methodology and identify the details to ensure its feasibility in regulation. Properly devised, we
believe life-cycle tools incorporated into the regulation will result in a better framework that
increases flexibility for auto designers and improves transparency, while enhancing the
environmental integrity of the underlying regulation. The current 2017- 2025 light duty vehicle
emission rules call for a mid-term evaluation that will lead to final agency action. We believe
that a complete evaluation of the feasibility of incorporating life cycle thinking into vehicle
emissions regulation is possible within the mid-term evaluation phase. We will continue to work
closely with the EPA and NHTSA on this issue and urge the agencies to actively solicit advice
and input from multidisciplinary experts prior to the mid-term review. [NHTSA-2010-0131-
0256-A1, p. 3]
In 110 year history of United States Steel Corporation, we have conducted our business practices
according to a framework of sustainable business conduct and corporate citizenship established
by one of our founders, Judge Elbert H. Gary. These principles, known as the Gary Principles,
are established in nine uncomplicated statements. The first of these states, "I believe that when a
thing is right, it will ultimately and permanently succeed". In light of that principle, life cycle
thinking applied to climate change regulation is the right thing and we believe it will ultimately
succeed. However, ultimately can be a long time with unintended and harmful consequences
occurring before the right thing is finally deployed. There is an opportunity during the course of
the 2017-2025 vehicle emissions regulations to implement the right solution and avoid
unintended consequences. Vehicle emissions regulations that incorporate lifecycle principles is
the right approach to achieve positive environmental and economic objectives. Accordingly, we
urge regulatory policymakers to begin to investigate the application of life cycle analytics and
metrics into future vehicle emissions regulations. [NHTSA-2010-0131-0256-A1, pp. 3-4]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 207-208.]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 209-210.]
So how does this conflict with the national objective of using CC>2 emissions and energy use of
vehicles to address climate change? As I stated, many technologies are required to achieve the
proposed 54.5 miles per gallon target of high manufacturing emissions. Examples of this: The
materials that compete with steel such as aluminum, magnesium and carbon fiber, which are 6 to
20 times more energy- and carbon-intensive in the manufacturing phase on a pound-per-pound
basis.
While these materials may improve fuel economy and tailpipe CC>2 emissions in the driving
phase, those improvements are not sufficient to offset the upstream CC>2 emissions associated
with producing these materials.
14-13
-------
EPA Response to Comments
To address these unintended consequences and achieve optimal environmental resource
allocation, future regulations should evaluate CC>2 emissions associated with all the vehicle's life.
This will ensure that technologies are not deployed and improve the driving phase emissions
while increasing a vehicle's overall carbon footprint.
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 210-213.]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 214-215.]
The intent and the examples we provided in our discussions with the EPA and NHTSA would
include all the materials, but there's a bill of materials that are associated with the vehicle, and it's
a standard deliverable that every vehicle comes with, and those can be interpreted with the
database as the materials.
So I agree that for OEM to chase the target footprint for the whole supply chain for the thousands
of suppliers that produce the vehicle won't be possible. The approach we are recommending uses
the database which are available such as the national GREET model that have this data already
included in there and it comes very simplified, and there are examples by the OEM of the
production vehicles today that have done that.
And, also, we have shared this with, at the recommendation, to the Alliance of Automotive
Manufacturers and made the same kind of discussion. Of course, adding another layer of
regulation on top of these ones were not seen very positively.
So, when we got through the presentation of this idea of design increases design flexibility; they
saw an opportunity in that they would have more ability to comply with the regulations; and, so,
they were interested in more information, and we will continue to work with them.
Organization: United Steel Workers (USW)
Additionally, life cycle-based vehicle regulations would establish the United States as the world
leader in manufacturing vehicles with the lowest possible emissions, directly resulting in job
growth and retention in the domestic manufacturing sector. This is particularly important to the
more than 350,000 men and women USW represents who make products - like steel - that are
used in auto and light-duty vehicles. [EPA-HQ-OAR-2010-0799-9580-A2, pp. 1-2]
Life-Cycle Greenhouse Gas Emissions [EPA-HQ-OAR-2010-0799-9580-A2, p. 2]
Recent studies at the University of California at Santa Barbara1 (UCSB) and the University of
Michigan2 have validated the use life-cycle assessment (LCA) principles in determining the true
impact of vehicles on total greenhouse gas emissions. A University of California at Davis3 (UC-
Davis) study examined the consequences of continuing to apply tailpipe-only (that is, driving
cycle only) regulations that exclude other critical sources of GHG emissions such as those that
occur during materials manufacturing. [EPA-HQ-OAR-2010-0799-9580-A2, p. 2]
14-14
-------
Treatment of Life Cycle Emissions Related to Vehicle Manufacturing
One objection often raised regarding the use of life cycle principles in regulations is the
perceived complexity. This is a concern to car manufacturers because of the large number of
parts used to manufacture vehicles and the large number of suppliers in the supply chain. While
specific details must be worked out, the UC-Davis study3 suggests that a bill-of-materials [BOM]
approach could simplify the problem. A schematic of the process for using the BOM for LCA
calculations in a vehicle is provided in Figure 3. [EPA-HQ-OAR-2010-0799-9580-A2, p. 2] [For
Figure 3 please refer to EPA-HQ-OAR-2010-0799-9580-A2, p. 2]
LCA methods are the most straightforward way to account for total emissions. Life cycle
emission data exist today for automotive materials [as do models for calculating life-cycle
emissions of vehicles]; this is vitally important as materials will carry with them their emissions
data just as they do their strength, density, thickness, etc. The important task is to consider how
these data and models can be used in future regulations and to use the time available to prepare
regulations which ensure a net reduction in emissions from light duty vehicles. [EPA-HQ-OAR-
2010-0799-9580-A2, p. 3]
As vehicles become more fuel efficient, materials manufacturing emissions will become an
increasingly larger contributor to total life cycle emissions. Several studies indicate this will
begin to occur around 2020. [EPA-HQ-OAR-2010-0799-9580-A2, p. 3]
LCA principles and materials life-cycle data are well-known and should allow regulators to
introduce life cycle emissions-based regulations by the time such regulations are needed, around
2020. [EPA-HQ-OAR-2010-0799-9580-A2, p. 3]
1 - Comparative LCA Model, Roland Geyer, UCSB (download from
http://www.worldautosteel.org/Proj ects/LCA-Study/2010-UCSB-model.aspx )
2 - Various reports on use of LCA methodology, University of Michigan, Center for Sustainable
Systems, Greg Keoleian,( download from http://css.snre.umich.edu/publications/all)
3 - Life Cycle Greenhouse Gas Emissions Standards for Passenger Vehicles - The Policy
Context, Alissa Kendall, Ph. D., and Lindsay Price, University of California, Davis, December
30,2011
Organization: World Resources Institute (WRI)
The GHG Protocol team at the World Resources Institute (WRI) would like to offer the
following comment to the inquiry on page 75112, section 5 about the current state of life cycle
GHG accounting. The GHG Protocol (www.ghgprotocol.org) has recently published two new
GHG accounting and reporting standards: Corporate Value Chain (Scope 3) and Product Life
Cycle. These standards were initiated based on stakeholder requests for a more comprehensive,
life cycle based approach to measuring and mitigating GHG emissions. [EPA-HQ-OAR-2010-
0799-7086, p. 1]
14-15
-------
EPA Response to Comments
Both standards were developed with the participation of over 2300 stakeholders including
industry, academia, NGO, and government representatives. During development, the draft
standards were road tested by over 60 companies including Ford Motor Company (see the
enclosed link) and World Auto Steel. Since publications, these standards have already been
adopted and endorsed by several large consumer goods companies. In October 2011, Ford
announced that they were expanding their GHG measurement program to include scope 3
emissions based on the GHG Protocol Standard (reference attached). [EPA-HQ-OAR-2010-
0799-7086, p. 1]
The support we received throughout this progress shows the need for life cycle based GHG
accounting. Considering the full life cycle of a product exposes not only additional GHG risk but
also reduction opportunities along the supply chain that otherwise would not be discovered.
Additionally, taking a life cycle approach to GHG accounting can help avoid unintended
consequences associated with shifting GHG burden, especially for new and emerging
technologies. Given the extensive technical research by leading experts and broad consensus
developed through a three year long multi-stakeholders process, we think GHG Protocol
standards provide a much needed tool to help companies, organizations, and governments
perform life cycle GHG Accounting. We hope you will consider and use our standards as a tool
to help you assess the life cycle GHG impacts of vehicles. [EPA-HQ-OAR-2010-0799-7086, pp.
1-2]
Organization: World Steel Association
In regard to the referenced Docket, the World Steel Association (worldsteel) commends the
US EPA for its acknowledgement of the life cycle impacts of vehicle emissions. While we
recognize that a life-cycle approach to emissions regulations is a significant paradigm shift, we
believe it is the best methodology to truly realize a vehicle carbon footprint reduction. [EPA-HQ-
OAR-2010-0799-7766-A1, p. 1]
Significant investments and efforts have been made over the years to apply Life Cycle
Assessment (LCA) to products and services to reduce environmental impacts, not only through
industry efforts, but through government-driven initiatives as well. While LCA is well known
and accepted in scientific circles and government circles around the world, both the United
Nations Environment Programme's Life Cycle Initiative and the Society of Environment
Toxicology and Chemistry's regional LCA groups (LCA Advisory Group in North America and
LCA Advisory Committee in Europe) have organized independently to study and advise on
LCA. The World Steel Association is a Board member of this UNEP/SETAC Life Cycle
Initiative. [EPA-HQ-OAR-2010-0799-7766-A1, p. 1]
However, the lack of consistency in incorporating LCA into policy and legislative measures fails
to recognize these significant achievements, but most importantly fails to capitalize on
the greenhouse gas (GHG) emissions reduction potential or comprehend the significant
unintended consequences of increased CO2 emissions that are likely to occur unless it is
addressed. The automotive industry is a clear example of this: tailpipe emissions remain the
overwhelming measurement for GHG emissions in the sector. [EPA-HQ-OAR-2010-0799-7766-
Al,p. 1]
14-16
-------
Treatment of Life Cycle Emissions Related to Vehicle Manufacturing
Life Cycle inventory data for automotive material applications such as steel, aluminum and
other competing products is robust and continues to improve and expand. Considerable academic
work is being done to support the application of LCA to regulatory policies such as those aimed
at improving the environmental performance of light duty vehicles. [EPA-HQ-OAR-2010-0799-
7766-A1, p. 1]
As detailed in the comments submitted by World Auto Steel, and the American Iron and Steel
Institute (AISI), more advanced internal combustion engine (ICE) technologies emerging in
today's cars as well as the future direction of greener vehicles, will reduce tailpipe emissions,
calling for a more integrated approach. [EPA-HQ-OAR-2010-0799-7766-A1, p. 1]
• As advanced technologies in ICE progress, tailpipe emissions will lessen, and the
relative importance of vehicle manufacturing emissions will increase. The introduction of
alternative powertrains, such as Battery Electric vehicles will leave more than half of the
total vehicle life cycle emissions unaccounted for in the regulations. Regulations based
on the tailpipe will become obsolete. Also, automaker measures taken in an effort to
address tailpipe-focused regulations have a great potential to actually cause more harm
through unintended consequences.
• LCA is the best methodology to encompass the full vehicle carbon footprint.
• LCA encourages the entire supply chain to optimize their environmental performance as
this will become a qualifier in order to be an automotive industry supplier. [EPA-HQ-
OAR-2010-0799-7766-A1, p. 2]
A life-cycle approach will drive design and manufacturing flexibility in complying with
the regulations, opening the door for even more holistic, creative solutions. [EPA-HQ-OAR-
2010-0799-7766-A1, p. 2]
Organization: World Auto Steel
WorldAutoSteel and its member companies are keenly aware of vehicle emissions regulations in
the world today and would like to take this opportunity to commend the U.S. EPA for their
consideration of Life Cycle Assessment (LCA) as you develop the next generation of
U.S. emissions standards. [EPA-HQ-OAR-2010-0799-7174-A1, p. 1]
We believe that a Life Cycle Assessment approach is the only way to effectively reduce vehicle
carbon footprint. Regulating only tailpipe or use phase emissions could lead to industry
responses that actually make things worse. Consider the use of light weight materials to reduce
vehicle mass: It does decrease use-phase emissions, but since the production of light weight
materials is typically GHG intensive, the emissions during vehicle production are likely to
increase significantly. [EPA-HQ-OAR-2010-0799-7174-A1, p. 1]
If the increase in embedded production emissions is greater than the decrease in use-
phase emissions, this approach to vehicle light-weighting actually increases total emissions -
an unintended consequence. [EPA-HQ-OAR-2010-0799-7174-A1, p. 1]
14-17
-------
EPA Response to Comments
Vehicle light-weighting is also costly, since it typically relies on expensive materials and
requires retooling of manufacturing lines. There is evidence that redesigning power trains offers
a better environmental return on investment than light-weighting. [EPA-HQ-OAR-2010-0799-
7174-Al,p. 1]
The problems created by ignoring emissions from vehicle production will be further aggravated
by future low-carbon fuels and drive-train technologies. While a typical gasoline-powered
vehicle currently emits only around 15% of its GHG during production, the use of cellulosic
ethanol or a shift towards battery or hybrid electric vehicles would dramatically increase the
share of vehicle production emissions. A recent Ricardo Study commissioned by the U.K.'s Low
Carbon Vehicle Partnership estimates that vehicle production will grow to 57% of the total life
cycle emissions due in large part to the introduction of the battery electric powertrain
technology. The production portion of these embedded emissions therefore becomes more
dominant and decisions made, such as material selection, become far more critical. For a battery
electric vehicle powered entirely by renewable electricity, vehicle production emissions could
account for as much as 85% - a complete reversal from today's ICE-powered vehicles. [EPA-
HQ-OAR-2010-0799-7174-A1, p. 1]
Without a life cycle assessment strategy in place, decisions will be made that may decrease
fuel consumption, but with the unintended consequence of significantly increasing these
embedded emissions. [EPA-HQ-OAR-2010-0799-7174-A1, p. 1]
A more thorough way of measuring automotive GHG emissions is by using LCA, which takes
into account all of the emissions created during the life of a product from raw material
production to product end-of-life. Only when a vehicle's total life-cycle emissions are accounted
for can the net environmental impact of different designs be compared. [EPA-HQ-OAR-2010-
0799-7174-A1, p. 1]
LCA methodology and practice have been developing since the early 1970s. Today, it is a
mature assessment tool with global standards. Independent of legislation many car manufacturers
are already using life cycle thinking and LCA, recognizing its importance and effectiveness in
product and process design. [EPA-HQ-OAR-2010-0799-7174-Al, p. 1, p. 2]
LCA is equally accepted and used by material producers. In fact, together with many of their
member companies, the trade associations of the steel, aluminum, and plastic industries
are among the most active members of the global LCA community. [EP A-HQ-OAR-2010-0799-
7174-Al,p. l,p. 2]
Many environmental agencies around the world support life cycle assessment, including the
European Commission which calls it "the best framework for assessing the potential
environmental impacts of products currently available." Environmental regulators and policy
makers have begun to draft legislation with a life cycle perspective, such as California's Low
Carbon Fuel Standards, but need to do so more frequently and consistently. [EPA-HQ-OAR-
2010-0799-7174-A1, p. 1, p. 2]
14-18
-------
Treatment of Life Cycle Emissions Related to Vehicle Manufacturing
Life-cycle-based automotive GHG regulation is feasible and can be achieved by amending rather
than replacing current standards. [EPA-HQ-OAR-2010-0799-7174-A1, p. 1, p. 2]
An automotive life cycle GHG emission standard accounts for the joint emissions from fuel
combustion, fuel production, and vehicle production and recycling. Fuel production emissions
need to be included so that driving fuel cell or battery electric vehicles do not appear emission
free, even though hydrogen and electricity production can be fairly GHG-intensive. [EPA-HQ-
OAR-2010-0799-7174-A1, p. 1, p. 2]
[See figure on page 2 of Docket number EPA-HQ-OAR-2010-0799-7174-A1, p. 1, p. 2]
The main task of accounting for vehicle production is to avoid unintended consequences such as
the one discussed earlier. Science-based rules need to be established about how to measure
emissions from vehicle production. A good starting point would be to multiply the materials
composition of a vehicle, which is readily available in automaker bill of materials, with the GHG
intensity of each material, also readily available, which would include adjustments due to
materials recycling. This would cover the majority of emissions from vehicle production and
recycling. Dividing the emissions from vehicle production and recycling by total driven distance,
also readily available, yields a measure in grams of CO2 equivalent per km and can be readily
added to the fuel cycle measure. This is illustrated in the figure above for two compact class
vehicles with differing materials compositions. This approach is simple for the vehicle makers to
implement and is sufficient to avoid the unintended consequences that will occur with tailpipe
only emissions. [EPA-HQ-OAR-2010-0799-7174-A1, p. 1, p. 2]
Automotive life cycle GHG emission standards are feasible and will benefit the climate. Life
Cycle Assessment is included in other industry emissions standards; however, life-cycle-based
environmental regulation is in its infancy and requires an investment of resources to bring this
approach to a mature state. We feel this can be accomplished in support of the interim review
period anticipated in 2018. Nevertheless, the regulation of automotive GHG emissions provides a
unique opportunity to align regulatory practice with the state of the art in environmental product
policy and launch a new area of enlightened and successful environmental legislation. [EPA-HQ-
OAR-2010-0799-7174-A1, p. 1, p. 3]
Response:
EPA recognizes that there are GHG emissions associated with vehicles beyond those
emitted during vehicle operation or the "use" phase, including emissions from component and
vehicle manufacturing and end-of-life disposal.26 We thank the commenters who responded to
our request for studies on this topic by providing information on their own or external research.
We also appreciate the World Resources Institute's comment highlighting two recent GHG
accounting and reporting standards related to life-cycle assessments. EPA is glad to see the
advances in research on this important issue and plans to continue to monitor new work in this
area.
26 For a discussion of GHG emissions associated with the production and distribution of fuel (including
emissions due to electricity generation used to power EVs and PHEVs), see Sections 4 and 6 of this document.
14-19
-------
EPA Response to Comments
The GHG standards we are finalizing for MY2017-MY2025 do not incorporate vehicle
manufacturing or end-of-life emissions. We agree with comments by the American Chemistry
Council and the Society of the Plastics Industry, Inc. that these emissions are typically small
relative to GHG emissions from vehicle operation, and therefore regulating emissions from the
use phase is an effective method for reducing GHG emissions from vehicles.
However, we acknowledge the point made by other commenters that the relative
significance of manufacturing emissions, and other non-use phase emissions, will increase as
vehicles' fuel economy improves over time. Some advanced vehicle technologies and materials
designed to reduce GHG emissions at the tailpipe may also be more energy and carbon intensive
to manufacture than conventional vehicles and result in vehicle production accounting for a
higher fraction of total life-cycle GHG emissions (e.g., electric vehicles powered by a low-
carbon grid or certain light-weighting materials).
Kendall highlighted one such example from her research at the University of California,
Davis comparing life-cycle emissions from two modeled MY2020 vehicle designs. She found a
more fuel-efficient vehicle (which utilizes magnesium and aluminum to reduce mass) to have
higher overall life-cycle GHG emissions than a heavier, less fuel-efficient model that
incorporates less of these materials. We recognize that such tradeoffs are possible and plan to
monitor how materials usage for future vehicles changes over time. However, as discussed in
chapter 3 of the Joint TSD, the agencies believe that manufacturers will be able to meet the
MY2017-2025 GHG standards through a combination of technologies, without relying on a level
of mass reduction that requires a high penetration of these light-weighting materials. Therefore,
EPA believes that these standards are unlikely to significantly impact vehicle production
emissions and the overall balance of GHG emissions (i.e., production versus use phase) for the
light-duty fleet due to the use of these materials.
We also believe there is currently too much uncertainty about the life-cycle impacts of
future advanced technologies to conduct the type of detailed, transparent, and replicable vehicle-
specific assessments that would be needed in a regulatory context. The GHG standards being
finalized in this rule are based on uniform test procedures that hold automobile manufacturers
accountable for emissions during vehicle operation. By contrast, full life-cycle accounting
would require automobile manufacturers to account for GHG emissions associated with a
vehicle's complete material supply chain and would require assumptions about how materials
and components would be used at the end of a vehicle's life, which are particularly uncertain for
future and emerging technologies such as electric vehicle batteries.
Kendall and several organizations from the steel industry suggested a possible approach
for incorporating vehicle production emissions into GHG standards by linking a vehicle's bill of
materials to an established GHG emissions model. While such a framework may be possible, it
would not eliminate many of the challenges associated with finding a comprehensive and
consistent set of emissions data and assumptions that would be fair and robust across all
technologies. Also, the bill of materials may not capture differences in material origin that could
impact GHG emissions (e.g., the percentage of recycled content, and the location and processes
used for production). NHTSA conducted a literature review of life-cycle studies for certain
14-20
-------
Treatment of Life Cycle Emissions Related to Vehicle Manufacturing
97
vehicle technologies as part of its Environmental Impact Statement for this rulemaking. The
range of different models and approaches utilized in the surveyed studies and the sensitivity of
the results to study assumptions further illustrate these challenges.
Moreover, in addition to the evident difficulties in accounting for life-cycle emissions
relating to upstream manufacturing in a reliable, transparent, and replicable manner, these
section 202 (a) standards are in the end for control of vehicular emissions. Compliance in
virtually all instances is measured at the tailpipe.28 Standards reflecting manufacturing life-cycle
GHG emissions would be more wide-ranging, changing the focus of the program at least in part
from vehicular emissions to manufacturing emissions. The Clean Air Act provides direct means
for control of stationary source GHG emissions, and EPA does not believe it appropriate, at least
at this time, to approach these issues indirectly by means of section 202 (a) vehicle emission
standards. See also the discussion in preamble section III.C.2.c.v, related to upstream accounting
of emissions from sources generating electricity used to power electric and plug-in hybrid
electric vehicles explaining that this rule establishes a vehicle emission program, not a fuel based
program.
We note the recommendation of several organizations to further investigate incorporating
life-cycle emissions, including manufacturing emissions, into later model year vehicle
regulations as part of the agency's mid-term evaluation. EPA plans to consider a broad range of
factors in its mid-term evaluation in order to determine whether the MY2022-2025 GHG
standards are appropriate under section 202(a) of the CAA. EPA will develop and compile up-
to-date information for the review through a collaborative and transparent process, including
public notice and comment. See section III.B.3 of the preamble for more information on the
mid-term evaluation. As noted above, EPA intends to continue to monitor new research related
to vehicle life-cycle assessment and would therefore be interested in reviewing any additional
work conducted to evaluate vehicle-specific production and end-of-life GHG emissions based on
the bill of materials (BOM) or other approaches.
27 See Ch. 6, "Literature Synthesis of Life-cycle Environmental Impacts of Certain Vehicle Materials and
Technologies," Docket No. NHTSA-2011-0056.
28 As explained in section III.C.2.c.v of the preamble, the rule accounts for upstream emissions attributable
to energy use by EVs and PHEVs in limited circumstances. While this upstream value does not reflect a single
means of generating electricity, the aggregated emissions from electricity generating facilities and their various fuels
can be estimated with reasonable certainty, and so differ from evaluating the upstream GHG emissions attributable
to the vast range of individual manufacturing facilities and processes.
14-21
-------
-------
Economic Assumptions Used in Analyses
15. Economic Assumptions Used in Analyses
15.1. On-Road Fuel Economy Gap
Organizations Included in this Section
U.S. Coalition for Advanced Diesel Cars
Organization: U.S. Coalition for Advanced Diesel Cars
Accurately account for the on-road Miles Per Gallon (MPG) gap. [NHTSA-2010-0131-0246-A1,
p.2]
On-Road MPG Gap [NHTSA-2010-0131-0246-A1, p. 11]
EPA is fully aware that the gap between CAFE certification and on-road fuel economy in the real
world has been growing for years. The following table, which is derived from data as published
in EPA's annual Light Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel
Economy Trends: 1975-2010 ("Trends Report") demonstrates the growing gap. [NHTSA-2010-
0131-0246-Al,p.ll]
As shown above, the gap between CAFE and 5-cycle label mpg, which was just 2.2 miles per
gallon in 1975, has increased to 5.8 mpg through 2010, or a gap of more than 20.5 percent.
While the fleet average gap was an even 20% in 2005, it jumped to 20.5% in 2010, following a
decade's long upward trend. In terms of GHG emissions, the gap is now close to 26 percent
between emissions that are measured under certification tests and emissions that occur in real-
world driving. EPA is aware of this growing gap and also is aware that certain technologies are
driving the fleet average gap to increase much faster than others. [NHTSA-2010-0131-0246-A1,
p. 12] [For the figure referenced 'above', please refer to NHTSA-2010-0131-0246-A1, p. 11]
"This greater impact occurs primarily because a number of the fuel efficient aspects of hybrid
vehicles produce their maximum benefit under conditions akin to the FTP and HFET tests, and
are somewhat less beneficial during aggressive driving, colder ambient temperatures and when
the air conditioner is turned on." [NHTSA-2010-0131-0246-A1, p. 12]
The following exhibit shows the growing gap between the 2-cycle CAFE tests and 5-cycle label
fuel economy, based on EPA's 2012 Fuel Economy.gov database of all light duty vehicles
available in the U.S. market.12 [NHTSA-2010-0131-0246-A1, p. 12] [For the associated 'exhibit'
please refer to NHTSA-2010-0131-0246-A1, p. 12]
Just as EPA found in its 2006 analysis, the fuel economy gap for hybrid electric vehicles is far
greater than the fleet average. In fact, the on-road gap for several HEVs is well above 30%.
Under rapidly increasing fuel economy standards, the on-the road gap will continue to grow
unless test procedures are brought up to date. [NHTSA-2010-0131-0246-A1, pp. 12-13]
15-1
-------
EPA Response to Comments
When calculating the benefits of the proposed rule, EPA fails to recognize the diminishing
correlation between lab and on-the-road fuel economy. Instead, EPA risks to freeze the gap at 20
percent for purposes of measuring benefits consumers will realize under the rules, where the
CAFE mpg is multiplied by 0.80 to estimate on-road fuel economy. As shown in the table above,
although the Trends Report shows a gap of 20% for 2005, by 2010 the gap had risen to 20.5%.
Instead of relying on fleet average label values from the Trends report, EPA and NHTSA,
beginning on page 4-4 of the Joint TSD, explain that they are relying on the Federal Highway
Administration's (FHWA) estimation of the fuel economy cars and light-duty trucks achieve as
Americans drive in the real world. In describing the reasons that they are using a constant 20%
on-the-road gap, rather than a growing gap as evidenced in the Trends Report, the agencies state:
[NHTSA-2010-0131-0246-A1, p. 13]
'We are not aware of the precise methodology used to develop the distinct on-road fuel economy
estimates for cars and trucks developed by FHWA." [NHTSA-2010-0131-0246-A1, p. 13]
The Coalition recommends that the agencies look at U.S. DOT Publication No. FHWA-PL-121-
031, published August, 2011. This document provides a detailed description of the methodology
FHWA uses to estimate on-the-road fuel economy for light duty vehicles as it attempts to
mathematically allocate how much fuel is consumed by each class of vehicle in the nation (cars,
motorcycles, busses and heavy trucks, etc.) On page 8 of this report, FHWA states that the EPA
Trends Report 5-cycle label values are the source for estimating on-the-road fuel economy for
vehicles in the fleet. In summary, FHWA uses EPA 5-cycle label fuel economy as an input to its
complex model to allocate fuel use by vehicle type while EPA does not use the same procedure.
[NHTSA-2010-0131-0246-A1, p. 13]
Since EPA is actively promoting hybridization through its rulemaking, we question why it has
elected to freeze the on-road gap at 20% when calculating benefits, since its own data shows this
gap has and will continue to expand through the duration of the rule. If the EPA is not planning
to update test procedures for purposes of administering fleet average rules and reporting fuel
economy to consumers on EPA labels, then we urge the agency to show the range of benefits it is
able to calculate as the gap between laboratory and real, on the road fuel economy continues to
grow through 2025. [NHTSA-2010-0131-0246-A1, p. 13]
12 - Data from EPA/DOE www.fueleconomy.gov 2012 Fuel Economy Datafile. Analysis by the
Martec Group.
Response:
This comment is discussed in TSD 4.2.1. As noted there, the U.S. Coalition for Advanced
Diesel Cars suggested that the on-road gap used in the proposal was overly conservative, and that
advanced technology vehicles may have on-road gaps larger than 20%. The agencies recognize
this potential issue - future changes in driver behavior or vehicle technology may change the on-
road gap. The Coalition states that the EPA 2012 Trends Report shows that the gap for gasoline
vehicles grew from 20% in 2005 to 20.5% in 2010, and that therefore the 20% value used by the
agencies is understated. We note that in recognition of the potentially greater gap for
15-2
-------
Economic Assumptions Used in Analyses
electrification technologies, the agencies are using a 30% adjustment for wall electricity; but
more broadly, to the extent that the Coalition is suggesting that the agencies extrapolate the
growth trend in the gap into the future, the agencies do not agree that the estimate of the future
on-road gap would be appropriately estimated by extrapolating the historical relationship
between the test procedure and real world fuel consumption and emissions. That historical rate
of change occurred as a result of the specific technological changes in vehicles over that
timeframe. In the future, different technologies will be employed, that are likely to affect the gap
differently. As an example, while some technologies such as electrification may increase the on-
road gap, other off-cycle technologies such as tire pressure management systems, air
conditioning improvements and aerodynamic improvements may decrease it. Thus, the agencies
are continuing to use the same on-road gap methodology as in the proposal for this final
rulemaking, but will monitor the EPA fuel economy database as these vehicles enter the fleet.
With regard to the comments regarding FHWA-PL-121-031, we appreciate the reference,
although, we believe the commenters mean FHWA-PL-11-031. We have removed the relevant
sentences from the text.
15.2. Vehicle Lifetimes and Survival Rates
No comments were received on this topic.
15.3. Vehicle Miles Traveled
15.3.1. Issues of Car-Truck VMT Used for Credit Transfers
No comments were received on this topic.
15.3.2. VMT Growth Projections
No comments were received on this topic.
15.3.3. Rebound Effect
Organizations Included in this Section
Consumer Federation of America (CF A)
Defour Group LLC
International Council on Clean Transportation (ICCT)
Plant Oil Powered Diesel Fuel Systems, Inc.
Organization: Consumer Federation of America (CFA)
• The rebound effect in the national cost-benefit analysis should be smaller. [EPA-HQ-
OAR-2010-0799-9419-A1, p. 14]
Rebound effect: When U.S. consumers drive vehicles that get more miles to the gallon, they save
money on their gasoline bills. They have more money in their pockets to spend. Whether or not
15-3
-------
EPA Response to Comments
they choose to use some of that extra spending money to drive more, they are still better off. 19
From a national cost-benefit point of view, the rebound effect should be subtracted from the fuel
savings, but from the point of view of the individual consumer, the analysis must assume that all
of the savings increase consumer welfare and that consumers choose to use those savings in a
manner that maximizes their individual welfare. For this reason, the rebound effect should be
subtracted in the national cost benefits analysis but not the consumer pocketbook analysis.[EPA-
HQ-OAR-2010-0799-9419-A1, p. 52]
19 We have argued that the rebound effect should be taken into account only in the
national cost-benefit analysis and then modelled as an income effect, not a price effect. That is,
the consumer would devote extra dollars of disposable income to gasoline expenditures
reflecting the marginal value of gasoline. This would put the current rebound effect in the range
of 5%, which is what more recent studies have found.
Organization: Defour Group LLC
V. Social Benefits and Costs of the 49.6 mpg Standard
In Table VIII-27b, page 715 of the PRIA, the agencies estimate a net social loss of $2.2 billion in
MY 2025, which in a 17 million unit sales year comes to a loss of just over $100 per vehicle.
This estimate is the sum of $2.5 billion in "Reduced Health Benefits from Criteria Emissions,"
$9.7 billion in "Climate Damages from CC>2 Emissions," and $4.4 billion in "Reduced Petroleum
Market Externalities," less a $9.6 billion "Change in [loss of] Fuel Tax Revenues" and $9.3
billion in "Increased Costs of Congestion, etc." [EPA-HQ-OAR-2010-0799-9319-A1 p. 10]
These estimates reflect a rebound effect - the impact of reduced fuel costs on increased vehicle
driving and thus increased fuel consumption — of just 10% and totally ignore the impact of the
so-called clunker effect, which is the effect of higher vehicle prices and consumer welfare losses
on the retention of older and higher emitting used vehicles. 12 If, consistent with the mainstream
literature, we assume a 20% rebound effect (see Part VII) and, following Goulder et al, a clunker
effect of 31.5%,13 the estimates of emissions reductions and fuel tax revenue losses in the table
should be reduced by 45% and the estimates of congestion and other externality costs (including
highway accident externality costs) should be increased by a factor of 2.14 The net result is a
social welfare loss of $900 per vehicle (as always, rounded to the nearest $100 per vehicle). 15
[EPA-HQ-OAR-2010-0799-9319-A1 p. 10]
This initial estimate is substantially understated. The higher rebound effect combined with the
clunker effect means that criteria pollution emissions will actually increase as a result of the
standard, as criteria pollution is the product of vehicles miles traveled, which increases with the
rebound effect, and emissions per vehicle on the road, which rises because of the clunker effect
as more higher emitting used vehicles remain on the road. Gruenspecht found, for example, that
because of the clunker effect, California's Zero Emission Standard for MY 2003 would actually
15-4
-------
Economic Assumptions Used in Analyses
increase criteria pollution emissions by 3 to 15 times the amount of the estimated emissions
reductions for new vehicles. 16 [EPA-HQ-OAR-2010-0799-9319-A1 p. 10]
VIII. The Rebound Effect: Crucial Determinant of Private and Social Welfare Effects
As we have shown, estimates of the rebound effect - the offsetting increase in fuel consumption
caused by increased driving in response to higher fuel economy and thus lower fuel costs -are
critical to the estimates of both private and social benefits of the standards. A higher rebound
effect means lower private fuel savings and lower estimates of climate and energy security
benefits. It also means proportionately higher estimates of congestion and accident externality
costs that must be subtracted from the nowreduced climate and energy security estimates. [EPA-
HQ-OAR-2010-0799-9319-A1 p. 16]
We find that the agencies' use of a 10% rebound effect understates the actual level by at least a
factor of two. The agencies justify their 10% estimate on the basis of two studies: a forthcoming
study of rebound effects that is as yet unavailable to the public, but which the author, Dr. Greene,
graciously provided to these reviewers, and an earlier study by Small and Van Dender, which
Greene (appropriately) rejects as an inadequate reflection of reality and as a violation of
economic first principles. Dr. Greene found a negative (albeit statistically insignificant),
relationship between fuel economy (mpg) and vehicle miles traveled (vmt) as opposed to the
predicted, intuitively appealing positive value. However, when several errors in his study are
corrected, it supports other recent studies that imply fuel price elasticities and thus rebound
effects of 30% and higher. [EPA-HQ-OAR-2010-0799-9319-A1 p. 16]
Of particular concern in Greene's study is the aggregation problem - a problem that can cause
dramatic over estimates of implicit consumer discount rates and underestimates of the
responsiveness of automotive fuel economy levels to fuel prices.26 Work by Resources for the
Future economist Elsheba Spiller, for example, shows that Greene's use of one overall car and
light truck light-duty fleet could bias his results downward by as much as 51%. That is because it
fails to allow enough margins over which auto buyers can adjust their purchasing decisions in
response to changing fuel prices and levels of fuel economy. If there is only one level of
aggregation - the entire fleet of cars and light trucks, it may not be possible to tell whether a
rising level of fuel prices or fuel costs is causing a shift within the aggregate fleet to more fuel-
efficient vehicles. The modeler's regression study could show little or no response on the
aggregate when there has been a substantial movement to higher mpg vehicles at lower levels of
aggregation.27 [EPA-HQ-OAR-2010-0799-9319-A1 p. 16]
In Greene's study light truck vehicle miles traveled (vmt) exceeded that of passenger cars by as
much as 1,500 miles per year, which has nothing to do with the influence of fuel cost on vmt. So
as the light truck market share and thus vmt increased over the period, Greene's proxy for fuel
cost, gallons per mile (the reciprocal of fuel economy or miles per gallon), also rose, causing a
spurious positive correlation between his measure of fuel cost and vmt. It is not surprising, then,
that his point estimate for the influence of fuel costs on vehicle miles traveled (vmt) is positive -
that as fuel economy falls and thus his measure of "fuel costs" rises, his model finds that
consumers will drive their vehicles more, not less (and conversely). [EPA-HQ-OAR-2010-0799-
9319-A1 p. 17]
15-5
-------
EPA Response to Comments
It would also seem that gallons per mile is not a good measure of fuel cost, which requires the
dollar sign in the numerator. Without the price of gasoline in the numerator, the measured level
of fuel costs — gallons per mile — can increase even when fuel cost per mile is falling and can
fall when fuel cost per mile is actually rising. Certainly, real-world consumers would be foolish
to look at mpg or its reciprocal in a vacuum. [EPA-HQ-OAR-2010-0799-9319-A1 p. 17]
We agree with Dr. Greene that his result - that as fuel costs rise auto owners do not respond by
reducing their driving (and possibly even increase their driving) - is counter intuitive. Indeed, it
violates the most well-established finding in all of economics, what economists call the "First
Law of Demand" - that, all else equal, when the price of a good or service rises, less is
demanded, not more or none at all.28 [EPA-HQ-OAR-2010-0799-9319-A1 p. 17]
His rationale for finding that owners do not reduce their driving when fuel costs rise is that
binding fuel economy standards cause vehicle prices to rise and that increased amortization of
the higher purchase prices partially offsets the reduction in fuel costs. To be sure, binding
mandates do raise the average price of the new car fleet. But much of the increase is an increase
in fixed costs that, unlike reductions in fuel costs, does not affect the marginal and thus variable
cost of driving. Much of the increase is dissipated immediately after the vehicle is taken home
from the showroom and a further amount later by vehicle obsolescence that is related solely to
age and not to the wear and tear that comes with vehicle miles traveled. [EPA-HQ-OAR-2010-
0799-9319-A1 p. 17]
The only empirical evidence Greene offers in support of a negative or zero rebound effect is
Greene's downward-biased estimate and that of Small and Van Dender - the other study on
which the agencies rely for their estimate of a 10% effect. But Greene, correctly, in our view,
rejects the Small and Van Dender rebound study, the update of which now finds a 15% rebound
effect,, because, as he says, it "does not represent an adequate representation of the effect of fuel
economy standards," and because, as he also points out, it finds a lack of statistical significance
for the fuel price variable, which "creates doubts about the validity of the methodology." Indeed,
economists at NERA Consulting found that Small and Van Dender failed to account for cost of
living differences across the metropolitan areas covered by his study, so that seemingly high fuel
prices in some areas were actually lower than fuel prices in other areas. Correcting for this error
and for certain econometric shortcomings, they found a statistically significant rebound effect of
a positive 0.24.29 [EPA-HQ-OAR-2010-0799-9319-A1 p. 18]
As Greene observes, "Most studies [of rebound effects] base their estimates on the elasticity of
vehicle travel with respect to fuel cost per mile, thereby constraining the elasticity of fuel price to
be equal and opposite in sign to the elasticity of fuel economy." As he also notes, they make this
assumption because "the two affect fuel cost per mile in equal and opposite ways."30 Greene's
own study rejects that hypothesis, finding a (longrun) fuel price elasticity of 0.30 and finding a
statistically insignificant fuel cost elasticity. [EPA-HQ-OAR-2010-0799-9319-A1 p. 18]
Greene cites two other studies of this issue. He reports that one (Schimek31) "estimated the
elasticities of vehicle travel with respect to fuel price and with respect to fuel economy
individually," finding, in Greene's words, that fuel price elasticity and fuel economy elasticity -
the rebound effect - were "almost precisely equal and opposite in sign as theory would predict."
15-6
-------
Economic Assumptions Used in Analyses
Greene co-authored the other study, which, in his words, did not reject the hypothesis of "equal
and opposite effects" for the fuel price and mpg elasticities. Greene ignores yet two other studies,
one of which was performed by Yale Professor Pinelopi Goldberg, current editor-in-chief of the
American Economic Review, and both of which found fuel price and fuel cost elasticities of
equal and opposite magnitude.32 Clearly, the weight of the literature is on the side of equal and
opposite effects. [EPA-HQ-OAR-2010-0799-9319-A1 p. 18]
In our view, the agencies should, therefore, take account of recent research by Spiller and by
Greene himself, that finds fuel price elasticities far higher (in absolute values) than the minus
0.20 reported in much of the econometric literature. Greene finds an elasticity of minus 0.30. As
previously noted, Spiller finds base elasticities of minus 0.30, rising to as "high" as minus 0.43
when aggregation errors are taken into accounts 3 - suggesting similar real-world values for the
rebound effect. At a minimum, an estimate of at least 25% seems warranted at this time. [EPA-
HQ-OAR-2010-0799-9319-A1 p. 19]
Finally, Greene finds that there has been a secular decline in the rebound effect in response to
rising incomes, mirroring the results of Small and Van Bender's regressions. However, as we
have shown, those regression studies contain serious errors that bias the estimates of rebound
effects and their mirror image, fuel price elasticities (in absolute values), dramatically
downward. What's more, the decline that he tracks occurred during a period of record low fuel
prices and recent research, including Spiller's for the years 2001 through 2009 and his own, finds
a sharp uptick even as fuel prices have rebounded to record highs. This suggests that as fuel
prices have risen, fuel costs have become a higher percentage of the household budget, which
renders households more, not less responsive to fuel prices and thus fuel costs. It further suggests
that as time goes on rebound effects may rise along with rising fuel prices and as consumer
expectations catch up with those increases over the years. EPA-HQ-OAR-2010-0799-9319-A1 p.
19]
12 - Howard Gruenspecht, "Zero Emission Vehicles: A Dirty Little Secret," Resources (Winter
2001) at http://www.rff org/rff/Documents/RFF-Resources-142-zeroemmis.pdf
13 - Lawrence Goulder, Mark Jacobsen, and Arthur van Benthem, "Unintended Consequences
from Nested State & Federal Regulation: The Case of Pavely Greenhouse-Gas-per-Mile Limits,"
Stanford, University of California at San Diego, NBER, and Resources for the Future, Available
at SSRN: http://ssrn.com/abstract=1491895, page 26.
14 - If the rebound effect of 20% reduces fuel savings and attendant ghg and energy security
benefits to 80% of those in the table and if the clunker effect cuts that 80% by another 31.5%, the
net effect is a 55% reduction of those values. Raising the rebound effect from 10% to 20%
implies a doubling of the estimate for the externality costs of raising the standards, which bear a
straight-line relationship to the rebound effect.
15 - Total Social Benefits in Table VIII-27b, page 715 of the PRIA come to $16.7 billion in MY
2025. Total Social costs come to the sum of Lost Fuel Tax Revenues of $9.6 billion and
15-7
-------
EPA Response to Comments
Increased Congestion (and accident) Costs of $9.3 billion, or $18.9 billion, for a net social
welfare loss of $2.2 billion, which divided by 17 million unit sales comes to a loss of $129 per
vehicle. The 45% offset for the combined leakage associated with the rebound and clunker
effects reduces total benefits to $9.15 billion and reduces fuel tax revenue losses to $5.26 billion.
The doubling of the rebound effect raises Increased Congestion (and accident) Costs to $18.6
billion. Total net costs or welfare losses are increased to $14.7 billion, or $864 per vehicle.
16 - Gruenspecht, Ibid.
26 - See Meghan Busse, Christopher Knittel, and Florian Zettlemeyer, "Pain at the Pump: The
Effect of Gasoline Prices on New and Used Automobile Markets, University of California
Energy Institute, UC Davis Institute of Transportation Studies and National Bureau of Economic
Research (September 2011), James Sallee, Sarah West, and Wei Fan, "The Effect of Gasoline
Prices on the Demand for Fuel Economy in Used Vehicles: Empirical Evidence and Policy
Implications," May 24, 2011, funded by the Energy Initiative at the University of Chicago and
by the Keck Foundation of Macalister College, and Elisheba Spiller, "Household Vehicle Bundle
Choices and Gasoline Demand," Resources for the Future and Duke University, January and July
2011 at http://emf.stanford.edu/files/docs/322/SPILLER.pdfand
http://fds.duke.edu/db/aas/Economics/phd/elisheba.spiller/files/Elisheba%20Spiller%20Job%20
Market%20Paper.pdf (two separate papers).
27 - Spiller, Ibid.
28 - Of course, "all else is not equal" in his analysis because he fails to account for the secular
movement from lower VMT and lower gallons per mile cars to higher VMT and higher gallons
per mile trucks.
29 - NERA Economic Consulting, Evaluation of NHTSA's Benefit-Cost Analysis of 2011-2015
CAFE Standards, Alliance of Automobile Manufacturers (2008), Appendix B.
30 - Ibid, pages 3 and 7.
31 - P.aul Schimek, "Gasoline and Travel Demand Models Using Time Series and Cross-Section
Data from the United States," National Research Council/Transportation Research Board,
Transportation Record 1558, 83-89
32 - Pinelopi Goldberg, "The Effects of the Corporate Average Fuel Efficiency Standards in the
US," Journal of Industrial Economics, (1998) and Antonio Bento, Shanjun Li, and Kevin Roth,
"Is There an Energy Paradox in Fuel Economy?" A note on the Role of Consumer Heterogeneity
and Sorting Bias," Resources for the Future, November 2010.
33 - See Spiller supra note 23.
Organization: International Council on Clean Transportation (ICCT)
15-8
-------
Economic Assumptions Used in Analyses
12. Historical VMT rebound estimates should not be used, as they do not consider the impacts of
personal income, vehicle efficiency, and fuel prices. Only dynamic models of the future VMT
rebound effect are appropriate and should be used in the final rule. [EPA-HQ-OAR-2010-0799-
9512-Al,p. 3]
12) VMT Rebound Effect
The agencies used a fixed estimate of 10% for the rebound effect. This estimate was not based
upon the latest research, but instead was a compromise between the latest research and outdated
historical data:
Tn summary, the 10 percent value was not derived from a single estimate or particular study, but
instead represents a compromise between historical estimates and projected future
estimates.' [EPA-HQ-OAR-2010-0799-9512-A1, p. 24]
'As we discussed in the 2012-2016 rulemaking and in Chapter 4 of the Joint TSD, this value was
not derived from a single point estimate from a particular study, but instead represents a
reasonable compromise between the historical estimates and the projected future
estimates.' [EPA-HQ-OAR-2010-0799-9512-A1, p. 24]
The agencies quoted the latest research from Small and VanDender and David Greene
demonstrating that the rebound effect is linked to personal income and vehicle efficiency, as well
as fuel prices, and has been declining over time. EPA also referenced recent work by Kenneth
Gillingham, who provides suggestive evidence that consumers may be less responsive to changes
in fuel efficiency than to changes in fuel prices. Yet, when it came time to select the number used
for the rebound effect, outdated studies with strictly historical effects were given equal weight to
the recent studies projecting the future VMT effect. [EPA-HQ-OAR-2010-0799-9512-A1, pp.
24-25]
The proposed rule asks for the submission of new data regarding estimates of the rebound effect
and comments on the methodology for applying the rebound effect. Additional data is not
needed. The Greene and Small and VanDender work is the proper basis for calculating the
rebound effect. They made a major contribution to the field by incorporating economic impacts
and the cost of driving into calculations of price elasticity of demand. This is much more
appropriate than assuming a fixed 10% rebound effect that does not take into account future
changes in vehicle efficiency, fuel prices, and future income. Only future projections of the
rebound effect that include the impacts of personal income, vehicle efficiency, and fuel price
should be used to calculate the future rebound effect. [EPA-HQ-OAR-2010-0799-9512-A1, p.
25]
Organization: Plant Oil Powered Diesel Fuel Systems, Inc.
1. The Proposed GHG Standards are inconsistent with law because do not regulate greenhouse
gasses. Instead, their main thrust is to regulate fuel economy. Fuel economy is not an accurate
surrogate for greenhouse gas emissions because of the rebound effect, whereby an improvement
in diesel engines' fuel efficiency has, in the aggregate, the paradoxical result of increasing
15-9
-------
EPA Response to Comments
consumption of the energy resource necessary to run the engines, and consequently, increasing
GHG emissions. While the Proposed Regulations acknowledge the factual existence of the
rebound effect, their analysis of it is incomplete and unduly limited. The expert opinion of Dr.
Harry D. Saunders ("Dr. Saunders") demonstrates that the Proposed Regulations, as drafted,
"grossly overestimate the savings in total overall energy consumed, and CC>2 emissions reduced,"
resulting from the Proposed Rules. Declaration of Dr. Saunders ("Saunders decl."), paragraph 18
(Exhibit 1). [EPA-HQ-OAR-2010-0799-10337-A2, pp. 1-2]
a. re-do their assessment of the rebound effect on GHG emissions resulting from the Proposed
GHG Standards, in light of Dr. Saunders's information and opinion (Exhibit 1 [Docket number
EPA-HQ-OAR-2010-0799-9882-A2]); [EPA-HQ-OAR-2010-0799-10337-A2, p. 2]
While relying on other, preexisting EPA Regulations, the main mechanism that the Proposed
GHG Standards utilize for reducing fuel consumption and GHG emissions is fuel economy. The
Agencies couple improvements in fuel economy with a corresponding equivalent decrease in
GHG emissions, CC>2 being by far the biggest constituent of GHG emissions from mobile
sources. [EPA-HQ-OAR-2010-0799-10337-A2, p. 3]
The Agencies acknowledge that a rebound effect exists, but they limit consideration of the
rebound effect to narrow grounds: the result that improved fuel economy will lead to an increase
in vehicle miles traveled ("VMT"). [EPA-HQ-OAR-2010-0799-10337-A2, p. 3]
POP DieselTM herewith submits evidence responding to the Agencies' appeal for more
information on the rebound effect. This evidence is in the form of the declaration by Dr.
Saunders, a leading American scholar and researcher on the rebound effect. Saunders decl.
(Exhibit 1). In summary, Dr. Saunders states that the rebound effect, properly understood, has
both direct and indirect manifestations in the economy. The Proposed Regulations' treatment of
the rebound effect ignores all indirect effects. Saunders decl., paragraphs 14-15 (Exhibit
1). [EPA-HQ-OAR-2010-0799-10337-A2, pp. 3-4]
The Agencies' consideration of direct rebound is limited to only one aspect of direct rebound: an
increase in vehicle miles traveled ("VMT") caused by lowered engine operating costs due to
improved fuel efficiency. Saunders decl. (Exhibit 1). The Proposed Regulations estimate a 10
percent rebound effect due to increased VMT occasioned by more fuel efficient light duty
engines. However, a study of the passenger vehicle market in Germany put this figure of rebound
caused by increased VMT at 58 percent. Saunders decl., at paragraph 12 (Exhibit 1). [EPA-HQ-
OAR-2010-0799-10337-A2, p. 4]
A recent article from the Wall Street Journal illustrates an aspect of the direct rebound effect that
the Agencies do not consider, but automakers acknowledge: the head of marketing for Chevrolet
states that improved fuel economy spurs demand for bigger sport utility vehicles and pick-up
trucks. "Americans Embrace SUV's Again," Dec. 2, 2011, at page 1 (Exhibit 2). This
phenomenon lowers, if not defeats, the overall fuel economy savings that would result if
consumers stayed with more fuel efficient, smaller motor vehicles. The Proposed Regulations
play into this shift towards bigger, higher fuel consuming vehicles, which erases expected gains
from improved fuel economy. [EPA-HQ-OAR-2010-0799-10337-A2, p. 4]
15-10
-------
Economic Assumptions Used in Analyses
A recent study by C.R. Knittel of the Massachusetts Institute of Technology gauges the direct
rebound effect in the light duty market, including shifts to bigger engines and vehicles, and not
just VMT, at 75 percent. Saunders decl., at paragraph 6 (Exhibit 1). Others raise the prospect that
engine efficiency rules like those incorporated into the Proposed Regulations may lead to
"energy backfire," a condition of greater than 100 percent rebound, "wherein an energy
efficiency gain leads to an absolute increase in overall energy use." Saunders decl., paragraph 8
(Exhibit 1) (referring to study from Austria). [EPA-HQ-OAR-2010-0799-10337-A2, pp. 4-5]
Furthermore, the Agencies underplay the uncertainty of their estimates of the rebound effect.
Saunders decl., paragraph 16 (Exhibit 1). This underestimated uncertainty undermines the
credibility of their predictions for total overall fuel savings resulting from the Proposed
Regulations' mandate for better fuel economy. Saunders decl., paragraph 17 (Exhibit 1). All of
the foregoing flaws in the Agencies' analysis of the rebound effect increase the chance that due
to the true magnitude of the rebound effect, the Proposed Regulations may not, in fact, reduce
GHG emissions, but may backfire and make them worse. [EPA-HQ-OAR-2010-0799-10337-A2,
p. 5]
The Latest Evidence of the Rebound Effect Shows That the Proposed Regulations Will Actually
Backfire and Produce More New Greenhouse Gas Emissions Than They Save.
In support of POP Diesel™'s position criticizing reliance on Fuel Economy Standards to achieve
Greenhouse Gas Reductions, POP Diesel™ submits herewith in their entirety two copyrighted
academic studies:
1. Christopher Knittel, "Automobiles on Steroids: Product Attribute Trade-Offs and
Technological Progress in the Automobile Sector," American Economic Review 2012, 101
(December 2011): 3368-3399 (Exhibit 1). This study points out that sales-weighted CAFE
standard has changed little since 1983 because automakers have increased the size of vehicles in
their fleets to take advantage of mandated improvements in fuel economy.
2. Kate S. Whitefoot and Steven J. Skerlos, "Design Incentives to Increase Vehicle Size Created
from the U.S. Footprint-Based Fuel Economy Standards," Energy Policy 41 (2012), 402-411
(Exhibit 2). This article quantifies the effectiveness or lack of effectiveness of the footprint-based
approach taken in the Proposed Regulations to countering the rebound effect. The Agencies have
not conducted such a quantitative analysis. This article concludes that, for instance, in 2017, a
rebound effect of at least 71 percent will ensue and that the rebound effect will more likely than
not be above 100 percent, producing a backfire condition by which the Proposed Regulations'
dependence on Fuel Efficiency Standards will actually increase the overall amount of energy
consumed and greenhouse gases emitted. [These comments were submitted late on July 31,
2012, EPA-HQ-OAR-2010-0799-11820]
Response:
Commenters suggested that EPA should use values both lower and higher than our
proposed value of the VMT rebound effect. We did not find that the commenters presented any
persuasive new data or analysis that justify revising the 10 percent value at this time, so we
continued to assume a 10 percent value in the final rule (i.e., we assume a 10 percent decrease in
fuel cost per mile from our standards would result in a 1 percent increase in VMT). We relied on
15-11
-------
EPA Response to Comments
a wide range of peer-reviewed literature to inform our estimate of the VMT rebound effect,
including recent studies and projected estimates as well as a larger body of historic literature
using both aggregate and household level data. As we discussed in the preamble (section
III.HAc) and Chapter 4.2.5.3 of the Joint TSD, the 10 percent value was not derived from a
single point estimate or from a particular study, but instead represents a reasonable compromise
between historical estimates and projected future estimates.
The Consumer Federation of America (CFA) suggested that we use 5 percent in our
national analysis since it would better reflect the income effect (consumers having more money
in their pockets to spend on driving) and not the price effect (consumers wanting to drive more
because it costs less) associated with lower driving costs. Much of the literature we reviewed to
inform our analysis of the rebound effect controls for income (since all sources of income, not
just income associated with fuel savings, can influence VMT) and, therefore, only captures the
price effect.
CFA also suggested that any additional driving due to the rebound effect increases
consumer welfare and therefore the rebound effect should not be subtracted in the consumer
pocketbook analysis. However, in both our proposed and final rules, we did not incorporate the
rebound effect in our consumer payback analysis (i.e., we calculate the consumer payback
associated with reference case VMT, which does not include rebound VMT). See RIA Chapter
5.5. As CFA recommends, we only considered the additional fuel consumption and fuel costs
associated with rebound driving in our overall, national-level analysis of costs and benefits.
Additionally, we quantify the value that consumers derive from additional rebound driving in our
analysis of national-lev el costs and benefits.
The Defour Group suggested using an estimate of 20 percent or higher for the VMT
rebound effect. The Defour Group cited potential methodological shortcomings in two studies
that informed our analysis of the rebound effect (Greene and Small and Van Dender29);
suggested that EPA should instead consider findings from studies evaluating the price elasticity
of demand for gasoline; and further suggested that the magnitude of the rebound effect might
increase rather than decrease in the future. The Defour Group also commented that Greene's
study was not available for public review and that EPA relied solely on studies from Greene and
Small and Van Dender in selecting the 10 percent value.
We found a number of errors and misrepresentations in the Defour Group's interpretation
of Greene and Small and Van Dender's studies.30 For example, the commenter suggests that
29 While not specified in their comments, we assume the Defour Group is referring to the online version of Greene,
David, 2012. "Rebound 2007: Analysis of U.S. light-duty vehicle travel statistics," Energy Policy, vol. 41, pp. 14-
28 (which was publically available on the journal's website as of February 9, 2010) and Small, K. andK. Van
Dender, 2007a. "Fuel Efficiency and Motor Vehicle Travel: The Declining Rebound Effect." The Energy Journal,
vol. 28, no. 1, pp. 25-51. We referenced both studies in the NPRM and placed copies in the docket (EPA-HQ-OAR-
2010-0799-0759 for Greene's paper and EPA-HQ-OAR-2010-0799-0755 for Small and Van Dender's paper).
30 The examples included here are illustrative and are by no means exhaustive. There are a plentitude of
errors and misrepresentations of equal magnitude throughout the Defour Group's comment. Additional examples
include a statement, without citation, that Small and Van Dender updated their study and now find a 15% rebound
effect; however Small and Van Dender have reported no such estimate. The Defour Group also states that Greene
15-12
-------
Economic Assumptions Used in Analyses
Greene's study rejects the findings from Small and Van Bender's study, however, Greene's
study actually provides broad confirmation of their work using a different dataset and method.31
As another example, the Defour Group critiques Greene's purported use of gallon/mile as a
surrogate for fuel costs whereas Greene actually used $/mile in his analysis. As yet another
example, the Defour Group suggests that, in contrast to findings in Greene's study and to a
certain extent in Small and Van Bender's study, the weight of literature supports the hypothesis
that elasticities of VMT with respect to fuel prices and fuel efficiency are of equal and opposite
magnitude, however, neither of the studies the Defour Group cited seems to support this claim.32
The Defour Group references findings in research from Spiller33 as evidence that the
rebound effect should be higher than 10 percent and compares these findings to Greene's
analysis of the rebound effect. The findings in Spiller's research, however, are related to the
price elasticity of demand for gasoline. This type of elasticity, while a useful point of
comparison, is not appropriate for measuring the VMT rebound effect because it reflects
consumer selection of vehicle fuel efficiency (both via vehicle choice as well as vehicle
finds that auto "owners do not reduce their driving when fuel costs rise", which is not true. Greene does not
conclude that auto owners do not respond to changes in fuel costs. Greene is simply unable to find a statistically
significant relationship between VMT and fuel efficiency (i.e., he is unable to find empirical evidence), but he goes
on to evaluate the rebound effect by looking at VMT responsiveness to changes in fuel cost per mile rather than fuel
efficiency and he produces statistically significant results (indicative that auto owners are responsive to fuel costs,
but not necessarily fuel efficiency).
31 For example, Greene states in the conclusion of his study, "The results obtained here with national time series data
are quite consistent with Small and Van Bender's estimates using state level time series, cross sectional data." (pg.
27). Greene's inability to find a statistically significant elasticity of VMT with respect to fuel economy "is not new,
having been previously reported by Small and Van Dender." (pg. 26). Greene goes on to explain on pg. 26, "What
is new is the finding that the hypothesis that the elasticities of vehicle travel with respect to fuel price and fuel
efficiency (gallons per mile) are equal, as predicted by theory, is now rejected by the national time series data." This
hypothesis is mainstream, having been adopted by many modelers examining the rebound effect, not just Small and
Van Dender (we discuss this topic in section 4.5 of the Joint TSD as a potential reason why rebound estimates in the
literature may overestimate the magnitude if, for example, people are more responsive to fuel prices than to fuel
efficiency).
32 The first study they cited did not find evidence that a change in the price per mile of driving impacts VMT
(Goldberg, Pinelopi, 1998, "The Effects of the Corporate Average Fuel Efficiency Standards in the US", Journal of
Industrial Economics, vol. XLVI) (Docket EPA-HQ-OAR-2010-0799). There is no mention of rebound in the
second study they cited as it focuses on willingness to pay for fuel efficiency, not VMT responsiveness to fuel
efficiency or fuel prices (Bento et al., 2010, "Is There an Energy Paradox in Fuel Economy? A Note on the Role of
Consumer Heterogeneity and Sorting Bias", Resources for the Future Discussion Paper available at
http://www.rff.org/RFF/Documents/RFF-DP-10-56.pdf) (Docket EPA-HQ-OAR-2010-0799).
Spiller, E. "Household Vehicle Bundle Choices and Gasoline Demand," Resources for the Future and Duke
University, paper from January 201 lavailavble at
http://fds.duke.edu/db/aas/Economics/phd/elisheba.spiller/files/Elisheba%20Spiller%20Job%20Market%20Paper.pd
f and PowerPoint from July 2011 available at http://emf.stanford.edu/files/docs/322/SPILLER.pdf. (Docket EPA-
HQ-OAR-2010-0799)
15-13
-------
EPA Response to Comments
operation and maintenance) in addition to VMT.34 Along these lines, the Defour Group cites
two other studies (Busse et al.35 and Sallee et al.36) that find fuel prices have a much stronger
impact on consumer purchase of fuel efficient vehicles than previous studies have found, but
again these findings are not directly relevant to estimating the VMT rebound effect since the
rebound effect is a measure of the additional VMT as a result of increased fuel efficiency, which
is a separate consumer behavior (modeled differently) than consumer choice of fuel efficiency.
In addition, the Busse et al. and Sallee et al. studies draw their conclusions based on analysis of
the used vehicle market, which may not behave in the same way as the new vehicle market.
The Defour Group also suggests that the magnitude of the rebound effect could increase
if fuel prices rise in the future, since this will cause fuel costs to represent a greater share of
household budgets, which in turn makes households more responsive to fuel costs. While this is
not implausible, the same logic holds that the rebound effect would continue to decline if other
driving costs (such as the time cost of driving associated with income and congestion levels, and
costs of other vehicle ownership and operational categories such as insurance, maintenance, and
tolls) increase enough to counteract the effect of higher fuel prices. Income is anticipated to
increase in the future and, as we discuss in the Chapter 4.2.5.2 of the Joint TSD, Small and Van
Dender (2007) and Hymel, Small, and Van Dender (2010) find that the rebound effect is more
strongly dependant on income than on fuel costs.
With respect to the Defour Group's comment on the availability of Greene's study, EPA
included in the NPRM docket the version that was accepted into the journal, Energy Policy, and
published in early 2012.3? This version was also available online at the journal's website as of
February 2010. Finally, the Defour Group's assertion that EPA justified our selection of a 10
34 We sought comment in the MYs 2012-2016 rulemaking on using the elasticity of demand for gasoline to
estimate the VMT rebound effect. We received one comment during that rulemaking, from ICCT, that this elasticity
should not be used to guide the choice of a value for the VMT rebound effect.
35 Busse, M., Knittel, C., and Zettelmeyer, F.. "Pain at the Pump: The Effect of Gasoline Prices on New and
Used Automobile Markets", September 2011. (Docket EPA-HQ-OAR-2010-0799)
36The authors of this study clearly note that it is preliminary and incomplete and request that it be cited only
with permission. It is not clear if the Defour Group had permission to cite it in their comments. Sallee, I, West, S.,
and Fan, W., "The Effect of Gasoline Prices on the Demand for Fuel Economy in Used Vehicles: Empirical
Evidence and Policy Implications," May 24, 2011, funded by the Energy Initiative at the University of Chicago and
by the Keck Foundation of Macalister College. (Docket EPA-HQ-OAR-2010-0799).
37 We included the following citation in the NPRM preamble (76 FR at 75126) and in Chapter 4.2.5.2 of the Draft
Joint TSD:
Greene, David, "Rebound 2007: Analysis of National Light-Duty Vehicle Travel Statistics," February 9, 2010.
This paper has been accepted for an upcoming special issue of Energy Policy, although the publication date has not
yet been determined. (Docket EPA-HQ-OAR-2010-0799)
15-14
-------
Economic Assumptions Used in Analyses
percent rebound value solely on the basis of two studies is not accurate, as we discuss above, in
preamble section III.HAc, and at section 4.2.5.3 of the Joint TSD.
The Defour Group also suggests that there will be a potential delay in fleet turnover (i.e.,
the retirement of used vehicles and their replacement by new models) as a result of our rule,
which the Defour Group refers to as "the clunker effect" in its comments. We discuss this topic
(which is unrelated to the VMT rebound effect) in section III.H. 11 .a of the preamble. In brief,
the effect of this rule on the use and scrappage of older vehicles is influenced by a number of
factors, including the rule's impacts on vehicle prices, the fuel efficiency of new vehicle models,
the fuel efficiency of used vehicles, and the total sales of new vehicles. If the value of fuel
savings resulting from improved fuel efficiency to the typical potential buyer of a new vehicle
outweighs the average increase in new models' prices, sales of new vehicles could rise, the used
vehicle market may increase in volume as new vehicle buyers sell their older vehicles, and
scrappage rates of used vehicles may increase slightly. This will cause both an influx of more
efficient vehicles into the used vehicle market and an increase in the turnover of the vehicle fleet,
thus accentuating the anticipated effect of the rule on fleet-wide fuel consumption and CC>2
emissions. The opposite scenario, as the commenter suggests, is also possible. Because we do not
have good estimates of the relationships between the new and used vehicle markets, we have not
attempted to estimate explicitly the effects of the rule on the used vehicle market, scrappage of
older vehicles, and the turnover of the vehicle fleet. EPA's analysis of the effects of the rule on
new vehicle sales, however, reasonably indicates that it is possible for the rule to increase vehicle
sales through its role in promoting social learning, reducing risk and uncertainty for
manufacturers, and promoting innovation (as discussed in section III.H. 11. a of the preamble).
Our response to this commenter on vehicle sales impacts is available in section 18.7 of this RTC
document.
The International Council for Clean Transportation (ICCT) suggested we should rely
solely on projected estimates of the VMT rebound effect that account for future incomes and fuel
prices, which tend to be lower than 10 percent for the years covered by this rule. We recognize
the merit of projected estimates of the VMT rebound effect that take into account future incomes,
fuel efficiency, and fuel prices over the period impacted by our rulemaking, particularly since the
recent studies ICCT cites (from Greene and from Small and Van Dender) have found evidence
that the VMT rebound effect is declining over time (see Joint TSD section 4.2.5.2). However, as
discussed above, we determined it was appropriate to consider projected estimates from recent
studies as well as the larger body of literature on this topic, reflecting a range of different
analytical methods and results, in selecting the most appropriate value to use in this rulemaking.
Plant Oil Powered Diesel Fuel Systems, Inc. (POP Diesel) cited a recent study in
Germany (Frondel et al., 2011) based on household survey data as evidence that EPA had
underestimated the VMT rebound effect. We focused on U.S.-based studies of the VMT rebound
effect to inform our regulatory analysis because driver behavior in the U.S. may differ from
driver behavior in other countries (e.g., there is likely to be less elastic demand for VMT in the
U.S. than Germany because of longer driving distances and fewer transportation
15-15
-------
EPA Response to Comments
TO
alternatives). The declaration from Dr. Saunders that POP Diesel referenced in its comments
also suggested that EPA relied too heavily on older analyses that use older data and that recent
studies using recent data tend to show a rebound effect that is larger than 10 percent. As
discussed above, we relied on a wide range of studies to inform our analysis, which were based
on data that spanned multiple decades. Recent studies have actually found evidence that the
rebound effect has declined in recent years and could be less than 10 percent in the years covered
by our rule (as we discuss in preamble section III.HAc and Joint TSD Chapter 4.2.5.2). POP
Diesel also suggested that EPA and NHTSA's uncertainty analysis was too narrow (referencing
the declaration from Dr. Saunders which cites the agencies' range as 5-15 percent). EPA and
NHTSA, however, conducted sensitivity and uncertainly analyses over a broader range of
estimates of the direct VMT rebound. EPA's sensitivity analysis covered a range of 0-20 percent
(see EPA RIA section 4.5.1) and NHTSA's uncertainty analysis, which we reference in the
introduction to preamble III.H, covered a range of 5-30 percent. Even assuming the higher end
of these ranges for rebound, EPA would not have changed the standards. Among other things,
the benefits of the rule would still vastly exceed the costs.
POP Diesel also suggested that EPA should account for the energy and GHG emissions
impact associated with the so-called "indirect rebound effects" (distinct from the VMT rebound
effect) of consumers using the increased disposable income they gain from fuel savings to
purchase goods and services that were produced with energy or that consume energy. We are not
aware of any data on the magnitude of potential indirect rebound effects, if any, from our rule.
Research on indirect rebound effects is nascent and POP Diesel did not provide analysis in its
comments indicating an appropriate method or value to use to estimate these putative effects
from our rule.39 We therefore believe it is unreasonable to consider potential indirect rebound
effects, if any, from our rule based on the commenter's speculative assertions. Furthermore, as
noted in the previous footnote, there are additional benefits to consumers associated with
increased consumption of goods and services, which would be important to consider if we were
38 Frondel, Manuel and Vance, Colin, 2011. "Re-Identifying the Rebound - What About Asymmetry?", Ruhr
Economic Papers #276. (Docket EPA-HQ-OAR-2010-0799)
39
The declaration from Dr. Saunders that POP Diesel referenced in their comments cited only one study on indirect
rebound effects (Druckman et al., 2011, "Missing carbon reductions? Exploring rebound and backfire effects in UK
households", Energy Policy, vol. 39, pp. 3572-3581.) (Docket EPA-HQ-OAR-2010-0799). While this UK-based
study could offer insights into how to estimate indirect rebound effects, the method is not appropriate for use in our
rule for many reasons. First, the U.S. economy and consumer behavior is likely to differ from other countries (e.g.,
Americans have different product and service preferences and our products and services have different levels of
embedded energy). Similar data and models may not exist to replicate the UK study in a U.S.-context. Second, the
study is designed to examine behavioral strategies (e.g., lowering thermostats, reducing food waste, and biking
instead of using a car) rather than improving technology. Among other things, the study does not consider capital
expenditures associated with energy savings that could dampen any increase in disposable income (e.g., our rule
increases the cost of new vehicles, which decreases disposable income). Third, the study does not consider the
potential for economic restructuring in response to decreased energy consumption (i.e., it does not consider "general
equilibrium" effects), which could lead to either lower or higher energy consumption as a result of our rule. Fourth,
the authors recognize that there is a major limitation of the study: they have only a very small number of
expenditure categories in their model and there is considerable disparity in GHG intensities of commodities within
each category (p. 3578). Finally, the authors do not attempt to quantify the additional benefits to consumers
associated with increased consumption of goods and services, which would be important to consider if we were
assessing the overall costs and benefits associated with potential indirect rebound effects from our rule.
15-16
-------
Economic Assumptions Used in Analyses
assessing the overall costs and benefits associated with potential indirect rebound effects from
our rule.
POP Diesel also commented that there is a potential for consumers to shift to larger, more
powerful vehicles that are less fuel-efficient in response to our standards. POP Diesel described
this as a direct rebound effect; however, since this behavior does not influence VMT, we
consider it to be another type of indirect effect unrelated to the direct VMT rebound effect. As
discussed above, we are not aware of any data on the magnitude of potential indirect rebound
effects from this rule, let alone whether they would be significant. POP Diesel's specific
assertion that people will spend some of the money they expect to gain from fuel savings on
larger, more powerful vehicles is highly uncertain. It assumes that not only would consumers
not be put off by what are likely to be higher vehicle prices, but would purchase disproportionate
numbers of the more expensive large footprint vehicles because of the perceived fuel savings.
First, as we discuss in preamble III.H.l.a and in response to comments in section 18.1, predicting
consumer preferences (and therefore the future fleet mix) is challenging. It is difficult to isolate
the influence of fuel efficiency standards from other factors (e.g., fuel prices, consumer taste,
demographics) on consumer vehicle choice. It is not yet clear whether vehicle choice models
can provide reasonable predictions of future fleet mixes with and without our rule. While it is
possible people will buy bigger, more powerful cars in response to our rule, it is also possible
they will do the opposite. Comments from the Institute for Policy Integrity suggest our rule
could actually make fuel-efficient vehicles more popular and that we have therefore
underestimated the benefits of our rule (see its discussion of "positionality" and the "bandwagon
effect" in EPA-HQ-OAR-2010-0799-9480-A1, pp. 19-21). Second, the commenter does not
seem to account for the fact that our rule sets attribute-based standards (whereby every size
vehicle has an emissions target), which reduces incentives to change the size distribution of
vehicles in the fleet (see preamble section II.C and joint TSD chapter 2.1 and 2.2).40 In late-filed
comments on July 31, 2012, POP Diesel submitted a study from Whitefoot and Skerlos41
claiming it as evidence that our rule will lead to vehicle upsizing that results in a large rebound
40 Ironically, the Knittel study cited in the declaration from Dr. Saunders that POP Diesel submitted with
their comments, and cited again by POP Diesel in their late-filed comment of July 31, 2012, maintains that
manufacturers will have to downsize their fleets to meet even the MY 2016 standards (Knittel, Christopher R., 2011,
"Automobiles on Steroids: Product Attribute Trade-Offs and Technological Progress in the Automobile
Sector." American Economic Review, 101(7): 3368-99) (Docket EPA-HQ-OAR-2010-0799). See Knittel at 3388.
Although EPA disagrees (as explained at RIA 1-40 and section 18.1 of this RTC, this rule includes costs of
maintaining all vehicle attributes of the existing fleet, including size, weight, torque, and horsepower), this study
appears to contradict POP Diesel's ultimate point. Furthermore, the Knittel study does not discuss rebound effects,
so EPA does not see that the study can properly be cited as support for a quantified rebound effect between 1980-
2006 as suggested in the Saunders declaration.
41 Whitefoot, Kate and Skerlos, Steven, 2012. "Design Incentives to Increase Vehicle Size Created from the
U.S. Footprint-Based Fuel Economy Standards," Energy Policy 41, pp. 402-411 (EPA Docket EPA-HQ-OAR-2010-
0799).
15-17
-------
EPA Response to Comments
effect that negates much, if not all, of the estimated fuel and GHG savings. This study does not
deal with rebound effects (nor does it purport to), and EPA disagrees that the standards will
result in a significant upsizing of the fleet in any case.42 We respond to comments on car and
light truck footprint curve shapes and level of the standards, including comments from Whitefoot
and Skerlos and other commenters who cite this study, in section 2.2.2 of the RTC (see also a
summary of our response in the previous footnote).
Our analysis of this rule has shown that it is possible to maintain vehicle characteristics
(including safety, size, and horsepower) and improve fuel economy (see EPA RIA at 1-40). It
should also be possible, though of course with increased cost, to have more fuel economy as well
as more size, safety, and/or horsepower. Nothing in our rule precludes these changes in vehicles.
We have assumed, however, that the fleet mix will not need to change in response to this rule
since we have factored in the cost of preserving the vehicle utility present in the existing fleet.
If, as POP Diesel suggests, changes occur in response to market forces, it is reasonable to assume
that those changes will reduce the costs or increase the benefits associated with consumer
ownership of the vehicles. We will review the environmental implications of any changes in the
vehicle fleet during the mid-term evaluation (see preamble section IB.5 for information on the
mid-term evaluation).
42In its late-filed comments, POP Diesel states that the Whitefoot and Skerlos study posits a rebound effect of at
least 71 percent will ensue and that the rebound effect will more likely than not be above 100 percent, producing a
backfire condition. In fact, the Whitefoot and Skerlos study does not discuss any type of rebound effect, much less
the quantified values attributed to the study by the commenter. Rather, the primary focus of the study is on issues of
curve shape and standard stringency. The authors analyze the 2012-2016 CAFE standards (not the standards
proposed in this rule), and do so assuming different inputs than the agencies actually used in the MYs 2012-2016
rule regarding the baseline fleet, the cost and efficacy of potential future technologies, and the relationship between
vehicle footprint and fuel economy. Were the agencies to use the Whitefoot and Skerlos methodology with the
actual inputs to the MYs 2012-2016 rules, it is likely that different results would be obtained from those in the
Whitefoot and Skerlos study. We have responded to these issues in detail in section 2.4 of the Joint TSD, RTC
2.2.2, and preamble section II.C. We also explain that the gradual extension of the cutpoint in the right hand portion
of the truck curve does not create an incentive to upsize. See preamble section ILC.S.b and Joint TSD section 2.5.2.
Thus, this study does not deal with rebound effects at all (nor does it purport to), and EPA disagrees that the
standards will result in a significant upsizing of the fleet in any case. We therefore believe that POP Diesel has
significantly mischaracterized the Whitefoot and Skerlos study, and that it does not support the commenter's
assertions regarding rebound effects. We also note that the other study submitted by POP Diesel, by Knittel,
postulates a reverse effect: that manufacturers will necessarily have to downsize the fleet to meet the standards.
Although we disagree (see footnote discussing the Knittel study, which precedes the previous footnote citing the
Whitefoot and Skerlos study), the study is illustrative of the range of views in the literature on the potential effects
of the standards.
15-18
-------
Analysis of GHG Emissions Reductions and Their Associated Effects
16. Analysis of GHG Emissions Reductions and Their Associated Effects
16.1. Impact on GHG emissions
Organizations Included in this Section
Alliance of Automobile Manufacturers
National Wildlife Federation (NWF)
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Union of Concerned Scientists (UCS)
U.S. Coalition for Advanced Diesel Cars
Weiner, L.
Organization: Alliance of Automobile Manufacturers
Weighted Average CO2 Content for Diesel Fuel [EPA-HQ-OAR-2010-0799-9487-A1, p.91]
Footnote 164 on page 74933 of the NPRM states that the Agencies used 10,200 grams/gallon as
an estimated weighted average CO2 content for diesel fuel. This is not consistent with the 2012-
16MY rule, where the Agencies had used the estimated weighted average CC>2 content for diesel
fuel of 10,180 grams/gallon. (See footnote 20 of the 2012-2016 Light-Duty Vehicle Greenhouse
Gas and CAFE rulemaking; 75 Fed. Reg. 25324, 25330 (May 7, 2010)) To stay consistent,
10,180 should be used in the 2017-25MY rule. [EPA-HQ-OAR-2010-0799-9487-A1, pp.91-92]
Organization: National Wildlife Federation (NWF)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 29.]
Taken together with light- and heavy-duty standards being implemented now, the proposed
standards will cut carbon pollution by over 650 million metric tons by year by 2030, about 10
percent of the total carbon pollution today. This is a historic step forward to combat our climate
challenge.
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 123-124.]
Finally these standards will keep 280 million metric tons of carbon pollution out of the
atmosphere. That's the equivalent of shuttering 72 coal-fired power plants for one year.
16-1
-------
EPA Response to Comments
Organization: Union of Concerned Scientists (UCS)
Environmental Benefits
The proposed standards will also deliver significant reductions in the greenhouse gas emissions
that cause climate change. Based on UCS analysis, the 2017-2025 standards would reduce global
warming pollution by as much as 290 million metric tons (MMT) in 2030 alone. This is
equivalent to shutting down 62 (600 megawatt) coal-fired power plants for an entire year. When
combined with the final standards for MYs 2012-2016, the National Program will reduce U.S.
greenhouse gas emissions by more than 630 MMT in 2030. [EPA-HQ-OAR-2010-0799-9567-
A2, p. 3]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 216.]
Based on UCS analysis, the 2017 through 2025 standards alone would reduce global warming
pollution by as much as 290 million metric tons in 2030. This is equivalent to shutting down 62
600-mega watt coal-fired power plants for an entire year. Cumulatively, this program will reduce
emissions by more than 1.7 billion metric tons through 2030.
Organization: U.S. Coalition for Advanced Diesel Cars
The success of the new rules ultimately will be judged by reductions in real-world petroleum
barrels and real-world GHGtons from 2017 through 2025. [NHTSA-2010-0131-0246-A1, p.2]
Organization: Weiner, L.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 106.]
In relation to carbon pollution, the reduction of carbon pollution by implementing these
standards, as you well understand, is another significant benefit. Cutting carbon pollution by 2
billion metric tons is equivalent to the annual emissions from 474 coal-fired power plants. And
as I'm sure you are aware, coal-fired power plants are very high makers of carbon pollution. This
is a considerable reduction of a dangerous greenhouse gas. The reality, as we know, is that global
efforts in reducing climate change have been slow.
Response:
EPA appreciates the many commenters (NWF; Sierra Club, Environment America, Safe
Climate Campaign, and Clean Air Council; UCS; Weiner, L.) who recognized the significant
GHG reductions that we expect from this rule. We agree with the U.S. Coalition for Advanced
Diesel Cars that the success of our rule is tied to the real-world fuel and GHG savings it will
achieve, which we have estimated using best available methods.
16-2
-------
Analysis of GHG Emissions Reductions and Their Associated Effects
With respect to the Alliance of Automobile Manufacturer's comment, the CC>2 content
for diesel fuel in EPA's analysis is consistent with the MYs 2012-2016 rulemaking value (10,180
grams/gallon) (see section 4.3.6 of the RIA). The 10,200 gram/gallon value presented in
footnote 164 on page 74933 of the NPRM was an approximate value.
16.2. Climate Change Impacts from GHG Emissions and Other Climate-
Forcing Agents
Organizations Included in this Section
Adams, G.
American Medical Association of California
Axford, H.
Cafagna, R.
Ceres
Cuenca, M.
Environmental Defense Fund (EDF)
Faria, R.
Haroldson, C.
Institute for Energy Research (IER)
International Council on Clean Transportation (ICCT)
Lennon, S.
Links, W.
Manufacturers of Emission Controls Association (MECA)
National Wildlife Federation (NWF)
Parker, M.
Paul, M.
Pearce, F.
Smith, G.
Steffanoff, N.
Steyn, R.
Sullivan, T.
Union of Concerned Scientists (UCS)
Van Coppenolle, J. and L.
Organization: Adams, G.
I do care about cutting US dependence on fossil fuel in general because I do NOT like what
global warming is doing to the weather. I am afraid that drought, flood, high winds, and crazy
weather in general are likely to drive the price of food sky-high. [EP A-HQ-OAR-2010-0799-
1550-Al,p. 1]
Organization: American Medical Association of California
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11787, p. 46.]
16-3
-------
EPA Response to Comments
Without strong action to reduce greenhouse gases, rising temperatures due to climate change will
lead to even higher suffering from increases in ozone pollution, pollen production, expanded heat
waves, devastating wildfires and accompanying wildfire smoke exposures. These will also
impact our most vulnerable communities the hardest.
Organization: Axford, H.
Lastly, EPA claims these regulations are necessary because of carbon dioxide emissions. But
EPA admits that this rule will, at most, reduce global temperature by 0.0184 °C by 2100. Two
hundredths of a degree Celsius is not enough to have an impact on the climate and therefore,
EPA cannot claim any climate benefits from this mandate. [EPA-HQ-OAR-2010-0799-9149-Al,
p. 2]
Organization: Cafagna, R.
Lastly, EPA claims these regulations are necessary because of carbon dioxide emissions. But
EPA admits that this rule will, at most, reduce global temperature by 0.0184 °C by 2100. Two
hundredths of a degree Celsius is not enough to have an impact on the climate and therefore,
EPA cannot claim any climate benefits from this mandate. [EPA-HQ-OAR-2010-0799-11689-
Al,p.2]
Organization: Ceres
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 75.]
Strong standards will also serve to mitigate climate change risks and the very significant
economic as well as environmental and human disruption that a changing climate will likely
cause — and, in fact, is already causing.
Organization: Cuenca, M.
Lastly, the EPA claims these regulations are necessary because of carbon dioxide emissions.
However the EPA admits this rule will, at best, reduce global temperature by 0.0184 °C by 2100.
Less than two hundredths of a single degree Celsius is not enough to have an impact on the
climate therefore, the EPA should not claim any climate benefits from this silly mandate. [EPA-
HQ-OAR-2010-0799-10142-A1, p. 2]
Organization: Environmental Defense Fund (EOF)
Our petroleum addiction has significant environmental consequences. The combustion of oil in
our nation's fleet of light-duty vehicles emits about 20 percent of total U.S. greenhouse gases
emissions. Carbon dioxide and other potent heat-trapping gases contribute to climate change,
which can threaten us at home and abroad. [EPA-HQ-OAR-2010-0799-9519-A1, p. 2]
16-4
-------
Analysis of GHG Emissions Reductions and Their Associated Effects
The U.S. Global Change Research Program has found that climate changes "are already affecting
water, energy, transportation, agriculture, ecosystems, and health." Its 2009 Assessment predicts
that water resources will be further stressed, crop and livestock production will be increasingly
challenged, coastal areas will be increasingly threatened, and human health will be impacted due
to heat stress, waterborne diseases, poor air quality, extreme weather events, and diseases
transmitted by insects and rodents. [EPA-HQ-OAR-2010-0799-9519-A1, p. 2]
The number of people at risk due to droughts will increase because many low-rainfall areas are
projected to receive less rain and because rising temperatures and evaporation will cause soils to
dry. Seasonal snow packs in the Western United States will shrink, endangering water supplies
relied upon by Western communities. The number and extent of wildfires, insect outbreaks, and
tree mortality in the interior West, the Southwest, and Alaska will likely expand. And damaging
impacts outside of the United States may harm our trade, humanitarian, and national security
interests. [EPA-HQ-OAR-2010-0799-9519-A1, p. 2]
Natural disasters in 2011 wielded the costliest toll in history — a massive $380 billion worth of
losses from earthquakes, floods, tornadoes, hurricanes, wildfires, tsunamis and more. And that
figure does not include the expenses associated with sickness or injuries triggered by the
disasters. 10 [EPA-HQ-OAR-2010-0799-9519-A1, p. 2]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 287-288.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 173.]
With respect to climate security, the combustion of oil in our nation's fleet of passenger vehicles
accounts for about 20 percent of U.S. greenhouse gas emissions. Together with the first-phase
standards, the proposed standard under consideration will cut heat-trapping carbon dioxide
pollution by over 6 million metric tons.
These emission reductions are an important part of a national and global effort to ward off the
worst consequences of climate change. The U.S. Global Change Research Program has found
that climate change is already affecting water, energy, transportation, agriculture ecosystems and
health.
Organization: Faria, R.
Lastly, EPA claims these regulations are necessary because of carbon dioxide emissions. But
EPA admits that this rule will, at most, reduce global temperature by 0.0184 °C by 2100. Two
hundredths of a degree Celsius is not enough to have an impact on the climate and therefore,
EPA cannot claim any climate benefits from this mandate. [EPA-HQ-OAR-2010-0799-9834-A1,
p. 2]
Organization: Haroldson, C.
16-5
-------
EPA Response to Comments
Climate change concerns are becoming increasingly debunked and should no longer be a
concern. [EPA-HQ-OAR-2010-0799-11137-A1, p. 1]
Organization: Institute for Energy Research (IER)
This comment explains that EPA, and by extension NHTSA, fail to justify increasing the
greenhouse gas emissions standards for light-duty vehicles. EPA's rule does not affect the pace
of climate change in any meaningful way. Therefore, this rule is fatally flawed or the
endangerment finding is fatally flawed. After all, EPA is regulating greenhouse gases in order to
reduce climate change. [EPA-HQ-OAR-2010-0799-9573-A1, p. 1]
EPA fails to provide any justification to regulate greenhouse gas emissions from light-duty
vehicles. In fact, EPA's proposed rule clearly demonstrates that greenhouse gas emissions from
light-duty vehicles do not "endanger public health or welfare" as required by section 202 of the
Clean Air Act. For these reasons, EPA should not regulate greenhouse gases using the Clean Air
Act. [EPA-HQ-OAR-2010-0799-9573-A1, p. 23]
Organization: International Council on Clean Transportation (ICCT)
18. Black carbon is an important climate-forcing agent. EPA should regulate black carbon
indirectly via stringent limits on particulate matter and expedite the congressionally mandated
black carbon study report followed by all appropriate steps to regulate this pollutant as a climate-
forcing agent. [EPA-HQ-OAR-2010-0799-9512-A1, p. 4]
18) Black Carbon
Black carbon is the light-absorbing fraction of particulate matter that causes warming. In January
2012 an article published in the journal Science found emission standards for new light- and
heavy-duty vehicles, as well as scrappage of high emitting vehicles, to be one of a handful of
measures to control black carbon that are necessary to guarantee stabilization of global average
temperatures no greater than 2°C above temperatures in the pre-industrial period.81 [EPA-HQ-
OAR-2010-0799-9512-A1, p. 51]
EPA acknowledges the climate benefits of reductions in particulate matter emissions that would
be generated by this rule, though they would be small.82 However, EPA does not evaluate the
concomitant reductions in black carbon, nor does it propose to regulate black carbon. Previously
the agency cited its concern that no definitive scientific assessment on the climate impacts of
black carbon had been made. 83 EPA has been directed by Congress to conduct a review of black
carbon climate science to be completed in 2010, but this is now overdue and remains
unpublished. [EPA-HQ-OAR-2010-0799-9512-A1, p. 51]
Other actions on black carbon are worth noting. In December 2010, the executive body of the
Convention on Long Range Transport of Air Pollution directed its Working Group on Strategies
and Review to consider the inclusion of black carbon in the revision of the Gothenburg
Protocol.84In May 2011 the Arctic Council put forward an assessment of emissions and
mitigation options for control of black carbon climate impacts on the Arctic. In June 2011, the
16-6
-------
Analysis of GHG Emissions Reductions and Their Associated Effects
International Maritime Organization adopted a workplan to investigate the definition,
measurement, and control options for black carbon. In November 2011, the Arctic Monitoring
and Assessment Program published a report on the impact of black carbon on Arctic Climate.
And in January 2012, CARB issued a staff report that captures the current state of scientific
o c
knowledge and remaining areas of investigation for black carbon. These actions reflect a
growing international scientific and policy interest in identifying mechanisms to regulate the
climate impacts of black carbon. [EPA-HQ-OAR-2010-0799-9512-A1, pp. 51-52]
There is reason to believe that black carbon emissions from current on-road vehicles have been
underestimated. Testing conducted by EPA and CARB staff of PFI engines caused an upward
revision of emission factors for PM in the California emissions inventory from less than 1 mg per
mile to 4 mg per mile.86This suggests that black carbon emissions have also been
underestimated, although speciation of these emissions was not conducted. High cold start
emissions contributed the bulk of this increase, but oil burning and engine degradation also
contribute. According to our calculations, a light-duty vehicle emitting on average 0.004 g
PM/mile would represent approximately 2.4 g CO2-eq/mile black carbon emissions assuming
75% of PM is black carbon and the GWP-100 value, is 800.[EPA-HQ-OAR-2010-0799-9512-
Al, p. 52]
Both the US EPA and CARB have regulatory provisions for non-CC>2 climate forcing agents,
such as methane, nitrous oxide, and hydrofluorocarbons. The IPCC in its Fourth Assessment
Report quantified estimated that the radiative forcing of black carbon ranks third among the
climate pollutants. Meanwhile, research conducted more recently by Ramanathan and
Carmichael concluded that IPCC estimates of radiative forcing are overly conservative, putting
black carbon second after carbon dioxide in terms of global contribution to radiative forcing.8
From this perspective, black carbon deserves greater priority than other climate forcing agents
currently regulated by EPA. [EPA-HQ-OAR-2010-0799-9512-A1, p. 52]
We recognize that EPA must initiate a process to bring black carbon into the basket of regulated
climate forcing agents, so regulation under this rulemaking may be premature. In light of this, we
strongly urge the agency to consider (a) regulating black carbon indirectly via stringent limits on
paniculate matter in future rulemakings; and (b) expeditiously finalizing the congressionally
mandated black carbon study report to inform future direct regulation of this pollutant. [EPA-
HQ-OAR-2010-0799-9512-A1, p. 52]
81(Shindelletal, 2012)
84 http://www.unece.org/fileadmin/DAM/env/documents/2010j eb/ eb/
eb%20decisions/Decision_2 010.2.e.pdf
85 CARB. 2011 Appendix U Proposed Technical Support Document: LEV III Climate Change
Impacts of Black Carbon Particles. Sacramento, CA: California Air Resources Board.
November, 2011. See http://www.arb.ca.govjregactj2012jleviiighg2012jlevappu.pdf
16-7
-------
EPA Response to Comments
86 CARS, 2012
87 Dr. V. Ramanathan and G. Carmichael, 2008
Organization: Lennon, S.
EPA cannot claim any climate benefits from this mandate. [EPA-HQ-OAR-2010-0799-9019-A1,
p. 1]
Organization: Links, W.
Lastly, EPA claims these regulations are necessary because of carbon dioxide emissions. But
EPA admits that this rule will, at most, reduce global temperature by 0.0184 °C by 2100. Two
hundredths of a degree Celsius is not enough to have an impact on the climate and therefore,
EPA cannot claim any climate benefits from this mandate. [EPA-HQ-OAR-2010-0799-10348-
Al,p.2]
Organization: Manufacturers of Emission Controls Association (MECA)
There is a significant linkage between ground level ozone concentrations and climate change
impacts. One example was detailed by a group of researchers from the United Kingdom in a
2007 Nature publication. In this work, ground-level ozone was shown to damage plant
photosynthesis resulting in lower carbon dioxide uptake from plants that have been exposed to
higher levels of ozone. Other studies have shown that increasing average annual temperatures are
likely to result in even higher levels of ozone in the environment. Emission reductions aimed at
lowering ambient ozone levels, such as lower emissions of volatile organic compounds (VOCs)
and NOX, will have a positive impact on climate change, as well as human health. Policies that
aim to reduce ambient ozone levels may also become more necessary and important to either
mitigate the climate change impacts of ground level ozone or to mitigate higher ozone levels that
result from climate change. [EPA-HQ-OAR-2010-0799-9452-A3, p.4]
Black carbon is a major component of particulate matter emissions from mobile sources and is
believed to have a significant net atmospheric warming effect by enhancing the absorption of
sunlight. Black carbon is a mix of elemental and organic carbon emitted by fossil fuel
combustion, bio-mass burning, and bio-fuel cooking as soot. Black carbon is a dominant
absorber of visible solar radiation in the atmosphere. Anthropogenic sources of black carbon are
transported over long distances and are most concentrated in the tropics where solar irradiance is
highest. Because of the combination of high absorption, a regional distribution roughly aligned
with solar irradiance, and the capacity to form widespread atmospheric brown clouds in a
mixture with other aerosols, emissions of black carbon are thought to be the second strongest
contribution to current climate change, after CO2 emissions. [EPA-HQ-OAR-2010-0799-9452-
A3, p.5]
According to scientists at the Scripps Institute of Oceanography and University of Iowa, soot
and other forms of black carbon could have as much as 60% of the current global warming effect
of carbon dioxide. Black carbon plays a major role in the dimming of the surface and a
16-8
-------
Analysis of GHG Emissions Reductions and Their Associated Effects
correspondingly large solar heating of the atmosphere. For example, the retreat of the
Himalayan-Hindu Kush glaciers is one of the major environmental problems facing the Asian
region. The glacier retreat has accelerated since the 1970s and several scientists have speculated
that solar heating by soot in atmospheric brown clouds and deposition of dark soot over bright
snow surfaces may be an important contributing factor for the acceleration of glacier retreat. A
recent study published in a 2009 issue of Nature Geoscience (vol. 2, 2009) by researchers from
the NASA Goddard Institute and Columbia University found that black carbon is responsible for
50% of the total Arctic warming observed from 1890 to 2007 (most of the observed Arctic
warming over this timeframe occurred from 1976 to 2007). [EPA-HQ-OAR-2010-0799-9452-
A3, p.5]
It is estimated that 70% of the black carbon emissions from mobile sources are from diesel -
fueled vehicles, with the assumption that 40% of gasoline PM is black carbon and 60% of diesel
PM is black carbon. Up to 25% of the carbon footprint of a heavy-duty diesel truck is associated
with black carbon exhaust emissions. Since black carbon particles only remain airborne for
weeks at most compared to carbon dioxide, which can remain in the atmosphere for more than a
century, removing black carbon would have an immediate benefit to both global warming and
public health. The black carbon concentration and its global heating will decrease almost
immediately after reduction of its emission. For these reasons and the growing body of scientific
evidence that links black carbon emissions with climate change, MECA believes that EPA
should include black carbon emissions as part of its overall greenhouse gas emission control
strategy. [EPA-HQ-OAR-2010-0799-9452-A3, p.5]
Black carbon from diesel vehicles can be significantly reduced through emission control
technology that is already commercially available. High efficiency diesel paniculate filters
(DPFs) on new and existing diesel engines provide nearly 99.9% reductions of carbon emissions.
During the regeneration of DPFs, captured carbon is oxidized to CC>2 but this filter regeneration
still results in a net climate change benefit since global warming potential of black carbon has
been estimated to be as high as 4,500 times higher than that of CC>2 on a per gram of emission
basis. To meet EPA's 2007-2010 heavy-duty engine PM standards, essentially all new, on-road
heavy-duty diesel engines are now equipped with high efficiency DPFs. It is estimated that the
installation of DPFs will reduce PM emissions from U.S. heavy-duty diesel vehicles by 110,000
tons per year. Current California and EPA light-duty emission standards for diesel particulate
matter also require the use of a high efficiency DPF on new light-duty diesel vehicles. [EPA-HQ-
OAR-2010-0799-9452-A3, pp.5-6]
Because older diesel engines emit significant amounts of PM, there are also significant
opportunities to reduce black carbon emissions through diesel retrofit programs that make use of
retrofit DPF technology. The number of vehicles retrofitted, the number of programs, and the
interest in new programs for DPFs have grown significantly over the past few years with more
than 250,000 DPFs installed as retrofits to date in a variety of world markets. Retrofit filters can
provide large benefits in human health through reductions in diesel PM and climate change
benefits through reductions in black carbon emissions on both existing, on-road and off-road
diesel engines. California has already tackled black carbon emissions from existing mobile
sources through its ambitious Diesel Risk Reduction Plan and their associated regulatory
initiatives that target the reduction of diesel particulate emissions from existing diesel engines
16-9
-------
EPA Response to Comments
over the next fifteen years. In many of these California regulatory programs existing diesel
engines will need to be retrofit with high efficiency DPFs or replaced/repowered with engines
that are equipped with high efficiency filters by OEMs. Similar regulatory programs could be
implemented within other states or by EPA to reap the public health and climate change co-
benefits associated with reductions in black carbon emissions. Incentive funding programs like
California's Carl Moyer program or the federal Diesel Emission Reduction Act (DERA) also can
be used as a strategy for mobile source retrofit programs at the state or federal level that target
black carbon reductions. Incentive funds for filter retrofits might also be generated by a state or
national greenhouse gas cap-and-trade programs. [EPA-HQ-OAR-2010-0799-9452-A3, p.6]
In the case of gasoline vehicles, additional climate change benefits could be obtained by
lowering federal gasoline fuel sulfur levels to enable the use of lean NOX adsorber catalysts on
gasoline lean-burn engines. [EPA-HQ-OAR-2010-0799-9452-A3, p.6]
Organization: National Wildlife Federation (NWF)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 28-29.]
Carbon pollution is warming our climate locally and worldwide. These changes threaten people
and global security right now, and they are a most profoundly threatening force against the future
of wildlife. Rising temperatures, flood, fires, droughts and ecosystem alterations are creating
direct habitat loss, increased invasive species and other threats for wildlife species, and many of
those species may not adapt.
Organization: Parker, M.
Lastly, EPA claims these regulations are necessary because of carbon dioxide emissions. But
EPA admits that this rule will, at most, reduce global temperature by 0.0184 °C by 2100. Two
hundredths of a degree Celsius is not enough to have an impact on the climate and therefore,
EPA cannot claim any climate benefits from this mandate. [EPA-HQ-OAR-2010-0799-9017-Al,
p. 2]
Organization: Paul, M.
Lastly, EPA claims these regulations are necessary because of carbon dioxide emissions. But the
EPA **ADMITS" that this rule will, at most, reduce global temperature by 0.0184°C by 2100...
[EPA-HQ-OAR-2010-0799-9027-A1, p. 2]
THAT'S JUST TWO **HUNDREDTHS** OF A DEGREE CELSIUS !!! [EPA-HQ-OAR-
2010-0799-9027-A1, p. 2]
Therefore, EPA CANNOT CLAIM any appreciable climate benefits from this mandate. Just
2/100ths of a degree Celsius IS »NOT» ENOUGH TO HAVE AN IMPACT ON THE
CLIMATE OF THE EARTH AND... [EPA-HQ-OAR-2010-0799-9027-A1, p. 2]
16-10
-------
Analysis of GHG Emissions Reductions and Their Associated Effects
Organization: Pearce, F.
The EPA claims these regulations are necessary because of carbon dioxide emissions. Global
Warming has been exposed to be nothing but a scam created through falsified data. Even then
the EPA admits that the additional regulations would reduce global temperature minimally at
best. [EPA-HQ-OAR-2010-0799-10343-Al,p. 1]
Organization: Smith, G.
'Reduce carbon dioxide pollution by over 6 billion metric tons over the life of the
program equivalent to the emissions from the United States in 2010.' Who cares? CC>2 is not a
problem. It has zip to do with global warming and our air is more pure than it has been for 200
years. [EPA-HQ-OAR-2010-0799-8438-A1, p. 1]
Organization: Steffanoff, N
Lastly, EPA claims these regulations are necessary because of carbon dioxide emissions. But
EPA admits that this rule will, at most, reduce global temperature by 0.0184 °C by 2100. Two
hundredths of a degree Celsius is not enough to have an impact on the climate and therefore,
EPA cannot claim any climate benefits from this mandate. [EPA-HQ-OAR-2010-0799-9335-Al,
p. 2]
Organization: Steyn, R.
* EPA claims its proposed increase is necessary to reduce carbon dioxide emissions, supposedly
to reduce global warming. Again, EPA has NO statutory authority to regulate greenhouse gases
such as carbon dioxide, which is not a pollutant and indeed is vital to the biosphere's life cycle.
Moreover, EPA admits that this rule will, at most, reduce global temperature by 0.0184 °C by
2100. Two hundredths of a degree Celsius is not enough to have an impact on the climate.
Therefore, EPA cannot claim any climate benefits from this mandate. [EPA-HQ-OAR-2010-
0799-8724-A1, p. 2]
* The very scientific basis upon which EPA bases its illegal rule-making to reduce greenhouse
gases is under increasing challenge. According to a recent editorial in the Wall Street Journal
signed by a two dozen respected, senior scientists and engineers, "...a large and growing number
of distinguished scientists and engineers do not agree that drastic actions on global warming are
needed." [EPA-HQ-OAR-2010-0799-8724-A1, p. 2]
Organization: Sullivan, T.
Lastly, EPA claims these regulations are necessary because of carbon dioxide emissions. But
EPA admits that this rule will, at most, reduce global temperature by 0.0184 °C by 2100. Two
hundredths of a degree Celsius is not enough to have an impact on the climate and therefore,
EPA cannot claim any climate benefits from this mandate. Besides, the theory of global warming
is a failure, since none of their predictions are coming true. Not one. CO2 is harmless, and is in
16-11
-------
EPA Response to Comments
fact beneficial to plant life, and thus to all animal life including mankind. [EPA-HQ-OAR-2010-
0799-10341-A1, p. 2]
Organization: Union of Concerned Scientists (UCS)
Finally, strong standards will help reduce the heat-trapping emissions that cause global warming.
Current and projected climate change impacts pose significant risks to public health, the
economy, and the environment. Delaying action now and waiting for the future before initiating
accelerated action to reduce global warming emissions would be more costly than initiating
action now. [EPA-HQ-OAR-2010-0799-9713-Al, p. 2]
Organization: Van Coppenolle, J. and L.
Climate change, as you at the EPA should well know, is not just theory and not a diabolical
scheme on the part of climate scientists to punish corporations. It is a threatening reality that
should have been vigorously addressed a decade or more ago. [EPA-HQ-OAR-2010-0799-1284-
Al,p. 1]
You at the EPA have the opportunity to address a major component of climate change with the
proposed new standards. Please take this opportunity to do as much as reasonably possible to
mitigate that phenomenon. [EPA-HQ-OAR-2010-0799-1284-A1, p. 1]
Response:
Commenters in this section fall into three categories, one supportive of the rule's impact
on reducing future climate change, one discussing the role of black carbon and other non-GHG
forcing agents in climate change, and one dismissive of the rule either because the magnitude of
the estimated impacts are small or because of doubts regarding the science underlying those
impacts. Each category will be addressed in turn.
The EPA agrees with the commenters who support the benefits of the rule. We agree with
Ceres, EDF, NWF, UCS, the Van Coppenolles, and Weiner that these standards will serve to
mitigate climate change risks by reducing emissions of the greenhouse gases which are
reasonably anticipated to endanger human health and welfare. We also agree with the American
Medical Association that certain groups such as children, the elderly, and the poor are most
vulnerable to climate-related health effects.
Issues regarding black carbon were raised by ICCT and MECA. These organizations urge
the regulation of black carbon (potentially through limits on PM) and request the expediting of
the black carbon report to congress. Since the proposed rule, EPA has recently released a Report
to Congress addressing black carbon.43 EPA continues to recognize that black carbon is an
important climate forcing agent and takes very seriously the emerging science on black carbon's
contribution to global climate change in general and the high rates of observed climate change in
43 EPA, March 2012. Report to Congress on Black Carbon (EPA-450/R-12-001) available at
http://epa.gov/blackcarbon
16-12
-------
Analysis of GHG Emissions Reductions and Their Associated Effects
the Arctic in particular. See generally 77 FR at 38991-993 (June 29, 2012) (proposal for revised
PMNAAQS discussing effects of black carbon on climate). However, issues of control of black
carbon are beyond the scope of this rulemaking, which implements section 202 (a) of the CAA
and focuses on control of the vehicular GHG emissions of CC>2, CH/j, N2O and HFCs. MECA
also mentioned the effects of NOx on climate. As discussed above, changes in NOx emissions
are included as an input into the MAGICC model. However, the effects due to NOx changes
alone have not been isolated, and because NOx emissions lead to decreased levels of methane in
addition to increased levels of ozone, the net effect on climate of changes in NOx emissions is
unclear.
A number of commenters criticized the rules. The most common criticism was that
because the climate impacts were small, that two hundredths of a degree Celsius is not enough to
have an impact on the climate (Axford, Cafagna, Cuenca, Faria, Lennon, Links, Parker, Paul,
Pearce, Smith, Steffanoff, Steyn, Sullivan), and that therefore EPA cannot claim any benefits
from the standards. EPA responds that, as stated in section III.F.2 of the Preamble, no one rule is
expected to prevent climate change by itself. As stated in the Endangerment and Cause or
Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act; Final
Rule (74 FR at 66543), "The commenters' approach, if used globally, would effectively lead to
a tragedy of the commons, whereby no country or source category would be accountable for
contributing to the global problem of climate change, and nobody would take action as the
problem persists and worsens."44 While this rule does not single-handedly eliminate climate
change, it is an important contribution to reducing the rate of change, and this reduction in rate is
global and long-lived. EPA appropriately placed the benefits of reductions in context in the rule,
by calculating the likely reductions in temperature and comparing them to total projected
changes in temperature over the same time period. In addition, EPA used the social cost of
carbon methodology in order to estimate a monetization of the benefits of these reductions (see
section III.H.6), and the net present value resulting from the CO2 reductions due to this rule
(between years 2017 and 2050) was calculated to be between tens to hundreds of billions of
dollars. The D.C. Circuit pointedly rejected the argument that EPA should refrain from issuing
GHG standards under section 202 (a) due to claimed lack of mitigating effect on the
endangerment, and further held that "the emission standards would result in meaningful
mitigation of greenhouse gas emissions" in the form of "960 million metric tons of CO2e over
the lifetime of the model year 2012-2016 vehicles". Coalition for Responsible Regulation v.
EPA, No. 09-1322 (June 26, 2012)) slip op. p 43; projected emissions reductions of this MYs
2017-2025 rule are projected to be approximately double those of the MYs 2012-2016 rule.
Some commenters (Haroldson, Pearce, Steyn) additionally claimed that climate change
science is "becoming increasingly debunked" and "a scam created through falsified data".
However, these commenters provide no support for their assertions except for one quote from an
44 The Supreme Court likewise spoke to this issue, stating that "[a]gencies, like legislatures, do not generally resolve
massive problems" like climate change "in one fell regulatory swoop." Massachusetts v. EPA. 549 U.S. at 524.
They "whittle away at them over time." Id The Supreme Court additionally emphasized that "reducing domestic
automobile [greenhouse gas] emissions is hardly a tentative step" toward addressing climate change, inasmuch as
"the United States transportation sector emits an enormous quantity of carbon dioxide into the atmosphere." IxL
Thus, "|j]udgedby any standard, U.S. motor-vehicle emissions make a meaningful contribution to greenhouse gas
concentrations." Id. at 525.
16-13
-------
EPA Response to Comments
editorial in the Wall Street Journal. These claims are contrary to the conclusions of the major
scientific assessments by the National Academies, the US Global Change Research Program, and
the Intergovernmental Panel on Climate Change. Responses to similar but more detailed
comments may also be found in the Response to Comments and the Response to Petitions for the
original Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section
202(a) of the Clean Air Act (74 FR 66496, December 15, 2009). Finally, see Coalition for
Responsible Regulation v. EPA. No. 09-1322 (June 26, 2012) (D.C. Circuit) slip op. p. 30,
upholding all of EPA's findings and stating "EPA had before it substantial record evidence that
anthropogenic emissions of greenhouse gases 'very likely' caused warming of the climate over
the last several decades. EPA further had evidence of current and future effects of this warming
on public health and welfare. Relying again upon substantial scientific evidence, EPA
determined that anthropogenically induced climate change threatens both public health and
public welfare. It found that extreme weather events, changes in air quality, increases in food-
and water-borne pathogens, and increases in temperatures are likely to have adverse health
effects. The record also supports EPA's conclusion that climate change endangers human
welfare by creating risk to food production and agriculture, forestry, energy, infrastructure,
ecosystems, and wildlife. Substantial evidence further supported EPA's conclusion that the
warming resulting from the greenhouse gas emissions could be expected to create risks to water
resources and in general to coastal areas as a result of expected increase in sea level."
16.3. Changes in Global Climate Indicators Associated with the GHG
Emissions Reductions
Organizations Included in this Section
Institute for Energy Research (IER)
Organization: Institute for Energy Research (IER)
A. ACCORDING TO EPA, THIS PROPOSED RULE WILL ONLY REDUCE GLOBAL
TEMPERATURE 0.0076-0.0184 °C BY 2100—TOO LITTLE TO AFFECT CLIMATE IN A
MEANINGFUL WAY OR BE DETECTABLE AGAINST BACKGROUND NATURAL
VARIABILITY
This proposed rule to regulate greenhouse gas emissions from light-duty vehicles (as well as
EPA's endangerment finding for greenhouse gases under section 202 of the Clean Air Act), and
Massachusetts v. EPA are all predicated on the assumption that regulating greenhouse gas
emissions from light-duty vehicles will reduce the impacts of climate change in a meaningful
way. According to this proposed rule, however, the climatic benefits from reducing greenhouse
gas emissions from light-duty vehicles are very, very small. Because the climatic benefits are so
small, this rule will not affect climate change in a meaningful way. [EPA-HQ-OAR-2010-0799-
9573-A1, p. 2]
16-14
-------
Analysis of GHG Emissions Reductions and Their Associated Effects
1. Climate Concerns in Massachusetts v. EPA—regulating vehicle emissions should result in a
"meaningful contribution" to "global warming"
In Massachusetts v. EPA the Supreme Court argued that greenhouse gas emissions were causing
a number of harms including, "the global retreat of mountain glaciers, reduction in snow-cover
extent, the earlier spring melting of ice on rivers and lakes, [and] the accelerated rate of rise of
sea levels during the 20th century relative to the past few thousand years . . . ." [EPA-HQ-OAR-
2010-0799-9573-A1, p. 3]
The Court continued to explain global warming harms:
If sea levels continue to rise as predicted, one Massachusetts official believes that a significant
fraction of coastal property will be 'either permanently lost through inundation or temporarily
lost through periodic storm surge and flooding events.' Remediation costs alone, petitioners
allege, could run well into the hundreds of millions of dollars, [internal citations omitted] [EPA-
HQ-OAR-2010-0799-9573-A1, p. 3]
The failure to regulate greenhouse gas emissions, according to the Court, "contributes" to
Massachusetts' injuries and therefore, EPA could take steps to remedy the injuries caused by
climate change. The Court further argued that "reducing domestic automobile emissions is
hardly a tentative step" and EPA could regulate greenhouse gas emissions from motor vehicles
because, "[j]udged by any standard, U.S. motor-vehicle emissions make a meaningful
contribution to greenhouse gas concentrations and hence ... to global warming." [emphasis
added] [EPA-HQ-OAR-2010-0799-9573-A1, p. 3]
2. Climate Concerns in EPA's Proposed Endangerment Finding
On December 15, 2009, EPA found that greenhouse gases in the atmosphere "endanger public
health and public welfare." In the endangerment finding, EPA argued that increased levels of
greenhouse gases were leading to increased temperatures, decreased Arctic sea ice extent,
increased precipitation, an increase in sea level rise, increased forest fires, reduced snowpack,
increased droughts, and "endangers the water resources important for public welfare" among
other concerns. [EPA-HQ-OAR-2010-0799-9573-Al, pp. 3-4]
3. Climate Concerns in EPA's Proposed Rule to Regulate GHGs from Light-Duty Vehicles
2017-2025
As EPA explains in the current proposed rule, "light-duty vehicles, heavy-duty trucks, buses, and
motorcycles—accounted for 23 percent of all U.S. GHG in 2007." Because greenhouse gas
emissions from light-duty vehicles represent a large portion of U.S. greenhouse gas emissions,
EPA argues light-duty vehicles contribute to the effects of climate change: [EPA-HQ-OAR-
2010-0799-9573-A1, p. 4]
the health effects of climate change linked to observed and projected elevated concentrations of
GHGs include the increased likelihood of more frequent and intense heat waves, increases in
ozone concentrations over broad areas of the country, an increase of the severity of extreme
16-15
-------
EPA Response to Comments
weather events such as hurricanes and floods, and increasing severity of coastal storms due to
rising sea levels. These effects can all increase mortality and morbidity, especially in vulnerable
populations such as children, the elderly, and the poor.
The proposed rule also states there is a "critical need to address global climate change." [EPA-
HQ-OAR-2010-0799-9573-A1, p. 4]
4. Despite these concerns, the proposed rule does not affect climate in a meaningful way, but
instead results in, at most, 0.02°C less warming by the year 2100
According to statements from the Supreme Court and EPA on the need to address climate
change, this rule would not affect global warming or climate change in any meaningful way.
This is because, according to EPA's modeling, the proposed rule would result in an incredibly
small reduction in the increase in global temperature. According to EPA: [EPA-HQ-OAR-2010-
0799-9573-A1, p. 4]
The results of the analysis demonstrate that relative to the reference case, projected atmospheric
CO2 concentrations are estimated by 2100 to be reduced by 3.29 to 3.68 part per million by
volume (ppmv), global mean temperature is estimated to be reduced by 0.0076 to 0.0184 °C, and
sea-level rise is projected to be reduced by approximately 0.074- 0.166 cm, based on a range of
climate sensitivities. The analysis also demonstrates that ocean pH will increase by 0.0018 pH
units by 2100 relative to the reference case. [EPA-HQ-OAR-2010-0799-9573-A1, p. 5]
A reduction of global temperature by 0.0076-0.018°C 90 years in the future is too small an
amount to affect heat waves, air quality, precipitation, intense storms, harm agriculture, wildlife,
or ecosystems in any way. A decrease in sea level rise of 0.0074-0.166 cm, 90 years in the future
will not reduce the loss of costal property that the Supreme Court was concerned about in
Massachusetts v. EPA. [EPA-HQ-OAR-2010-0799-9573-A1, p. 5]
Because EPA's regulation of greenhouse gases from light-duty vehicles does not impact global
warming in a meaningful way, EPA's regulation is not rational. Either global warming and
climate change is a problem that can and should be addressed in a meaningful way through the
regulation of greenhouse gas emissions from vehicles or EPA should not be regulating
greenhouse gases from vehicles. Instead, EPA claims global warming is a problem but takes no
meaningful steps to do anything about it. This is not rational. [EPA-HQ-OAR-2010-0799-9573-
Al,p.5]
EPA's regulations themselves are very significant. The regulations would double fuel economy
standards from 2010 to 2025. But even this will not result in a meaningful reduction in the
increase in temperature. Therefore, it does not appear that U.S. greenhouse gas emissions from
light-duty vehicles endanger public health and welfare. [EPA-HQ-OAR-2010-0799-9573-A1, p.
5]
In the proposed rule, EPA obfuscates the fact that the rule does not make any meaningful
contribution to global warming by stating that the climate impacts are merely "small." EPA
states: [EPA-HQ-OAR-2010-0799-9573-A1, p. 5]
16-16
-------
Analysis of GHG Emissions Reductions and Their Associated Effects
Although the projected reductions and improvements are small in comparison to the total
projected climate change, they are quantifiable, direct!onally consistent, and will contribute to
reducing the risks associated with climate change. [EPA-HQ-OAR-2010-0799-9573-A1, pp. 5-6]
EPA's explanation is not sufficient. Just because EPA can quantify something using a computer
model or a hand-held calculator, does not mean that it is either detectable or meaningful. [EPA-
HQ-OAR-2010-0799-9573-A1, p. 6]
For instance, Hansen et al. 2006 reported that that the precision of their estimate of the annual
global temperature anomaly is only known (with 95% confidence) within a range of+/-0.05°C.
Thus the error in our measurement of the global temperature is more than twice as great as the
highest level of temperature savings calculated by the EPA (which is 0.0184°C). [EPA-HQ-
OAR-2010-0799-9573-A1, p. 6]
The error is compounded when calculating a trend over the long-term (like out to the year
2100—or a timescale of about a century). For instance, using a least-squares statistical fit to the
temperature annual global temperature anomalies in Hansen's dataset from 1900-2011 shows
that the temperatures have risen at a rate of 0.681 +/- 0.074°C per century. So for a century-long
trend, the error is more than 4 times as large as the EPA's highest amount of temperature
savings. [EPA-HQ-OAR-2010-0799-9573-A1, p. 6]
While EPA's temperature savings is quantifiable, it is not detectable. Since it is not detectable, it
means that we cannot assess any sort of scientific meaningfulness from such a change. [EPA-
HQ-OAR-2010-0799-9573-A1, p. 6]
This lack of scientific meaningfulness in EPA's regulation is a problem. EPA is supposed to
protect the public health and welfare. EPA's regulations should be meaningful, not merely
"quantifiable," and "direct!onally consistent." EPA's statement about quantifiability and
directionality would be equally true if greenhouse gas emissions standards were increased by 1
gram per mile (i.e. 249 grams per mile instead of 250). But instead of tightening the standard to
249 grams per mile, EPA sets the standard at 163 grams per mile in 2025. EPA gives no rational
basis for choosing 163 grams per mile instead of 249 grams per mile. [EPA-HQ-OAR-2010-
0799-9573-A1, p. 6]
For all practical purposes, in the context of human welfare, setting the GHG emission standard at
249 grams per mile would result in the same climate impact as setting the standard at 163 grams
per mile. The theoretical temperature impact of a 1 gram per mile standard would be even less
than 0.0076-0.018°C, but because 0.0076-0.018°C is so small, the difference would be
indistinguishable in the real world. [EPA-HQ-OAR-2010-0799-9573-A1, pp. 6-7]
It should be noted that the EPA Administrator is required to explain the reasonableness of her
regulatory response. For example, Motor Vehicle Mfirs.' Ass'n v. State Farm Mut. Auto. Ins.
Co., requires the agency to "examine the relevant data and articulate ... a 'rational connection
between the facts found and the choice made.'" The EPA has not done that in this case—there is
no rational connection between EPA finding that greenhouse gases endanger public health and
16-17
-------
EPA Response to Comments
welfare and a rule which does not result in a meaningful impact on the imperiled public health
and welfare. [EPA-HQ-OAR-2010-0799-9573-A1, p. 7]
5. The climate impact of the proposed rule, though small, may nevertheless be overstated
It is quite possible that EPA's estimate of the reduction in temperature and sea level rise is an
overestimate. EPA used a climate sensitivity of 1.5 to 6°C. More recent science argues that the
climate sensitivity is likely to be below or in the low range of this estimate. For example, one
recent paper found it likely that that climate sensitivity is between 1.7°C and 2.6°C. Another
recent paper found a "Transient Climate Response of 1.3-1.8°C". [EPA-HQ-OAR-2010-0799-
9573-A1, p. 7]
Previously, EPA has avoided considering climate sensitivities lower than the AR4 range arguing
that the IPCC was correct. In 2010, EPA stated: [EPA-HQ-OAR-2010-0799-9573-A1, p. 7]
"the IPCC indicates the levels of understanding and confidence in quantitative estimates of
equilibrium climate sensitivity have increased substantially and there is increased confidence of
key processes that are important to climate sensitivity due to improved comparisons of models to
one another and to observations. Thus EPA concludes that the use of the climate sensitivity range
for the climate analysis for this rule is appropriate and supported by the scientific literature from
the major assessment reports." [EPA-HQ-OAR-2010-0799-9573-A1, pp. 7-8]
In this proposed rule, it is good to see EPA consider a climate sensitivity lower than the IPCC's
standard climate sensitivity of 2 to 4.5°C. EPA's past response is now inadequate because of
more recent science. Furthermore, the more recent science argues for climate sensitivity nearer
the low end of the range and discounts the top end of the range EPA used. [EPA-HQ-OAR-2010-
0799-9573-A1, p. 8]
The climate sensitivity is important because it forms the basis for EPA's justification for
regulating greenhouse gases from light-duty vehicles. If the lower bound for climate sensitivity is
correct, the impact of this proposed rule would only be about 0.008°C by 2100—an incredibly
small amount to say the least. [EPA-HQ-OAR-2010-0799-9573-A1, p. 8]
6. Because these regulations would not affect climate in a meaningful way, this calls into
question EPA's Endangerment Finding
This proposed rule is a follow-up to EPA's proposal that greenhouse gases from motor vehicles
"endanger public health or welfare" under section 202 of the Clean Air Act. The 2017-2025
light-duty vehicle standard demonstrates that the Endangerment Finding is on shaky ground. If
greenhouse gas emissions from motor vehicles "endanger public health or welfare," it stands to
reason that this proposed rule should lead to meaningful climatic benefits. However, because this
proposed rule would only lead to a reduction in global temperature by 0.0076-0.0184°C by 2100
that is both climatically meaningless and undetectable against background natural variability, this
rule does not create a meaningful impact. [EPA-HQ-OAR-2010-0799-9573-A1, p. 8]
7. Conclusion to Section A
16-18
-------
Analysis of GHG Emissions Reductions and Their Associated Effects
Because this rule fails to affect climate in a meaningful way, and because reducing climate harms
is the point of EPA's regulatory authority under Massachusetts v. EPA and the proposed
endangerment finding, EPA should not regulate greenhouse gases from light-duty
vehicles. [EPA-HQ-OAR-2010-0799-9573-A1, p. 8]
Response:
The Institute for Energy Research (IER) makes two major claims in order to argue
against the standard. First, that the estimated reductions in climate change in the rule do "not
affect climate in a meaningful way." This argument has been addressed in Section 16.2. As noted
there, the commenter's argument has been decisively and pointedly rejected by the D.C. Circuit.
It also bears mention that regardless of the degree to which this rule will, in and of itself,
ameliorate global climate change, EPA has clear discretion under section 202 (a) to issue these
standards following its positive endangerment finding. Section 202 (a) does not specify any
minimum level of effectiveness for standards. Rather, section 202 (a) directs EPA to set the
standards at a level that is reasonable in light of applicable compliance cost and technology
considerations. Like any other technology based standard, the rule's stringency is not dependent
on any particular environmental outcome but rather on a weighing of the statutorily specified
criteria relating to feasibility, cost and available lead time. The second claim by IER is that the
climate impact of the rule has been overstated. IER references two new studies in order to argue
that the climate sensitivity of the Earth system to a doubling of carbon dioxide concentrations is
at or below the low end of the range used by the EPA (which was 1.5 to 6.0 degrees C). While
this new research is of interest, these studies are not definitive. The EPA has reasonably relied on
comprehensive assessments like those of the National Academies, US Global Change Research
Program, and IPCC because assessments cover the full range of the literature and place the
individual studies in context.
The first study cited by IER is Schmittner et al., 2011, which estimates a likely range of
climate sensitivity of 1.7 to 2.6 degrees C. This climate sensitivity is on the low end of the IPCC
estimates. This study is a useful contribution, but depends on a single computer model as well as
on estimates of conditions during the last glacial maximum (such as temperature and forcing)
that are difficult to calculate. For example, the authors acknowledge that their estimates of global
mean temperatures in the last glacial maximum are 30 to 40 percent smaller than previous
estimates, and only 2.2 degrees C cooler than present, and a recent review of paleoclimate
studies shows that the Schmittner et al. estimate of global glacial temperatures remains an outlier
(Braconnot et al., 201245). Meanwhile, other recent studies estimating climate sensitivity have
come to the conclusion that the IPCC range is possibly an underestimate rather than an
overestimate (Pagani et al., 200946). Therefore, it would be premature at this time to conclude
based on Schmittner et al. that the climate sensitivity range used by the EPA is either an over or
an underestimate.
45 Braconnot P. et al., Evaluation of climate models using palaeoclimatic data, Nature Climate Change (2012),
doi:10.1038/nclimatel456. (Docket EPAEPA-HQ-OAR-2010-0799)
46 Pagani, M, Z. Liu, J. LaRiviere, and A. Ravelo, 2010: High Earth-system climate sensitivity determined from
Pliocene carbon dioxide concentrations. Nature Geoscience, 3, 27-30. (Docket EPA EPA-HQ-OAR-2010-0799)
16-19
-------
EPA Response to Comments
The second paper cited by IER estimated the "Transient Climate Response" (TCR), and
IER incorrectly compares this TCR estimate to the range of equilibrium climate sensitivity
estimates used by the EPA. Transient sensitivity is a measure of the temperature change
precisely at the time of doubling of CC>2 concentrations, before the climate system has come to
equilibrium, in contrast to the climate sensitivity which is related to the temperature response
after the system has come to equilibrium. The IPCC fourth assessment report, in Table 8.2
(Randall et al., 200747), shows how the TCR compares to the climate sensitivity in a number of
climate models. The climate sensitivity in this table ranges from 1.3 to 2.3 times the TCR.
Applying these ratios to the TCR estimates provided by the commenter results in a range of CS
from 1.7 to 4.2, which is similar to the likely range of 2 to 4.5 provided by the IPCC.
Therefore, the EPA finds that the range of climate sensitivity used in this rule is
appropriate, and that the analysis of climate impacts was appropriate and reasonable.
47 Randall, D.A., R.A. Wood, S. Bony, R. Colman, T. Fichefet, J. Fyfe, V. Kattsov, A. Pitman, J. Shukla, J.
Srinivasan, R.J. Stouffer, A. Sumi, and K.E. Taylor (2007) Climate Models and Their Evaluation. In: Climate
Change2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the
Intergovernmental Panel on Climate Change [Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt,
M. Tignor and H.L. Miller (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY,
USA. (Docket EPA EPA-HQ-OAR-2010-0799)
16-20
-------
Analysis of Estimated Costs, Economic and Other Impacts
17. Analysis of Impacts on Non-GHG Emissions
Organizations Included in this Section
American Lung Association of the Mid-Atlantic
Clean Fuels Development Coalition (CDFC)
Growth Energy
Comments on GDI and PM
Organization: Clean Fuels Development Coalition (CDFC)
OEMs NEED CLEANER FUELS IN ORDER TO FULLY AND COST EFFECTIVELY
COMPLY WITH THE RULE.
To meet the aggressive targets established by this rule, OEMs will employ advanced engine
technologies that would benefit from and require fuel quality improvements in order to meet the
fuel efficiency and lower carbon goals without worsening other forms of pollution and
contributing to air quality backsliding. The OEMs will bundle multiple advanced engine
technologies to meet the stricter targets. Notably, the Agencies project that for spark ignition (SI)
engines, gasoline direct injection (GDI) will be an especially important compliance tool, and
they expect the OEMs to rapidly adopt it, projecting 85% penetration by 2016, and 100% by
2020 and beyond. However, as will be discussed more below, absent fuel composition changes,
experts warn that for all of its mileage efficiency and carbon reduction benefits, GDI technology
is expected to result in substantial increases in urban ambient paniculate matter, especially the
highly pathogenic PM2.5 that includes UFPs.5 Unfortunately, if regulators ultimately decide to
deal with that problem by requiring the OEMs to install filters and traps on SIDI engines (as is
now done with diesel engines), adverse consequences are likely to ensue. Engine efficiencies and
costs to consumers will be compromised. The Agencies will limit the ability of the OEMs to
utilize engineering expertise to develop the optimal solution to reach the goals of this regulation.
Experts warn that gasoline UFPs are so much smaller than diesel PM, use of filters will be
ineffective, cost prohibitive, and counterproductive, leading to increased carbon emissions and
reduced engine efficiency.6 In short, failure to synchronize fuel composition changes with
advanced engine technologies could negate many of the positive outcomes this rule is designed
to achieve. [EPA-HQ-OAR-2010-0799-9574-A3, p. 3]
As previously discussed, experts warn that advanced engine designs needed for automakers to
comply with tighter fuel efficiency rules could lead to a significant increase in the UFP fraction
of PM2.5 emissions unless fuel composition is upgraded to replace the toxic octane components
of Aromatic Group Compounds with Clean Octane components.24 [Attachment E can be found
in Docket number EPA-HQ-OAR-2010-0799-9574-A8] [EPA-HQ-OAR-2010-0799-9574-A3, p.
7]
PAHQs are combustion byproducts and derivatives of Aromatic Group Compounds (see
Attachment C for the discussion in the 2010 Honda SAE paper), and could be inadvertently and
17-1
-------
EPA Response to Comments
substantially increased by this rulemaking in the absence of fuel composition changes. [EPA-
HQ-OAR-2010-0799-9574-A3, p. 7]
As the 2007 Tufts University study warned, this oversight represents a major deficiency in
transportation fuels regulatory policy, especially since vehicle GHG reduction technologies
expected to come into widespread use as a result of this rule are likely to increase these
pollutants dramatically.29 [EPA-HQ-OAR-2010-0799-9574-A3, p. 8]
VEHICLE FILTERS INEFFECTIVE FOR GASOLINE'S SMALLER PARTICLES.
A number of recent studies have concluded that requiring the OEMs to fit gasoline-powered
vehicles with filters or traps, as they have done with diesel engines, would be cost prohibitive,
ineffective, and counterproductive. For example, according to the Delphi Powertrain
International 2011 SAE study, ". . . the number size distributions show for homogeneous
gasoline engines compared to Diesel engines typically a higher number of particles at smaller
sizes.. .the typically smaller particles generated by gasoline engines require a finer filter
characteristic.. .which consistently leads to a negative impact on performance, fuel consumption,
and CO2 emissions." For that reason, we firmly believe that the most cost effective, and
technologically efficient, solution to these undesirable tradeoffs is to upgrade fuel standards to
significantly reduce Aromatic Group Compounds, which are the primary source of the PM2.5 and
particle-bound toxics. [EPA-HQ-OAR-2010-0799-9574-A3, p. 7]
Organization: Governors' Biofuels Coalition
Recent reports indicate that the failure to establish tighter fuel standards to complement
advanced engine designs could result in dramatic increases in a major health threat in urban
areas: fine and ultrafine paniculate matter. [EPA-HQ-OAR-2010-0799-9570-A1, p. 2]
Organization: Growth Energy
This Attachment explains why, in the Joint NPRM, the Agencies should have thoroughly
examined the impacts of new technologies used to meet the GHG standards on PM emissions.
There are many studies that indicate that gasoline direct injection, a technology which will be
used to meet the GHG standards, will increase both particulate matter mass and particulate
number emissions. The Agencies need to consider an alternative approach, which would include
fuel parameter changes that could enable additional engine technologies to be used to improve
efficiency and reduce emissions. The Agencies' proposal requires new technology to be used on
vehicles using old technology fuels. It has long been recognized that vehicles and fuels operate
as a system. To undertake significant changes and increases in the stringency of tailpipe GHG
standards without a parallel and integrated examination of potential changes in the fuel used by
these vehicles is inappropriate. [EPA-HQ-OAR-2010-0799-9505-A1, p. 22]
I. Relevant Emissions Impacts
17-2
-------
Analysis of Estimated Costs, Economic and Other Impacts
The Joint NPRM includes extensive discussion of the technologies, costs, and benefits of the
proposal, seeking comments on many aspects of the proposal. In addition, EPA "seeks comment
on whether there are any other health and environmental impacts associated with advancements
in vehicle GHG reduction technologies that should be considered." These are the salient points:
• EPA and NHTSA project widespread use of gasoline direct injection (GDI) in meeting
the proposed CAFE and GHG standards.
• There is substantial evidence that GDI increases PM mass and PM number emissions
compared to the conventional port fuel injection (PFI) technology now in widespread use.
• There is also substantial evidence that increased ethanol use will decrease PM mass and
PM number emissions from the affected vehicles.
• The EPA and NHTSA proposal does not account for the increased PM emissions from
GDI technology.
• The benefits from the proposal are sensitive to the PM effects assumed by the Agencies.
• Therefore, the final rule should evaluate and consider both the increased PM due to GDI
use and the potential for more widespread ethanol use to decrease PM mass and number
emissions. [EPA-HQ-OAR-2010-0799-9505-A1, p. 23]
A. EPA and NHTSA project widespread use of gasoline direct injection (GDI) in meeting the
proposed CAFE and GHG standards.
The proposed rule discusses technologies that can increase fuel economy, indicating that many of
the technologies are already available, and that manufacturers will be able to meet the standards
through significant efficiency improvements in these technologies as well as a significant
penetration of these technologies across the fleet. [EPA-HQ-OAR-2010-0799-9505-A1, p. 23]
The proposed rule indicates:
There are a number of competing gasoline engine technologies, with one in particular that the
agencies project will be common beyond 2016. This is the gasoline direct injection and
downsized engines equipped with turbochargers and cooled exhaust gas recirculation, which has
performance characteristics similar to that of larger, less efficient engines. [EPA-HQ-OAR-2010-
0799-9505-A1, p. 24]
The Joint NPRM also provides estimates of the penetration of various technologies in 2021 and
2025. GDI penetrations are forecast to be greater than 90% in both cars and trucks by 2025 as
shown in Tables 111-42 and 111-43. Therefore, widespread use of GDI is one of the technologies
that the Agencies are relying on in the proposal. [EPA-HQ-OAR-2010-0799-9505-A1, p. 24]
17-3
-------
EPA Response to Comments
34 In the recent California GHG rulemaking, the Air Resources Board avoided this issue by
assuming that PM mass emissions from PFI and GDI would be similar based primarily on
speculative assumptions about future GDI technology and deterioration rates.
The Joint NPRM considers several impacts of the proposal on non-GHGs, both positive and
negative. For example, the analysis evaluates the impact that reductions in domestic fuel refining
and distribution due to lower fuel consumption will have on U.S. emissions of various pollutants.
In addition, the analysis evaluates the increase in emissions from additional vehicle use
associated with the rebound effect from higher fuel economy. As the various positive and
negative impacts on non-GHGs and considered, the proposal indicates: [EPA-HQ-OAR-2010-
0799-9505-A1, p. 30]
Thus the net effect of stricter CAFE standards on emissions of each pollutant depends on the
relative magnitudes of its reduced emissions in fuel refining and distribution, and increases in its
emissions from vehicle use. [EPA-HQ-OAR-2010-0799-9505-A1, p. 30]
One aspect of these "complex interactions" that certainly merits attention is the potential effect
of technological innovation on criteria and toxic pollutants, in the absence of improved in-use
fuel standards. As HEI's February 2011 study noted, the use of GDI technology increases some
current gasolines' particulate emissions. Without NHTSA having directly addressing that study
in the DEIS, the Agencies simply note in the NPRM that "the net effect of stricter standards on
emissions of each criteria pollutant depends on the relative magnitudes of reduced emissions
from fuel refining and distribution, and increases in emissions resulting from added vehicle use."
76 Fed. Reg. at 74,933. That cursory observation does not meet the requirements of NEPA for a
"thorough investigation" and a "candid acknowledgment" of risks. Nat'l Audubon Soc. v. Dept.
Navy, 422 F.3d 174, 185 (4th Cir. 2005; see also Natural Resources Defense Council, Inc. v.
Morton, 458 F.2d 827, 838 (D.C. Cir. 1972); Kleppe v. Sierra Club, 427 U.S. 390, 410 fn. 21
(1976); Tlio'ulaokalani Coalition v. Rumsfeld, 464 F.3d 1083, 1094 (9th Cir. 2006; accord, Ctr.
for Biological Diversity v. Nat'l Highway Traffic Safety Admin., 538 F.3d 1172, 1223 (9th Cir.
2008). [EPA-HQ-OAR-2010-0799-9505-A1, p. 31]
B. There is substantial evidence that GDI increases PM mass and PM number emissions
compared to the conventional PFI technology now in widespread use.
A recent Myung and Park review of nano-particle emissions from internal combustion engines
indicates that GDI engines produce considerably more particles than conventional port fuel
injection ones and that "much of the research indicates that GDI engines produce significantly
more particulates than conventional PFI engines, especially during the cold start phase and
during stratified operation." Myong and Park provide numerous references to support their
findings, including textbooks, literature surveys, research studies using single-cylinder and
multi-cylinder engines in which various parameters can be changed, measurements from
production engines, and studies of various potential after-treatment systems. [EPA-HQ-OAR-
2010-0799-9505-A1, p. 24]
The California Air Resources Board (CARB) in 2010 acknowledged that GDI increased PM
mass and number emissions substantially. The CARB report indicated "GDI technology tends to
have higher PM mass and particle number emissions than conventional PFI technology." The
17-4
-------
Analysis of Estimated Costs, Economic and Other Impacts
CARB report noted that the published literature points to GDI PM mass emissions in the range of
2 to 20 mg/mi, and indicated that, if not abated, the GDI combustion system has the potential to
emit two to eight times more PM mass than PFI vehicles. [EPA-HQ-OAR-2010-0799-9505-A1,
p. 24]
Szybist et al., 2011 also report that "while gasoline DI technology is beneficial for fuel economy,
it produces an increase in particulate matter emissions in comparison to PFI engines" and
provide several references to support that fact. Maricq also notes the DI PM issue: [EPA-HQ-
OAR-2010-0799-9505-A1, pp. 24-25]
GDI engines offer a number of opportunities for improved fuel efficiency, such as reduced
pumping losses, charge air cooling, and downsizing when turbocharged. But, direct injection of
fuel into the engine cylinder is susceptible to incomplete fuel evaporation and to fuel
impingement on piston and cylinder walls, both of which lead to combustion of liquid fuel and,
consequently, to increased PM emissions. [EPA-HQ-OAR-2010-0799-9505-A1, p. 25]
A recent report by the Health Effects Institute's Special Committee on Emerging Technologies
states that the need to improve fuel economy and the need to reduce GHG emissions are driving
the introduction of gasoline direct injection (GDI) technology because it improves fuel economy
and performance. They state GDI is more expensive than the port fuel injection (PFI) system that
it is replacing. They also point out that because of less complete mixing of the fuel vapor and air
in GDI systems, particulate emissions of the engine increase, including the number of ultrafine
particles (UFPs defined as particles that are less than 100 nanometers (nm) in diameter). Thus
additional technological fixes may be required to meet the Tier 2 PM2.5 emission standards for
GDI vehicles which would incur additional costs. More recently, similar concerns were echoed
by Ayala, Brauer, Mauderly and Samet. [EPA-HQ-OAR-2010-0799-9505-A1, p. 25]
With respect to current production vehicles, Piock et al., 2011 present results for particle number
and particle mass for a number of production European vehicles that meet the Euro 4 (2005)
standards in their Figure 1. The seven GDI vehicles have an order of magnitude higher PM mass
and PM number emissions than do the three PFI vehicles. [EPA-HQ-OAR-2010-0799-9505-A1,
p. 25]
Because a limit on PM number emissions is under discussion for implementation in 2014 in
Europe, effort toward understanding and reducing PM mass and PM number emissions from
GDI engines is underway. There are two basic approaches on the emitted by the engine, and (2)
aftertreatment particulate filters. It is not clear how successful either of these approaches can be.
With manufacturers under strong incentives to optimize engines for fuel economy and cost,
optimization for minimum PM mass and number emissions may conflict with optimization for
fuel economy or may add additional cost for hardware and development. With regard to
particulate filters, Piock et al. indicate: [EPA-HQ-OAR-2010-0799-9505-A1, pp. 25-26]
In principle, particulate filters already in standard use on modern Diesel engine powered
passenger cars can be applied to gasoline engines as well. The typically smaller particles
generated by gasoline engines require a finer filter characteristics (e.g. cell density, mean pore
size and porosity) which consequently leads to a higher exhaust system backpressure with a
negative impact on performance, fuel consumption and COz emissions. The addition of a
17-5
-------
EPA Response to Comments
particulate filter system would cause a significant increase of the overall aftertreatment system
complexity and cost. [EPA-HQ-OAR-2010-0799-9505-A1, p. 26]
The proposed rule is silent on the potential increase in PM mass and number emissions due to the
widespread use of GDI. As noted above, this is a major oversight. EPA and NHTSA have an
obligation to insure that any new fuel or technology developed for transportation must not
adversely impact health or the environment. [EPA-HQ-OAR-2010-0799-9505-A1, p. 26]
Despite the evidence that widespread use of GDI may increase PM emissions, the proposal does
not address the issue. The proposal does note that:
EPA has the discretion under the CAA to consider many related factors, such as the availability
of technologies, the appropriate lead time for introduction of technology, and based on this the
feasibility and practicability of their standards; the impacts of their standards on emissions
reductions (of both GHGs and non- GHGs); [EPA-HQ-OAR-2010-0799-9505-A1, p. 30]
Therefore, even if EPA determines that it cannot implement Growth Energy's proposal at the
current time, given the limits on the current rulemaking, the Final Rule should evaluate and
consider both the increased PM due to GDI use and the potential for more widespread ethanol
use to decrease PM emissions. In considering the increased PM due to widespread use of GDI
technology, the final rule should consider the increase in PM mass as well as particle number.34
The emission of, effects from, and potential mitigation of ultrafme particles from vehicles are all
active research areas. In addition, various approaches for setting particle number standards for
vehicles are being considered in Europe and California. Within the time frame of the regulations
in the proposed rule, the importance of ultrafme particles and their control will be
understood. [EPA-HQ-OAR-2010-0799-9505-A1, p. 40]
The final rule should also consider potential ways of mitigating the PM increases from GDI use.
The mitigation methods examined should include both fuel-related methods and aftertreatment.
Higher ethanol use should be thoroughly evaluated. [EPA-HQ-OAR-2010-0799-9505-A1, p. 40]
However, there is no discussion in the in the proposal indicating that EPA considered whether
the technologies assumed in the proposal would increase non-GHG emissions. This is an
important oversight. Instead, EPA merely assumed that they would not. For example, the
proposal indicates: [EPA-HQ-OAR-2010-0799-9505-A1, p. 30]
The agencies' analysis assumes that the per-mile emission rates for cars and light trucks
produced during the model years affected by the proposed rule will remain constant at the levels
resulting from EPA's Tier 2 light duty vehicle emissions standards. [EPA-HQ-OAR-2010-0799-
9505-A1, p. 30]
Organization: Boyden Gray & Associates PLLC
As air toxics, PAHs must be removed under the MSAT provisions, because there are ample
substitutes. It is especially important to do this before efficiency technologies such as direct
injection are adopted. Such technologies will increase PAH emissions, compounding the
17-6
-------
Analysis of Estimated Costs, Economic and Other Impacts
problem and necessitating expensive future tailpipe adjustment for pollution that is the fault of
the fuel, not the car, and that could be addressed at no cost today. [EPA-HQ-OAR-2010-0799-
9506-A1, pp. 8-9]
Organization: Marz, Loren C.
GDI technology (especially lean-burn GDI) may have difficulty meeting future PM emission
limits as currently proposed by the California Air Resources Board (CARB) based on several
studies (e.g., 'Preliminary Discussion Paper - Proposed Amendments To California's Low-
Emission Vehicle Regulations - Particulate Matter Mass, Ultrafine Solid Particle Number, And
Black Carbon Emissions.' CARB,
http://www.arb.ca.gov/msprog/levprog/leviii/meetings/051810/pm_disc_paper-v6.pdf; Walter
Piock et al, "Strategies Towards Meeting Future Particulate Matter Emission Requirements in
Homogeneous Gasoline Direct Injection Engines." SAE International, 2011-01-1212,
http://delphi.com/pdf/techpapers/2011-01-1212.pdf; Kody Klindt, IAV Automotive Engineering
Inc., 'Reducing the particulate emission numbers in DI Gasoline Engines.'
http://wwwl.eere.energy.gov/vehiclesandfuels/pdfs/deer_2010/monday/presentations/deerlO_kli
ndt.pdf). This has the potential of effectively requiring particulate filters (GPF) on GDI vehicles,
which in turn has the potential of significantly increasing the price of GDI technology and/or
reducing the assumed efficiency of GDI technology. [NHTSA-2010-0131-0213-A1, pp.4-5]
Response to GDI-PM Comments:
As discussed in Preamble section III. G. 1 and RIA Chapter 6.2, EPA is finalizing
greenhouse gas emissions standards that will result in a net reduction of PM2.5. In 2030, the EPA
estimates that the MY 2017-2025 light-duty standards will reduce total PM 2.5 inventories by
1,254 short tons. The EPA analyzed the impact the MY 2017-2025 light-duty vehicle GHG rule
will have on PM2.5 and other non-GHG pollutants in both 2020 and 2030. For PM2.5 the EPA
estimates reductions in "upstream" PM2.5 emissions, including reductions from fuel refining,
distribution and transport as a result of the standards, We also estimated "downstream" increase
in PM2.5 due to people driving more. The rule effectively makes the cost per mile of driving
lower for consumers by improving fuel economy, increasing the likelihood that they will drive
more. This is known as the "rebound effect." Thus this small downstream PM2.5 increase is a
result of a predicted change in driving behavior consistent with the economics literature, as well
as the past four Corporate Average Fuel Economy (CAFE) rulemakings. In addition, we also
estimate a small increase in PM2.s from power plants as electric powertrain vehicles increase in
prevalence as a result of this rule.
With regard to advanced engine technologies, such as "gasoline direct injection fuel
systems" or GDI, there are various forms of this technology in production today. While some
initial designs are not yet optimized for PM emissions performance, the EPA believes that
industry will have adopted the cleanest forms of GDI by the timeframe of this rule.
We received several comments on PM2.5 emissions from advanced technology vehicles.
Growth Energy commented that "There is substantial evidence that GDI increases PM mass and
PM number emissions compared to the conventional port fuel injection (PFI) technology now in
widespread use... Therefore, the final rule should evaluate and consider both the increased PM
17-7
-------
EPA Response to Comments
due to GDI use and the potential for more widespread ethanol use to decrease PM mass and
number emissions." The Clean Fuels Development Coalition and Loren Marz submitted similar
comments. EPA agrees with the commenter that testing on initial GDI technology, primarily
wall-guided systems, has shown an increase in PM emissions over the FTP as compared to
conventional PFI gasoline engines. However as noted above, the technology is still evolving,
making it difficult to predict future PM emission performance of GDI vehicles. Testing on initial
spray-guided GDI systems has shown less of a PM increase over the FTP, and even reduced PM
emissions over the US06 compared to PFI vehicles.48 Due to the improved fuel economy and
reduced emissions offered by spray-guided GDI technology, it is anticipated that spray-guided
GDI will replace wall-guided systems in the 2017 to 2025 timeframe.4 As a result, in the
technical assessment conducted by the agencies as part of this rulemaking, the agencies assessed
the emissions and fuel consumption improvements associated with spray-guided GDI systems
and assumed that their overall in-use PM emission performance was comparable to that of PFI
vehicles.
Regarding comments from Clean Fuels Development Council (CFDC) on use of
Aromatics as ethanol use in gasoline has continued to rise in response to market forces and RFS,
the additional octane provided by ethanol has been used by refiners to reduce the concentration
of aromatics (another source of octane) in the gasoline they supply. As shown below in figure
below, there has been a 15 percent decrease in aromatics with the rise in ethanol use over the
past decade. Some recent research50 suggests that this aromatics reduction has lead to reductions
in both PM emissions and improvement in PM air quality. Instead of allowing aromatics levels
to fall naturally as ethanol levels increase, an aromatics standard could ensure that gasoline
aromatic levels fell in proportion to the projected increase in ethanol use. With the increased use
of ethanol, not only have the aromatic levels in gasoline been declining, but we project that they
will continue to decline. The average level of aromatics in gasoline today is around 22 percent,
although it ranges from 3 to 47 percent on a batch basis, and 10 to 40 percent on a refinery
average basis due to the wide variation in refinery configuration, crude oil source, and available
product markets.51 Some stakeholders have stated that EPA should mandate even larger
reductions in the aromatics content of gasoline in order to provide an incentive for increased
ethanol use in gasoline beyond RFS levels. They believe that the country would benefit from
reduced air pollution (air toxics, PM emissions and secondarily-formed PM) resulting from the
reduction in the aromatic content of gasoline. Such regulatory action is clearly outside the scope
of this light-duty GHG standards rulemaking. However, given the potential PM emission
benefits, it is something that may warrant further study in the future.
48 "Test Program to evaluate PM emissions from GDI vehicles," Memo from Michael Olechiw to EPA docket EPA-
HQ-OAR-2010-0799
49 The technology modeling for this rule includes a spray guided GDI system. See Joint TSD Section 3.3
"Development of a Predictive Model for Gasoline Vehicle Paniculate Matter Emissions," by K. Aikawa, T.
Sakurai, J. letter. SAE International 2010-01-2115. Published 10/25/2010. SAE International Journal of Fuels and
Lubricants, Volume 3, Issue 2. "Particle Emissions from a 2009 Gasoline Direct Injection Engine Using Different
Commercially Available Fuels," by I. Khalek, T. Rougher, J. Jetter. SAE International 2010-01-2117. Published
10/25/2010. SAE International Journal of Fuels and Lubricants, Volume 3, Issue 2.
51 Based on current refinery batch data.
17-8
-------
Analysis of Estimated Costs, Economic and Other Impacts
30
20
o
£ 15
u
I
Ol
_c
"o
£ 10
8.1
„ it
— - — If
• Avg.Corrected Aromatics, vol% (AAM)
. Avg.EtOH, vol%(EIA)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Figure: Aromatics and Gasoline Ethanol Concentration vs. Time
Increases in Pollutants due to the Final Standards
Organization: American Lung Association of the Mid-Atlantic
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 81-82.]
Although reducing traditional air pollution emissions is not the primary focus of the proposed
rules, in some scenarios result in increases for particular vehicle pollutants, notably carbon
monoxide and aldehydes.
ALA nevertheless recognizes that the general trend across the alternatives considered is to lower
emissions of ambient air pollutants when compared with the no action alternative.
Not only does the preferred alternative, the proposed standards, result in significantly lower
carbon dioxide emissions.
17-9
-------
EPA Response to Comments
But these standards also result in lower levels of sulfur dioxide, fine particle pollution, volatile
organic compounds, nitrogen oxides, benzene and diesel paniculate matter once fleet turnover
would be substantially complete by 2040 with the reduction in VOCs and NOX yielding
corresponding increases in ground level ozone.
Organization: Boyden Gray & Associates PLLC
Again, at the very least, EPA must address this issue: if it is going to rely on the CAA for
authority to reduce mobile CC>2, it cannot ignore the same statute's requirements to reduce
mobile source air toxics, especially if that reduction also reduces CC>2. At the very least, EPA
cannot under the CAA cause an increase of one form of regulated pollution that causes serious
health problems by reducing another that does not. [EPA-HQ-OAR-2010-0799-9506-A1, p. 10]
There are other factors at work in addition to the rebound effect. The California Air Resources
Board's (CARB) pending proposal for lowering PM standards charts the increase in PM that is
expected to result from new technologies such as GDI. CARS's proposed tightened PM limits
are thus designed to counteract this "backsliding"—an increase in addition to that caused by the
rebound effect. But fuel reformation with alcohol blending or CNG could produce reductions and
block this "backsliding" at far less cost than tailpipe regulations. At the very least, this issue must
be addressed in this proceeding, which will otherwise cause pollution increases that are likely to
be held illegal under the CAA and which might never be precluded by any Tier III rule. [EPA-
HQ-OAR-2010-0799-9506-A1, p. 10]
Response:
As we state in Section 11 of this Response to Comments document, reducing the
aromatic content of gasoline is clearly outside the scope of this LD GHG standards rulemaking.
However given the potential PM emission benefits, the Agency is continuing to study the effects
of aromatics on vehicle emissions and air quality. The innuendo that this rule will significantly
increase emissions of air toxics as a trade-off for controlling GHGs is misplaced. EPA
performed national-scale air quality modeling to estimate future year annual PM2.5
concentrations, 24-hour PM2.5 concentrations, 8-hour ozone concentrations, air toxics
concentrations, visibility levels and nitrogen and sulfur deposition levels based on the final
vehicle standards and, as detailed in Section 6.2.2 of the RIA, our modeling indicates that there
will be only small changes in ambient concentrations of criteria and air toxics pollutants as a
result of this rule. The overall small impacts of the final vehicle standards are a function of
emissions changes related to VMT increases from rebound, upstream reductions in petroleum
consumption from crude oil production and transport, and gasoline production, distribution and
transport, and changes in location and amount of electricity generation.
Comments on Regional Modeling
Organization: Clean Fuels Development Coalition (CDFC)
17-10
-------
Analysis of Estimated Costs, Economic and Other Impacts
5. Update the CMAQ model to ensure full capture of the benefits derived from the significant
reductions in urban PM2.s secondary organic aerosol (SOA) that will occur due to the reductions
in gasoline "Aromatic Group Compounds" made possible by E30+ blends' substitution
(especially significant for OMB cost - benefit analysis purposes, see discussion on p. 6 and
Attachment D). [This attachment can be found in Docket number EPA-HQ-OAR-2010-0799-
9574-A7] [EPA-HQ-OAR-2010-0799-9574-A3, p. 1]
As will be discussed in more detail below, the Agencies have stated their intention to incorporate
more detailed findings in the final rule from new science and model improvements. For example,
the EPA says it will use its updated CMAQv.5.0 model to —.. .analyze the impact of the
standards on PM2.5, ozone, and selected air toxics. || This is potentially significant because EPA
has known for years that its CMAQ model was substantially under-reporting the formation of
mobile source PM2.5 secondary organic aerosols (SOAs). In urban areas, PM2.5 SOAs primarily
originate from mobile sources, most importantly from toluene within the Aromatic Group
Compounds. It must be assumed that incorporation of these new findings will also require
NHTSA to make adjustments to its draft EIS, which gives insufficient attention to mobile source
PM2.5, particularly the future health and welfare costs which will be imposed by increases in
gasoline-derived particulate matter emissions, and will most severely impact the nation's highly
vulnerable urban population. New science suggests that the particulate bound toxics can be found
at elevated levels up to 2,500 meters from congested roadways, thus exposing a vast majority of
Americans to these deadly pollutants.
• We also note that the EPA's October 19, 2011, announcement of the completion of its
CMAQ 5.0 model means that it will be better able to measure localized pollution impacts,
such as those that occur near congested roadways. 18 As a 2007 Tufts University study 19
and others have warned, EPA's regional modeling approach has seriously masked the
true health costs of gasoline Aromatic Group Compounds and their primary role in urban
PM emissions.
P. 75109, EXPOSURE AND HEALTH EFFECTS ASSOCIATED WITH TRAFFIC-RELATED
AIR POLLUTION. We strongly urge the Agencies to update their database and assumptions
with regard to how far mobile source air pollutants can travel at elevated levels. The Agencies,
both EPA in the rulemaking, and NHTSA in its EIS, assume populations are exposed only 300 -
500 meters from congested roadways. (Even at this limited range, the Agencies note that 48
million people would be subjected to these elevated pollutant levels.) However, more recent
studies (such as 2009 CARB, UCLA, and University of Southern California research) show that
mobile source-generated PAHs can be found at elevated levels as far away as 2,500 meters, or
more than 1.5 miles. The report states that these findings have "significant exposure
implications, since most people are in their homes during the hours before sunrise, and outdoor
pollutants penetrate into indoor environments."28 This means that the vast majority of
Americans are exposed to pathogenic PAHs and other particle-bound toxics that this rulemaking
does not consider. As the 2007 Tufts University study warned, this oversight represents a major
deficiency in transportation fuels regulatory policy, especially since vehicle GHG reduction
technologies expected to come into widespread use as a result of this rule are likely to increase
these pollutants dramatically.29 [EPA-HQ-OAR-2010-0799-9574-A3, p. 8]
17-11
-------
EPA Response to Comments
Response:
EPA performed national-scale air quality modeling using CMAQ v4.7.1 for the final rale. The
air quality modeling for these final standards was initiated prior to February 2012, when CMAQ 5.0 was publically
released. CMAQ 4.7.1 was used since it was the most current version of the model available at the time the air
quality modeling started. CMAQ v4.7.1 includes updates related to secondary organic aerosol (SOA) chemistry.
SOA chemistry research, described in Section 6.2.1.2.2 of the RIA, has led to implementation of
new pathways for SOA in CMAQ 4.7, based on recommendations of Edney et al. and the recent
^9 ^1
work of Carlton et al. ' In previous versions of CMAQ, all SOA was semivolatile and
resulted from the oxidation of compounds emitted entirely in the gas-phase. In CMAQ v4.7,
parameters in existing pathways were revised and new formation mechanisms were added.
Some of the new pathways, such as low-NOx oxidation of aromatics and particle-phase
oligomerization, result in nonvolatile SOA.
Section 6.1.1.10 of the RIA presents information on exposure and health effects associated with traffic-
related air pollution near roads. This information is focused within 500 meters of a road because that range includes
the distance that review articles show as the range where most studies indicate that pollutants reach background
levels. There is research, such as the 2009 study cited by the commenter, indicating that depending on
meteorological conditions, near road pollutants can be transported further than 500 meters.
The CMAQ model, described in Section 6.2.1 of the RIA, does not make any assumptions about
exposure at various distances from roads. Instead it models the transport and dispersion of
pollutants based on numerous science modules that simulate the emission, production, decay,
deposition and transport of organic and inorganic gas-phase and particle-phase pollutants in the
atmosphere. In addition, as noted above, there are various forms of advanced engine technologies such as GDI,
and EPA believes that over the timeframe addressed by this rale, manufacturers will have adopted the cleanest forms
of GDI which are expected to have emission performance comparable to PFI vehicles.
Comments on Health Effects of Acetaldehyde
Organization: Clean Fuels Development Coalition (CDFC)
P. 75107, ACETALDEHYDE. We note that EPA states it is currently "conducting a
reassessment of cancer risk from inhalation exposure to acetaldehyde," which is the only
hazardous air pollutant associated with increased use of E30+ blends. Attachment F provides
preliminary details on acetaldehyde's extremely low ranking in terms of Inhalation Risk Factor
(IRF), as reported by DOE, CARB, and other experts (1, 3 butadiene = 100; formaldehyde = 4.6;
benzene = 3.0; acetaldehyde = 0.8). We will be submitting a more detailed analysis on this
subject for the Tier 3 rulemaking, but, in the meantime, we respectfully request that the Agencies
take this information into account as they finalize this rule. [Attachment F can be found in
Docket number EPA-HQ-OAR-2010-0799-9574-A10] [EPA-HQ-OAR-2010-0799-9574-A3, p.
8]
52 Edney, E. O., T. E. Kleindienst, M. Lewandowski, and J. H. Offenberg, 2007. Updated SOA chemical mechanism
for the Community Multi-Scale Air Quality model, EPA 600/X-07/025, U.S. EPA, Research Triangle Park, NC.
Docket EP A-HQ-O AR-2011-0135.
53 Carlton, A.G., B. J. Turpin, K. Altieri, S. Seitzinger, R. Mathur, S. Roselle, R. J. Weber, (2008), CMAQ model
performance enhanced when in-cloud SOA is included: comparisons of OC predictions with measurements,
Environ. Sci. Technol. 42 (23), 8798-8802. Docket EP A-HQ-O AR-2011-0135.
17-12
-------
Analysis of Estimated Costs, Economic and Other Impacts
Response:
EPA is currently conducting a reassessment of cancer risk from inhalation exposure to
acetaldehyde. However, inhalation unit risk factors were not used in any of the analyses for this
rule.
17-13
-------
-------
Analysis of Estimated Costs, Economic and Other Impacts
18. Analysis of Estimated Costs, Economic and Other Impacts
Organizations Included in this Section
Center for Biological Diversity
Growth Energy
Institute for Energy Research (IER)
Investor Network on Climate Risk (INCR) - Ceres
Mass Comment Campaign (20) (Union of Concerned Scientists-1)
National Association of Clean Air Agencies (NACAA)
New Jersey Senate, Third Legislative District
New York City Council, 35th District
New York State Assembly Committee on Government Operations
New York State Senate, 26th District
Pennsylvania Department of Environmental Protection
Shick, R.
Smith, Frank Houston
State of New York, The Assembly
Organization: Center for Biological Diversity
The Agencies cite the fact that the rulemaking's benefits far outweigh their costs as an indication
of its reasonableness. But the opposite is true. In light of the statutory mandate to achieve energy
conservation, it is unreasonable to design a rulemaking that so obviously undervalues benefits.
Here, technologies that can improve fuel efficiency significantly have been ruled out because of
alleged cost concerns by manufacturers. Yet, the rulemaking's benefits exceed its costs by many
hundreds of billions of dollars.39 The fuel savings alone pay for the costs of additional
technologies many times over, leaving billions of dollars in consumer pockets. The Agencies
have thus left substantial, achievable fuel economy improvements and public benefits unrealized
due to industry objections. Plainly, a rulemaking that elevates the protection of industry profits
over energy conservation is contrary to EPCA and EISA. This calculus underlying the preferred
alternative is anything but reasonable. [EPA-HQ-OAR-2010-0799-9479-A1, p. 8]
Response:
EPA agrees with the commenter's assessment that the projected benefits of the final standards far
exceed the projected costs. Given the entire impact analysis set forth in the preamble and the
RIA, EPA concludes that the final standards are reasonable and feasible. However, the
commenter's claim that even more stringent standards would be reasonable (because benefits so
far exceed projected costs) does not take into account that the benefits of the rule are dependent
on vehicles actually being built and purchased when one takes into consideration issues of cost,
consumer acceptance, and available lead time. Note that EPA also responds to comments
regarding the stringency of the standards in Section 2.
18-1
-------
EPA Response to Comments
EPA has analyzed these issues in detail, including a projection of technology penetration rates
needed to meet more stringent car and truck standards. As set out in detail in Section III.D.6 of
the preamble to the final rule, truck and car standards which are 20 grams/mile more stringent
would result in significantly increased penetration rates for advanced technologies. This is true
in both MY 2021 and even more so in MY 2025. See Tables 111-35 and 111-37 for trucks, Tables
111-42 and 111-44 for cars. In addition, as discussed in that section of the preamble, a 20 g mile
more stringent truck standard in MY 2021 would raise issues of available lead time and
consumer acceptance for introducing challenging technologies into large pickup trucks. -This
rapid influx of technologies (and costs) is also illustrated in figures III-3 and III-4. The tables
and figures show that more stringent standards add costs and technologies in a non-linear
fashion, as costs greatly increase as the rate of electrification increases. This commenter
advocated alternative 4 (cars -20g/mi) as its preferred alternative, which is equivalent to an
average of 6.5% annual rate of increase in stringency for cars.
This level of stringency increase leads not only to increased costs, but raises issues of consumer
acceptance due not only to the cost increases but in response to a marked increase in technology
in vehicles. These technology increases include a doubling of electric vehicles and hybrid
electric vehicles. For the MY 2025 standards, our analysis indicates that some manufacturers
would be required to use the maximum amount of advanced technology we consider feasible (i.e.
the phase-in cap amount) to achieve the 20 grams per mile more stringent standard and in some
cases add even further advanced technology (see Table 111-54 for the alternative 4 example). A
number of commenters have noted that current penetration rates of HEVs are low (see discussion
in Response to Comments section 18.1). Preamble III.H.l.b discusses issues related to consumer
acceptance of EVs. As discussed there, we consider the projected level of EVs and PHEVs in
this rule to be small enough that the market is likely to absorb the vehicles, but we acknowledge
that we do not have sufficient information to estimate consumer response to these
unconventional technologies. Increasing stringency of the standards would of course raise even
more questions about market acceptance. In addition, more aggressive standards would raise
significant issues not only of cost and consumer acceptance, but available lead time as well.
Additionally, EPA feels that there are substantial uncertainties about the ability of consumers and
automakers to absorb the total cost of a program where the total lifetime benefits equal the costs
of the program. Although the commenter does not explicitly espouse such stringent standards,
the commenter states that "fuel savings alone pay for the costs of additional technologies many
times over, leaving billions of dollars in consumer pockets." Simultaneously the commenter
must acknowledge the market limitations associated with such radically high costs as in the
alternative where total costs equals total benefits (which would be significantly more stringent
than the standards in this rule). Some, if not all, of the increasing costs associated with this rule
will be passed along to consumers (see discussions of cost pass-through in Preamble Section
III.H.l l.a and Response to Comments Section 18.7.1); thus, it is incorrect to imply that "industry
profits" are the primary beneficiary of the standards in this rule relative to more stringent
standards. Various public commenters (see discussion in Response to Comments Section 18.1)
already raise concerns about public acceptance of the increased costs and new technologies
resulting from this rule; other commenters express more optimism. As discussed in Response to
Comments Section 18.1, consumer acceptance of the vehicles subject to these standards is
necessary for the standards to have the impacts predicted in this rule. We believe that the
18-2
-------
Analysis of Estimated Costs, Economic and Other Impacts
standards in this rule achieve a reasonable balance in promoting technological innovation while
maintaining consumer acceptance. Tighter standards would involve significant uncertainties
about these factors.
We note that analyses substantially similar to these were presented in the proposed rule, and the
commenter does not raise any questions as to the accuracy of these analyses. EPA has made a
reasonable policy choice to encourage more rapid penetration of advanced technology, especially
into the heavy truck sector, by means of incentives and credit mechanisms, rather than by
adopting aggressive standards under which the projected benefits may not accrue in whole or in
part for the reasons just given.
Organization: Institute for Energy Research (IER)
Depending on the discount rate used, and the value attributed to the social benefits from reduced
greenhouse gas emissions, EPA estimates that through the year 2050, the proposed rule will have
net benefits (i.e. benefits exceeding costs) ranging from $460 billion to $1.7 trillion (in 2009
dollars). [EPA-HQ-OAR-2010-0799-9573-A1, p. 9]
However, EPA's cost-benefit analysis rests upon several dubious assumptions, at times straining
to account for various possible benefits from the new rule while ignoring quite plausible
drawbacks. Even a cursory inspection of EPA's own breakdown of the numbers should give
EPA pause before implementing the rule. Because of the sensitivity of the results to the
controversial assumptions, it is not merely that EPA may be overstating the net benefits of the
rule. Rather, the new rule may impose large net costs. [EPA-HQ-OAR-2010-0799-9573-A1, p.
9]
Furthermore, EPA's cost-benefit analysis for this rule is fatally flawed. [EPA-HQ-OAR-2010-
0799-9573-A1, p. 23]
Response:
EPA disagrees with the commenter's assertion that the cost-benefit analysis is fatally flawed.
EPA uses standard economic parameters (including discount rates) to measure the monetary
value of the rule's impacts. These parameters, methods and assumptions are based on the best
available data at the time and are documented extensively in the Preamble, RIA, and Joint TSD
that accompanies this rule.
EPA acknowledges that a wide range of estimates is available for many of the primary inputs
that are used in the GHG emissions models. EPA recognizes that each of these values has some
degree of uncertainty, which we discuss in the Joint TSD. EPA tested the sensitivity of their
estimates of costs and benefits to a range of assumptions about each of these inputs, and found
that the magnitude of these variations would not have changed the final standards. EPA
conducted sensitivity analyses on discount rates (throughout the rulemaking package, but see
specifically preamble III.H.10 and RIA Chapter 7.3), the social cost of carbon (preamble III.H.6
and RIA Chapter 7.2), the rebound effect (RIA Chapter 4.5.1), and battery costs, mass reduction
18-3
-------
EPA Response to Comments
costs, the indirect cost markup factor and on the cost learning curves used in this analysis (RIA
Chapter 3.11).
In total, EPA's analysis found that the benefits of the final rulemaking, including fuel savings
and many other benefit categories such as the Social Cost of Carbon, far outweigh the costs of
the standards. See, for example, preamble Table 1-17; preamble section III.H.10.
Organization: Investor Network on Climate Risk (INCR) - Ceres
Finally, strong standards will serve to mitigate the economic risks associated with our continuing
dependence on oil as well as climate change. In light of the inevitable rise in oil prices given
increased demand from China, India and Brazil, we need strong standards in order to reduce
transportation costs for businesses and consumers. In addition, climate change presents
significant long-term risks to the global economy, and to investors across all asset classes.
Strong standards will serve to mitigate that risk by providing significant GHG reductions; the
proposed standards would save approximately two billion metric tons of GHG emissions. [EPA-
HQ-OAR-2010-0799-9516-A1, p. 2]
Response:
We agree that world oil demand could be relatively strong over the time frame of this rule and
that lower demand for petroleum as a result of this rule could help to lower fuel costs in the U.S.
transportation sector. We also agree that climate presents significant long-term risks to the
global economy and that our climate impacts analysis and valuation show notable benefits
associated with GHG reductions. We refer the commenter to the climate impacts and SCC
sections in Preamble Section III.H.6, Section III.F.2, RIA Chapter 7, and the Joint TSD Chapter
4 for more details about the benefits.
Organization: Mass Comment Campaign (20) (Union of Concerned Scientists-1)
The proposed standards can bring significant economic, environmental, and energy security
benefits. [EPA-HQ-OAR-2010-0799-1558-A1_MASS, p.l]
Organization: National Association of Clean Air Agencies (NACAA)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 37-38.]
The estimated benefits of this proposal include a reduction in oil consumption of four billion
barrels, a reduction in greenhouse gas emissions of two billion million metric tons, fuel savings
on the order of $347 to $444 billion and a monetized net benefit to society in the range of $311
to $421 billion.
Organization: New Jersey Senate, Third Legislative District
18-4
-------
Analysis of Estimated Costs, Economic and Other Impacts
The projected annual benefits of such standards by 2030 are enormous:
• $45 billion in savings at the gas pump
• 23 billion gallons of gasoline saved
• 280 million metric tons of global warming pollution avoided [EPA-HQ-OAR-2010-0799-9970-
Al,p. 1]
Organization: New York City Council, 35th District
On behalf of my constituents urge you to maximize the consumer and environmental benefits of
these standards by keeping the standards as strong as possible through the rulemaking process.
The projected annual benefits of such standards are enormous. By 2030 the standards would:
• Save Americans $45 billion at the gas pump
• Cut annual oil use by an amount equivalent to our imports from Saudi Arabia and Iraq in 2010
• Reduce annual global warming pollution by the amount equivalent to shutting down 70 coal-
fired power plants for one year [EPA-HQ-OAR-2010-0799-9901-A2, p. 1]
Organization: New York State Assembly Committee on Government Operations
On behalf of my constituents urge you to maximize the consumer and environmental benefits of
these standards by keeping the standards as strong as possible through the rulemaking process.
The projected annual benefits of such standards are enormous. By 2030 the standards would:
• Save Americans $45 billion at the gas pump
• Cut annual oil use by an amount equivalent to our imports from Saudi Arabia and Iraq in
2010
• Reduce annual global warming pollution by the amount equivalent to shutting down 70
coal-fired power plants for one year [EPA-HQ-OAR-2010-0799-9453-A2, p. 1]
Organization: New York State Senate, 26th District
On behalf of my constituents I urge you to maximize the consumer and environmental benefits
of these standards by keeping the standards as strong as possible through the rulemaking process.
The projected annual benefits of such standards are enormous. By 2030 the standards would:
• Save Americans $45 billion at the gas pump
• Cut annual oil use by an amount equivalent to our imports from Saudi Arabia and Iraq in 2010
18-5
-------
EPA Response to Comments
• Reduce annual global warming pollution by the amount equivalent to shutting down 70 coal-
fired power plants for one year [EPA-HQ-OAR-2010-0799-9884-A1, p. 1]
Organization: State of New York The Assembly
On behalf of my constituents urge you to maximize the consumer and environmental benefits of
these standards by keeping the standards as strong as possible through the rulemaking process.
The projected annual benefits of such standards are enormous. By 2030 the standards would:
• Save Americans $45 billion at the gas pump
• Cut annual oil use by an amount equivalent to our imports from Saudi Arabia and Iraq in 2010
• Reduce annual global warming pollution by the amount equivalent to shutting down 70 coal-
fired power plants for one year [EPA-HQ-OAR-2010-0799-10155-A1, p. 1]
Organization: The Catskill Center for Conservation and Development
The projected annual benefits of such standards by 2030 are enormous:
• $45 billion in savings at the gas pump
• 23 billion gallons of gasoline saved
• 280 million metric tons of global warming pollution avoided [EPA-HQ-OAR-2010-0799-9913-
Al,p. 1]
Organization: Weiner, L.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 105.]
The scale of benefits far outweighs any opposition: Reducing reliance on foreign oil, saving
American families thousands of dollars in gas, cutting pollution, creating jobs and revitalizing
the American auto industry as an engine of economic growth and innovation, as you heard.
Organization: Center for Biological Diversity
39 The Agencies state the net benefits of the rulemaking as between $311 billion and $421
billion, at 7 and 3% discount rates, respectively, over the lifetimes of the vehicles sold during
MY 2017-2025. NPRM, 76 Fed. Reg. 74859 [EPA-HQ-OAR-2010-0799-9479-Al, p. 8]
Response:
18-6
-------
Analysis of Estimated Costs, Economic and Other Impacts
EPA thanks the commenters for pointing out the clear benefits associated with the final standards
and agrees that the benefits of the standards far outweigh the costs.
Organization: Shick, R.
If enacted, these new regulations will increase average vehicle costs by $5000 (source: NADA
study) and drastically limit consumers' choices as popular and useful vehicles as pickup trucks
and SUVs are either removed from the market or simply become unaffordable. [EPA-HQ-OAR-
2010-0799-6215-Al,p. 1]
The regulations will also reduce vehicle sales and production which will reduce employment,
cause people to drive their vehicles longer, and risk safety by forcing vehicles to be smaller and
lighter weight. [EPA-HQ-OAR-2010-0799-6215-Al, p. 1]
I have seen first hand the incredible expense of the technologies required to meet these
requirements and they are certainly not justified by the limited potential benefits in fuel savings.
Even if fuel usage were drastically reduced, state and federal governments would increase the
gasoline taxes to make up for the reduced gasoline tax revenue, thus negating the savings to
consumers. [EPA-HQ-OAR-2010-0799-6215-A1, p. 1]
Response:
EPA disagrees with the commenter's assertion that the expense of the technologies is not
justified by the potential benefits of fuel savings. Our analysis found that the benefits of the final
rulemaking, including fuel savings and many other benefit categories such as the Social Cost of
Carbon, far outweighed the costs of the standards. See, for example, preamble Table 1-17. How
state and federal governments address the impacts of this rule on gasoline taxes is beyond the
scope of this rule. The benefit-cost analysis does not include sales tax, because sales tax
revenues are a transfer of income, not income created or reduced by this rule.
Regarding the other points the commenter makes, we address these concerns elsewhere in our
Response to Comments document: costs are addressed in Section 12.3, safety in Section 13, fuel
savings in Section 18.3, vehicle sales in Section 18.7, and employment in Section 18.8.
Organization: Smith, Frank Houston
The range of impacts extend well beyond ... automotive fuel economy, lack of US parity with
world CO2/fuel economy standards NOW & post 2014, 2025 CAFE, US industrial base, US jobs
creation/loss, oil imports/energy independence, balance of trade, US economic expansion
without requiring TAXPAYER MONEY, preventing the demise of Det3 (& general) US auto
industry post 2016, ultimately ... Our US ECONOMY ... and ... NATION SECURITY.
[NHTSA-2010-0131-0240, p.2]
Concerns or Opportunity?
18-7
-------
EPA Response to Comments
President Obama's 2012 STATE of the UNION address praised the auto industry recovery and
the idea/opportunity of exporting US automotive product. [NHTSA-2010-0131-0240-A2, p.6]
Unfortunately, the EU and South Korea will require, by statute, < 140 gCCVkm in 2015 to avoid
severe financial penalties (> USD $25/gram minimum over limit, in some jurisdictions
increasing to almost $90/gram by 2020) for each noncompliant vehicle sold. This requires
minimum fuel economy of 40 and 44 mpg(US) combine for gasoline and diesel vehicles
respectively to avoid these penalties. It is reasonable to believe China and India will be following
soon after. Table 4 offers an assessment of the current UK/EU market status to allow
appreciation of future expectations. [NHTSA-2010-0131-0240-A2, p.6]
For reference 22.2 (the 2011 US fleet average) and 30 mpg combined are roughly 250 and 182 g
CO2/km respectively. [NHTSA-2010-0131-0240-A2, p.6]
Are there any current or proposed US manufactured vehicles that would NOT be subject to
penalties when exported to those 4 regions constituting about 70% [and growing] of world
automotive markets in 2011? [NHTSA-2010-0131-0240-A2, p.6]
Will these external CO2 limits make it more difficult to export US manufactured automotive
product based on foreseeable offering and emerging US powertrain technologies? See Table 4
above for UK/EU market status. [NHTSA-2010-0131-0240-A2, p.6]
This may be a serious problem ... except for the niche high end segments where price/cost is of
no concern. The down side of this is that the rich can only buy a relatively limited number of
vehicles per year. [NHTSA-2010-0131-0240-A2, p.6]
Response:
EPA thanks Mr. Smith for his thoughtful comment. The final standards will move
automakers towards more fuel efficient vehicles and move the US toward lower GHG emissions.
However, it is up to the automakers to decide how to respond to environmental standards in other
countries. We believe that it is possible that the standards will facilitate meeting increasingly
stringent international standards, which may reduce coordination costs, and thus overall costs for
the standards. We discuss this issue in Preamble III.H. 11 .a.
18.1. Consumer Impacts/Consumer Welfare/Consumer Acceptance of
Vehicles
Organizations Included in this Section
AAA
Alexandria Hyundai
Alliance of Automobile Manufacturers
American Fuel and Petrochemical Manufacturers (AFPM)
Applied Materials
BlueGreen Alliance
BMW of North America, LLC
18-8
-------
Analysis of Estimated Costs, Economic and Other Impacts
Competitive Enterprise Institute (CEI)
Consumer Federation of America (CF A)
Consumer Reports
Consumers Union
Dawid, I.
Defour Group LLC
Detroit NAACP
El00 Ethanol Group
Eaton Corporation
Ecology Center
EcoMotors International, Inc.
Edmunds.com
Environmental Defense Fund (EDF
Ford Motor Company
General Motors Company
Gilles, B.
Institute for Energy Research (IER)
Institute for Policy Integrity, New York University School of Law
International Council on Clean Transportation (ICCT)
Michigan State Senate, District 18
National Association of Clean Air Agencies (NACAA)
National Automobile Dealers Association (NADA)
National Caucus of Environmental Legislators
National Wildlife Federation (NWF)
Natural Resources Defense Council (NRDC)
Northeast States for Coordinated Air Use Management (NESCAUM)
Pennsylvania State Senate et al.
Rafter, M.
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Slemp III, R. L.
U.S. Coalition for Advanced Diesel Cars
Union of Concerned Scientists (UCS)
United Automobile Workers (UAW)
Volkswagen Group of America
Volvo Car Corporation (VCC)
Organization: AAA
Since the first CAFE standard was established in 1975, automotive technologies have advanced
to provide consumers with a range of choices for automobiles that meet mobility needs, are safe,
and fulfill a desire for fuel economy. AAA hopes that the CAFE reforms sought under this
rulemaking will continue the progress we have made as a country in improving automobiles from
all perspectives. [EPA-HQ-OAR-2010-0799-9484-A1, p. 1]
AAA's interest in CAFE has always been to represent the motorist, while leaving the
establishment of specific target numbers to manufacturers, researchers and policymakers. In this
18-9
-------
EPA Response to Comments
capacity, AAA's position and policy has remained that the federal government should establish
fuel economy standards that are ambitious enough to result in marked improvements in overall
efficiency but realistic enough to maintain passenger safety and consumer choice. [EPA-HQ-
OAR-2010-0799-9484-A1, p. 1]
Organization: Alexandria Hyundai
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 64-68.]
Safety, reliability, styling and fuel economy are all key considerations for our customers when
selecting a vehicle brand or model.
I believe our customers will continue to value and place great emphasis on fuel economy. And
that is one of the reasons I generally support the proposed standards.
I have seen firsthand how customers are open to new platforms and technologies when selecting
a new vehicle.
Achieving the 54.5 MPG target will most certainly require a great deal of automotive ingenuity
and substantial investment on the part of all key stakeholders.
However, I am certain consumers will continue to demand improvements in fuel economy and
purchase vehicles from manufacturer vehicle offerings achieving that target.
I state this example to underscore that while we must remain sensitive to cost increases,
consumers will see value in and pay for advancements in technologies that improve their lives
and the lives of those around them.
Organization: Alliance of Automobile Manufacturers
Even assuming that the energy cost savings will far exceed the increased up-front vehicle costs,
consumer response is difficult to predict. The NPRM describes what the agencies call an "energy
paradox" whereby consumers appear not to purchase products featuring levels of energy
efficiency that, according to some metrics, might appear to be in their economic self-interest:
[EPA-HQ-OAR-2010-0799-9487-A1, p. 19]
Of 27 studies, significant numbers of them find that consumers undervalue, overvalue, or value
approximately correctly the fuel savings that they will receive from improved fuel economy. The
variation in the value of fuel economy in these studies is so high that it appears to be
inappropriate to identify one central estimate of value from the literature. Thus, estimating
consumer response to higher vehicle fuel economy is still unsettled science. Regarding consumer
response to [fuel economy] labeling information on cost savings: Whether the new label will
help consumers to overcome the "energy paradox" is not known at this point. [EPA-HQ-OAR-
2010-0799-9487-Al,p.l9]
18-10
-------
Analysis of Estimated Costs, Economic and Other Impacts
Are Consumers Purchasing the Technologies Needed to Achieve the Goals of the Rulemaking?
[EPA-HQ-OAR-2010-0799-9487-Al,p.23]
Of course, the ultimate question will be whether mainstream consumers will be able and willing
to purchase the technologies needed to achieve this country's fuel economy energy security and
environmental goals - particularly as the federal and state governments phase out many of the
financial incentives that are available today.10 The proposed regulatory language does not
include this single most critical factor. Will mainstream consumers be willing and able to
purchase vehicles with more fuel efficient technologies? As the NPRM states, "there is
considerable uncertainty in the economics literature about the extent to which consumers value
fuel savings from increased fuel economy." [EPA-HQ-OAR-2010-0799-9487-A1, p.23]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 97.]
In fact, consumer acceptance is the most critical - and unpredictable - component of advanced
technology vehicle deployment. Manufacturers strive to understand how their advanced
technology vehicles will be used and fueled and what combination of pricing, incentives and
vehicle attributes are needed to convince mainstream consumers to invest in new technologies.
[EPA-HQ-OAR-2010-0799-9487-Al,p.23]
Recognizing the critical role of customers in determining the viability of future vehicle
technologies, theNAS wrote: [EPA-HQ-OAR-2010-0799-9487-A1, p.23]
Manufacturers will choose fuel economy technologies based on what they think will be most
effective and best received by consumers. Customers also will have a central role in what
technologies are actually chosen and will make those choices based partly on initial and
operating costs. Subsidies and other incentives also can significantly impact the market
acceptance rate of technologies that reduce fuel consumption. Finally, adoption of these
technologies must play out in a sometimes unpredictable marketplace and policy setting, with
changing standards for emissions and fuel economy, government incentives, consumer
preferences, and other events impacting their adoption. Thus, the committee acknowledges that
technologies downplayed here may play a bigger role than anticipated, or that technologies
covered in this report may never emerge in the marketplace. [EPA-HQ-OAR-2010-0799-9487-
Al,p.23]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 96-98.]
The unprecedented effort of the coming 13 years to further our country's energy and
environmental goals will succeed only, only if consumers buy the fuel-efficient technologies that
we will be offering.
Looking into the future, consumer purchasing patterns will be the biggest unknown. Besides fuel
economy, we know that consumers demand affordability, safety, convenience and utility. One
challenge we have is that fuel economy considerations often rank below those other factors. Fuel
18-11
-------
EPA Response to Comments
prices are especially difficult to predict and have a huge impact on how consumers weigh fuel
economy at the dealership.
First, let consumers determine the winning fuels and technologies. Ultimately consumers should
decide what best meets their needs. Vehicles that run on gasoline, diesel, biofuels, electricity,
hydrogen and natural gas will all play a role in improving fuel efficiency and reduce greenhouse
gas emissions.
10 - In 2011, when automakers offered 231 models that achieved 30 miles per gallon or more on
the highway, these vehicles represented about 37% of U.S. sales. More than ten years after
hybrids were introduced to the U.S. market, in a year when there were 38 different models of
hybrids on sale in the United States, these vehicles represented only 2.1% of new vehicle sales.
In 2011, the top-selling pickup truck outsold all hybrids combined by a factor of two to one.
(Data in this footnote is computed based on data from www.fueleconomy.gov and from
WardsAuto
Organization: American Fuel and Petrochemical Manufacturers (AFPM)
II. NHTSA should adopt feasible CAFE standards. [EPA-HQ-OAR-2010-0799-9485-A1, p.3]
NHTSA's authority to issue these CAFE standards is set forth at 49 U.S.C.§ 32902(b)(2)(B).
That statute requires NHTSA's CAFE standards to be "feasible" and practicable and states:
[EPA-HQ-OAR-2010-0799-9485-Al,p.3]
When deciding maximum feasible average fuel economy under this section, the Secretary of
Transportation shall consider technological feasibility, economic practicability, the effect of
other motor vehicle standards of the government on fuel economy, and the need of the United
States to conserve energy. [EPA-HQ-OAR-2010-0799-9485-A1, p.3]
In analyzing the latest round of CAFE standards, NHTSA recognized that some technologies
currently have limited commercial use and require a realistic schedule for widespread
commercialization to be feasible. We note that consumer acceptability is an important element of
economic practicability. [EPA-HQ-OAR-2010-0799-9485-A1, p.3]
AFPM is very concerned that this proposal is based on an analysis that does not incorporate a
vehicle choice model that appropriately considers the impacts of consumer choice upon
industries and individuals that will be affected by the rulemaking. This is a serious deficiency
that must be addressed to properly understand the implications of this proposal. EPA
acknowledges this need with the following excerpt from the proposal: [EPA-HQ-OAR-2010-
0799-9485-A1, p.4]
The agency hopes to evaluate those potential impacts through use of a "market shift" or
"consumer vehicle choice" model, discussed in Section IV of the NPRM preamble. With an
integrated market share model, the CAFE model would then estimate how the sales volumes of
18-12
-------
Analysis of Estimated Costs, Economic and Other Impacts
individual vehicle models would change in response to changes in fuel economy levels and
prices throughout the light vehicle market, possibly taking into account interactions with the used
vehicle market. Having done so, the model would replace the sales estimates in the original
market forecast with those reflecting these model-estimated shifts, repeating the entire modeling
cycle until converging on a stable solution. We seek comment on the potential for this approach
to help the agency estimate sales effects for the final rule. [EPA-HQ-OAR-2010-0799-9485-A1,
p.4]
Using a new consumer choice model to evaluate the impacts of the final rule is appropriate, but
requires the agency to re-propose the rule and offer its revised conclusions on sales estimates and
market forecasts for public comment. It is inappropriate and a violation of the Administrative
Procedure Act to promulgate a final rule without first seeking comment on the changes caused
by the application of the revised model. A new consumer vehicle choice model should have been
peer-reviewed and then employed in this proposal to permit public review and comment on the
impacts of this proposal. It is improper to propose a rule, accept comments, change the
methodology for analyzing the rule's impact and finalize the rule without providing an additional
opportunity for comment on the impacts of the final rule. How can affected parties provide
informed comments to the agency when the proposed rule excludes the agency's understanding
of the potential impacts of the proposed rule? Under these circumstances, the Administrative
Procedure Act requires the agency to apply the vehicle choice model, describe its impact, and
issue a supplemental notice of proposed rulemaking to facilitate informed comment on the
potential impact of the rule. [EPA-HQ-OAR-2010-0799-9485-A1, p.4]
The agency's failure to apply an appropriate vehicle choice model has resulted in proposed
standards that are not feasible. Electrification is a good example. The following chart reflects the
unwarranted optimism of attaining sufficient sales volumes for electric vehicles: [EPA-HQ-
OAR-2010-0799-9485-A1, p.4] [For the associated chart please refer to EPA-HQ-OAR-2010-
0799-9485-A1, p.5]
Conclusion [EPA-HQ-OAR-2010-0799-9485-A1, p.9]
AFPM believes that this rule needs to be re-proposed with the inclusion of a consumer choice
model that reflects a feasible and practicable market penetration of alternative fuel vehicles.
[EPA-HQ-OAR-2010-0799-9485-Al,p.9]
Organization: American Fuel and Petrochemical Manufacturers (AFPM)
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 201.]
We echo the support and the comments made regarding savings for consumers. We think those
are going to be very real.
Organization: BlueGreen Alliance
18-13
-------
EPA Response to Comments
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 58-60.]
Based on the agencies' initial technical assessment, the net consumer savings of fuel
expenditures will be very substantial and will provide much needed relief at the pump. By
developing and producing advanced fuel- saving technology in the United States, automakers
and suppliers can create quality jobs and provide the clean, fuel-efficient cars and light-duty
trucks consumers want.
We also request continuing federal programs to support these auto industry efforts in retooling to
meet the demand for cleaner, more efficient cars.
Consumers looking to purchase vehicles in the next few years are expressing interest in higher
fuel economy. Building the next generation of advanced vehicles in the United States will create
tens of thousands of new engineering and manufacturing jobs and strengthen America's
rebounding sector.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 38.]
This standard will give Americans more advanced vehicle choices, which in turn will help
consumers save money at the pump. By making it less expensive to drive, by covering the same
ground but using less fuel, consumers will have more money left over to spend or invest in other
economically beneficial ways.
Organization: BMW of North America, LLC
To reiterate, achievable greenhouse gas emission reductions and commensurate fuel economy
increases depend on both designing more fuel-efficient vehicles AND increasing market demand
for such vehicles. We can build the vehicles, but consumers must buy them. The implementation
of new greenhouse gas-reducing technologies, alternative powertrains, and fuels strongly
depends on customer acceptance. The proposed standards were developed based on today's best
estimates of future technology, market developments, and assumed customer acceptance. A
comprehensive emission reduction policy needs to consider all aspects, including the customer.
[EPA-HQ-OAR-2010-0799-9579-A1, p. 3]
Organization: Competitive Enterprise Institute (CEI)
The agencies project net benefits ranging from $262 billion (assuming a 7% discount rate) to
$358 billion (assuming a 3% discount rate).2 These projections are based on assumptions
regarding vehicle cost, fuel prices, and consumer acceptance that may or may not be borne out
by events. Skepticism is justified. If the proposed standards are as beneficial to consumers and
automakers as the agencies contend, why wouldn't consumers demand and profit-seeking
manufacturers produce vehicles built to the same or similar standards without regulatory
compulsion? Fuel economy regulation assumes that auto buyers do not want to avoid pain at the
pump and automakers do not want to get rich. [EPA-HQ-OAR-2010-0799-9552-A1, p. 1]
18-14
-------
Analysis of Estimated Costs, Economic and Other Impacts
Organization: Consumer Federation of America (CFA)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 39-41.]
These potential consumer benefits come at a moment when American consumers are in desperate
need of relief from rising and volatile gasoline prices. Gasoline prices set a record in 2011 in
both nominal and real terms, averaging $3.53 per gallon. This week's price is a record for the
month of January, and that clobbers the economy and the consumer pocketbook.
So if there is one thing you take away from this hearing today, remember this is a consumer
benefit program. This is a wonderful consumer program. In fact, we estimate that 80 percent, 500
billion of the $600 billion of total benefits are the consumer savings. So this is a consumer
program.
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 87-89.]
I gladly appreciate the opportunity to appear today because we believe that the benefits of this
proposed rule are obvious.
They lower the cost of driving and will save consumers thousands of dollars per vehicle. It will
save the national economy hundreds of billions of dollars.
They lower our imports, lower our vulnerability to supply disruptions. Above all, these are a
consumer-friendly set of rules. This is the consumer policy that will benefit American
consumers.
Consumers will buy the new fuel-efficient vehicles enabling auto makers to reach the targets that
have been set. Not because they're so beneficial in terms of economics. That's important.
But also because the rules have been written in a consumer-friendly fashion that is sensitive to
the needs of the industry. And that is the backbone of the political consensus that you have heard
this morning.
First, the public is concerned about gasoline and that leads to support for higher fuel economy
and it changes consumer behavior.
Seventy-five percent or more of respondents to our public opinion polls. And we've conducted a
dozen over the last six or seven years.
Second of all, consumers have shown a willingness to shift their buying patterns in light of
recent gas price spikes.
Americans are meeting their needs for driving with vastly more fuel-efficient vehicles. They are
ready to do this. They have already started, and they are way ahead of the auto industry.
18-15
-------
EPA Response to Comments
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 59-61.]
The car dealers say that fuel economy performance is typically not high on the consumer's list of
priorities. If this were, in fact, true, why do we see so many car companies advertising fuel
economy as a selling point. The car manufacturers who spend millions of dollars studying
consumer behavior obviously disagree with their dealers. Fuel economy is the very top priority
for consumers looking to purchase a new car. In fact, Consumers Union, the publishers of
Consumer Reports, determined that fuel economy was the number two reason why consumers
would change their brands of vehicle.
The NADA has said that just because vehicles can be built doesn't mean that they will be bought.
Actual sales data, however, is very clear. Consumers want and will pay for more fuel-efficient
vehicles. And the manufacturers supporting this new standard have agreed to make them.
Consider Ford, for example. The combined sales of their two new fuel-efficient cars, the Fiesta
and the Focus, in May 2011 are up 74 percent in one year.
Like everyone in the economy, car dealers are reeling from the financial setbacks. The reduction
in the cost of driving from these new standards, however, will cause more autos to be sold and
over 100,000 jobs to be created. More jobs and vehicles that are less expensive to drive means
more consumers, not less, will be buying cars.
Consumers are desperate for more fuel-efficient vehicles. Consumer pocketbooks are hurting and
more fuel-efficient vehicles will drive more and more consumers into the showroom. Right now,
there are not enough fuel-efficient vehicles on the market to meet consumer demand.
V. NATIONAL COST BENEFIT: HIGHER FUEL ECONOMY STANDARDS DELIVER
LARGE AND DIVERSE BENEFITS
Exhibit S-5 shows CFA's estimates of national benefits and costs. [See Exhibit S-5 on p. 7 of
Docket number EPA-HQ-OAR-2010-0799-9419-A1] [EPA-HQ-OAR-2010-0799-9419-A1, p.
5]
The total discounted national benefits are close to $600 billion, a value that is well over three
times the cost. [EPA-HQ-OAR-2010-0799-9419-Al, p. 5]
Higher fuel economy standards are primarily a consumer benefit program, with consumer
savings of close to $500 billion, over 80 percent of the total national benefits. [EPA-HQ-OAR-
2010-0799-9419-A1, p. 5]
Environmental and public health benefits will be almost $60 billion (just over 10 percent of the
total). [EPA-HQ-OAR-2010-0799-9419-A1, p. 5]
Exhibit S-6 presents the full range of cases and scenarios considered by the agencies. It plots the
costs (on the x-axis) and the benefits (on the y-axis) for the eight different target levels
considered with each target level evaluated at discount rates of 3% and 7%. It also shows the
18-16
-------
Analysis of Estimated Costs, Economic and Other Impacts
results of the sensitivity analyses that were conducted at the 3% discount rate. In all, there are 28
cases/scenarios shown. The Exhibit also includes a break even line. If a case/scenario falls above
the line, the benefits exceed the costs. [See Exhibit S-6 on p. 9 of Docket number EPA-HQ-
OAR-2010-0799-9419-A1] [EPA-HQ-OAR-2010-0799-9419-A1, p. 8]
In every sensitivity analysis conducted by the agencies, no matter how extreme the assumptions,
the benefits exceed the costs. [EPA-HQ-OAR-2010-0799-9419-Al, p. 8]
The exhibit makes it clear that the benefits are likely to exceed the costs by a wide margin. Even
under the most extreme assumption - i.e. that consumer pocketbook savings are only one-quarter
of the base case calculation, the benefits are almost twice as large as the costs at the 3% discount
rate. [EPA-HQ-OAR-2010-0799-9419-Al, p. 8]
VIII. NHTSA AND EPA HAVE SERIOUSLY UNDERESTIMATED THE BENEFITS OF
THE STANDARDS
There are both quantitative and qualitative flaws in the agency analysis that must be corrected.
The analyses presented in the attached Technical Appendices reflect our independent calculation
of the costs and benefits which includes corrections of the flaws in the underlying agency
analyses. At the outset, we want to stress that neither the standards nor the cost benefit analyses
are perfect, but the perfect must not be the enemy of the excellent. Increasing the fuel economy
of the vehicle fleet to the levels proposed by the standards represents such major progress
towards important national policy goals and the approach taken by the standards is so well
crafted that we believe it is of the utmost importance to adopt the standards and move vigorously
to implement them. Our primary concern is that the agencies have underestimated the value of
the standards in several important ways. Even with the flaws, the benefits of the standards are
shown to far outweigh the costs, but it is important for the final rule to correct the flaws we
identify. [The Technical Appendices can be found on pp. 16-55 of Docket number EPA-HQ-
OAR-2010-0799-9419-A1] [EPA-HQ-OAR-2010-0799-9419-A1, pp. 11-12]
• NHTSA will be issuing final rules periodically over the next decade and a half, and the
agencies will jointly conduct a mid-course review in a decade; the errors should not be
allowed to become engrained in the analytic structure. [EPA-HQ-OAR-2010-0799-9419-
Al,p. 12]
While the current standards are well within the frontier of what is technologically feasible and
economically practicable (which are two key standards that in the authorizing legislation for
NHTSA), over time, the standards may move closer to the frontier. [EPA-HQ-OAR-2010-0799-
9419-Al,p. 12]
• As the fuel economy standards rise, they will be closer to the economic margin, which
will make it more important for the agencies to get it right, so that future rules do not
demur from setting standards that are in the public interest because benefits have been
underestimated. [EPA-HQ-OAR-2010-0799-9419-Al, p. 12]
18-17
-------
EPA Response to Comments
The agencies need to articulate the analytic justification for the standards more clearly and
forcefully. The Preliminary Regulatory Impact Analysis contains a lengthy discussion of what
has been called the "efficiency gap" or the "efficiency paradox" for several decades. In many
ways, this discussion is far superior to earlier discussions in the sense that it recognizes there are
both supply-side and demand-side factors that may cause the market for new autos to under
invest in fuel economy technologies. The "efficiency gap" is identified by the
economic/engineering analysis, where, under reasonable and realistic assumptions about cost and
value, there are many technologies available that would produce substantial net benefits to
consumers if they were included in the new vehicles. The failure of the auto market to include
these technologies raises the question of why, in a capitalist economy, where markets are
presumed to be efficient, so much economic value is left unrealized. The answer, as we have
pointed out in the all of the recent rulemakings dealing with the fuel economy of light duty
vehicles is that there are market imperfections that suppress investment in fuel efficient
technologies. [EPA-HQ-OAR-2010-0799-9419-Al, p. 12]
Our earlier analyses are summarized in Exhibit S-9. The imperfections [See Exhibit S-9 on p. 13
of Docket number EPA-HQ-OAR-2010-0799-9419-A1]
• affect both the demand side and the supply-side of the light duty vehicle market,
• go well beyond the problems of externalities and information problems, and
• include significant market structural conditions, transaction costs and behavioral
factors. [EPA-HQ-OAR-2010-0799-9419-A1, p. 12]
The fact that the market has begun to move in the right direction is encouraging. The fact that it
has taken almost a doubling of the cost of gasoline in real terms to get it to move is testimony to
the strength of the barriers to optimal investment in fuel economy in the market. In spite of the
fact that the agency discussion of market imperfections is incomplete, the agencies conclude,
correctly, that the base case analysis should be the pillar on which the choice of a standard rests.
We agree with that conclusion. The agencies treat the base case with a 3% discount rate as the
starting point for the sensitivity analysis. [EPA-HQ-OAR-2010-0799-9419-Al, p. 12]
We do not agree with the decision to conduct a "fudge" factor analysis that arbitrarily slashed the
size of the efficiency gap and the magnitude of consumer welfare gains. The analysis offers no
empirical justification for doing so. Moreover, the general discussion of consumer welfare
combined with the traditional sensitivity analysis has already addressed the underlying
uncertainties. Uncertainties about the price of gasoline, the cost and effectiveness of
technologies, the value of externalities are already incorporated in the sensitivity analysis. The
"fudge" factor analysis is unnecessary and double counts uncertainty. [EPA-HQ-OAR-2010-
0799-9419-A1, p. 12]
Organization: Consumer Reports
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 165-166.]
18-18
-------
Analysis of Estimated Costs, Economic and Other Impacts
It is our view that implementing these proposed fuel economy standards, will increase vehicle
choice and provide consumers with more efficient and alternative fuel vehicles.
In a recent Consumer Reports survey, consumers demonstrated a strong support for fuel
economy standards and alternative fuel vehicles and a willingness to pay more for these
technologies.
Consumers want it all. They want function, performance, a variety of choices, and better fuel
economy. And they have indicated that they'd rather pay slightly more for these vehicles if it
means they would save money at the gas pump.
According to the survey, 93 percent believe that the fuel efficiency standards for all vehicles
should be improved. Nearly 80 percent support the 55 miles per gallon target for the fleet by
2025.
As the availability of these vehicles, many consumers would buy or consider an alternative fuel
vehicle such as a hybrid, electric vehicle or natural gas.
Organization: Consumers Union
Finally, the standards are likely to improve the choices available to consumers. Because CAFE
standards are now footprint-based, improvements are required across all vehicle sizes, so each
class of car will likely see efficiency gains. Because the standards are scaled by size, there is no
incentive for automakers to downsize vehicles. Consumers will have more efficient options
across vehicle classes and are likely to see more partially and fully electrified options from many
or all automakers. [EPA-HQ-OAR-2010-0799-9454-A2, p.3]
II. Consumers support a strong CAFE standard
Improving fuel economy also provides intangible benefits and acts as insurance against unstable
oil prices. Uncertainty in fuel prices and price spikes take an emotional toll that is not easily
captured in modeling or consumer choice analysis. Spikes in gasoline prices cause immediate
and keenly noticed financial pain for many consumers. Consumers support improving fuel
economy in large part because it provides peace of mind by improving energy security for
individual consumers and the nation. The CAFE program is an effective, proactive option when
it comes to dealing with rising gas prices. [EPA-HQ-OAR-2010-0799-9454-A2, p.3]
In a recent Consumer Reports survey, consumers demonstrated strong support for fuel efficiency
standards, a desire for alternative fuel vehicle options and a willingness to pay for more efficient
technology.? Consumers want it all—function, performance, a variety of choices and better fuel
economy, and they would rather pay more for a vehicle in order to save on gasoline. According
to the nationally representative survey conducted in October 2011: 93% believe that fuel
efficiency standards for all vehicles should be improved; 80% support at least 55 mpg as a target
fleet average for 2025; as availability improves, 72% ofconsumers who plan to buy a vehicle
would consider an alternative power train, such as hybrid, electric, flex-fuel or natural gas; and
18-19
-------
EPA Response to Comments
83% are willing to pay extra for more fuel efficient vehicle if the payback from lower fuel costs
is less than five years.8 [EPA-HQ-OAR-2010-0799-9454-A2, pp.3-4]
Although surveys have limitations in capturing consumer preferences, relying solely on market
data for consumer preferences is imperfect as well. Consumers are not satisfied with the status
quo, but they generally must buy a vehicle from the available fleet. By expressing support for
improved standards, they are essentially stating a preference for better options in the future. A
strong CAFE program gives credence to this consumer preference that is not being
communicated effectively in the marketplace. [EPA-HQ-OAR-2010-0799-9454-A2, p.4]
It is true that when gas prices are relatively low, consumers tend to put less emphasis on fuel
economy when buying a car. But as we saw in 2008, when gas prices soar, consumers quickly try
and sell their gas guzzler and buy a more fuel efficient vehicle. Unfortunately, vehicle
manufacturers cannot design, build and supply different vehicles on a monthly basis. A typical
model cycle is about five years, and to take the best advantage of all the weight saving and new
fuel efficient technologies, these decisions need to be made at the beginning of a model concept
and cannot be easily retrofitted. The CAFE standard targets for 2017-2025 give manufacturers a
predictable roadmap and the impetus to incorporate these technologies and sell desirable vehicles
that achieve better fuel economy and save consumers money in the future. [EPA-HQ-OAR-
2010-0799-9454-A2, p.4]
7 - See Appendix D Consumer Reports Fuel Economy Poll November 2011 for full survey
report.
8 - See Appendix D at 16.
Organization: Dawid, I.
Its' clear that Detroit and the overseas manufacturers can meet the 54.5 mpg regulation. What's
NOT clear is whether the market wants them! [EPA-HQ-OAR-2010-0799-6325-A1, p. 1]
We know 2 things: new EV, EREV, and hybrids sell at a premium cost. Consumers determine
whether to purchase them, or a comparable, ICE model at a significantly lower price, based on:
1. Price of gas
2. How high the premium is. [EPA-HQ-OAR-2010-0799-6325-A1, p. 1]
I urge the EPA to consider how the market affects the marketability of the vehicles they regulate.
[EPA-HQ-OAR-2010-0799-6325-A1, p. 1]
Organization: Defour Group LLC
I. Willingness to Pay for Fuel Economy: Revealed Preference
18-20
-------
Analysis of Estimated Costs, Economic and Other Impacts
The agencies erroneously assume that auto buyers will be willing to pay for 100% of their
projected fuel economy gains. The real-world impact of the proposed standards, however, flow
from actual consumer purchase decisions. There is a great deal of research supporting our
conclusion that consumers are not willing to pay 100% for fuel economy gains. Thus, our first
correction to the agencies' analysis is based on real-world or revealed preference willingness to
pay at $3.54 per gallon regular unleaded fuel, the price the agencies use to project their benefit
and cost estimates for MY 2025 vehicles. [EPA-HQ-OAR-2010-0799-9319-A1 p.2]
We utilize a 25% U.S. consumer willingness to pay for fuel efficiency technology improvements.
We derive this estimate from the MIT study, On the Road in 2035, which was published in 2008
and found that U.S. consumers are not willing to spend any of the increases in the value of fuel
efficiency technologies - the value of increases in gallons per ton mile — on fuel economy (miles
per gallon), but rather would prefer to spend all of the value of any potential gains on other
vehicle attributes of greater value to them such as improved performance, carrying capacity,
towing capacity, comfort, and safety. [EPA-HQ-OAR-2010-0799-9319-A1 p.2]
They also found that European consumers are willing to spend roughly 50% of any gains in fuel
efficiency on fuel economy and prefer to spend the rest of any such gains on the afore-mentioned
other vehicle attributes.1 Their study was for the years 1995- 2006 — years in which U.S. regular
unleaded gasoline sold for an average $2.07 per gallon ($2009) and European premium unleaded
fuel prices that power most of their gasolinepowered vehicles sold for an average of $5.15 per
gallon (median of $5.30 per gallon). The actual relevant fuel cost in Europe, of course, is much
higher when their substantial engine displacement taxes are factored in. [EPA-HQ-OAR-2010-
0799-9319-A1 p.2]
We conservatively assume a $5.50 per gallon average price in Europe as the level of fuel prices
at which auto buyers will be willing to take - i.e. pay for — 50% of fuel efficiency gains as fuel
economy improvements, and $2.10 per gallon as the price at which they are willing to pay for no
increases in vehicle mpg. This gives us a midpoint estimate of about $3.80 per gallon as the point
at which auto buyers are willing to spend 25% of any increase in fuel efficiency on fuel
economy. NHTSA uses a gasoline price of $3.54 per gallon as their projection for MY 2025, so
our estimate of willingness to pay is somewhat overstated. [EPA-HQ-OAR-2010-0799-9319-A1
p.2]
II. Private Benefits vs. Private Costs of the Proposed Standard Lower Bound Estimate
In their Preliminary Regulatory Impact Analysis (PRIA) the National Highway Traffic Safety
Administration (NHTSA) and U.S. Environmental Protection Agency (EPA) find that U.S auto
buyers will be willing to pay $6,000 per vehicle for standards achieving a combined 49.6 mpg in
MY 2025 (56.0 mpg for cars and 40.3 mpg for light trucks) at $3.54 per gallon gasoline ($2009)
- or $4,200 more than their estimated $1,800 per vehicle increase in retail price. We first
multiply the agencies' estimate of $6,000 per vehicle present discounted fuel savings by the 25%
willingness to pay, which comes to a revised estimate of $1,500 per vehicle. The literature also
shows that their estimate of the retail price increase necessitated by the proposed standards, or
$1,800 per vehicle, is too low by at least 60%.3 Making just these two adjustments off their
baseline of MY 2016 34.1 mpg results in a $4,500 per vehicle reduction in willingness to pay to
18-21
-------
EPA Response to Comments
$1500 per vehicle, and a $1,100 per vehicle increase in retail price to $2,900 per vehicle (all
estimates rounded to the nearest $100 per vehicle). The fuel savings for a 49.6 mpg MY 2025 are
worth $1500 per vehicle, but it costs $2900 to get them. [EPA-HQ-OAR-2010-0799-9319-A1
p.3]
Net willingness to pay, the bottom-line number and what the agencies call "net lifetime owner
fuel savings," or the difference between the present value of the expected fuel savings less the
increased retail price of the vehicle, is a negative $1,400. [EP A-HQ-OAR-2010-0799-9319-A1
p.3]
For our lower bound estimate, we further adjust willingness to pay for more realistic assumptions
for the rebound effect and for consumer interest rates. The agencies assume a rebound effect of
10% and a discount rate of 3% for the above estimates. Using a mainstream historical literature
estimate of 20% for the rebound effect and assuming the historical, long-term consumer auto
loan rate of 9%, we further reduce willingness to pay from 25% to 15% of the agencies estimates
$6,000 per vehicle. This yields a bottomline willingness to pay of $900 per vehicle and a net
consumer or private welfare loss of $1,900 per vehicle. [EPA-HQ-OAR-2010-0799-9319-A1
p.3]
Mid-Range Estimate
Defour estimated willingness to pay in a study of the proposed standards that has been accepted
for publication by the Society of Automotive Engineers and that was derived from the agencies'
earlier estimates of consumer benefits and costs in their Joint Technical Assessment Report
(JTAR).4 Our estimates are for a scenario comparable to that of the Preferred Alternative, and
which approximates the 51 mpg scenario in the Joint Technical Assessment Report. Adjusting
their estimates of benefits for the 25% willingness to pay and for technology costs contained in
the National Research Council's 2010 report,5 we found consumer welfare losses of $2,900 per
vehicle - our minimum estimate for the JTAR's 4% growth scenarios. (There were four
scenarios with losses ranging from $2,900 to $3,200 per vehicle.) Of course, a lower and more
realistic baseline beyond which fuel economy standards become binding constraints would imply
a still higher retail price increase and still higher losses in consumer welfare or net willingness to
pay. That is why we call this a "mid-range" estimate. [EPA-HQ-OAR-2010-0799-9319-A1 p.4]
Reality Check
To subject these estimates to other authoritative sources, we compare our results to a study by
the Energy Information Administration (EJA). In its 2011 Energy Outlook,6 the EIA concluded
that a CAFE standard of 46.1 mpg (3.5 mpg lower than the proposed 2025 standard) would result
in an 8% loss in new vehicle sales in 2025. Congress established the Energy Information
Administration as a source of independent estimates of the impacts of alternative governmental
policies, including the corporate average fuel economy standards. Applying the agencies' unitary
new vehicle price elasticity estimate implies an equal and opposite percentage increase in prices,
which on the average $28,000 vehicle transaction price comes to $2,200 per vehicle. The EIA's
estimate is for a 46.1 mpg standard, which is 12 mpg above the baseline 34.1 mpg for MY 2016.
Assuming a straight-line welfare loss yields an estimate of $2,900 per vehicle. Of course, the
18-22
-------
Analysis of Estimated Costs, Economic and Other Impacts
straight-line assumption understates the actual cost increase because of the laws of diminishing
marginal returns and increasing marginal costs. [EPA-HQ-OAR-2010-0799-9319-A1 p.4]
Figure 1 compares estimates of consumer willingness to pay (PV Benefits), retail price increase,
and net willingness to pay (NPV Benefits) for the proposed MY 2025 fuel economy mandate
under our three alternative methodologies. (We are only able to infer net lifetime owner savings
values from the EIA study.) The agencies' estimates of benefits, as shown by the vertical blue
line for PRIA are 6 times higher than our midrange estimate, while our mid-range estimate for
the requisite retail price increase is roughly twice the agencies'. The bottom line estimate, NPV
Benefits, the increase in willingness to pay less the increase in retail price on MY 2025 vehicles,
ranges from the loss of $1,900 to $2,900 per vehicle to the positive gain of $4,200 per vehicle in
the PRIA. [Please refer to EPA-HQ-OAR-2010-0799-9319-A1 p.5 for Figure 1.] [EPA-HQ-
OAR-2010-0799-9319-A1 p.5]
Both our estimates and those inferred from the EIA study are considerably understated when
compared to those implied by the research of economists at Resources for the Future (RFF), the
Environmental Protection Agency, and at the Congressional Budget Office - research that the
agencies did not but should consider in this rulemaking. [EPA-HQ-OAR-2010-0799-9319-A1
p.5]
An RFF November 2010 study co-authored by David Evans of the EPA,7 finds that "using
standards to cut fuel use by 5 percent under a standard value for CO2 damages is warranted only
if consumers fail to internalize 44 percent of the savings from fuel economy. In fact recent
rulings that rapidly ramp up the corporate average fuel economy CAFE standards are not
supported on welfare grounds, even under our bounding case for market failures. ... In our
bounding case for these failures, a standard that cut fuel use by 8.9 percent would be optimal,
though potential welfare gains are only about a third of those for the fuel tax." [EPA-HQ-OAR-
2010-0799-9319-A1 p.6]
Dr. Evans and co-authors assume a baseline free expression combined fleet fuel economy level
of 23 mpg and the 5% and 8.9% reductions in fuel consumption represent 10 to 36% of the 25%
cut mandated by the 2012-2016 MY standards relative to that baseline. They find that the
marginal welfare costs of increasing the standards rapidly escalate to $6 per gallon and higher
well before required fuel savings approaches the 25% that would be achieved under the MY
2016 standards. Going another 12.9 mpg to MY 2025 standards would dramatically increase
these estimates. [EPA-HQ-OAR-2010-0799-9319-A1 p.6]
Earlier studies by economists at RFF and the Congressional Budget Office came to similar
conclusions, finding that raising mandated fuel economy levels like those proposed would
impose very substantial welfare losses on consumers and on the broader economy.8 These
conclusions are summarized in the survey of mainstream research by economists at Resources
for the Future, which was published in the Journal of Economic Literature, the leading survey
journal for economic scholars, It is important to note that the authors address much smaller
increases in the standards than here and from a much lower base mpg. The authors concluded:
18-23
-------
EPA Response to Comments
Whether higher fuel-economy standards would increase or reduce efficiency or have little effect
remains unsettled. Kleit (2004) and Austin and Dinan (2005) find that costs from binding
increases in standards of 3-4 miles per gallon would cost around $3-4 billion or more, assuming
market adoption of all privately cost-effective technologies. Higher fuel-economy standards
significantly increase efficiency only if carbon and oil dependence externalities greatly exceed
the mainstream estimates in Table 2, or if consumers perceive only about a third of the actual
fuel-economy benefits (Fischer, Harrington, and Parry 2006).9 [EPA-HQ-OAR-2010-0799-9319-
Al p.6]
IX Summary and Conclusions
The agencies find net positive owner lifetime fuel savings or "willingness to pay" of $4,200 per
vehicle in part because they ignore consumer tradeoffs between fuel economy and other vehicle
attributes and assume auto buyers are willing to pay for 100% of the agencies' projected fuel
efficiency technology gains to 2025. But mainstream research shows that at fuel prices of the
projected $3.54 per gallon consumers will be willing to pay for no more than 25% of any
potential fuel economy improvements. When this adjustment is made, when further adjustments
for a more realistic rebound effect and discount rate are made, and when the agencies' estimate
of retail technology costs is increased by a factor of 60% to reflect real-world retail price mark
ups, we find the agencies' Preferred Alternative for MY 2025 standards imposes net private
welfare losses of at least $2,900 per vehicle. [EPA-HQ-OAR-2010-0799-9319-A1 p.20]
Applying agency estimates of vehicle price elasticities and employment multiplier effects shows
that the $2,900 per vehicle net consumer welfare cost will cause a loss of more than 1.8 million
industry sales and more than 200,000 industry, supplier, and dealer jobs. The proposal is
extremely regressive — imposing disproportionately higher hardships on those who are the
poorest and least able to afford personal transportation. Fuel prices well above $5.00 per gallon
are necessary if consumers are to embrace these standards and eliminate the adverse impacts on
sales and employment. [EPA-HQ-OAR-2010-0799-9319-A1 p.20]
Use of a more realistic estimate for the rebound effect and incorporation of a similarly realistic
estimate of the clunker effect increases the agencies' already negative estimate of social benefits
from a minus $100 per vehicle to minus $900 per vehicle. [EPA-HQ-OAR-2010-0799-9319-A1
p.20]
These results are consistent with the findings of numerous studies by economists at the Energy
Information Administration, Resources for the Future, the Congressional Budget Office, and
even the Environmental Protection Agency. Those studies show that improving consumer and
social welfare requires a reduction, not an increase in the standards from MY 2016 levels. [EPA-
HQ-OAR-2010-0799-9319-A1 p.20]
In the public interest, it is incumbent on the agencies to consider all of these studies their
rulemaking. [EPA-HQ-OAR-2010-0799-9319-A1 p.20]
18-24
-------
Analysis of Estimated Costs, Economic and Other Impacts
Based on real-world, revealed auto buyer preferences, we find that the proposed MY 2025 49.6
mpg fuel economy standard for the combined passenger car and light truck fleet will result in net
consumer welfare losses of at least $2,900 per vehicle relative to the base MY 2016. This
compares to the Preliminary Regulatory Impact Analysis' (PRIA's) estimate of net positive
private benefits of $4,200 per vehicle. (All estimates are rounded to the nearest $100 per
vehicle.) We find that implementation of the MY 2025 fuel economy standards will result in a
loss of more than 1.8 million industry sales and a loss of more than 200,000 jobs in auto
manufacturing, supply and retail distribution. [EPA-HQ-OAR-2010-0799-9319-Al, p. 1]
We also find that the standard will impose additional net social externality costs of more than
$900 per vehicle versus an agency net cost estimate of $100 per vehicle. We estimate the sum of
net private and social welfare costs to be more than $3,800 per vehicle. This compares to the
agencies' estimate of $4,100 in net private and social benefits per vehicle. We find that the fuel
economy standards are extremely regressive, imposing markedly disproportionate costs on the
group of lowest-income households relative to those imposed on the highest-income households.
[EPA-HQ-OAR-2010-0799-9319-A1, p. 1]
Our findings of substantial private net welfare losses result from a much:
• Lower, real-word assessment of auto buyer willingness to pay, and
• Higher, real-world assessment of markups from direct manufacturing cost to retail
consumer price than the agencies assume in their engineering/mathematical model.
Our findings of substantially higher net societal costs follow from higher and more realistic
estimates of the rebound effect -the offsetting impact of higher fuel economy on vehicle miles
traveled and thus fuel consumption — and from taking account of the "clunker effect," or the
impact of higher new vehicle prices on encouraging the retention of older and higher emitting
vehicles. [EPA-HQ-OAR-2010-0799-9319-A1, p. 1]
We find that fuel prices well above $5.00 per gallon would be required to render the standards
"consumer friendly." We conclude that consumer or societal welfare is optimized at a level
below the MY 2016 fuel economy standards. All of our findings are supported by mainstream
research at leading governmental and academic institutions, including the Energy Information
Administration, the Congressional Budget Office, Resources for the Future, and the
Environmental Protection Agency. We urge the agencies to consider all of this research in
finalizing their proposed rule. [EPA-HQ-OAR-2010-0799-9319-A1, p. 1]
III. Fuel Prices and Willingness to Pay
The next question is what fuel price would be necessary for auto buyers to freely purchase a
combined fleet with 49.6 mpg fuel economy? [EPA-HQ-OAR-2010-0799-9319-Al, p. 7]
The short answer is "well in excess of $5.00 per gallon." As shown in Figure 2 below, the
Energy Information Administration projects unconstrained or free expression levels of fuel
18-25
-------
EPA Response to Comments
economy for MY 2025 at 35.3 mpg for $3.54 gasoline (40.0 mpg for cars and 29.6 mpg for light
trucks). It also finds that at $5.12 per gallon — its highest fuel price scenario for 2025 - the
combined new vehicle fleet would attain 36.8 mpg with cars at 41.1 mpg and light trucks at 30.4
mpg, well below the agencies' proposed mandate.10 [EPA-HQ-OAR-2010-0799-9319-A1, p. 7]
Another estimate is provided by the European experience with much higher fuel prices when
there were no fuel economy regulations. Estimates of willingness to pay at higher fuel prices can
be derived from European levels of fuel economy that existed in the late 1990s and early 2000s,
before their standards became binding and which thus represent free expression levels that their
consumers would be willing to pay for. Customer demand for passenger cars never exceeded 40
mpg - well below the agencies' projection of a 56.0 mpg achievable level in 2025 — and this was
so even with $7 and $8 per gallon gasoline, with heavy engine displacement taxes, and with
substantial subsidies for diesel fuel. [EPA-HQ-OAR-2010-0799-9319-A1, p. 7]
A third estimate can be inferred from a 2010 study by the National Research Council, which
found that if consumers were willing to pay for 50% of potential fuel economy improvements the
government could achieve a level of just 40 mpg for combined cars and light trucks and in MY
2035. This was at the $5.50 or higher fuel price equivalents for the study period of 1995 to
2006.n Of course, the 50% willingness to pay is more than double the 25% willingness to pay
we derived from the MIT study cited above, and the learning curve effect means that 2025
technologies will cost more than the NRC's estimate for MY 2035. [EPA-HQ-OAR-2010-0799-
9319-A1, p. 7] [For figure 2 please refer to EPA-HQ-OAR-2010-0799-9319-A1, p. 8.]
1 - Laboratory for Energy and the Environment, On the Road in 2035: Reducing
Transportation's Petroleum Consumption and GHG Emissions, Massachusetts Institute of
Technology, July 2008, pages 61 and 156-157.
2 - Derived from Table VIII-27b, page 715 of the NHTSA PRIA. See also "Dealers Fight
Mileage Rules," The Wall Street Journal, January 28, 2012. The mandated level is 49.6 mpg.
The agencies estimate that consumers will also be willing to pay for achieved levels of 56.0 mpg
for MY 2025 cars and 40.3 mpg for MY 2025 light trucks. We derive a slightly lower estimate of
the retail price increase, or $1,800 per vehicle versus the $2,000 per vehicle reported in the
article. We derive a slightly lower estimate of $4,200 willingness to pay than the reported $4400
per vehicle.
3 - National Research Council, Assessment of Fuel Economic Technologies for Light-Duty
Vehicles (2011), pages 24-26.
4 - Dean Drake, David Aldorfer, Michael Whinihan, and Thomas Walton, "Using Economic
Analysis to Assess the Viability of Post-2016 MY Greenhouse Gas Emission and Fuel Economy
Standards for Light Duty Vehicles," Paper #2012-01-0754, Society of Automotive Engineers,
Forthcoming.
5 - National Research Council, America's Energy Future (2010), Tables 4.3 and 4.4.
18-26
-------
Analysis of Estimated Costs, Economic and Other Impacts
6 - Energy Information Administration, "Increasing light-duty vehicle greenhouse gas and fuel
economy standards for model years 2017 to 2025," (2011).
7 - Ian Parry, David Evans, and Wallace Gates, "Are Energy Efficiency Standards Justified?"
Resources for the Future Discussion Paper 10-59, November 23, 2010 at
http://www.rff.org/documents/RFF-DP-10-59.pdf
8 - See, in particular, Fischer, Harrington, and Parry, "Should Corporate Average Fuel Economy
Standards (CAFE) be Tightened?" Energy Journal (2007) at http://www.rff.org/documents/RFF-
DP-04-53-REV.pdf at and Harrington, Parry, and Walls, "Automobile Externalities and
Policies," Journal of Economic Literature (2007), and David Austin and Terry Dinan, "Clearing
the Air: The Costs and Consequences of Higher CAFE Standards and Increased Gasoline
Taxes," Journal of Environmental Economics and Management (2005). The Journal of Economic
Literature article is a survey of the leading economic studies in the field, and David Sandalow,
Freedom from Oil: How the Next President Can End the United States' Oil Addiction, Brookings
(2008).
9 - Harrington et al, Ibid.
10 - Energy Information Administration, Annual Energy Outlook 2011, page 71.
11 - National Research Council, America's Energy Future (2010), Tables 4.3 and 4.4.
VII. The "Energy Paradox" and Willingness to Pay
The agencies suggest that consumer myopia - auto buyer systematic undervaluation of future
fuel economy benefits — and not any errors in their analysis, explains what they call the "Energy
Paradox," or why today's auto buyers would be "hesitant" to buy vehicles that achieve 49.6 mpg
on average and provide, by their reckoning, more than $4,000 worth of fuel savings net of retail
price increases. [EPA-HQ-OAR-2010-0799-9319-A1, p. 14]
The Congressional Budget Office (CBO), in a study commissioned by the U.S. Senate in 2002,
addressed this contention, noting that many proponents of increased fuel economy standards
argue that the market for fuel economy is inefficient because consumers either "lack information
about vehicles' fuel efficiency or that producers lack an incentive to respond to consumers'
preferences for fuel efficiency." The CBO concluded:
"Most economists do not believe that either assumption is valid. Vehicles' current level of fuel
efficiency most likely reflects consumers' trade-offs between fuel economy and other
characteristics that drivers want, such as vehicle size, horsepower, and safety. The same
technologies that can be used to boost fuel economy can be used to hold fuel economy constant
while increasing the vehicles' weight, size, or power. Thus, the fact that producers have done the
latter rather than the former in recent years suggest that they have responded to buyers'
preferences by targeting available technologies toward other features that consumers desire.
Raising CAFE standards would impose costs on both consumers and automobile producers by
18-27
-------
EPA Response to Comments
99 _
forcing improvements in fuel economy that car buyers may not want." [EPA-HQ-OAR-2010-
0799-9319-A1, p. 14]
Or, to quote the most recent, and we believe, most definitive study of this issue by economists at
MIT and Northwestern University:
We find little evidence that consumers "undervalue" future gasoline costs when purchasing cars.
The implied discount rates we calculate correspond reasonably closely to interest rates that
customers pay when they finance their car purchases.23 [EPA-HQ-OAR-2010-0799-9319-A1, p.
14]
Whether or not auto buyers know what they are doing, their choices do, in the final analysis,
determine the demand for new cars and light trucks in the marketplace. When, for whatever
reason, their willingness to pay for increased fuel economy falls short of the increased retail
vehicle price necessary to attain that level, industry sales losses necessarily ensue, as the EIA
analysis found.24 This is so even if better informed and more intelligent auto buyers would be
willing to pay for 100% of the "cost-effective" fuel efficiency gains assumed in the agencies'
mathematical model. [EP A-HQ-O AR-2010-0799-9319-Al, p. 15]
Moreover, if the mainstream studies that we cited are correct, the standards cannot be justified on
benefit-cost grounds even if the supposed consumer undervaluations are corrected using the
literature's most optimistic, "upper bound" assumptions and even using the most optimistic,
"upper bound" assumptions regarding externality costs of climate change and energy security.25
There is no basis for increasing the standard - neither on the consumers' behalf nor on the
public's behalf. The proposed increase will make everyone worse off. As these studies
demonstrate, improving either consumer or societal welfare requires a reduction, not an increase
in the standards from MY 2016 levels. [EP A-HQ-O AR-2010-0799-9319-Al, p. 15]
22 - Congressional Budget Office, A CBO Study: Reducing Gasoline Consumption: Three
Policy Options (November 2002), Chapter 2, page 2. (Emphasis added)
23 - Meghan Busse, Christopher Knittel, and Florian Zettlemeyer, "Pain at the Pump: The Effect
of Gasoline Prices on New and Used Automobile Markets," University of California Energy
Institute, UC Davis Institute of Transportation Studies and National Bureau of Economic
Research (September 2"011), page 2.
24 - See text accompanying supra note 6.
25 - See text accompanying supra notes 7-9.
Organization: Detroit NAACP
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EP A-HQ-O AR-2010-0799-11786, pp. 140-141.]
18-28
-------
Analysis of Estimated Costs, Economic and Other Impacts
So, for us, you know, this is about countenance. For the NAACP these proposed standards will
help families, families with passenger cars, light trucks, SUVs. It will help them save money, put
more money back in your pocket. To extend the standards enacted last year that cover vehicles
sold in 2012-2016 will raise the average fuel economy by 2016, but the first ever fuel-efficiency
standards for medium- and heavy-duty trucks from 2014 to 2018 will also be enacted this year.
So, the common sense standards that are represented here will be our largest reduction in oil
consumption in the history of the United States of America.
As I said earlier, the average American household spends approximately $2,000 per year on
gasoline. I don't know if I have $2,000 a year to spend on gasoline anymore, but the daily
gasoline costs in the United States is astronomical. And adopting these standards of fuel
efficiency and emissions performance, to take it to 54.5 miles per gallon by 2025 will save me,
my mom, my family and consumers across the country about $6,000 a year, maybe more, which
is very significant, and when it can go to so many other places to do so many other positive
things other than going to a foreign oil distributor.
Organization: E100 Ethanol Group
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 202-203.]
Depending on electric cars to meet the program's objectives is a quote 'big bet; a huge bet,' end of
quote. That is a direct quote from Bill Ford, Jr., Chairman of the Ford Motor Company at a talk
that he gave at the Commonwealth Club here in San Francisco last October 27 about his agenda.
Current lithium ion battery vehicles are not selling. Only 17,345 of the almost 13 million light-
duty vehicles sold in 2011 were Chevy Volts and Nissan Leafs, a little more than one-tenth of
1%. The Volt base price is $40,000 and the Leafs is $36,050 after their large price increase in
December.
Comparably-sized and equipped gasoline versions of these vehicles, the Chevy Cruz and Nissan
Versa, are at least $20,000 less than the price of the electrics.
So the question becomes, will millions of consumers spend $20,000 up front to save the $8200
over the life of the proposed standards? The answer, we believe, is clearly not.
Organization: Eaton Corporation
Allows OEM to bring safe, affordable vehicles to market that customers want to purchase. [EPA-
HQ-OAR-2010-0799-9494-A1, p. 2]
Organization: Ecology Center
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 189.]
18-29
-------
EPA Response to Comments
but that they will also lead to big savings by consumers at the pump as well as to the economy
generally. The estimated consumer savings of approximately $3,000 to $4,400 in net lifetime
savings is almost certainly a conservative estimate when considering likely increases in the fuel
prices and improvements in technology. The estimated social level benefits of $311 to $421
billion are, therefore, likely conservative as well. We certainly think that consumers and
businesses alike who rely on transportation will all significantly benefit from having the 300-plus
billion dollars more in their pocketbooks to spend on other things.
Organization: EcoMotors International, Inc.
The agencies have gone to great lengths in the Proposed Rule to stress how they have designed
the standards to preserve consumer choice. EcoMotors suggests that EPA go a step further by
acknowledging consumers' preference for familiar vehicle technologies and building in
additional compliance flexibilities to enable OEMs to choose alternative advanced technology
paths for achieving the same CO2 reductions and fuel economy improvements. OEMs should not
be forced to produce vehicles that consumers may not want. Furthermore, if consumers are
dissatisfied with the range or price of LDVs being offered, they could choose to keep their
existing vehicles longer, reducing new vehicle sales and resulting in increased GHG emissions -
a scenario that could be avoided if EPA were less aggressive in promoting a small, select group
of hybrids. [EPA-HQ-OAR-2010-0799-9594-A2, p. 6]
If a vehicle technology doesn't create a value proposition all the way through to the customer
base, it will not succeed. Market forces will ultimately drive consumers' vehicle decisions - not
intangible regulatory credits and incentives that only benefit automotive manufacturers. If there
is not enough consumer demand for EVs, PHEVs and FCVs today, how will consumers react to
even more expensive, high-mileage vehicles in the future? The agencies risk undermining their
ultimate energy and environmental objectives if they fail to acknowledge this fact, and choose to
remain firmly wedded to promoting only a small group of unfamiliar and expensive technologies
- EVs, PHEVs and FCVs. [EPA-HQ-OAR-2010-0799-9594-A2, p. 6]
Organization: Edmunds.com
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 102-104.]
Our second point is that, by their nature, the proposed CAFE standards force automakers to focus
their efforts on improving fuel economy. This dictates the nature of competition. Automakers
focus on fuel economy rather than letting consumer preferences determine on what basis they
compete. This focus on fuel economy for all automakers limits competition in other dimensions,
such as safety, comfort, performance, design and electronics. In fact, the focus on fuel economy
could limit the innovation of these other features, especially for automakers that have fewer
resources or that need to work relatively harder to meet their fuel economy target. Moreover, the
proposed rules have the potential to limit innovation of fuel economy itself by offering favored
status to certain technologies via special credits, which could then deter automakers from
developing other technologies.
18-30
-------
Analysis of Estimated Costs, Economic and Other Impacts
First, the current proposal needs to address the potential consequences of mandated increased
focus on fuel economy for competition and innovation in the automotive industry. The proposed
rules need to more fully explore how such consequences could force consumers to make
sacrifices to get the desired emissions results.
[These comments were submitted as testimony at the San Francisco, California public hearing
on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 100-103.]
Many parties involved in the CAFE process have asserted why the proposed rules should make
sense for consumers, why consumers should embrace these rules, how consumers should benefit
from these rules, despite higher vehicle prices, and so on. The problem is that while they purport
to represent consumers, these parties typically do not represent consumers. In our view, it's better
to go straight to the source, rather than to presume to know what is best for a particular group.
First of all, the improved fuel economy results for the proposed CAFE standards for 2017 to
2025 are based on production forecasts and do not account for how consumer demand for and
willingness to pay for fuel economy will keep pace with the more fuel-efficient fleet built. To
date, consumers have demonstrated relatively little preference for high-mileage vehicles, and
then usually just for brief periods during high gas prices. If reality differs significantly from key
assumptions used in these forecasts, for example, if gas prices drop and consumer demand for
fuel efficiency then decreases, a disconnect could arise between what consumers want and what
automakers supply under the proposed standard. This has the potential to result in more limited
choice, higher prices, and decreased auto sales.
Our third point is that the multiple measures of MPG that have emerged from the rulemaking
process add excessive complexity to the consumer decision-making process, making it harder,
not easier, for consumers to assess fuel economy, compare vehicles, and decide which vehicle
works best for them.
Organization: Environmental Defense Fund (EDF)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 287.]
With respect to economic security, again, combined with the Phase I standards, the proposed rule
will provide families with more than $8,000 in fuel savings over the lifetime of the new vehicle
by 2025, for a total of $1.7 seven trillion and national fuel savings over the life of the program.
Organization: Ford Motor Company
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 43-44.]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 32.]
18-31
-------
EPA Response to Comments
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 85-86.]
The key is to ensure that the proposed targets do not outpace consumer demand or the
affordability of the technologies needed for compliance. As a full-line manufacturer, we are
challenged to meet a broad range of customer wants, such as function, performance, comfort and
convenience, safety and fuel economy. And all these attributes need to come together in a line of
vehicles that consumers can afford. After all, attainment of our national goals for CC>2 reduction
and energy security cannot be met by niche products and technologies. It does little good to
produce vehicles with improved fuel efficiency unless those vehicles are actually purchased by a
wide range of American consumers. Further, the technologies must be self-sustaining in the
marketplace and not dependent on long-term government subsidies.
We must also acknowledge that market success is dependent upon many factors outside of our
control, such as the price of fuel, the state of the economy or the availability of affordable
technologies and materials. The further we look into the future, the more difficult it is to predict
these factors with accuracy.
Organization: General Motors Company
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 37-38.]
Let me also note that the proposed standards will not be easy; they will be difficult and they will
be expensive. The success of our current new offerings in the marketplace like the Chevy
Malibu, Equinox, Cruze and the Volt convince us we are on a good path toward meeting these
early requirements the proposal will create, but we will need further breakthroughs in technology
and good customer acceptance of the additional vehicle changes, technologies and costs that will
be associated with providing the vehicles needed in the future years to allow us continued
success in meeting the aggressive requirements down the road.
Organization: Gilles, B.
It will hurt the consumer by making vehicles much more expensive. [EPA-HQ-OAR-2010-0799-
8065-A1, p. 1]
Organization: Institute for Energy Research (IER)
EPA's cost-benefit analysis for this rule is also fatally flawed. EPA's cost-benefit analysis shows
positive net benefits only because EPA omits the cost to consumers of limiting consumer choice.
Instead, EPA credits forced fuel savings as a benefit. Because the rule increases the upfront cost
of buying a car, the rule forces 7 million drivers out of the car market. This means that 7 million
people will not be able to enjoy the fuel savings calculated by EPA because they will not be able
to afford a car in the first place. [EPA-HQ-OAR-2010-0799-9573-A1, pp. 1-2]
18-32
-------
Analysis of Estimated Costs, Economic and Other Impacts
As EPA's own discussion indicates, its modeling assumes that the current market for fuel
economy is incredibly inefficient, with consumers and businesses making massive, systematic
errors in their behavior over the course of decades. If, in reality, households and businesses are
not as shortsighted as the EPA analysis assumes—perhaps because the EPA modeling leaves out
one or more important factors that matter to vehicle buyers in the real world—then the EPA's
cost-benefit analysis collapses. [EPA-HQ-OAR-2010-0799-9573-A1, p. 9]
1. EPA Assumes That in Absence of Fuel Economy Regulations, Vehicle Buyers Would Ignore
Hundreds of Billions of Dollars in Potential Gains [EPA-HQ-OAR-2010-0799-9573-A1, p. 9]
In standard economic models, it is assumed that households rationally act in their interest, and
spend their incomes in ways that maximize utility. It is not that economists literally believe each
consumer is a robot capable of performing complex calculus problems with each item in the
grocery store, but instead economists believe that rationality is a safe benchmark assumption.
This is because the forces of competition, learning from the examples of others, and the ubiquity
of product ratings and other information will tend to limit systematic errors on the part of
consumers, especially for expensive, recurring purchases and in markets that have many
customers. [EPA-HQ-OAR-2010-0799-9573-A1, pp. 9-10]
To be sure, standard economic theory allows a role for government intervention in the case of
"negative externalities," which can include greenhouse gas emissions. In this case, although
motorists (for example) would presumably make vehicle purchases that tended to equate
marginal private benefits with marginal private costs, nonetheless their behavior would be
suboptimal since each vehicle buyer would ignore the social costs of his or her behavior. In this
setting, the typical economic textbook might recommend a carbon tax or a cap-and-trade
framework to force consumers to "internalize the externality" and to once again have their
private incentives aligned with social welfare. [EPA-HQ-OAR-2010-0799-9573-A1, p. 10]
To be clear, the above analysis is typical in standard economic theory, but this is not how EPA
approaches the cost-benefit assessment of the proposed rule. Instead, EPA assumes that the new
rule will benefit vehicle buyers even considering only their narrow self-interest, and then on top
of these net private benefits, EPA adds the social benefits of reduced greenhouse gas emissions.
In other words, EPA attempts to justify the new rule not simply on the grounds that individual
consumers are ignorant of how their behavior will affect global temperatures in the year 2100,
but EPA also assumes that consumers are ignorant of how their behavior will affect their
gasoline purchases next year. [EPA-HQ-OAR-2010-0799-9573-A1, p. 10]
EPA recognizes the problem:
For this proposed rule, EPA projects significant private gains to consumers in three major areas:
(1) Reductions in spending on fuel, (2) for gasoline-fueled vehicles, for time saved due to less
refueling, and (3) additional driving that results from the rebound effect. In combination, these
private benefits, mostly from fuel savings, appear to outweigh the costs of the standards, even
without accounting for externalities. [EPA-HQ-OAR-2010-0799-9573-A1, p. 10]
18-33
-------
EPA Response to Comments
Admittedly, these findings pose an economic conundrum... .If our analysis projects net private
benefits that consumers have not realized.. .then, [assuming efficient markets], there must be
additional costs of these private net benefits that are not accounted for [in the EPA
analysis]... .The estimate of large private net benefits from this rule, then, suggests either that the
assumptions [of efficient markets and rational consumers] do not hold, or that EPA's analysis
has missed some factor(s) tied to improved fuel economy that reduce(s) consumer welfare. [Bold
added.] [EPA-HQ-OAR-2010-0799-9573-A1, p. 11]
To see just how important EPA's assumption of consumer error is to its overall cost-benefit
results, consider the following table: [See table on p. 11 of Docket number EPA-HQ-OAR-2010-
0799-9573-A1]
The above table shows the breakdown of the aggregate net benefits figures quoted earlier. For
example, if we assume a discount rate of 7% and take the lowest estimate of the SCC that EPA
uses, then the cost of the proposed rule (through 2050) has an estimated present value of $243
billion, in the form of higher vehicle costs passed on to the purchaser. [EPA-HQ-OAR-2010-
0799-9573-A1, pp. 11-12]
However, this gross cost is offset by (a) fuel savings of $579 billion and (b) other benefits
(including avoided climate-change damages) of $124 billion. On net, therefore, the high discount
rate and low SCC yield benefits of ($579 billion + $124 billion) - $243 billion = $460 billion.
Similar calculations show that if we assume a low discount rate of 3%, and a high SCC, then the
net benefits rise to $1.72 trillion. [EPA-HQ-OAR-2010-0799-9573-A1, p. 12]
IER has added the row entitled "Implicit Assumed Consumer Error." These values are the
difference between the fuel savings and the assumed technology cost (i.e. higher vehicle price,
holding all else constant except for fuel efficiency) for each time period. For example, in the year
2040 EPA assumes consumers will suffer $39.8 billion in the form of higher vehicle prices.
However, consumers will benefit from saving $144 billion in fuel expenditures. This means that
looking solely at private costs and benefits, in the year 2040 the rule will ostensibly provide net
benefits to consumers of $104.2 billion. [EPA-HQ-OAR-2010-0799-9573-A1, p. 12]
This is quite a large error to attribute to consumers, and to repeat, this is an annual figure (for the
year 2040), and it is reckoned in inflation-adjusted 2009 dollars. The reader should recall EPA's
own admission: Either consumers are going to systemically ignore hundreds of billions of dollars
in free money, or the EPA's modeling omits important real-world considerations. In the next
subsection this comment will explore what these considerations might be. [EPA-HQ-OAR-2010-
0799-9573-A1, p. 12]
Before doing so, it should be reiterated just how significant this assumption of consumer
irrationality is to EPA's overall cost-benefit assessment. For the high discount rate, low SCC
scenario, the implicit consumer error through 2050 is $336 billion, compared to total net benefits
of $460 billion. Thus 73 percent of the total net benefits allegedly accruing from the proposed
rules (in this particular scenario) are due to the assumed consumer error. In the scenario
assuming a low discount rate and high SCC, the implicit consumer error accounts for 56 percent
of the total estimated net benefits. [EPA-HQ-OAR-2010-0799-9573-A1, p. 12]
18-34
-------
Analysis of Estimated Costs, Economic and Other Impacts
In other words, if it turns out that EPA is indeed omitting important factor(s) from its
modeling—such that consumers wouldn't systematically miss out on hundreds of billions of
dollars over the course of decades if the government doesn't force them to reap this free
money—then EPA's claimed net benefits from the proposed rules would fall by roughly one-half
to three-fourths, depending on the other parameter values. [EPA-HQ-OAR-2010-0799-9573-A1,
p. 12]
As explained in the previous subsection, EPA's analysis rests on the assumption that consumers
are irrationally unwilling to pay a higher price for "the same" vehicle that is equal in all respects
to another, cheaper vehicle, except for superior fuel economy. This behavior is assumed true
even when the present value of lifetime savings on fuel expenditures would more than
compensate for the higher initial purchase price, leading to the term "energy paradox" in the
literature. The EPA discussion relates some of the theories in the literature to explain this
"conundrum," such as consumers incorrectly calculating the fuel savings from differences in
mpg ratings, consumers using rules of thumb when making purchases rather than optimizing
calculations, etc. [EPA-HQ-OAR-2010-0799-9573-Al, p. 13]
The problem with these ad hoc explanations is that they ignore the tremendous profit
opportunities such massive consumer irrationality would leave open to enterprising firms. For
example, even if one were to believe that individual motorists could make gross computational
errors of this magnitude, surely entire taxicab fleets wouldn't be plagued by these simple
mistakes. (And yet, in 2011 New York City Mayor Bloomberg sought the power to regulate fuel
economy standards for NYC cabs.) Another obvious industry—and one that is more open to
competition than taxi fleets—to benefit from this alleged inefficiency is the rental car market. It
might take some ingenuity to implement, but if the EPA's analysis is correct, then a rental car
company could presumably profit by buying only vehicles with very high fuel-efficiency, and
coming up with various methods for capturing the savings this would allow for its customers.
(For example, it would be fairly easy to estimate the dollar savings in fuel for a given trip that
would last only a few days—as opposed to estimating the lifetime fuel savings when buying a
new car.) The fact that rental car agencies currently don't consist entirely of the highest fuel-
efficient models is yet more evidence that EPA's modeling leaves out important factors. [EPA-
HQ-OAR-2010-0799-9573-A1, p. 13]
Consider the following table produced from data from U.S. Department of Energy and EPA. In
every case, the 2010 version of each car is larger, has a larger engine, has more passenger
volume, and more luggage volume. The fuel economy is similar with the 2010 version generally
getting slightly worse city fuel economy and slightly better highway fuel economy. [EPA-HQ-
OAR-2010-0799-9573-A1, pp. 13-14]
Consumers demand a certain fuel economy, but consumers also want to maximize other
attributes such as performance and size (then again, maybe the fuel economy of these cars is
actually higher than consumers' actual preferences because of CAFE standards). If consumers
really demanded very fuel efficient cars, Honda would still make a car today that gets better gas
mileage than the 1985 Honda Civic Coupe HF. The Civic Coupe HF got nearly 50 mpg on the
highway a quarter century ago. Today, the Honda's most fuel efficient car is a hybrid sedan
Civic that gets 44 mpg in the city and 44 mpg on the highway. The better explanation for this
18-35
-------
EPA Response to Comments
outcome is that consumers have preferences for a variety of attributes that the EPA analysis
omits, not that consumer irrationality increased over the last 25 years. [EPA-HQ-OAR-2010-
0799-9573-A1, p. 14]
Besides the possibility of other factors entering into the consideration, another explanation for
the ostensible "irrationality" of consumers is that they treat the uncertainty of the future
differently from how the EPA's modeling approach requires. When evaluating the present
monetary value of improvements in fuel efficiency, two of the most important considerations are
future interest rates and the price of gasoline. These are highly volatile, and consumers quite
rationally may not place much weight on expected savings from fuel economy occurring several
years in the future. [EPA-HQ-OAR-2010-0799-9573-A1, p. 16]
In other words, consumers may rationally have much higher discount rates than EPA assumes
they should have. Consider this research presented by economist Ronald J. Sutherland in the
context of a previous NHTSA rulemaking: [EPA-HQ-OAR-2010-0799-9573-A1, p. 16]
Corporations frequently require high hurdle rates in excess of 12 percent to undertake capital
investments. Dixit and Pindyck present a compelling analysis of observed high discount rates for
irreversible investments. The technical literature indicates that irreversible investments may
require hurdle rates two to four times the average discount rate in order to trigger an investment.
However, fuel economy standards have the unattractive investment properties of being
irreversible, whereas common stocks are highly liquid. Metcalf and Rosenthal and Hassett and
Metcalf explain how this irreversibility property warrants discount rates of at least two or three
times higher than may be expected. Allowing for the irreversibility property of such investments,
a required rate of return of at least 20% appears reasonable for high-income households. [EPA-
HQ-OAR-2010-0799-9573-A1, pp. 16-17]
Energy saving investments are typically irreversible investments and therefore require an even
higher premium. The proposed fuel economy standards for light trucks are irreversible
investments. The investment in fuel economy is a sunk cost at time of purchase. The investment
cannot be reversed, should the consumer decide that the investment is unwarranted. Hassett and
Metcalf apply the irreversible investment model to investments in energy conservation and
conclude that an appropriate hurdle rate would be about four times greater than the standard
discount rate. Metcalf and Rosenthal reach a similar conclusion in applying the model to
commercial lighting and to energy efficient refrigerators. If the government imposed discount
rate of 7 percent is considered standard, an appropriate discount rate for the fuel economy
benefits would be at least 14 percent, but probably closer to 21 percent or event 28
percent. [EPA-HQ-OAR-2010-0799-9573-A1, p. 17]
The application of higher hurdle rates indicates that the benefits from fuel economy standards
should be revised downward. The NHSTA study calculates consumer benefits as the present
value of future energy saving using a 7 percent discount rate. However, the evidence on discount
rates, as well as revealed consumer preferences, indicates that an appropriate discount rate is at
least 2 or 3 times higher that [sic] the government imposed rate. [EPA-HQ-OAR-2010-0799-
9573-Al,p. 17]
18-36
-------
Analysis of Estimated Costs, Economic and Other Impacts
Consumers may not act as EPA assumes they should act, but that is no proof that consumers act
against their rational economic self-interest. Consumers may be maximizing other dimensions
that EPA is not considering. [EPA-HQ-OAR-2010-0799-9573-A1, p. 17]Responding to this
argument in the past, EPA has argued that we are suggesting that "there must be a loss associated
with improving fuel economy, because many consumers do not purchase highly fuel-efficient
vehicles already on the market." Furthermore, EPA states: [EPA-HQ-OAR-2010-0799-9573-A1,
p. 17]
OMB Circular A-4 notes that "Economists ordinarily consider market prices as the most accurate
measure of the marginal value of goods and services to society." The fuel savings that consumers
will receive are directly measurable using market prices for fuel, while the values that consumers
reveal through their purchase decisions are indirect measures and may therefore be less
reliable. [EPA-HQ-OAR-2010-0799-9573-A1, p. 18]
EPA, along with most commenters on the rule, finds that there are cost-effective fuel savings that
the market has not at this time provided to consumers and includes those benefits in our
analysis. [EPA-HQ-OAR-2010-0799-9573-A1, p. 18]
In other words, EPA is ignoring (or at least heavily discounting) people's actual purchase
decisions and only considering what EPA can measure—fuel consumption. This same logic is
contained in this proposed rule. Just because people may value safety, power, four wheel drive,
comfort, convenience, size, more than fuel economy does not mean EPA can discount those
choices. It is not necessarily irrational to value other characteristics more than fuel savings as
EPA assumes. [EPA-HQ-OAR-2010-0799-9573-Al, p. 18]
The EPA's logic can be turned on its head, to show the problem with its approach. Currently, it
is unprofitable for manufacturers to produce vehicles with the specific combination of attributes
that would satisfy the proposed mileage standard. That means the amount consumers would be
willing to pay for these compliant vehicles is less than the market value of the resources that
would be required to produce them; that's what it means to say their production is currently
unprofitable. Thus EPA's own criterion shows that its rule would force vehicle manufacturers to
devote scarce resources into channels that are less valuable than other potential outlets. [EPA-
HQ-OAR-2010-0799-9573-A1, p. 18]
3. Models which purport to show consumers do not act in their rational economic self-interest are
crude at best [EPA-HQ-OAR-2010-0799-9573-A1, p. 18]
To reiterate, the EPA cost-benefit analysis relies on a particular theory of consumer behavior—
namely that it is prone to extreme error in the context of vehicle fuel economy. In the literature
modeling consumer behavior, the estimated valuations of fuel economy vary by an order of
magnitude, suggesting that the econometricians do not understand this issue very well. In
practice, there are no "controlled experiments" where consumers are offered the choice between
two otherwise identical vehicles, where one is more expensive yet has better fuel economy. On
the contrary, in the real world there are tradeoffs between vehicles that simultaneously differ on
vehicle size, acceleration, price, safety, and finally fuel economy. More recent modeling has
done a better job capturing these nuances, but economists have still not reached a consensus on
18-37
-------
EPA Response to Comments
exactly what motivates consumers when making vehicle purchases. [EPA-HQ-OAR-2010-0799-
9573-Al,pp. 18-19]
To give a concrete example of the problem, the EPA's discussion of the "energy paradox"
acknowledges that consumers in practice do not always have a full spectrum of vehicle attributes
varying in each dimension, and then says in a footnote: "For instance, in [model year] 2010, the
range of fuel economy (combined city and highway) available among all listed 6- cylinder
minivans was 18 to 20 miles per gallon. With a manual transmission, 4-cylinder minivan, it is
possible to get 24 mpg." [EPA-HQ-OAR-2010-0799-9573-A1, p. 19]
The EPA discussion is here trying to explain why the energy paradox persists; in EPA's view,
the market for some inexplicable reason isn't offering minivans getting 24 mpg, and so
consumers have no choice but to buy the less fuel efficient models, even though the savings in
price is swamped by the long-run fuel expenditures that these cheaper minivans will
require. [EPA-HQ-OAR-2010-0799-9573-A1, p. 19]
But the EPA discussion fails to ask: Why did the market for minivans concentrate on automatic
transmission, 6-cyclinder models that only got 18 to 20 mpg? After all, car companies in the past
offered manual transmissions in their station wagons and vans. So why are car companies not
offering manual transmissions in their minivans now? Could it be that many of the households in
the market for a new minivan weren't interested in an option that would require using the clutch
while taking the kids to soccer games and other activities throughout the week in stop-and-go
driving? In the EPA's crude modeling, if these households had instead been forced to buy a more
expensive, 4-cylinder minivan with a stick shift, EPA's rule would be doing them a favor in the
long run. [EPA-HQ-OAR-2010-0799-9573-A1, pp. 19-20]
4. A one-size-fits-all regulatory policy is not the answer for people with heterogeneous tastes and
preferences
As another specific example of the true subtleties involved—which are ignored by simplistic
models—we must remember that a typical suburban family might purchase a "gas guzzling"
SUV in order to make large grocery runs, pick up furniture, pull a boat, etc., while it also
purchases a fuel efficient car for other travel. Depending on future movements in gasoline prices,
the family can then adjust its driving accordingly, using the SUV more when gasoline is cheap,
while relying more heavily on the hybrid when gasoline prices are relatively high. The typical
model looking for "the" consumer valuation of fuel economy currently does not capture the
flexibility and needs of actual motorists. By imposing a one-size-fits-all decision that raises fuel
economy (while hurting other attributes) across the board, the government would be taking away
options from families and making them worse off. [EPA-HQ-OAR-2010-0799-9573-A1, p. 20]
Another problem with the entire approach is to assume that consumers have identical tastes
regarding fuel economy. In reality, some consumers may be very concerned, while others may
not be. Thus even if the proposed rule made the "representative consumer" better off, in practice
it would still harm those consumers who (for whatever reason) do not place a high subjective
value on fuel economy. [EPA-HQ-OAR-2010-0799-9573-A1, p. 20]
18-38
-------
Analysis of Estimated Costs, Economic and Other Impacts
As a final example showing the problem in the EPA's assumption of a typical vehicle buyer,
consider that the proposed rule increases the upfront cost of buying a car, and thereby forces an
estimated 7 million drivers out of the car market. This means that 7 million people will not be
able to enjoy the fuel savings calculated by EPA because they will not be able to afford a car in
the first place. Thus the alleged fuel economy benefits to vehicle buyers who are still able to
afford their purchase must be weighed against the psychic losses to those who now must
postpone or abandon their purchases altogether. Aggregating subjective preferences together to
achieve a single number of "net benefits" is a very controversial area of economic theory, though
EPA hardly discusses the issue. [EPA-HQ-OAR-2010-0799-9573-A1, pp. 20-21]
EPA's cost-benefit analysis shows positive net benefits only because EPA omits the cost to
consumers of limiting consumer choice. [EPA-HQ-OAR-2010-0799-9573-A1, p. 23]
Organization: Institute for Policy Integrity, New York University School of Law
The agencies constant performance cost projections are likely to be an overestimate of the risk of
lost consumer welfare. Since attributes like size and performance are at least partly relative,
changing the fleet-wide average size or performance may not significantly impact overall
consumer welfare. Manufacturers may not have to spend as much as the agencies' assume in
order to prevent any aggregate consumer welfare loss. Similarly, any risk of lost consumer
welfare unaccounted for in the agencies' constant performance cost projections is mitigated by
the positionality of attributes. [EPA-HQ-OAR-2010-0799-9480-A1, p. 2]
The agencies should consider how positionality and the bandwagon effect will shape the
consumer market for new technologies. As fuel-efficient vehicles become more visible and more
common, the perceived attractiveness of fuel efficiency may increase. Information diffusion and
habit formation will also affect the future of the market for electric vehicles and other new
technologies. [EPA-HQ-OAR-2010-0799-9480-A1, p. 2]
Constant Performance Cost Projections Likely Overestimate the Risk of Lost Consumer Welfare,
and the Agencies Should Treat Them as an Upper Bound
The agencies build an assumption of constant performance into their compliance cost estimates.
They believe that manufacturers will spend whatever extra it costs to maintain current vehicle
attributes as they increase fuel economy, in order to preserve consumer welfare. The cost
projections therefore depend on the agencies' best guesses about how changed attributes would
impact consumer preferences and welfare. As the agencies note, "[b]ecause welfare losses are
monetary estimates of how much consumers would have to be compensated to be made as well
as in the absence of the change, the price increase measures the loss to the buyer." [EPA-HQ-
OAR-2010-0799-9480-A1, p. 15]
As a result, if the agencies are wrong about how changing attributes would impact consumer
preferences, then they are overestimating how much manufacturers will need to spend to
maintain consumer welfare. The agencies acknowledge that their cost estimate is likely to be an
overestimate: [EPA-HQ-OAR-2010-0799-9480-A1, p. 15]
18-39
-------
EPA Response to Comments
because the consumer has choices other than buying the same vehicle with a higher price; she
could choose a different vehicle, or decide not to buy a new vehicle. The consumer would choose
one of those options only if the alternative involves less loss than paying the higher price. Thus,
the increase in price that the consumer faces would be the upper bound of loss of consumer
welfare, unless there are other changes to the vehicle due to the fuel economy improvements that
make the vehicle less desirable to consumers."98 [EPA-HQ-OAR-2010-0799-9480-A1, pp. 15-
16]
Positional goods theory reinforces the conclusion that the agencies' cost estimate is an upper
bound and is likely an overestimate. 99 The value of a "positional good" depends on how it
compares with similar goods possessed by others. 100 The owner of a positional good derives
more welfare from that good than expected when considering only its functional qualities. The
prominent explanation for this phenomenon is that highly visible consumption becomes a signal
for status, 101 and people value status because they anticipate it will translate into more favorable
treatment in economic and social interactions. 102 For example, jewelry, silk ties, and expensive
champagne all have very little functional value, but their consumption is conspicuous and
conveys status to others. [EPA-HQ-OAR-2010-0799-9480-A1, p. 16]
Other goods, like cars, have both functional and positional value. Consumers may partially value
vehicle size and horsepower for their functional utility like hauling capacity and speed, but a
growing body of research indicates that many consumers do not necessarily want the biggest and
fastest car, so long as their car is bigger and faster than their friends' and neighbors'. According
to a recent U.S. survey on the visibility of 31 expenditure categories (from food to mobile
phones), new or used motor vehicle purchases were the second most visible expenditure; related
expenditures on gasoline/diesel, vehicle maintenance, and insurance were all substantially less
visible. 103 Surveys also consistently confirm that cars are highly positional goods, that people
prefer a relative increase in a car's value to an absolute increase, 104 and that the more visible
features of cars are more positional. 105 Financial savings, in contrast, are typically considered
non-positional. 106 [EPA-HQ-OAR-2010-0799-9480-A1, p. 16]
The more observable prestige features of vehicles include newness, brand, size, design, and
power. While all these traits have functional value (such as capacity, safety, and
performance), 107 they also all have relative value: consumers value power not just for speed but
for the status signal and for the ability to out-accelerate others at a traffic light; consumers do not
necessarily want a big car, but they do want a bigger car. 108 As Bob Lutz, Vice Chairman of
General Motors, has stated, "aspirational aspects overwhelm the functional differences" when
customers choose cars. 109 Importantly, many vehicle prestige features—especially larger size
and increased performance—reduce fuel economy. 1 lOAnd given the low visibility of gasoline
expenditures and of financial savings, fuel efficiency itself is currently a relatively non-positional
good (though there is some chance that the agencies' new vehicle labeling requirements could
start to make fuel economy more visible and positional). [EPA-HQ-OAR-2010-0799-9480-A1,
p. 17]
A vehicle's size and weight are also positional for safety reasons, in addition to status
motivations. To the extent smaller cars fare worse in crashes with bigger cars, consumers may
value bigger cars not because of any intrinsic safety value, but because of the average fleet size.
18-40
-------
Analysis of Estimated Costs, Economic and Other Impacts
According to Wenzel's research on the relationship between vehicle weight/size and safety,
while an increase in footprint decreases the risk of casualty to the driver, an increase in
footprint—especially for pick-up trucks and sports cars—raises the risk of both fatality and
casualty to other drivers. Ill [EPA-HQ-OAR-2010-0799-9480-A1, p. 17]
The trouble with positional goods is they impose externalities. This is obvious in the safety
context: if Joan upgrades from her compact car to a large pick-up truck, she may feel somewhat
safer, but her purchase marginally increases the risk to all other drivers. It also applies in the
status context. Again, if Joan buys a big, fast, flashy car to move up the status hierarchy, John's
big, fast, flashy car is no longer as rare. John feels relatively worse off and so will have to invest
in an even bigger, faster, flashier car just to restore his previous status position. As a result, both
consumers spend resources without actually improving their relative status. [EPA-HQ-OAR-
2010-0799-9480-A1, p. 17]
Because vehicle purchase decisions are made non-cooperatively but in fact alter the spending
behavior and relative safety of others, consumers get stuck on a "positional treadmill" that does
not increase welfare. 112 Yet if any individual opts out of this "expenditure arms race," it would
only move that consumer backwards on the status or safety hierarchy, which for most consumers
is unacceptable. 113 And given limited resources and limited market options, the over-
consumption of positional goods results in under-consumption of non-positional goods (such as
fuel efficiency). If consumers could maintain their relative economic position, they might be
more willing to pay for non-positional goods. 114 [EPA-HQ-OAR-2010-0799-9480-A1, pp. 17-
18]
Fuel economy regulation, therefore, is a cooperative solution that allows consumers to achieve
what they could not in the non-cooperative open market: namely, an increase in fuel economy
without losing position in the status hierarchy. 115 Regulations similarly help consumers select
fuel economy without falling behind in the safety/size rankings, since with time the average fleet
size will shift.116 [EPA-HQ-OAR-2010-0799-9480-A1, p. 18]
In other words, positional goods theory explains that consumer valuations of vehicle attributes
like size and performance are relative, which means consumer preferences can adjust as average
fleet-wide attributes shift. As a result, changing the fleet-wide average size or performance may
not significantly impact overall consumer welfare. In the context of the agencies' cost estimates,
this means that manufacturers may not have to spend as much as the agencies' assume in order to
prevent any aggregate consumer welfare loss. Consequently, the agencies' constant performance
cost projects likely overestimate the actual cost of the regulation. [EP A-HQ-OAR-2010-0799-
9480-Al,p. 18]
To improve the accuracy of their cost estimates, the agencies should reanalyze their assumption
that "changes in vehicle attributes can significantly affect the overall utility that vehicles offer to
potential buyers," in light of positional goods theory. A better understanding of the positionality
of cars will help the agencies refine their projections for how much manufacturers will need to
spend to maintain actual consumer welfare. Even if a more accurate cost estimate is unlikely to
change the stringency or structure of the proposed rule,l 18 refining the cost estimate remains
important. Not only is an accurate cost-benefit analysis based on the best available evidence
18-41
-------
EPA Response to Comments
required by professional and legal norms,! 19 but a better cost estimate will enhance confidence
in justifications for the rule, will improve the public debate over fuel economy, and will set a
valuable precedent for future rulemakings.120 [EPA-HQ-OAR-2010-0799-9480-A1, pp. 18-19]
Any Risk of Lost Consumer Welfare Unaccounted for in the Agencies' Constant Performance
Cost Projections Is Mitigated by the Positionality of Attributes
Despite the constant performance price projection model, the agencies worry that "if estimates
do not include adequate allowances to prevent attribute sacrifices, technological costs will
underestimate true economic costs." The agencies acknowledge that, even with footprint-based
standards and a constant performance approach, the proposed rule could cause manufacturers to
forego future planned attribute improvements or even, "[i]n extreme cases," to change current
attributes. 122 NHTSA conducted a sensitivity analysis to test this possibility, and found that
even if lost consumer welfare equaled 50% of total private benefits, the rule would still be cost-
benefit justified. 123 [EPA-HQ-OAR-2010-0799-9480-Al,p. 19]
Nevertheless, for use in the final rulemaking, NHTSA is developing a fuller model of buyers'
decisions to estimate explicitly any welfare changes that could result from the combination of
price increases, fuel economy increases, and altered vehicle attributes. 124 NHTSA should be
sure to build the lessons from positional goods theory into its model, and the agencies should use
the positionality of vehicle attributes and explain why their cost estimates are not likely to
underestimate consumer welfare losses; in fact, to the contrary, position goods theory would
predict that the cost projections are more likely to be overestimates. [EPA-HQ-OAR-2010-0799-
9480-A1, p. 19]
Positionality and the Bandwagon Effect Will Shape the Consumer Market for New Technology
The agencies ask for comment on factors that may affect the consumer market for electric
vehicles and other advanced technologies. In conducting this analysis, the agencies should
consider the malleability of consumer preferences and valuations for new technologies. [EPA-
HQ-OAR-2010-0799-9480-A1, p. 19]
If fuel efficiency becomes a sufficiently visibility trait (perhaps as a result of the vehicle labeling
rule, marketing campaigns, and related efforts), it is possible that consumers could start
competing for the highest fuel efficiency. But even if that does not happen, consumers' valuation
of fuel efficiency will undoubtedly change overtime and as a result of the proposed
regulation. 126 [EPA-HQ-OAR-2010-0799-9480-A1, p. 19]
The bandwagon effect occurs when the perceived attractiveness of a good increases as more
people consume it. Growing empirical evidence suggests an environmental bandwagon: people
are more likely to make environmental choices when they think everyone else is doing the
same. 127 [EPA-HQ-OAR-2010-0799-9480-A1, p. 19]
The separate though conceptually related effects of information diffusion and habit formation
might also affect the market for more fuel-efficient vehicles. Car choices are strongly influenced
by the purchases of peers, 128 perhaps because consumers often deal with the need to justify
18-42
-------
Analysis of Estimated Costs, Economic and Other Impacts
their choices by deferring to the preferences of others. 129 Consumers might currently have a
negative opinion of vehicles running on unknown technology or of unknown model types; 130
but once more fuel-efficient vehicles increase market share and become more familiar to
consumers as a result of the proposed regulations, new consumer habits will form, and
willingness to pay for fuel efficiency might increase. [EPA-HQ-OAR-2010-0799-9480-A1, pp.
19-20]
The agencies should treat their constant performance cost projections as an overestimate of the
risk of lost consumer welfare. Positional goods theory explains that vehicle attributes like size,
power, and safety have relative value. Since attributes like size and performance are at least
partly relative, changing the fleet-wide average size or performance may not significantly impact
overall consumer welfare. Manufacturers may not have to spend as much as the agencies'
assume in order to prevent any aggregate consumer welfare loss. [EPA-HQ-OAR-2010-0799-
9480-A1, pp. 20-21]
The agencies should consider how positionality and the bandwagon effect will shape the
consumer market for new technologies. As fuel-efficient vehicles become more visible and more
common, the perceived attractiveness of fuel efficiency may increase. Information diffusion and
habit formation will also affect the future of the market for electric vehicles and other new
technologies. [EPA-HQ-OAR-2010-0799-9480-A1, p. 21]
98 Id. at fn. 525 (emphasis added).
99 See attached symposium paper on positional goods for additional details.
100 Robert H. Frank, The Demand for Unobservable and Other Nonpositional Goods, 75 AM.
ECON. REV. 101, 101 (1985).
101 Id. at 107 ("When an individual's ability level cannot be observed directly, such observable
components of his consumption bundle constitute a signal to others about his total income level,
and on average, therefore, about his level of ability. . . . [I]mperfect information about ability
might create incentives for people to rearrange consumption patterns to favor observable
goods."). Consumption patterns might vary depending on the relevant population in the status
competition. People might compete among friends, neighbors, and coworkers; within their socio-
economic class; with higher classes; or on a society-wide basis. See Fredrik Carlsson et al., Do
You Enjoy Having More than Others? Survey Evidence of Positional Goods, 74 ECONOMIC A
586, 590 (2007). If a particular population has more reliable, independent information on
abilities or income, consumption patterns for observable goods might shift. Frank, supra note
100, at 108.
102 Y. Weiss & C. Fershtman, Social Status and Economic Performance: A Survey, 42 EURO.
ECON. REV 801, 802 (1998). Status can be instrumental, in that higher status can carry better
consumption opportunities, access to better employment, and even better marriage prospects. Ed
Hopkins & Tatiana Kornienko, Running to Keep in the Same Place: Consumer Choice as a
18-43
-------
EPA Response to Comments
Game of Status, 94 AM. ECON. REV. 1085, 1087 (2004). Factors like psychology, biological
hardwiring, and envy also should not be ignored.
103 Ori Heffetz, A Test of Conspicuous Consumption: Visibility and Income Elasticities, 93
REV. OF ECON. & STAT. 1101, 1106 (2011) (vehicle purchase had a visibility index of 0.73,
second only to tobacco products (0.76); gasoline/diesel had a visibility index of 0.39, car repairs
were at 0.42, and car insurance fell near the bottom at 0.23).
104 Specifically, a majority of people surveyed would prefer a world in which their car is
superior to other people's but less valuable overall, versus a world in which their car has more
absolute value but is inferior to the societal average. See, e.g., Carlsson et al., supra note 101, at
588, 593 (reporting results of a Swedish survey); Francisco Alpizar et al., How Much Do We
Care About Absolute Versus Relative Income and Consumption?, 56 J. OF ECON. BEHAVIOR
& ORG. 405, 412 (2005) (reporting results of Costa Rican survey). Though some such surveys
were conducted in other countries, if anything positionality for cars could be stronger in the
United States, given the American affinity for cars and the income distribution. See Reid R.
Heffner et al., Effects of Vehicle Image in Gasoline-Hybrid Electric Vehicles 2 (U.C. Davis Inst.
of Transportation Studies UCD-ITS-RR-05-08, 2005) ("In the words of automobile psychologist
G. Clotaire Rapaille, Americans are in 'a permanent search of an identity' and 'cars are very key
. . . [they are] maybe the best way for Americans to express themselves.'"); Hopkins &
Kornienko, supra note 102 (noting that positional effects increase as society's income increases,
because the portion of income spent on conspicuous consumption increases). On the other hand,
cars are often more a necessity and less a luxury in the United States than in other countries. See
Mark Grinblatt et al., Interpersonal Effects in Consumption: Evidence from the Automobile
Purchases of Neighbors (Yale ICF Working Paper No. 04-10, 2004).
105 Carlsson et al., supra note 101, at 588, 593 (finding support for hypothesis that Visible goods
and their characteristics, such as the value of cars, are more positional than less visible goods and
their characteristics, such as car safety.').
106 See, e.g. Omer Moav & Zvika Neeman, Savings Rates and Poverty: The Role of
Conspicuous Consumption and Human Capital (2009), available at
http://www.hecer.fi/Seminars/Papers/moav_paper.pdf
107 Carlsson et al., supra note 101, at 595, could not provide a clear answer to the question of
whether cars are completely positional. On average cars are highly positional, but that reflects a
good deal of heterogeneity: cars may be completely positional for some people, but are possibly
completely non-positional for others. Id. at 596.
108 Erik Verhoef & Bert van Wee, Car Ownership and Status: Implications for Fuel Efficiency
Policies from the Viewpoint of Theories of Happiness and Welfare Economics 4 (Tinbergen
Institute Discussion Paper TI2000-076/3, 2000) ('However, most cars in most Western countries
have engines with much more power than needed, given the characteristics of infrastructure,
speed limits, and travel distances.').
18-44
-------
Analysis of Estimated Costs, Economic and Other Impacts
109 George Will, Americans and Their Cars, TOWNHALL DAILY, Apr. 18, 2002, available at
http://townhall.eom/columnists/GeorgeWill/2002/04/l 8/americans_and_their_cars.
110 See Knittel, supra note 84.
Ill Wenzel, supra note 85, at 19, 36. Effect of footprint on fatality risk to driver: P-value 0.215,
R2 value 0.01. Effect of footprint on fatality risk to other drivers: P-value <0.001, R2 value 0.38
(though the data for trucks drives this relationship much more than for cars). Effect of footprint
on casualty risk to driver: P-value <0.001, R2 value 0.26. Effect of footprint on casualty risk to
other drivers: P-value <0.001, R2 value 0.26 (though again the data for trucks drives this
relationship much more than for cars).
112 Robert H. Frank, Positional Externalities Cause Large and Preventable Welfare Losses, 95
AM. ECON. REV. 137, 137 (2005).
113 Frank, supra note 100, at 105-06.
114 Robert H. Frank & Cass R. Sunstein, Cost-Benefit Analysis and Relative Position, 68 UNIV.
OF CHICAGO LAW REV. 323, 326 (2001) ("If people could maintain their relative economic
position, they would be willing to pay more, and possibly a great deal more, to purchase many of
the goods that regulation attempts to deliver. . . .[W]hen an individual buys additional safety in
isolation, he experiences not only an absolute decline in the amounts of other goods and services
he can buy, but also a decline in his relative living standards. In contrast, when a regulation
requires all workers to purchase additional safety, each worker gives up the same amount of
other goods, so no worker experiences a decline in relative living standards. If relative living
standards matter, then an individual will value an across-the-board increase in safety more highly
than an increase in safety that he alone purchases.").
115 Correcting for negative externalities and collective action problems is a classic case for
regulation. "Analytically, positional externalities are no different from ordinary environmental
pollutants." Id. at 364. Such regulation is not about taking public action just because one
consumer's increased consumption makes another consumer unhappy or envious; rather,
regulation is justified to address a market failure. Id. at 365. Even if not everyone wants to solve
this particular collective action problem, "we do not require unanimity as a precondition for
unquestionably legitimate collective action in other spheres." Id. at 366. See also Verhoef & van
Wee, supra note 91, at 13-14. ("On the free market, consumers would inefficiently strongly
stimulate each other to purchase more luxurious variants. Corrective taxes [or a CAFE standard
with tradable permits] may protect consumers against such treadmills.").
116 Regulations also correct a supply-side problem, since theory predicts manufacturers will
devote their research and development budget to status goods until government adjusts the
incentives. Ben Cooper et al., Status Effects and Negative Utility Growth, 111 ECON. J. 642
(2001).
118 See supra note 63, and accompanying text.
18-45
-------
EPA Response to Comments
119 See supra note 62, and accompanying text.
120 See supra notes 65-67, and accompanying text.
122 See NHTSA, PRIA, supra note 69, at 708.
123 Id. at 719.
126 Heffner et al., supra note 104, at 3 ("As more hybrid models enter the market, the meanings
of HEVs are likely to evolve.").
127 For example, when hotel guests are told they should "join their fellow citizens" in saving
water by reusing towels, reuse rates increase by 34%; similarly, when electric bills present a
comparison of neighborhood consumptions, usage decreases by 2%. See Hunt Allcott & Sendhil
Mullainathan, Behavior and Energy Policy, 327 SCI. 1204 (2010); Hunt Allcott, Social Norms
and Energy Conservation, 95 J. PUB. ECON. 1082 (2011).
128 Grinblatt et al., supra note 104 (reporting results of study in Finland that found car purchases
strongly influenced by purchases of neighbors, most likely because of information sharing).
129 James Bettman et al., Constructive Consumer Choice Processes, 25 J. CONSUMER RES. 3
(1998).
130 Eugenio Miravete & Maria Moral, Qualitative Effects of Cash-For-Clunkers Programs
(2009), available at http://www.eugeniomiravete.com/papers/EJM-MJM-Clunkers.pdf.
Organization: International Council on Clean Transportation (ICCT)
The agencies may be confused by studies that rely on standard economic theory, which says that
assuming full information and no uncertainty, consumers will make optimal tradeoffs between
the purchase price and subsequent operating costs. However, the standard economic theory does
not apply in this case because mainstream consumers undervalue fuel savings due to uncertainty
and loss-aversion. [EPA-HQ-OAR-2010-0799-9512-A1, p. 15]
There is substantial circumstantial evidence that most consumers in the U.S. place a low value on
fuel economy. For example, Turrentine and KuranilS conducted an in depth survey of the car-
buying histories of 57 California households. None of these 57 households made any kind of
quantitative assessment of the value of fuel savings and only 9 stated they compared the fuel
economy of vehicles in making their choice. The selected consumers were largely unaware of
their annual fuel cost, in contrast to general knowledge of the daily price fluctuations of a gallon
of gasoline. Turrentine and Kurani concluded that: 'When consumers buy a vehicle, they have
neither the tools nor the motivation nor the basic building blocks of knowledge to make a
calculated decision about fuel costs.' [EPA-HQ-OAR-2010-0799-9512-A1, p. 15]
The question that has been debated for decades is simply - why? This is an extremely important
question, as most of the calculation of consumer welfare is based on the answer. If consumers are
18-46
-------
Analysis of Estimated Costs, Economic and Other Impacts
already receiving their optimum level of fuel economy, then efficiency standards will decrease
their welfare. However, if there are valid reasons why consumers are not making optimal
tradeoffs at the time of vehicle purchase, or if the entire question is not being framed properly,
then efficiency standards would increase consumer welfare. [EPA-HQ-OAR-2010-0799-9512-
Al,p. 16]
ICCT believes uncertainties about the cost and value of fuel economy improvements, combined
with general loss-averse behavior by consumers, offers a rational and accurate explanation of the
failure of the market to optimize fuel cost savings. Green 201019 found that using reasonable
estimates of the uncertainty offing-use fuel economy, future fuel prices, annual vehicle use,
vehicle lifetime, and incremental vehicle price yielded an average customer payback period of
roughly 3 years. While economists refer to this as a market failure, given the large uncertainties
in the actual amount of future fuel cost savings and the other ways that consumers can spend
their money, the typically loss-averse customer is being quite rational in only wanting to pay for
2-5 years of projected fuel savings. [EPA-HQ-OAR-2010-0799-9512-A1, p. 16]
If consumers only value 2-5 years of fuel savings, does this mean their consumer welfare will
decrease if standards force them to save money on fuel from technologies that achieve a fuel-
savings based payback in more than 2-5 years? Greene's paper also addressed this issue and
found there are two important issues that invalidate this conclusion: [EP A-HQ-OAR-2010-0799-
9512-Al,p. 16]
(1) Standards change the status quo by removing the option to buy a vehicle without the
additional efficiency technology - it is not presented to the customer at all. Loss aversion is
context dependent, which leads to the paradox that consumers who would decline a risky bet
may reach a higher level of utility if forced to accept the bet. Efficiency standards mandate that
only vehicles with additional efficiency technology can be sold. There is no reason why
consumers should evaluate the choice limited by standards in the same way they perceive the
choice without standards. ICCT believes the only valid reference point for loss aversion is the
updated status quo that exists when the consumer actually makes the purchase decision. [EPA-
HQ-OAR-2010-0799-9512-Al,p. 16]
(2) Standards require everyone to purchase higher levels of efficiency technology, not just
individual customers, leading to indirect consumer welfare benefits. The concept of consumer
welfare under standard economic theory is based upon individual choices. However, efficiency
standards affect everyone, not just individual customers. The individual's welfare is now the sum
of the direct impact on the individual and the indirect benefit to the individual of forcing other
customers to buy more efficient vehicles. There are substantial benefits to an individual if
everyone else buys more efficient vehicles. It reduces demand for oil, which leads to lower fuel
prices and reduced energy security risks. It also reduces carbon emissions and slows down global
warming. Most people are aware of these benefits if standards are imposed on everyone and
place significant value on them. [EPA-HQ-OAR-2010-0799-9512-A1, pp. 16-17]
18-47
-------
EPA Response to Comments
18 Turrentine, Thomas S., and Kenneth S. Kurani, 'Car Buyers and Fuel Economy?' Energy
Policy 35 (2007): 1213-1223.
19 Greene, David 2010. 'Uncertainty, loss aversion, and markets for energy efficiency', Energy
Economics.
6. Mainstream customers severely discount the value of future, highly uncertain fuel savings.
The primary purpose of efficiency standards is to make up for this discounting and push
technology into the fleet beyond what would have otherwise been demanded by the market.
Considering the stringency of the 2011-2016 standards, the sensitivity analysis for market-driven
increases in efficiency after 2016 should be removed from the Final Rule. [EPA-HQ-OAR-2010-
0799-9512-A1, p. 3]
11. The estimates of net benefits should fully value fuel savings over the lifetime of the vehicle.
The alternative NHTSA estimates reducing the net benefits are speculative and should be
removed from the final rule. [EPA-HQ-OAR-2010-0799-9512-A1, p. 3]
11) Discounting of Consumer Benefits
The NPRM evaluates the costs and benefits of the proposed rule, and concludes that the net
benefits to society of the 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. Most of these benefits are attributed to reductions in fuel consumption. [EPA-HQ-OAR-
2010-0799-9512-Al,p. 23]
The reference case analysis of benefits includes the value of fuel savings over the entire lifetime
of the vehicle. EPA summarizes its rationale for this approach as follows: [EPA-HQ-OAR-2010-
0799-9512-A1, p. 23]
EPA continues to value fuel savings from the proposed standards using the projected market
value over the vehicles' entire lifetimes, and to report that value among private benefits of the
proposed rule. Improved fuel economy will significantly reduce consumer expenditures on fuel,
thus benefiting consumers. Real money is being saved and accrued by the initial buyer and
subsequent owners. In addition, using a measure based on consumer consideration at the time of
vehicle purchase would involve a very wide range of uncertainty, due to the lack of consensus on
the value of additional fuel economy in vehicle choice models. [EPA-HQ-OAR-2010-0799-
9512-Al,pp. 23-24]
NHTSA's reference case analysis similarly assumes that there is no loss in value to consumers
resulting from vehicles that have an increase in price and higher fuel economy. However,
NHTSA also performed sensitivity analyses that assumed that there is a 25 percent or 50 percent
loss in value to consumers—equivalent to the assumption that consumers will only value the
calculated benefits they will achieve at 75, or 50 percent, respectively of the main analysis
estimates. This is intended to account for possible unspecified or poorly understood negative
impacts of the rule on consumer preferences. [EPA-HQ-OAR-2010-0799-9512-A1, p. 24]
18-48
-------
Analysis of Estimated Costs, Economic and Other Impacts
The sensitivity analyses conclude that these alternative assumptions have a large impact on the
magnitude of net benefits, reducing the estimated net benefit by 63.0% and 31.5% respectively.
Even in the worst case, however, total benefits still exceed costs. [EPA-HQ-OAR-2010-0799-
9512-Al,p. 24]
ICCT agrees that estimates of net benefits should fully value fuel savings over the lifetime of the
vehicle. As noted by EPA these are real-world impacts that have tangible value. The alternative
NHTSA estimates presented in the NPRM are speculative and should not be given any
consideration. [EPA-HQ-OAR-2010-0799-9512-A1, p. 24]
Organization: Michigan State Senate, District 18
But increased fuel economy will also save working families already feeling the pinch at the
pump. Americans spend approximately $2,000 a year on gasoline, and at this rate the costs
quickly add up. In fact, all together Americans spend more than $1.3 billion filling up each day.
The proposed 54.5 fuel economy standard will save consumers who buy cars after 2025 up to
$6,600 in fuel costs over the life of their vehicle. [EPA-HQ-OAR-2010-0799-5594-A1, p. 1]
And anyone who has filled up their car in the last few years is all too familiar with the price
volatility of gas. In 2008, the price of oil stood at $147 a barrel. By 2009, it had dipped to $35 a
barrel, but in 2011 it once again climbed to $120 per barrel. Greater fuel economy will insulate
consumers and businesses from this constant rollercoaster and save us all money at the pump.
[EPA-HQ-OAR-2010-0799-5594-A1, p. 1]
Organization: National Association of Clean Air Agencies (NACAA)
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 34.]
Buffering against gasoline price volatility for consumers and a hedge against rising fuel prices
due to increased use of domestic and alternative fuel sources;
Organization: National Automobile Dealers Association (NADA)
Since the enactment of EPCA in 1975, NADA has supported the goal of continuous fuel
economy improvements. At the same time, NADA recognizes the constraints inherent in a 'push'
approach to achieving such improvements. The success of mandates on vehicle manufacturers to
research, develop, design, and manufacture vehicles to meet fuel economy performance targets is
limited necessarily by the fact that their regulatory obligations end when those vehicles are
delivered to the 17,000+ independent businesses licensed to sell or lease them to the motoring
public. Real life fuel economy improvements cannot be achieved, and related policy benefits
cannot be realized, unless and until consumers actually buy (or lease) and use those new
vehicles. [EPA-HQ-OAR-2010-0799-9575-A1, p. 2]
'Push' mandates do not necessarily mean that 'if they build them, they will come.' It is this simple
fact that serves as the basis for NADA's concern. First, prospective new light-duty vehicle
18-49
-------
EPA Response to Comments
purchasers must need or desire to purchase or lease a new vehicle for there to be demand. And,
the demand for new light-duty vehicles is and always will be constrained by choices, including
the used vehicle marketplace, vehicle service and repair options, and alternatives to light-duty
vehicle transportation. [EPA-HQ-OAR-2010-0799-9575-A1, p. 2]
Lastly, prospective new light-duty vehicle purchasers must be willing to make a purchase,
assuming they have the need and/or desire and the ability to do so. Factors influencing customer
willingness to purchase a new light-duty motor vehicle include, but are not limited to, consumer
confidence, perceived operating costs, and expected residual values. [EPA-HQ-OAR-2010-0799-
9575-A1, p. 6]
B. Assuming a Need or Desire, and the Ability to Purchase a New Vehicle Covered by the MY
2017-25 Standards, Will Consumers Be Willing to Do So?
Notwithstanding the very significant impact the MY 2017-2025 proposed rule could have on the
ability of consumers to purchase or lease new vehicles subject to the rule, many other
prospective purchasers with a need or desire to do so will have the ability to buy. For those
customers, the issue is whether and to what extent they will be willing to 'pay-up' for fuel
economy improvements. Answering this question is not a simple task in that it involves several
key hard-to-predict variables and is dependent on the circumstances of individual
consumers. [EPA-HQ-OAR-2010-0799-9575-A1, p. 7]
A couple of facts are clear, however. First, as described above, vehicle lenders and lessors do not
account for any potential reductions in vehicle operating costs, such as may result from lower
household fuel costs, since they cannot predict actuarially if those avoided costs will be saved,
let alone be applied to the loan or lease. Second, when assessing the willingness of prospective
new vehicle purchases, it is neither appropriate nor fair to rely on surveys of what consumers say
they might do if and when offered a new vehicle with improved fuel economy performance. This
is especially true when the questioner neglects to note that the respondent must pay a premium
up front for that improved fuel economy performance, or fails to accurately quantify that up-
front cost premium, or the higher operating costs associated with that premium (additional
interest, insurance, taxes, etc.). Indeed, many pollsters in this area fail to accurately inform the
respondent of the degree to which the up-front cost premium and higher operating costs will off-
set any potential reductions in household fuel expenses, or may fail to remind those polled of any
trade-offs that may be involved with vehicles designed to achieve improved fuel economy
performance, let alone that they always have used vehicle, vehicle service and repair, and
alternative transportation choices. Of course, consumer surveys can play a valuable role in
assessing actual behavior, such as when used to evaluate why consumers do what they do or did
what they did. But surveys with queries aimed at determining consumer willingness to pay for
fuel economy performance 5 to 13 years into the future, which fail to provide respondents with
information appropriate to make reasoned responses are of no value and should be considered as
such by NHTSA and EPA. [EPA-HQ-OAR-2010-0799-9575-A1, pp. 7-8]
If and to the extent prospective purchasers are unwilling to pay some or all of a regulatory
premium for mandated fuel economy improvements, it will negatively impact new vehicle sales
and reduce forecasted regulatory benefits. The proposal characterizes increased fuel economy
18-50
-------
Analysis of Estimated Costs, Economic and Other Impacts
performance (i.e., fuel cost reductions, discounted to the present) as the future benefit that offsets
the higher up-front and operating costs needed to buy such performance. In and of itself, this
cost/benefit analysis is problematic given that correct estimates of future fuel savings are not
simple financial calculations in which one can estimate a discount rate as a corporation might for
its cost of money when calculating the net present value of a potential project. It is incumbent
upon EPA and NHTSA to accurately consider the expectations of able and willing prospective
purchasers, because those expectations will ultimately determine their behavior in the
marketplace. As illustrated in and supported by the paper attached as Exhibit D, prospective
purchasers form expectations of the net present value of future fuel savings that are related, but
not closely related, to a standardized financial calculation. During dramatic upward swings in the
price of gasoline followed by heavy media coverage, consumers place a large value on fuel
economy, as revealed by shifts in demand to more fuel efficient portion of the market. During
slow and steady increases in the price of gasoline with little or no media attention, consumer
demand shifts reveal a much diminished value for fuel economy.15 [EPA-HQ-OAR-2010-0799-
9575-A1, p. 8]
In addition, when assessing the valuation of fuel economy improvements by prospective
purchasers, the financial benefits of reduced future fuel savings cannot be separated from the
utility lost by necessary reductions to other vehicle qualities and performance. For example, if a
consumer values an increase in fuel economy of 1 mpg at $500, but gaining this 1 mpg forces a
reduction in power or safety valued at $600, then for this consumer the value of the fuel
economy gain is negative. [EPA-HQ-OAR-2010-0799-9575-A1, p. 9]
Consumer behavior indicates how these tradeoffs are valued. Indeed, these tradeoffs are
available today in dealership showrooms which offer new light-duty vehicles with a wide variety
of fuel economy performance, along with variations in other safety and performance features. A
classic example of actual prospective purchaser willingness to pay involves a look at sales of
models with both a hybrid electric and a conventional powertrain (e.g., Honda Civic, Ford
Escape or Focus, Toyota Camry). The average fuel economy spread is approximately 20 mpg at
a cost premium of approximately $5,000. In virtually every instance, hybrid sales have been very
small and in total, have made up well below 3% of annual light-duty new vehicle sales. The
proposed regulations will mandate this tradeoff for all new vehicle buyers. Admittedly, some of
this lack of consumer willingness to pay may derive from concerns about new technologies, as
suggested by sales experience with the Mercury Milan hybrid which had an up-front price close
to a similar, but conventionally-powered model. [EPA-HQ-OAR-2010-0799-9575-A1, p. 9]
Exhibit D includes a review of the pertinent 'willingness to pay' literature, finding that statistical
models that do not properly account for the tradeoff between fuel economy and other vehicle
attributes will generate a false positive relationship between price and fuel costs, highlighting the
significance of these tradeoffs in the mind the average consumer. Based on these revealed
preferences, consumers are unlikely to value the proposal's mandated fuel economy
improvements more than the sum of the higher up-front costs for such improvements and other
reductions to vehicle quality. In fact, when more reasonable estimates of per vehicle regulatory
costs are used, the perceived net benefit will be negative for the average consumer. As a result,
many prospective purchasers of new light-duty motor vehicles will be unwilling to 'pay-up' for
costly fuel economy improvements, instead opting for less expensive and less fuel efficient
18-51
-------
EPA Response to Comments
options in the used vehicle market or the vehicle service and repair market, or for alternate
transportation, thus reducing the proposal's projected regulatory benefits. [EPA-HQ-OAR-2010-
0799-9575-A1, p. 9]
[This comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 57.]
Now, finally, America's auto dealers support continuous improvement to fuel economy. Instead
of fighting the customer, we urge the administration to act in a measure [sic] that will leverage
consumer demand, maximize fleet turnover and ensuring maximum feasible fuel economy
increases.
[Supplemental comemnt to testimony]
I. Fuel Economy Program Success Depends on Consumer Affordability and Acceptance
Several individuals and organizations presented testimony at the hearings suggesting that higher
fuel economy production mandates necessarily will result in consumers achieving net fuel
economy "savings," "pay backs," or "benefits". Such assertions ignore the fact that no such
"savings," pay-backs," or "benefits" are achieved unless, if, and until new vehicles covered by
the proposed mandates are actually bought and used. The follow key factors do not allow one
simply to assume that production mandates will equate to profitable retail sales:
1. The fundamentals of new vehicle financing.
2. The relative importance of fuel economy performance as a purchase criterion.
3. Consumer alternatives to high-priced new light-duty vehicles.
4. The degree to which high fuel prices undermine new vehicle affordability.
5. That any operational "savings" will vary depending on an individual's or households'
transportation profile. [NHTSA-2010-0131-0267-A1, p.2]
III. Fuel Economy is But One of Many Factors Consumers Consider When Purchasing New
Vehicles
When evaluating consumer behavior, the proposal understandably is fuel economy performance
focused. In reality, consumers interested in purchasing new vehicles consider a variety of factors.
Fuel economy performance may be high on their list, or it may not be there at all. Naturally,
when fuel economy performance enhancements involve no additional up-front costs or trade-
offs, they are readily accepted by the marketplace. Similarly, as demonstrated by the 2009 Cash-
for-Clunkers program, consumers readily accept enhanced fuel economy performance when
someone else pays for it. Unfortunately, the proposed fuel economy mandates involve
significantly higher up-front costs and/or vehicle performance trade-offs which no one but
consumers themselves must pay for. [NHTSA-2010-0131-0267-A1, p.3]
18-52
-------
Analysis of Estimated Costs, Economic and Other Impacts
NADA's written comments discussed how the overall new sales mix can vary significantly with
dramatic fuel price swings and with the general perception of where fuel prices are headed.
However, even when fuel prices are rising, fuel economy is rarely a high consumer priority.4
Since at least 2002, there has been an overall increase in new light-duty fleet fuel economy
paralleling a overall increase in real fuel prices (2008 being the exception), with fuel economy
standards serving as a back-stop. At the same time, consumers consistently have demonstrated a
limited willingness to "pay-up" for higher fuel economy performance. Contrary to the suggestion
of many including CFA6, Consumer Reports?, and others, it matters much less what consumers
say they will or might do, and much more what they actually do. [NHTSA-2010-0131-0267-A1,
p.3]
Actual consumer behavior with respect to "buying" fuel economy is perhaps no more evident
than with conventional hybrids. Offering significantly higher fuel economy performance versus
their conventional counterparts, hybrids typically are offered at significantly higher prices. To
date, hybrid sales have peaked at just above 2% of the new light-duty sales market, despite
strong interest from early adopters and car pool lane devotees. For many consumers, they simply
do not offer a sufficient total cost of ownership value proposition. [NHTSA-2010-0131-0267-
Al, pp.3-4]
IV. Consumers Unable to Afford or Unwilling to Pay Higher Prices Have Other Options
NHTSA and EPA recognize the existence of a "jalopy effect" that occurs when consumers face
higher priced vehicles they are unable or unwilling to pay for. This behavioral effect is a
cumulative measurement of the degree to which regulatory mandates that increase new vehicle
costs or decrease (compromise) new vehicle performance can cause consumers to turn to the
used vehicle marketplace, to hold on to their current vehicles longer (the service/repair
marketplace), or to seek transportation alternatives. The first two of these consumer choices, if
exercised, will inhibit fleet turnover and thereby eliminate regulatory benefits. Depending on the
transportation option selected, the third choice actually may result in measurable "benefits," but
not without significant negative economic costs. [NHTSA-2010-0131-0267-A1, p.4]
V. Higher Fuel Prices Can Create a Greater Interest in Fuel Economy Performance, But Also Act
To Reduce Vehicle Affordability
Consumer interest in fuel economy performance increases as fuel prices rise and when they are
expected to trend higher. At the same time, NHTSA and EPA cannot ignore that many
individuals and households are less able to afford a new (or new used) vehicle when higher
transportation expenses eat into their ability to muster a down payment. [NHTSA-2010-0131-
0267-A1, p.4]
15 Analysis of wholesale used vehicle transaction data show that demand reactions to significant
changes in gasoline prices between 2005 and 2011 vary significantly depending on media
reaction, the speed at which the price of gasoline changes, and other economic circumstances.
For example between February and July 2008, the price of gasoline (regular, national average)
18-53
-------
EPA Response to Comments
increased by $1.14/gal. At that time, approximately 70% of the price change for a given vehicle
relative to the market average can be explained by its MPG rating, equivalent to a 1.7% relative
price per MPG variation for a $1.00/gal. change in the price of gasoline. But when gasoline
increased by $0.97/gal. in 2007, consumer reaction was less distinct, with just 8% of the price
change for a given vehicle relative to the market average explained by its MPG rating, equivalent
to a 0.3% relative price per MPG variation for a $1.00/gal. change in the price of gasoline. Media
coverage played a role in the difference in these reactions, as coverage in 2008 was significantly
stronger than in 2007. For the 2008 events, a Google News search found approximately 21,700
gasoline price articles (an average of the total referencing 'Gas Prices' and the total referencing
'Gasoline Prices'), while a search for 2007 shows less than half that amount or 8,745.
4 Since 2005, AutoPacific has conducted a bi-monthly Internet survey designed to measure the
impact of fuel prices on consumer vehicle purchase decisions and driving behavior. This Fuel
Price Impact Study puts years of trend data to work to understand how consumers react to
fluctuating fuel prices and how the impact has changed over time. In April 2011, AutoPacific's
analysis revealed that, unlike in 2008, a run up in fuel prices from 2010 to 2011 did not drive the
market to smaller vehicles and that, while fuel economy improvements are of value in the
context of increasing fuel prices, the vehicle type and functionality is of greater importance.
Moreover, the run up in fuel prices did not cause a rush to hybrids, with only 21 percent of
surveyed consumers stating even a willingness to consider purchasing one. AutoPacific,
Americans Want Fuel Efficiency, Not Smaller Cars: No Wholesale Move to Small Cars, Even
With High Gas Prices (April 2011). To the extent that the MY 2012-2025 contemplates mix
shifting and downsizing as important compliance strategies, the AutoPacific analysis is
concerning. See, Knittel, Automobiles on Steroids: Product Attribute Trade-Offs and
Technological Progress in the Automobile Sector (July 2009). [NHTSA-2010-0131-0267-A1,
p.3]
Organization: National Caucus of Environmental Legislators
Strong standards maximize consumer savings at the pump. Under the 54.5mpg-by-2025 standard
that you recently proposed Americans would save nearly $45 billion at the gas pump annually by
2030, even after accounting for the cost of new technology. [EP A-HQ-OAR-2010-0799-9443-
Al,p. 1]
Organization: National Wildlife Federation (NWF)
These standards don't just deliver for America's outdoor heritage, but for consumers and the
economy
Consumers save big. The 2017-2025 proposed standards will save Americans half a trillion
dollars. That's tens of billions of dollars a year American families and businesses can spend at
home building jobs instead of overseas for oil. Families and businesses will save more than
$4,000 in the life-cycle cost of a car or truck, after accounting for the costs of more fuel-efficient
technology. [EPA-HQ-OAR-2010-0799-9887-A2, p. 3]
18-54
-------
Analysis of Estimated Costs, Economic and Other Impacts
What's more, many consumers will see saving the moment they drive off the lot. EPA and
NHTSA estimate that the gas savings from the more efficient vehicle will offset the additional
upfront cost of new technology in under 4 years. But this kind of payback assumes that drivers
pay for their vehicles in cash. In fact, most consumers finance their vehicles, and in that case,
many will see savings from day one, since the savings monthly on gas outpace the small added
finance charge from a modestly higher purchase price. 4 [EPA-HQ-OAR-2010-0799-9887-A2,
p. 3]
Put differently, for household budgets, doubling fuel economy is like cutting the price of
gasoline in half. For those concerned about cutting dependence on foreign oil and reducing pain
at the pump, the best place to drill for oil is under the hoods of our cars. [EPA-HQ-OAR-2010-
0799-9887-A2, p. 4]
These standards bring innovation and fuel savings to owners of all kinds of vehicles. For many
of our members, the outdoor traditions that mean most to them include getting together with
family and friends, loading gear into the truck and heading out hunting or fishing. Across the
country, communities and businesses that depend on outdoor recreation depend on these trips.
For those who rely on larger vehicles, high gas prices hit particularly hard, and achieving robust
fuel efficiency improvements is critical and welcome. [EPA-HQ-OAR-2010-0799-9887-A2, p.
4]
Fortunately, today's fuel economy standards don't just focus on cars, but ensure improvement
across all vehicle sizes and types to achieve an overall increase in fuel economy and reduction in
pollution. And innovation is delivering far better fuel efficiency together with improved power
and performance. This means not just financial savings but improved choices for
consumers. [EPA-HQ-OAR-2010-0799-9887-A2, p. 4]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 30-31.]
Today's new vehicles provide a case in point. In a report NWF released in August 2011, we
compared the fuel economy, power and performance options available to buyers of the 2011
Ford F-150 pickup truck against a 2005 model they might trade in. The F150 is America's
bestselling vehicle, and the 2011 model incorporated the EcoBoost engine and other innovations
that will be widely used to meet the new light duty standards. As shown in Figure 2 below, the
2011 F ISO's were more efficient while delivering greater horsepower and better torque, enabling
customers to achieve more than 25% increase in fuel economy while still gaining greater
performance. [Figure 2 can be found on p. 5 of Docket number EPA-HQ-OAR-2010-0799-
9887-A2] [EPA-HQ-OAR-2010-0799-9887-A2, p. 4]
Consumers have responded positively to the more fuel efficient models. The EcoBoost
turbocharged V6 model costs approximately $750 more than the comparable V8, but has sold
strongly accounting for more than 40% of total sales - and exceeding the company's sales
forecasts. 5 [EPA-HQ-OAR-2010-0799-9887-A2, p. 4]
18-55
-------
EPA Response to Comments
Consumer support for the most advanced vehicles is also growing. In a recent Consumer Reports
survey 56% of adult car buyers said they would "consider an electric or hybrid for their next
car". 8 Sales of plug-in hybrid electric vehicles and battery electric vehicles in 2011, while still
relatively modest, were easily comparable to the sales of the first hybrids in 2000 and 2001.
9 [EPA-HQ-OAR-2010-0799-9887-A2, p. 6]
There are many reasons for optimism regarding consumer acceptance of the most advanced
vehicles. Compared to most alternative fuels, infrastructure needs for electric vehicles -
especially PHEV's - are relatively modest. As early as this year, automakers will be offering a
wide range of alternatives to consumers on the hybrid/ PHEV/ BEV continuum - again providing
greatly enhanced powertrain options to consumers, along with other vehicle benefits. Utilities
and communities across the country are preparing to facilitate EV adoption, while technology
companies are preparing to capture the benefits of connecting vehicles to home and business
energy systems. [EPA-HQ-OAR-2010-0799-9887-A2, p. 6]
4 Ibid. We find similar "savings as soon as you drive of the lot" for buyers of super duty pickups
in our own analysis of the medium and heavy duty rule, in our report Trucks that Work at
http://www.nwf.Org/~/medi a/PDF s/Global-
Warming/Reports/NWF_TrucksThatWork_FINAL.ashx
5 http://blogs.wsj.com/drivers-seat/2011/10/13/ford-raises-sales-forecasts-for-ecoboost-f-
150s/?mod=google_news_blog
8 http://news.consumerreports.org/cars/2011/11/survey-car-owners-want-better-fuel-economy-
support-increasedstandards.html
9 http://www.torquenews.com/1075/overhyped-criticism-electric-car-charging-station-subsidies-
washington-post
Organization: Natural Resources Defense Council (NRDC)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 199-200.]
Consumers would have an additional $200 billion in their pockets to spend on the economy,
thanks to the fuel sipping vehicles.
Consumers win under this proposal because they have more choices of cleaner, fuel-efficient
offerings in the showroom. As the agencies' analysis shows, consumers will have net savings of
up to $4,400 over the life of their vehicle under the standard. Importantly, for most consumers
that finance their vehicles, the net savings will be brought home immediately.
18-56
-------
Analysis of Estimated Costs, Economic and Other Impacts
Under the standards the combination of fuel expenditures and new car payments will be lower in
the first month. By 2030 the aggregate national savings will provide the equivalent of an annual
tax rebate of $330 for every American household.
Consumers want cleaner, more fuel-efficient vehicles, and they are buying them. According to
data from the University of Michigan, the average fuel economy of new vehicles since data was
first collected in October 2007 has been increasing year over year.
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 70.]
Consumers will benefit from decreased vulnerability to fuel price volatility, and from the long-
term fuel cost savings it will more than offset the initial added vehicle costs necessary to meet
the standards.
Organization: Pennsylvania State Senate et al.
Under the 54.5mpg-by-2025 standard that you outlined in July, Americans would save over $80
billion at the gas pump annually by 2030. [EPA-HQ-OAR-2010-0799-9914-A1, p. 1]
Organization: Rafter, M.
They also make cars that no one wants to buy. [EPA-HQ-OAR-2010-0799-11587-A1, p. 1]
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
Enhancing Consumer Choice and Savings: Americans do not want to guzzle gas or waste billions
at the pump, and they want a range of vehicle choices that reflect that. Polls consistently show
that Americans support higher standards and are willing to pay more upfront for fuel-saving
technology in order to use less gas and spend much less money at the pump. [EPA-HQ-OAR-
2010-0799-9549-A2, p. 2]
A recent poll by Consumers Union finds that consumers are increasingly supporting stronger fuel
efficiency standards, and the driving force is the cost of gasoline.4 Many consumers are
considering more efficient vehicles, including advanced technology vehicles. Over half (56
percent) of respondents said they were considering an electric vehicle for their next vehicle, and
89 percent of consumers who are considering these vehicles cited lower fuel costs as the reason
for their choice. [EPA-HQ-OAR-2010-0799-9549-A2, p. 2]
The results of the Consumers Union poll are consistent with polling done by the Go60 campaign
in September of 2010. The September 2010 Mellman Poll released by the Go60 campaign found
that an overwhelming majority support significantly increasing vehicle standards, even when told
18-57
-------
EPA Response to Comments
it would add $3,000 to the price of a new vehicle. When respondents were informed that the
added cost of technology would be offset within four years by savings at the pump, 83% of
respondents expressed support for higher standards (67% strongly).5 [EPA-HQ-OAR-2010-
0799-9549-A2, p. 2]
It is crucial that the agencies not use inflated and arbitrary discount rates when considering
consumer benefits, such as the 25% and 50% discount rates considered in sensitivity analysis for
NHTSA's PRIA. Given the consequences of our oil addiction on our economy, environment,
national security and on consumer's individual pocketbooks, the full value of the savings and
benefits must be accounted for. [EPA-HQ-OAR-2010-0799-9549-A2, p. 3]
While the polling and recent study of Gen Y consumers supports consumer interest in fuel
efficiency and willingness to pay for the technologies that will reduce oil consumption and
emissions, the auto industry has, historically allowed new vehicle fuel consumption to stagnate
absent rising standards. This conclusion is supported by the recent study, Automobiles on
Steriods which concludes that between 1980 and 2006 (a period that includes increases due to
the original CAFE program) average gas mileage increased 15% and application of technologies
that could have significantly reduced fuel consumption went to support increased vehicle weight
and acceleration. 10 [EPA-HQ-OAR-2010-0799-9549-A2, p. 3]
The EPA and NHTSA both note that the proposed standards preserve consumer choice by basing
the standards on vehicle footprint. The fact is that these standards enhance consumer choice.
Consumers today already enjoy a full range of more efficient and less polluting vehicles. A new
analysis shows that new vehicles purchased last year "averaged a half-mile more per gallon than
those purchased in 2010, an improvement that saved $722 million at the gas pump, where
consumers bought 214 million fewer gallons of gas than a year earlier." [EPA-HQ-OAR-2010-
0799-9549-A2, p. 3]
This year, Automotive News included in its top 10 new things of 2011, Ford's Ecoboost engine
for its F150 trucks - the top selling vehicle in the country. Automotive News writes: "A year
ago, who would have guessed that Ford's F-150 pickup buyers would prefer an EcoBoost v-6 to
a traditional V-8." This shows that the technologies exist and automakers are putting them to
work to improve efficiency and reduce emissions, even in the largest pickup trucks, and that
consumers will buy cars and trucks that go further on a gallon of gas. [EPA-HQ-OAR-2010-
0799-9549-A2, p. 3]
A recent study by University of Michigan Transportation researchers found that all classes of
vehicles offered for sale in the U.S from 2008 to 2011 show improvements in fuel
economy. 12 [EPA-HQ-OAR-2010-0799-9549-A2, p. 3]
On average, compact cars' fuel economy increased 3.8 mpg to 25.6 mpg, and small pick ups
increased 0.4 mpg to 18.6 mpg. While this may not sound like much, the study indicates that
automakers are making more fuel efficient vehicles available across the board. Even with these
small gains consumers are now able to buy greater fuel efficiency without having to express it as
a preference. Absent standards, however, automakers cannot be relied upon to produce fuel
efficient vehicles. [EPA-HQ-OAR-2010-0799-9549-A2, p. 4]
18-58
-------
Analysis of Estimated Costs, Economic and Other Impacts
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 123-124.]
Consumers will save more than $3,500 at the pump even after paying for the fuel-saving
technology. Savings will be even greater if gas prices rise above current levels. According to
DOT and the EPA these standards will save our economy and consumers more than 311 to 421
billion dollars. These hundreds of billions of dollars will translate into new jobs.
Americans want choices in the vehicle market but they do not want to guzzle gas nor do they
want to waste billions at the pump. Americans consistently support higher standards and are
willing to pay more to save oil. We can now be confident that technology once used to make
vehicles more powerful will be used to improve fuel efficiency from improving the internal
combustion engine, better transmissions, high strength lightweight materials, and to hybrid and
plug-in vehicles.
The EPA and NHTSA both note the proposed standards preserve consumer choice. The fact is
that these standards enhance consumer choice. Consumers today already enjoy a full range of
more efficient and less polluting vehicles. The new analysis shows that new vehicles purchased
last year averaged a half mile more per gallon than those in 2010, an improvement that saved
$722 million at the gas pump where consumers bought 214 fewer billion gallons of gas than the
year earlier.
4 http://www.consumersunion.org/pub/core_other_issues/018227.html [EPA-HQ-OAR-2010-
0799-9549-A2, p. 2]
5 http://www.go60mpg.org/sites/default/themes/go60mpg/pdf/Voters-Support-Fuel-
Efficiency.pdf [EPA-HQ-OAR-2010-0799-9549-A2, p. 2]
7 http://www.autoremarketing.com/trends/deloitte-gen-y-may-end-gasoline-
domination#ixzzlk2QNjEZA [EPA-HQ-OAR-2010-0799-9549-A2, p. 3]
10 http://web.mit.edu/newsoffice/201 l/cars-on-steroids-0104.html [EPA-HQ-OAR-2010-0799-
9549-A2, p. 3]
12
http://www.autonews.com/apps/pbcs.dll/article?AID=/20120207/RETAIL01/120209843/1135 [
EPA-HQ-OAR-2010-0799-9549-A2, p. 3]
Organization: Slemp III, R. L.
Most people cannot or should not spend this much money on a new vehicle. A lot of bigger
vehicles are needed for business and bigger families. The average household will not get any
benefit from these vehicles. [EPA-HQ-OAR-2010-0799-6314-A1, p. 1]
18-59
-------
EPA Response to Comments
Organization: U.S. Coalition for Advanced Diesel Cars
Our comments below assert that technology neutral policies and consumer acceptance are the
only proven methods for the automotive industry to move forward with certainty and with the
flexibility to seek and strive for new innovations that will dramatically improve fuel economy
and reduce emissions. [NHTSA-2010-0131-0246-A1, p.l] [This statement also cross-referenced
with section 4]
Market acceptance is also critical to defining the best technology or portfolio of technologies
necessary to reach the targets set by government. Failure to adopt technology neutral policies and
reality-based vehicle ratings will undermine consumer choice and drive a systematic shortfall in
achieving the benefits promised by the new rulemaking. [NHTSA-2010-0131-0246-A1, p.2]
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 240-241.]
Predictions in the NPRM regarding consumer preference and driving habits within the NPRM
ignore current data and are inaccurate. The agencies need only look to their predictions for
500,000 electric vehicles to be sold for model years 2012-2016. [NHTSA-2010-0131-0246-A1,
pp.2-3]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 244-246.]
Current take rates for passenger HEV's clearly demonstrate consumer hesitance to invest in a
vehicle that, while it's fuel efficient on the test cycle, does not fulfill their driving needs. When
we refer to take rates, we're referring to the percentage of consumers who purchase an advanced
technology powertrain over a standard gasoline powertrain when the option exists on the same
vehicle.
From June 2010 to June 2011, the average take rate for HEV's was 5%. That means consumers
chose a standard gasoline engine over the HEV version of the same vehicle 95% of the time.
Comparing that to the take rate of the clean diesel technology over the same period, consumers
chose the diesel option over the standard gasoline version 39% of the time. While both
technologies offer comparable fuel savings over a standard gasoline vehicle, diesel technologies
lower purchase price, and greater functionality proved more attractive to consumers than the
HEV. The Coalition recognizes there are some popular vehicles such as the Toyota Prius that
only offer the HEV option, therefore, do not factor into that average take rate referenced above.
However, when provided the option, the vast majority of consumers are still choosing the
standard gasoline vehicles over HEV.
EPA and NHTSA do not show any market data to suggest consumers will treat full-sized HEV
pickup vehicle that, while it's fuel efficient on the test cycle, does not fulfill their driving needs.
When we refer to take rates, we're referring to the percentage of consumers who purchase an
advanced technology powertrain over a standard gasoline powertrain when the option exists on
the same vehicle.
18-60
-------
Analysis of Estimated Costs, Economic and Other Impacts
From June 2010 to June 2011, the average take rate for HEV's was 5%. That means consumers
chose a standard gasoline engine over the HEV version of the same vehicle 95% of the time.
Comparing that to the take rate of the clean diesel technology over the same period, consumers
chose the diesel option over the standard gasoline version 39% of the time. While both
technologies offer comparable fuel savings over a standard gasoline vehicle, diesel technologies
lower purchase price, and greater functionality proved more attractive to consumers than the
HEV. The Coalition recognizes there are some popular vehicles such as the Toyota Prius that
only offer the HEV option, therefore, do not factor into that average take rate referenced above.
However, when provided the option, the vast majority of consumers are still choosing the
standard gasoline vehicles over HEV.
EPA and NHTSA do not show any market data to suggest consumers will treat full-sized HEV
pickup trucks any differently. In fact, consumers have already displayed significant reluctance to
make an investment in a full-sized hybrid truck. In model year 2010, consumers showed the
GMC Sierra and Chevy Silverado hybrid .23% of the time preferring the gasoline option in more
than 99% of the cases. This amounts to 1165 hybrid models out of nearly 500,000 Sierra and
Silverados sold in 2010, yet the incentive assumes consumers will flock to this option.
Organization: Union of Concerned Scientists (UCS)
Consumer and Economic Benefits
According to UCS analysis, full implementation of the proposed 2017-2025 standards would
save consumers, cumulatively, $535 billion in avoided fuel expenses through 2030 - over $90
billion in 2030 alone. Even after paying for the additional cost of better technology, consumers
would see over $260 billion in net savings through 2030—over $50 billion in 2030 alone. [EPA-
HQ-OAR-2010-0799-9567-A2, p. 2]
And while the cost of clean car technology will lead to a modest increase in new vehicle price,
the average consumer will save money the moment they drive off the lot. Since most Americans
finance the purchase of a new vehicle (or lease it), the higher vehicle price is borne as a slightly
higher monthly loan payment, which is more than offset by avoided monthly fuel expenses.
Based on an average 5-year, 5% APR loan and the agencies' estimate that the most stringent
standards will increase the average vehicle price by approximately $2,000, a consumer's monthly
loan payment would increase by $36. However, the standards would save that consumer $81 per
month at the gas pump, assuming a price of $3.50 per gallon, resulting in a net monthly
consumer savings of $45.2 Further, the consumer will capture the entire value of fuel-savings
after the end of the loan period, resulting in even greater savings. [EPA-HQ-OAR-2010-0799-
9567-A2, p. 2]
Beyond the monetary benefits to consumers, these standards will provide greater choice in the
new and used vehicle markets. Currently, many consumers do not have meaningful options for
better fuel efficiency and lower emissions depending on vehicle class. For instance, consumers
interested in purchasing full-size minivans in today's marketplace have virtually no clean vehicle
options. If fully implemented, the 2017-2025 standards would ensure that automakers apply
18-61
-------
EPA Response to Comments
clean, fuel-efficient technology across the entire fleet of new vehicles for nearly the next decade
and a half. [EPA-HQ-OAR-2010-0799-9567-A2, p. 2]
(f) Discount Rates & Consumer Welfare
UCS supports the agencies' decision to continue the use of discount rates of 3 and 7% in the
proposed rule. As we have stated previously in both the MY2012-2016 rulemaking and our NOT
comments, these discount rates properly reflect realistic interest rates and opportunity costs
consumers face in the marketplace. [EPA-HQ-OAR-2010-0799-9567-A2, p. 12]
However, we are concerned that the proposed rule continues to include some debate about the
role of private benefits and potential loss in consumer welfare in assessing the total benefits and
costs of the program. In the proposed rule, EPA states that, "assuming full information, perfect
foresight, perfect competition, and financially rational consumers and producers, standard
economic theory suggests that normal market operations would have provided the private net
gains to consumers, and the only benefits of the rule would be due to external benefits." [EPA-
HQ-OAR-2010-0799-9567-A2, p. 12]
The problem is that none of these assumptions accurately reflect the automotive market or
consumer behavior. In the real world, we know that consumers cannot have full information and
perfect foresight. For example, EPA window stickers and the EPA Fuel Economy Guide note
that "Your Fuel Economy Will Vary." Further, despite having extensive modeling experience
and expertise, even the EIA has not accurately predicted gasoline prices - it is a stretch to think
that an individual consumer would have more certainty. Consumers also cannot predict future
traffic patterns, changes in job location and many other factors that will influence how much they
could save on gasoline from various vehicle choices. Consumers also have not had perfect
substitutes available in the market. The assertion that "financially savvy consumers could have
sought vehicles with improved fuel efficiency, and auto makers seeking those customers could
have offered them," indicates unfamiliarity with actual vehicle offerings and a misunderstanding
of the risk averseness of highly capitalized industries. [EPA-HQ-OAR-2010-0799-9567-A2, p.
12]
Consider the following example: In model year 2010, the fuel economy range of full-size
minivans spanned a mere two mpg, from 18 to 20 miles per gallon. To achieve higher fuel
economy, a consumer had one choice, a 23 mpg model that was smaller and less powerful than
the others on the market. While a consumer choosing the 20 mpg model instead of the 23 mpg
model does indicate that they place more value on the available size and performance than on the
benefit of a 3 mpg increase, it does not imply that they would experience a welfare loss should
they be given a 23 mpg vehicle with the same size and performance as the 20 mpg model. [EPA-
HQ-OAR-2010-0799-9567-A2, pp. 12-13]
Given this market reality, UCS is deeply concerned that NHTSA evaluated scenarios in the
proposed rule that would reduce consumer benefits by nearly 25 and 50%.37 This is an
unprecedented shift in evaluating the CAFE program and should not be included in the final rule.
Unless the agencies can demonstrate that consumers do not value one dollar in fuel savings as
being worth one dollar, this is pure conjecture based on economic theory that seeks to apply an
18-62
-------
Analysis of Estimated Costs, Economic and Other Impacts
ideal market model that does not comport with actual consumer experience in the
marketplace. [EPA-HQ-OAR-2010-0799-9567-A2, p. 13]
The agencies should continue including the full private benefits to consumers, using discount
rates that reflect market conditions, when calculating the total benefits of the program and should
not shift to a system that would include highly uncertain and idealized consumer choice models
in the benefits assessments. It was those same consumer choice models that led many companies
to dismiss hybrid-electric vehicles like the Prius, airbags, and many other innovations that have
seen significant market success. [EPA-HQ-OAR-2010-0799-9567-A2, p. 13]
Strong, cost-effective standards will provide consumers with a wider choice of cleaner and more
fuel efficient vehicles that save drivers money. In the absence of standards, market barriers
prevent drivers from realizing these savings, leaving drivers without the options they need to
respond to volatile and rising gasoline prices. Standards are the right policy approach given the
realities of this marketplace. [EPA-HQ-OAR-2010-0799-9713-A1, p. 2]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 217-223.]
Even after paying for the additional cost of better technology, consumers would still see over
$260 billion of that savings through 2030.
While the cost of clean car technology will lead to an increase in vehicle price, the average
consumer will save money the moment they drive off a lot.
Since most Americans finance the purchase of a new vehicle, the higher vehicle price is borne as
a slightly higher monthly loan payment, which is more than off-set by avoided monthly fuel
expenses.
The standards also strengthen our economy. By spending less on oil, consumers will have more
money to spend on goods and services that will create U.S. jobs.
Hence, the CAFE and GHG standards being discussed in this meeting appear to be necessary
from the consumer choice side; that the U.S. auto industry has been party to the setting of this
specific standards under discussion in the case; that the standards are feasible and not unduly
burdensome. Both sides of the auto market stand to benefit.
2 Analysis assumes on-road values of 22 mpg and 37 mpg, corresponding to unadjusted 2-cycle
fuel economies of 28 mpg and 50 mpg, respectively.
Organization: United Automobile Workers (UAW)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 24-25.]
18-63
-------
EPA Response to Comments
One obvious reason is that consumers are demanding more fuel-efficient vehicles, and meeting
that demand is an increasingly important part of the business. In an age of rising and volatile fuel
prices, American families want to save money on fuel.
Organization: Volkswagen Group of America
Customer shopping habits for cars is highly personal with individuals balancing competing needs
and wants against cost. For many people a car will amount to one of their most expensive
purchases ever in their lifetime. If an individual is not comfortable with the capabilities or
limitations of an advanced technology car, or if they fail to appreciate the long-term benefit, the
car will simply remain unsold. Advanced technology left on a dealer's lot provides no benefit to
the environment or return on investment to the company who leveraged capital to develop the
car.[EPA-HQ-OAR-2010-0799-9569-Al, p. 13]
Volkswagen applies technologies which we expect will offer consumers with a market
acceptable balance of performance and cost. Early adopters excited by the prospects of owning
the latest technology will be open to explore new advancements in their purchase decision.
However, for many mainstream consumers, the consideration of newer, more expensive, or
alternative technology may invoke another set of considerations. Some people may choose more
incremental gains of an evolved, but familiar technology, as opposed to jumping into something
completely new. [EPA-HQ-OAR-2010-0799-9569-A1, p. 13]
Volkswagen expressed some contrarian views with regards to projected estimates for future
technology adoption by consumers. This was even more evident in terms of comprehending
consumer demand for the longer 2022-2025 future timeframe. Volkswagen feels it is especially
difficult to confidently predict consumer behavior that far into the future. [EPA-HQ-OAR-2010-
0799-9569-A1, p. 13]
Organization: Volvo Car Corporation (VCC)
Regardless of the environmental imperatives, it remains difficult to assess what will motivate
tomorrow's consumers to actually purchase these highly advanced vehicles in requisite numbers,
both to achieve the desired environmental impact and to provide economies of scale. [EPA-HQ-
OAR-2010-0799-9551-A2, p.2]
Response:
Comments in this section relate to the effect of the rule on the range of choices available
to consumers, consumer acceptance of vehicles built in response to these standards, the use of
consumer vehicle choice models to estimate what vehicles consumers will buy, and the role of
fuel economy in consumer vehicle purchases (willingness to pay for fuel economy).
Effect of the Rule on Choices to Consumers
EPA agrees with all of these commenters that consumer acceptance of the new
technologies used to meet the standards is an important component of the program's success.
18-64
-------
Analysis of Estimated Costs, Economic and Other Impacts
These comments show a diversity of views on consumer response to the vehicles with
compliance technologies under these standards.
Some comments indicate that consumers are eager for more fuel-efficient vehicles, with
their resulting fuel savings, and the increased choices of technologies and fuel economies that
will result from this rule. These commenters find that consumers are willing to pay higher
vehicle prices to get greater fuel savings. Some note that consumers want improvements in fuel
economy in all vehicle categories, and the footprint-based standards encourage improvements
across all vehicle types.
Other comments indicate that consumers are not willing to pay the higher up-front costs
required for some of the technologies, especially electric vehicles. Some raise concerns over
consumer willingness to change to unfamiliar technologies, and cite low adoption levels of
hybrid vehicles as evidence of this reluctance. Others note that improving fuel economy comes
at the expense of other vehicle features, such as performance or size, because of technological
tradeoffs. Some comments suggest that consumer interest in fuel economy varies with the price
of gasoline.
EPA has sought to achieve the goals of reducing GHG emissions and improving
efficiency while maintaining safety and consumer choice. The use of the footprint-based
standard is intended to maintain the size distribution of vehicles in the fleet; downsizing is not
expected to be a compliance strategy. The engineering assessment is based on the costs of
adding GHG-reducing technologies while maintaining all other vehicle characteristics at their
current levels, with minor exceptions (such as electric vehicles where purchasers nonetheless
would knowingly accept limited vehicle range). See EPA RIA Chapter 1.3 explaining how the
agencies' methodology for evaluating cost and effectiveness of the various technology packages
preserves all existing vehicle utilities as part of the methodology. Thus, we reiterate that the
agencies' estimates of the estimated compliance costs of their respective rules include the costs
of preserving all the utilities found in the present-day fleet. This analysis thus demonstrates that
it is possible to improve efficiency without eliminating other vehicle attributes. That
improvement comes at a cost, but the value of the fuel savings is expected to exceed those costs
with a payback period of 3.2-3.4 years (see RIA Chapter 5.5) (for purchases in cash; there would
be immediate savings for purchases made under now-standard credit arrangements). As
discussed in Preamble III.H.I.a, by maintaining all other vehicle characteristics and utilities in its
cost estimates, EPA's cost estimates have accounted for tradeoffs with other vehicle
characteristics in the reference fleet. Those commenters (e.g., Edmunds.com, IER, and NADA)
that indicated that the rules would cause a reduction in vehicle utility - in essence that other
desirable features would be sacrificed as fuel economy improved - overlook that the agencies'
analyses reflect the costs of preserving all of those flexibilities. The agencies have consequently
reasonably concluded that nothing in these standards causes manufacturers to reduce vehicle
utility, or results in a situation where consumers no longer have access to some type of vehicle
attribute in the present fleet considered to be desirable. See preamble section II.C. We thus
disagree with IER that the benefit-cost analysis is fatally flawed because it "omits the cost to
consumers of limiting consumer choice." We discuss the (incorrect) assertion from NADA and
others that the rule "forces 7 million drivers out of the car market" in Preamble Section
III.H.ll.b and Section 18.7.1 of this Response to Comments.
18-65
-------
EPA Response to Comments
At the same time, notwithstanding that both agencies have demonstrated compliance
paths that are feasible at reasonable cost without any diminution of present vehicle attributes and
utility, the agencies are sensitive to the possibility that the standards may create incentives for
manufacturers to reduce utility. For example, as explained in sections II.CAaand III.D.6, the
agencies were sensitive about truck standards (curve shapes) and stringencies that would create
incentives to reduce towing and hauling utility as a compliance path for larger trucks, and also
sought to craft standards for which anticipated compliance paths are safety neutral.
The new standards may provide consumers with greater choices in vehicle technologies
and fuels, as automakers identify compliance approaches to these rules and may provide multiple
versions of models - for instance, the choice between a Ford F-150 with an 8-cylinder engine
and a Ford F-150 with a 6-cylinder Ecoboost engine, or hybrid and conventional models of the
same vehicle. Consumers then have the opportunity to respond in their purchase patterns.
Greater choices should generally improve consumer welfare.
EPA agrees that consumer interest in additional fuel economy in vehicles depends in part
on the price of fuel. Because the price of fuel fluctuates rapidly, the resulting varying level of
interest in fuel economy on the part of vehicle buyers can lead to problems for auto producers,
who need much more lead time to change production and technology levels on vehicles. For
instance, when gasoline prices rose suddenly in 2008, many vehicles with poor fuel economy
went unsold, and many vehicles with high fuel economy were in high demand. Improving fuel
economy reduces vulnerability to fuel price fluctuations; using a footprint-based standard
encourages improvements in fuel economy across the fleet, rather than in just some market
segments.
The low adoption of hybrids (to date) is not expected to be a good model of consumer
response to the technologies used to comply with these standards because we expect most of the
technologies used for compliance to involve smaller cost increases and less apparent changes
(except to fuel economy) than hybridizing a vehicle. On average, the GHG-reducing
technologies expected to be used will involve lower cost increases than strong hybrids. For
instance, though the Toyota Camry hybrid has an MSRP roughly $3,000 higher than the cost of a
conventional Camry, the average cost of achieving the MY 2025 standards under this rule is
about $1,800; in earlier years, those costs are lower. Other commenters (including Ford itself)
point out that Ford's EcoBoost engine in the Ford F-150 pickup is proving very popular: though
costing $750 more than the comparable V8, it is accounting for more than 40% of sales of those
trucks. For most vehicles, then, consumer response to the EcoBoost engine may be a more
appropriate model than consumer response to hybrids. Among other things, EPA's projected
compliance paths utilize the turbocharged downsized engine technology far more than strong
hybrid technology; see Preamble Tables 111-47 and III-51.
Consumer Acceptance of Vehicles from Fleets Achieving the Standards
EPA agrees that consumer acceptance of the new vehicles is very important for the
success of the program. Commenters show mixed responses: some state that consumers actively
want more fuel-efficient vehicles and will respond very positively to the program, while others
express concern that consumers may be hesitant about the new technologies and the costs
associated with them. We agree with the Alliance of Automobile Manufacturers that it is
18-66
-------
Analysis of Estimated Costs, Economic and Other Impacts
difficult to predict how consumers will respond to vehicles designed to comply with the
standards. We note that sales of vehicles subject to the MY 2012 GHG/CAFE standards have
been strong, though we acknowledge that some of the strong sales is due to improvement in
economic conditions relative to the low point of the recession. The midterm evaluation provides
an opportunity to evaluate the effects of GHG/fuel economy standards on the auto market.
Consumer Vehicle Choice Models
American Fuel and Petrochemical Manufacturers (AFPM) maintains that principles of
administrative law compel EPA first to develop a quantitative sales analysis including a vehicle
choice model, and to provide notice and opportunity for comment before adopting rules based
upon the results of such a model.54 The premise of its comment is that a quantitative sales
analysis based on the results of a consumer choice model is critical to the rule, and that such
critical information must be subject to notice and opportunity for comment before a rule can be
adopted. AFPM quotes language from the preamble to the proposed rule, which it attributes
(incorrectly) to EPA,55 in support of its premise. Id
AFPM's premise regarding the centrality of a quantified sales analysis based on
consumer vehicle choice models is mistaken. Consistent with CAA section 202 (a), the MYs
2017-2025 greenhouse gas standards for light duty vehicles are premised on the standards being
technically feasible at reasonable cost during the lead time provided by the rule. It is correct
that, for the GHG rule's objectives to be fulfilled, consumers will have to purchase the vehicles
with the added technology, and EPA has carefully considered that issue. Among the factors that
lead EPA to reasonably believe that the final standards will result in vehicles that consumers will
purchase are: a) the short payback period and net financial benefits to consumers due to fuel
savings; b) the auto industry's support for the standards (presumably the industry would not
support standards for vehicles which could not be sold); c) due to the footprint-based standards,
fuel economy and CO2 emission improvements will likely include the entire range of vehicle
footprints (see Preamble section II.C), meaning that there will be more efficient vehicles of every
type available for purchase; d) the agencies' costing methodology includes the cost of preserving
all vehicle utilities found in the present fleet (see, e.g. EPA RIA Chapter 1.3), meaning that
nothing in the GHG rule prevents consumers from purchasing the type of vehicle that best
satisfies their needs. None of these bases for EPA's belief that the rule establishes reasonable
and feasible standards depends on a quantified sales analysis (much less use of a consumer
vehicle choice model).
EPA in fact discussed U.S. vehicle sales impacts at proposal, indicating why the rule
could have a positive impact on vehicle sales. 76 FR at 75150-53. This analysis likewise
supports the reasonableness of the standards. A quantified sales analysis reflecting consumer
choice modeling is thus not critical to EPA's analysis.
54 These comments were addressed to NHTSA because, at the time, the D.C. Circuit had not yet ruled on
industry challenges to EPA's MYs 2012-2016 light duty vehicle standards. Since the time of the comment, the D.C.
Circuit rejected all challenges to that rule, as well as all challenges to EPA's endangerment finding and tailoring and
timing rules. Coalition for Responsible Regulation v. EPA, no. 09-1322 (D.C. Cir. June 26, 2012). Consequently,
EPA is considering these comments to be addressed to EPA as well as to NHTSA.
55 In fact, the quoted excerpt was a statement made exclusively by NHTSA.
18-67
-------
EPA Response to Comments
As discussed in Preamble Section III.H.l.a and RIA Chapter 8.1.2, EPA has done
extensive research on consumer vehicle choice models. A number of such models exist, but the
predictions from those models have rarely been evaluated against each other, or against actual
vehicle sales. As also discussed in those sections, EPA has been developing a consumer vehicle
choice model, with the goals of better understanding these models as well as the potential
impacts of our rules. Those sections explain that EPA does not consider the model to be ready
for use in regulatory analysis, in part because we have not had sufficient opportunity to evaluate
its performance for predicting impacts on vehicle markets. We also discuss the even greater
difficulties in predicting the effects of the rules on sales of advanced technology vehicles, such as
electric vehicles, in Preamble Section III.H. 1 .b and RIA Chapter 8.1.2.7. EPA thus disagrees
with American Fuels and Petroleum Manufacturers that using a vehicle choice model is
necessary, because it is not yet clear whether vehicle choice models can provide reasonable
predictions of the effects of this rule on vehicle sales, especially for advanced technology
vehicles.
In place of using vehicle choice models, EPA has provided a robust discussion of the
expected impacts of this rule on aggregate vehicle sales and on the factors that are important in
determining those impacts in Preamble Section III.H. 11 .a and RIA Chapter 8.1. As discussed
above, we believe that we can reach reasonable conclusions about the feasibility of the rule
without use of a vehicle choice model. Moreover, the discussion of these issues in the final rule
(see EPA RIA section 8.1.1) is very similar to the information and analysis on vehicle sales EPA
presented at proposal. See preamble section III.H. 11. Thus, no legitimate issues of adequacy of
notice and opportunity for comment arise. In any case, this analysis corroborates the information
and analysis on vehicle sales EPA presented at proposal. It has long been held that agencies' use
of such corroborative information does not necessitate giving further notice and opportunity for
public comment. Community Nutrition Inst. v. Block. 749 F. 2d 50, 57-58 (D.C. Cir. 1984);
Chemical Mfir's Ass'n v. EPA. 870 F. 2d 177, 202 (5th Cir. 1989 ); Time Warner Entertainment
v. FCC. 240 F. 3d 1126, 1140 (D.C. Cir. 2001); Chamber of Commerce of United States v. SEC.
443 F. 3d 890, 900-901 (D.C. Cir. 2006). Therefore, no such notice is required here.
The Energy Paradox and the Role of Fuel Economy in Consumer Vehicle Purchases
We agree with several of these commenters that, if our rule analyses are correct, standard
economic theory suggests that many of these fuel-saving technologies should be adopted in the
absence of the rule, and that it is puzzling that both consumer benefits and producer profits of the
magnitudes we estimate are left unadopted. In practice, though, many of these technologies have
existed but not been widely adopted. Preamble III.H. 1 .a. and RIA Section 8.1.2.6 discuss this
phenomenon, commonly called the energy paradox or efficiency gap, including the range of
hypotheses for its existence and the lack of definitive empirical evidence to explain the apparent
gap. The hypotheses mentioned by some reviewers, including uncertainty of future benefits, loss
aversion, irreversibility of investments, tradeoffs with other vehicle attributes, and the
"positional" nature of vehicles, are discussed in those sections.
On the role of uncertainty of future benefits and irreversibility of investments, we note
that high discount rates, attributed to investments in fuel economy being uncertain and
irreversible, are a symptom of the issue rather than an explanation. The implicit discount rates
found for many energy-saving technologies are far beyond any reasonable market rates. Left
18-68
-------
Analysis of Estimated Costs, Economic and Other Impacts
unexplained is why the discount rates are so high. We agree with ICCT that this rule may
change the reference point consumers use in considering additional technology, and that the rule
provides external benefits for energy security (discussed in Section 18.5 of this Response to
Comments) and climate change (see Section 16 of this Response to Comments). We
nevertheless use a different rationale (see below) for why these standards will increase consumer
welfare, by distinguishing between how consumers think of fuel savings when buying a vehicle
compared to their post-purchase experience.
The theory that consumers prefer other attributes to fuel economy, or are heterogeneous
in their taste for other attributes, does not solve the conundrum, because it is possible to have
both the existing vehicle attributes and additional fuel-saving technology. As noted above,
EPA's cost estimates include costs of preserving all vehicle utilities found in the present fleet, as
well as the costs of adding greenhouse gas emission control technologies. See e.g. RIA at p. 1-
40.) Thus, it is incorrect for the IER to say that markets operated efficiently if consumers chose
6-cylinder minivans over more efficient 4-cylinder minivans because they preferred greater
power to fuel savings; the conundrum is why 6-cylinder minivans in MY 2010 got 18-20 mpg,
when it was possible for them to get higher fuel economy with no loss of power and relatively
short payback periods.56 For the same reason, it is irrelevant to compare, as NADA does, an
increase in fuel economy worth $500 to a consumer with a reduction in power or safety valued at
$600; a more relevant comparison for the $500 value of fuel economy is the cost of the fuel
economy increase for a specified level of safety or power.
We disagree that our rule omits costs associated with limiting choice. As noted above,
the standards and analysis in this rule are based on maintaining the diversity of the vehicle fleet -
including all the utility of the vehicles comprising that fleet - and improving fuel efficiency
across the fleet. The commenters on this issue did not fully address the implications of the
agencies' cost methodology including the costs of preserving vehicle utilities found in the
existing fleet. If auto makers choose to change the range of vehicles offered, they would do so
only in response to market forces. The diversity of the fleet may increase, if auto makers add
alternative-fuel or advanced technology alternatives for existing vehicles to their fleets without
removing the conventional versions of these vehicles from their fleets.
We do not know how positionality and the bandwagon effect will affect the markets for
more fuel efficiency. If, as the Institute for Policy Integrity (IPI) suggests, greater fuel efficiency
starts to confer status for consumers, then acceptance of these more efficient vehicles should be
high. If less compensation is needed than the technology costs for consumers to accept these
vehicles, as IPI observes, then EPA has overstated the costs to consumers. We note this
possibility but are not able to estimate this effect. We also note that the footprint-based standard
is aimed to minimize the incentives for automakers to change their fleet size distribution purely
in response to the rule. As a result, we do not expect changes in the utility associated with the
positionality of autos unless what makes a vehicle confer status changes, a trend about which we
do not make predictions.
56 Indeed, in MY 2012 it is already possible to get a 6-speed minivan rated at 22 mpg.
www.fueleconomy.gov.
18-69
-------
EPA Response to Comments
We note that the commenters critical of EPA's use of the market value for fuel savings in
the benefit-cost analysis, including the Walton and Drake study57 included in the NADA and
Defour Group comments, do not provide comments disputing the reductions in fuel use predicted
by the proposed MY2017-2025 GHG and CAFE rule, but rather argue that these fuel savings are
not worth their market value to consumers. Here we find it important to distinguish between the
role of fuel economy in consumers' vehicle purchase decisions and the value of fuel savings that
they will receive once the new vehicles are purchased. It is possible that these amounts differ;
indeed, the "energy paradox" is defined as this gap between what consumers would "rationally"
consider and what they actually consider, as discussed in Preamble Section III.H.l.a. Because
reducing fuel consumption saves consumers money, a "rational economic actor" would take into
account the expected lifetime fuel savings that s/he would experience when deciding what
vehicle to buy.58 In reality, the role of fuel savings in consumer new vehicle purchases appears
to be poorly estimated statistically. A review of the literature finds tremendous variation in the
role of fuel economy in consumer purchase decisions.59 The Defour Group is incorrect, then,
when it claims that we "erroneously assume that auto buyers will be willing to pay for 100% of
their projected fuel economy gains." It is also incorrect to say that we "find that U.S auto buyers
will be willing to pay $6,000 per vehicle for standards achieving a combined 49.6 mpg in MY
2025." As discussed in Preamble Section III.H. 11 and RIA Chapter 8.1, EPA has in the past
used a five-year payback period in its vehicle sales analysis. This corresponds to 30 to 50% of
the expected future fuel savings resulting from these standards.
We note an internal inconsistency in the Walton and Drake study in their arguing both
that consumers are behaving fully rationally, and that consumers are not willing to pay the full
lifetime value of fuel savings in their vehicle purchase decisions. Economic studies that estimate
whether vehicle buyers consider fuel economy "rationally" do so by comparing the estimated
willingness to pay for additional fuel economy from their studies with estimates of the lifetime
fuel savings of vehicles.60 These calculations of lifetime fuel savings commonly draw on the
57 Walton, Thomas, and Dean Drake (2012). "Willingness to Pay for MY 2025 Fuel Economy Mandates:
Government Estimates vs. Economic Reality." Docket EPA-HQ-OAR-2010-0799-9575 and EPA-HQ-OAR-2010-
0799-9319.
58 Even if the buyer does not expect to own the vehicle for its full lifetime, more fuel-efficient vehicles
should be worth more than less fuel-efficient vehicles. Working papers by Allcott and Wozny, Busse et al., and
Sallee et al. find that a large portion (arguably all) of the expected future fuel savings of used vehicles is reflected in
their purchase prices. Allcott, H., and N. Wozny (2010). "Gasoline Prices, Fuel Economy, and the Energy
Paradox." Center for Energy and Environmental Policy Research Working Paper 10-003, Massachusetts Institute of
Technology (Docket EPA-HQ-OAR-2010-0799). Busse, M., C. Knittel, and F. Zettelmeyer (2010). "Pain at the
Pump: The Effect of Gasoline Prices on New and Used Automobile Markets," Working Paper, University of
California at Davis (Docket EPA-HQ-OAR-2010-0799). Sallee, I, S. West, and W. Fan (2010). "The Effect of
Gasoline Prices on the Demand for Fuel Economy in Used Vehicles: Empirical Evidence and Policy Implications,"
Working Paper Version 1.2, University of Chicago (Docket EPA-HQ-OAR-2010-0799).
59 Greene, D. (2010). "How Consumers Value Fuel Economy: A Literature Review." Office of
Transportation and Air Quality, U.S. Environmental Protection Agency, Report EPA-420-R-10-008 (Docket EPA-
HQ-OAR-2010-0799).
See, e.g., Allcott, H., and Nathan Wozny, July 2011. "Gasoline Prices, Fuel Economy, and the Energy Paradox."
Working paper, pp. 14-18 (Docket EPA-HQ-OAR-2010-0799); Busse, M., C. Knittel, and F. Zettlemeyer. May 2011.
"Pain at the Pump: The Effects of Gasoline Prices on New and Used Automobile Markets." Working paper, pp. 21-
22 (Docket EPA-HQ-OAR-2010-0799); Sallee, J., S. West, and W. Fan. May 2011. 'The Effect of Gasoline Prices on
18-70
-------
Analysis of Estimated Costs, Economic and Other Impacts
agencies' estimates of expected future driving and fuel economy and use methods similar to
those of the agencies. Thus, a claim that consumers are rational in their approach suggests that
EPA should assume that consumers take into consideration the lifetime fuel savings of more
efficient vehicles not only in its net benefits calculation, but also in any vehicle sales analysis.
As discussed above and in Preamble Section III.H.l and RIA Chapter 8.1.2.5, EPA instead finds
that the value of fuel savings that consumers consider in their buying decisions is likely to differ
from full lifetime fuel savings. The Walton and Drake study thus does not provide clear
guidance into how to consider consumer fuel savings in either the vehicle buying decision or the
benefit-cost analysis, because it asserts two claims that cannot both be true.
If there are two values for fuel economy - the expected future fuel savings over the
vehicle's lifetime, and the amount of fuel savings that consumers consider when buying a vehicle
- which value should be used in the benefit-cost analysis? Here, commenters differ, with ICCT,
Sierra Club et al., and UCS arguing for use of the expected value of future fuel savings, using
standard economic parameters including the discount rate, while CEI, the Defour Group, IER,
and NADA argue that this approach omits hidden costs or overstates benefits. IPI argues that
EPA's cost estimates are likely to overstate costs, but it does not speak specifically to the value
of fuel savings in the benefit-cost analysis.
EPA's principle for the benefit-cost analysis is to measure the actual expected impacts of
the policy and use standard economic parameters (including discount rates) to measure their
monetary value, because those are intended to measure the impacts projected to occur. Using
only the amount of fuel savings that consumers think about when buying vehicles is
inappropriate because it may not reflect actual fuel expenditure changes due to the rule.
Consumers are under no obligation to think "rationally" about fuel savings when buying
vehicles; indeed, they are not obligated to consider fuel economy at all. Similar principles apply
with discount rates: 3 and 7 percent discount rates represent the opportunity cost of capital to
consumers and producers in practice. As mentioned above, very high estimated discount rates
for fuel savings in consumer vehicle purchases are a symptom rather than an explanation of the
energy paradox. If the rule reduces the fuel consumption of the vehicles that consumers
purchase, though, EPA estimates the impacts expected of the rule based on the market
opportunity costs.
We note that the Walton and Drake study bases its argument that consumers are willing
to pay for 25 percent of fuel savings on a study of technology costs (Laboratory for Energy and
the Environment, On the Road in 2035: Reducing Transportation's Petroleum Consumption and
GHG Emissions, Massachusetts Institute of Technology, July 2008, pp. 61, 156-157). EPA
considers using technology costs an indirect approach at best to estimating consumer response,
and considers it more appropriate to use the substantial literature (see Greene, footnote 59)
specifically looking at consumer decisions on fuel economy. We thus find the 25 percent figure
to be derived from a source less relevant to the analysis than those that EPA uses. Walton and
Drake, in discussing Greene, state that "The most significant and widespread error - the very
same error that is inherent to the agencies' model of consumer choice - is that most of the studies
the Demand for Fuel Economy in Used Vehicles: Empirical Evidence and Policy Implications", Working paper, pp.
12-17 (Docket EPA-HQ-OAR-2010-0799).
18-71
-------
EPA Response to Comments
and surveys fail to account for tradeoffs between fuel economy and other vehicle attributes of
value to consumers - what the studies call 'fixed effects.'"61 This statement is incorrect. In the
studies that Greene reviews, virtually all of them account for other vehicle attributes. As noted
above, the agencies' costing methodology also prices in preservation of existing vehicle utilities.
We appreciate the effort in Walton and Drake to identify reasons that the existing studies of the
willingness to pay for fuel economy find varying results, although they do not provide a
recommendation resulting from this critique. We agree that a number of statistical issues arise in
estimating this parameter. This problem may not yet be solved. As a result, EPA has
approached the use of consumer vehicle choice models cautiously.
We agree that fuel economy changes are likely to influence consumers' vehicle purchase
decisions. We discuss the effects of this rule on vehicle sales in Preamble Section III.H.l 1 and
RIA Chapter 8.1.
On the cost side, we base our estimates on the best available engineering data, as
discussed in RIA Chapter 5. IER does not identify hidden costs of the rule; rather, it asserts that
they must exist. In Preamble III.H.l.a., EPA explains that holding all vehicle attributes other
than fuel economy and cost constant allows for direct measure of the welfare costs of the rule. If
a vehicle buyer were given an amount equal to the price increase resulting from this rule, she
could not be worse off than in the absence of the rule, because she would be able to buy her
originally chosen vehicle (though with improved fuel economy). If the vehicle price increases
by the same amount as technology cost, as would be expected in a perfectly competitive
market,62 giving her the technology cost fully compensates her for any losses that the rule might
impose; it is thus a measure of the full cost of the rule. The technology cost may actually
overstate the cost to her, because she may choose to buy a different vehicle and save some of the
compensation money for other purposes. IPI argues as well that the technology costs may
overstate the rule costs, if the chosen vehicle ends up conferring greater status that makes it more
attractive and thus needing less compensation. EPA agrees that this is a possible reason that
lower compensation might be required than the technology costs, but we do not have a basis to
say that more efficient vehicles will confer greater status in the future.
The Defour Group (Walton and Drake) cites the National Research Council (NRC) for its
claim that our cost estimates for this rule are too low. We note that the NRC cost estimates are
"for technologies that are commercially available and can be implemented within 5 years."63 We
thus consider the NRC report an inappropriate source for adjusting the cost estimates of this rule,
because the cost estimates are based on a much shorter lead time than is available under this rule.
Because we consider both the willingness to pay (see above) and cost adjustments used in the
61 The reference to fixed effects is puzzling: fixed effects are not tradeoffs, but rather dummy variables
used in regressions to account for discrete characteristics, such as vehicle type.
62 The auto market is not generally assumed to be perfectly competitive. In general, though, cost pass-
through is commonly less in imperfectly competitive markets. See discussion in Preamble Section III.H. 11 .a, and
Gron, Ann, and Deborah Swenson, 2000. "Cost Pass-Through in the U.S. Automobile Market," Review of
Economics and Statistics 82: 316-324 (Docket EPA-HQ-OAR-2010-0799-0675), who found significantly less than
full-cost pass-through in the auto industry.
63 National Research Council, 2011. Assessment of Fuel Economy Technologies for Light-Duty Vehicles.
Washington, D.C.: National Academies Press, p. S-l (Docket EPA-HQ-OAR-2010-0799).
18-72
-------
Analysis of Estimated Costs, Economic and Other Impacts
Walton and Drake study to be based on an inappropriate sources, we consider their net benefits
estimate of the rule of -$1,400 to -$2,900 to be fatally flawed. Their adjustment to the discount
rate is discussed above. Loan rates are discussed in TSD Chapter 4.2.13. Rebound rate is
discussed in Section 15.3.3 of this Response to Comments and TSD Chapter 4.2.5. Section 18.7
discusses the Defour and EIA estimates of the effects of this rule on vehicle sales. Preamble
Sectionlll.H.ll.aand Section 18.7 of this Response to Comments address the comments on
vehicle sales. Preamble Section III.H.12 and Section 18.8 of this Response to Comments address
the comments on employment. Preamble Section III.H.ll.b and Section 18.7.1 of this Response
to Comments address the comment on whether these standards are regressive.
Whether these technologies would be adopted in the absence of the rule is discussed in
Preamble Section III.D.l and in Section 12.1 of this Response to Comments. Walton and Drake
cite two studies that predict achievement of average fuel economy levels in future years below
the fuel economy levels of the rulemaking in the absence of regulation. EPA uses as its baseline
a 2008 based model fleet64 projected out to MY 2025 and meeting the MY 2016 GHG standards
in the absence of new standards; there are strong reasons for doing so, as explained in preamble
section HID. 1 .a. We agree that private market interactions may not provide the level of fuel
economy that would occur with the rulemaking. This lack of provision of fuel economy, with its
concomitant impacts on greenhouse gas emissions, is a motivation for the rule.
Comments from the National Automobile Dealers Association state that consumers
consider at most five years of fuel savings in their vehicle purchase decisions. As discussed in
Preamble Section III.H.5, the payback period for the new technologies EPA projects to be
needed in MY 2025 is 3.2-3.4 years (see RIA Chapter 5.5).
The assertion from the IER that the rule will drive an estimated 7 million drivers out of
the car market is erroneous in that it does not have any relationship to new vehicle purchasers or
to new vehicle sales. The analysis that produced this value is not based on households in the
market for new vehicles and thus includes many households who will not face direct effects of
this rule. This issue is discussed in Preamble Section III.H.ll.b. and in Section 18.7.1 of this
Response to Comments.
We agree that consumers can and do respond more quickly than automakers to changes in
fuel prices. Consumers can easily decide to buy different vehicles, but automakers need lead
times to redesign vehicles in response to market signals. Because the rule allows for great
diversity in the kinds of vehicles available to consumers - indeed, as discussed in Preamble
III.H.l.a, it may increase choices to consumers - consumers will continue to be able to choose
among a variety of vehicles, with improved fuel economy expected to be available in virtually all
vehicle classes.
Walton and Drake cite criticism of the survey results presented by Consumer Reports
(CR). The fundamental question is whether survey results are informative sources for public
policy. EPA's analysis of the net benefits of the rule does not rely on survey results of the
popularity of fuel economy standards. We note, though, that one criticism raised is that the CR
64 In an alternative analysis, EPA uses a 2010 based model fleet. See RIA chapter 10.
18-73
-------
EPA Response to Comments
polling does not ask questions in terms of tradeoffs. In fact, one CR question asked whether the
respondent agreed or disagreed with the statement, "I am willing to pay extra for a more fuel
efficient vehicle if I can recover the additional cost through lower fuel costs within 5 years,"
which identifies the opportunity costs. A total of 83 percent agreed, with 48 percent strongly
agreeing.65
Walton and Drake note that, when presented with the choice of using additional
technology to add fuel economy to an existing vehicle or making that existing vehicle larger with
constant fuel economy, people have chosen the larger vehicle. Their examples suggest that
consumers are likely to pursue additional fuel economy in various market segments: the larger
vehicles, after all, are more efficient than without the added technology. Because the rule seeks
to encourage additional fuel economy in all vehicle segments, the commenter's argument here
appears to support the structure of the rule. The agencies seek to maintain the range of vehicle
choices currently available to consumers, but with additional fuel savings across the entire range
of vehicle footprints (i.e., to all market segments. For any level of fuel economy, additional
power or other vehicle characteristics can be achieved by adding more technology. The rule
does not restrict these possibilities.
The Walton and Drake study discusses several papers in seeking to bolster its argument
that fuel economy standards impose significant welfare losses. These studies all use older
estimates of technology and fuel costs than those used in this rule. Several of them focus on the
use of a gasoline tax compared to fuel economy standards. EPA does not tax gasoline. In
economic theory, a gasoline tax may have a number of advantages relative to standards, as these
papers discuss. Because EPA does not tax gasoline, though, the relative merits of GHG
standards versus a tax are not relevant to the MYs 2017-2025 standards. We note, though, that
the studies cited66 note reasons that increased fuel economy standards may be desirable policies
in the absence of gasoline taxes. Fischer et al. note that regulation may promote the development
of fuel-saving technologies with significant social returns (p. 25). The Congressional Budget
Office study states, "If [consumers do not receive adequate information about the fuel savings
offered by different vehicles and do not correctly value those savings], then the advantages of an
increase in CAFE standards could be greater than assumed here" (p. 4). Parry et al. state that
"using standards to cut fuel use by 5 percent under a standard value for CO2 damages is
warranted only if consumers fail to internalize 44 percent of the savings from higher fuel
economy" (p. 3). Five years of fuel savings for MY 2025 vehicles, the amount NAD A states as
an upper limit on how much consumers consider in their vehicle purchases, is approximately 30-
50% percent (depending on the discount rate) of the lifetime fuel savings; in other words, under
that assumption, consumers fail to consider 50-70% of fuel savings. Using a 5-year or less
payback period for vehicle sales purchases, as NADA suggests, may thus mean consumers are
65 Consumer Reports National Research Center. November 2011. "Consumer Reports Fuel Economy
Poll." CU Project #2012.51, p. 22 (Docket EPA-HQ-OAR-2010-0799).
66 Fischer, Carolyn, Winston Harrington, and Ian Parry (2007). "Should Automobile Fuel Economy
Standards be Tightened?" Energy Journal 28(4): 1-29 (Docket EPA-HQ-OAR-2010-0799); Congressional Budget
Office, Fuel Economy Standards Versus a Gasoline Tax, March 9, 2004 (Docket EPA-HQ-OAR-2010-0799); Parry,
Ian W. H., David Evans, and Wallace E. Gates (2010). "Are Energy Efficiency Standards Justified?" Resources for
the Future Discussion Paper RFF DP 10-59, http://www.rff.org/RFF/Documents/RFF-DP-10-59.pdf (Docket EPA-
HQ-OAR-2010-0799).
18-74
-------
Analysis of Estimated Costs, Economic and Other Impacts
likely to "fail to internalize [more than] 44 percent of the savings from fuel economy" - the
circumstance under which Parry et al. state that such standards are warranted.
Miscellaneous and Addressed Elsewhere
Fuel Savings to Consumers and Energy Shocks
EPA agrees with commenters that the rule will provide substantial fuel savings for
consumers and will reduce vulnerability to shocks in international oil prices. The energy
security impacts of the rule are discussed in Preamble Section III.H.8 and in Section 18.5 of this
Response to Comments.
Impacts of the Rule on Employment
The impacts of this rule on employment in the U.S. are discussed in Preamble Section
III.H.12 and RIA Chapter 8.2. We agree that developing and implementing the new technologies
will require additional employment. As discussed in Preamble III.H.l 1 and III.H.12,
employment would increase even more if there are increases in vehicle sales (though we do not
quantify vehicle sales impacts). We are not able to predict how employment will change due to
changing labor intensity of the new technologies; our analysis of employment in the auto sector
is thus partial. The total effects of this rule on employment in the U.S. overall are even more
difficult to predict. The effect of a rule on total employment in the U.S. depends heavily on the
overall macroeconomic conditions of the country. When the economy is at or near full
employment, the primary effect of this rule will be to reallocate workers among sectors, rather
than to create or reduce employment; when the economy has substantial unemployment, the rule
may have an impact on total employment, through its effects on the auto market, on auto
suppliers and other related sectors, on fuel suppliers, and on consumer expenditure patterns.
Continuing Federal Programs for Retooling in the Auto Industry
Providing continuing federal programs to support retooling in the auto industry is beyond
the scope of EPA authority.
Multiple measures of MPG
We do not understand Edmunds.corn's comment on the "multiple measures of MPG that
have emerged from the rule-making process." This rule does not change the information
provided to consumers about mpg.
18.2. Analysis of Costs Associated with the Vehicle Standards
Organizations Included in this Section
American Fuel and Petrochemical Manufacturers (AFPM)
Clean Fuels Development Coalition (CDFC)
Growth Energy
Haroldson, C.
International Council on Clean Transportation (ICCT)
18-75
-------
EPA Response to Comments
Jackson, F.W.
Knapp, B.
Lipetzky, P.
Marshall, C.
National Association of Clean Air Agencies (NACAA)
National Automobile Dealers Association (NADA)
Natural Resources Defense Council (NRDC)
Pennsylvania Department of Environmental Protection
Ross, D.
Smith, Frank Houston
Tarazevich, Yegor
Van Voorhies, M.
Volkswagen Group of America
Organization: American Fuel and Petrochemical Manufacturers (AFPM)
Vehicle Electrification Impacts [EPA-HQ-OAR-2010-0799-9485-A1, p.6]
Recharging during peak hours could increase peak electricity demand. For example, this could
happen if many consumers in an area recharge their plug-in vehicle simultaneously in the early
evening of a weekday after returning home from work. It could be necessary to restrict
recharging to late-night off-peak hours and this could adversely impact the market penetration of
EVs. These potential impacts must be analyzed by the agency and presented for comment.
Moreover, if electrification requires additional fossil fuel-generated electricity (whether peak or
off-peak), then these technologies will not deliver substantial carbon reductions. The proposed
rule does not properly analyze these potential impacts, making it impossible to provide
meaningful comment upon the agency's estimates of GHG reductions. [EPA-HQ-OAR-2010-
0799-9485-A1, p.6]
The agency states that "The analysis in this [EPA/NHTSA] proposal assumes that the consumer
market is sufficient to absorb the expected number of EVs without subsidies." 76 Federal
Register 75118 This assumption is unrealistic. [EPA-HQ-OAR-2010-0799-9485-A1, p.6]
The National Research Council (NRC) analyzed PHEVs and concluded the following: [EPA-
HQ-OAR-2010-0799-9485-A1, p.6]
PHEVs will recoup some of their incremental cost, because a mile driven on electricity will be
cheaper than a mile on gasoline, but it is likely to be several decades before lifetime fuel savings
start to balance the higher first cost of the vehicles. Subsidies of tens to hundreds of billions of
dollars will be needed for the transition to cost-effectiveness. Higher oil prices or rapid
reductions in battery costs could reduce the time and subsidies required to attain cost-
effectiveness.11 [EPA-HQ-OAR-2010-0799-9485-A1, p.6]
This NRC committee's realistic assessment is ignored in this rulemaking. The agency must
consider these real world implications in assessing the costs and benefits of this rulemaking.
[EPA-HQ-OAR-2010-0799-9485-Al,p.7]
18-76
-------
Analysis of Estimated Costs, Economic and Other Impacts
11 - "Transitions to Alternative transportation Technologies—Plug-In Hybrid Electric Vehicles,
"2010, p. 33
Organization: Defour Group LLC
The government and automotive industry are engaged in an ambitious program to raise the fuel
economy of today's new vehicle fleet to 49.6 mpg by 2025. This program is primarily embodied
in two rulemakings: one for model years 2012 - 2016 and the rulemaking covered in this NPRM
from model years 2017 - 2025. Taken together, these rulemakings represent what may well be
the most expensive government-mandated program in automotive history. As such, it is essential
that the cost of this program be estimated using the best information available. Unfortunately, in
both this rulemaking and the previous one, the agencies involved have deviated from using
mainstream economic assumptions to estimate costs in favor of new and unorthodox
methodologies. [EPA-HQ-OAR-2010-0799-9319-Al, p. i]
Attached to this letter and incorporated in our official comments by reference is a study by Dr.
Thomas Walton detailing our concerns with the economic assumptions made in this rulemaking.
Dr. Walton is uniquely qualified to perform this study. Academically, he holds a BA in
Economics from the University of Missouri, Columbia and a Ph.D. in Economics from the
University of California at Los Angeles. He has extensive experience within government, having
served as Special Advisor for Regulatory Affairs, United States Federal Trade Commission and
is a former Vice Chair of the Business Research Advisory Council to the United States Bureau of
Labor Statistics. He has 24 years of experience within the automotive industry as Director of
Economic Policy Analysis for General Motors. [EPA-HQ-OAR-2010-0799-9319-A1, p. i]
It is more important now than ever that government agencies use the best accounting procedures
to estimate costs. Historically, government cost estimates were one of many independent cost
estimates: today, the government is either directly or indirectly involved in every major effort to
estimate the cost of this rulemaking. Government cost estimates are now used both within and
outside of government to guide regulatory and investment decisions. [EPA-HQ-OAR-2010-
0799-9319-A1, p. ii]
If the government estimates of costs are too low, then the automotive industry may well find
itself in the position of producing vehicles that consumers are unwilling to purchase. This could
have profound impacts on the U.S. economy. Preliminary analysis by the Defour Group of the
cost of this program indicate that consumer demand for fuel economy, which is primarily driven
by fuel prices, may wane well before the 2017 model year. If our conclusions are correct, the
automotive industry could find that the market for more fuel efficient vehicles will disappear
before these standards are due to be implemented. Without additional policies in place to
enhance consumer willingness to pay, sales and employment will be adversely impacted. [EPA-
HQ-OAR-2010-0799-9319-A1, p. ii]
18-77
-------
EPA Response to Comments
In conclusion, we urge the agencies to re-estimate the costs of this program using the most
mainstream and conservative accounting methodology available. [EPA-HQ-OAR-2010-0799-
9319-Al,p. ii]
Organization: Growth Energy
Attachment 1 [pp. 7-15 of Docket number EP A-HQ-OAR-2010-0799-9505-A1] to this letter
explains why Growth Energy believes that the analyses supporting the Joint NPRM's electric
vehicle cost estimates are not reliable. Under the applicable Executive Orders governing cost-
benefit analyses, we believe that the Agencies need to reconsider and revise the current cost-
benefit analyses. In addition, given the significant under-estimation of electric vehicle costs in
the Joint NPRM's current analysis, Growth Energy questions whether EPA and NHTSA can
properly determine that proposed standards are economically practicable and take proper account
of the state of technology, as required by the governing statutes. If EPA and NHTSA believe that
those methods of estimating the market impacts of regulatory programs that rely upon or require
electric vehicles are inadequate or unnecessary, the Agencies should explain why. [EPA-HQ-
OAR-2010-0799-9505-A1, p. 2]
Organization: Haroldson, C.
The proposed standards will either make all new vehicles too expensive to purchase or the
vehicles will necessarily become too small to be safe to drive. Instead, let's increase our
domestic drilling for oil and reduce our dependence on foreign oil. [EPA-HQ-OAR-2010-0799-
11137-Al,p. 1]
Organization: International Council on Clean Transportation (ICCT)
5. While the 2011 NAS Report was well done, it specifically stated that only current and near
term technologies and costs were analyzed. Thus, the sensitivity analysis using the 2011 NAS
Report benefits and costs is inappropriate and should be removed from the Final Rule. [EPA-
HQ-OAR-2010-0799-9512-A1, p. 3]
5) Sensitivity Case using the 2011 NAS Report Benefits and Costs
NHTSA included a sensitivity case using costs and effectiveness from the 2011 NAS Report.
This sensitivity run increases vehicle cost by 40 to 50 percent, adding about $800 to the per
vehicle cost. [EPA-HQ-OAR-2010-0799-9512-A1, p. 17]
It is inappropriate to use the 2011 NAS Report technologies and technology benefits and costs
for 2017 to 2025 efficiency regulations. While the 2011 NAS Report is an excellent report, it
makes several explicit statements constraining the applicability of its technology and cost data to
the very near term, e.g.: [EPA-HQ-OAR-2010-0799-9512-A1, p. 17]
Tables S-l and S-2 show the committee's estimates of fuel consumption benefits and costs for
technologies that are commercially available and can be implemented within 5 years. The cost
18-78
-------
Analysis of Estimated Costs, Economic and Other Impacts
estimates represent estimates for the current (2009/2010) time period to about 5 years in the
future.' [NA5 report page S-l] [EPA-HQ-OAR-2010-0799-9512-A1, p. 17]
'Again, except where indicated otherwise, the cost estimates provided are based on current
conditions and do not attempt to estimate economic conditions and hence predict prices 5, 10, or
15 years into the future.' [NA5 report page S-6] [EPA-HQ-OAR-2010-0799-9512-A1, p. 17]
The cost estimates represent estimates for the current (2009/2010) time period to about 5 years
in the future,' [NAS report page 9-8] [EPA-HQ-OAR-2010-0799-9512-A1, p. 17]
While sensitivity analyses can illuminate the impacts of important uncertainties, in this case the
2011 NAS Report expressly states that it is not applicable to the period considered by the
proposed rule. In addition, as noted in our comments in section 1, above, the technology benefit
and costs in the proposed rule are conservative and overstate the costs of the rule, not understate
them. [EPA-HQ-OAR-2010-0799-9512-Al,p. 18]
Organization: Jackson, F.W.
'Faulty' analyses used to create more favorable values: 1. Points to limited areas to make a point
without also pointing out complete impact, Le., at National level, 2. Poor competition selected to
compare against instead of showing all possibilities and comparing against the best, 3. Using a
reference case while 'flexibility' in the law allows far more expensive and less beneficial cases to
be selected by profit motivated manufacturers. [EPA-HQ-OAR-2010-0799-8041-A1, p. 1]
So starting with EPA's vehicle lifetime average mileage of 161,851 (cars) & 190,030 (trucks &
MPVs) miles and 201635.5 mpgge vs. 2025 54.5 mpgge EPA proposal mix, I calc (assuming
gasoline pre taxes at $3.00 per gallon fuel only at pump discounted 20% because it is spread out
over many years to reflect the cost as at 2025 to with interest pay for the fuel) fuel savings at
$4,333 less $ 1946 added vehicle cost reduces savings to $ 2,387 over the vehicles lifetime.
Include taxes based on purchase price and claimed savings are further reduced. And this is
against the 2016 35.5 mpgge, i.e., not the best competition; improve the competition, e.g. My
Max technologies ICEs vs. EPA Proposal fleet I calc Max ICEs at $4,785 ($ 7,178 with assumed
pass throughs) less over the vehicle lifetime. And vs. 36 Bgal corn ethanol 2025 proposal fleet $
8,004 and $ 12,006 (with pass throughs) less. [EPA-HQ-OAR-2010-0799-8041-A1, p. 2]
6. to account for Business/Govt pass throughs, i.e., inflation/taxes (very significant, albeit not
included in most of my data), e.g., assuming for every consumer vehicle lifetime cost
business+Govt also have some added cost then the delta cost (all factors included) would be an
increase to consumers/taxpayers. For my analyses I assumed a 50 % pass throughs
increase/decrease. [EPA-HQ-OAR-2010-0799-8041-A1, p. 2]
Taking all the above into effect and using ref 2 (tables 3.8-23 thru 25) proposal fleet here is what
I calc for the 2025 proposal fleet VS. 2025 54.5 mpgge fleet:
EPA proposed fleet vs. 2025 new fleet (54.5 ave mpgge), both using gasoline liquid fuel; system
lifetime cost up $174 ($ 261 with my assumed Govt/Business pass throughs), lifetime gCO2/mile
18-79
-------
EPA Response to Comments
up 14 g/mile. The EPA Proposal fleet has 2.8 % BEVs and 0 % PHEVs. [EP A-HQ-OAR-2010-
0799-8041-A1, p. 3]
Conclusion: when all factors fully and properly counted my calc indicates 2025 new fleet
lifetime cost due to all Govt actions up, i.e., not down as shown in articles & references! [EPA-
HQ-OAR-2010-0799-8041-A1, p. 3]
So while EPA picks and chooses assumptions & methods & credits & multipliers to arrive at
'make believe' savings my analyses yield: the cost to consumers & taxpayers is exceedingly high.
And this is when EPA's proposed mix is used and as another 'mix' with increased % of more
expensive Plug-ins, e.g., see EPRI mix, that allow more 'guzzlers' I would expect the numbers to
get even worse! Also while EPA factors in a strong 2025 EV learning (which I have not factored
in), it is also true EPA proposed 2025 fleet has very few Plug-ins so I would not expect a
significant cost 'swing' from electrical equipment 'learning' with only minor plug-in
penetration. [EPA-HQ-OAR-2010-0799-8041-A1, p. 3]
Summary table of my evaluated 'mix's; 2025 57.4 % cars, 42.6 % Trucks & MPVs: [See table on
pp. 3-4 of Docket number EPA-HQ-OAR-2010-0799-8041-A1] [EPA-HQ-OAR-2010-0799-
8041-Al,p. 3]
Note: above numbers for EPA & EPRI vehicles include allowed increase in 'guzzlers' that I
believe should be added to numbers for allowing them. Other above table numbers do not
include 'guzzler' impact as while Govt plan is to allow them, I would not plan to allow them.
[EPA-HQ-OAR-2010-0799-8041-A1, p. 4]
Bundling obscures individual vehicle impacts: pretty clear, at National level, plug-ins
exceedingly more expensive than ICEs and HEVs; they are also less efficient in fossil BTUs and
produce far more National CO2! Expect EPA knows this, hence very limited penetration in EPA
defined 2025 proposal fleet (zero penetration in my Mid and Max). E.g, if in the EPA proposal
case with the 36 billion gallons of corn ethanol the HEVs were PHEVs instead, I calc, with
assumed pass throughs, the consumer & taxpayer added cost per vehicle at $ 11,745. [EPA-HQ-
OAR-2010-0799-8041-A1, p. 4]
Question: with such poor performance and minor PHEV & BEV penetration EPA proposal &
reference cases why is Govt promoting and subsidizing plug-ins?? Could it be the only way to
get Industry to go along with 54.5 mpgge target is if they have a path to continue highly
profitable 'guzzlers'; e.g., if 54.5 average gge is target and for every 101 mpgge vehicle BEV
they are able to build 1.5 23.5 mpgge 'guzzlers'. Bummer, Govt borrows money to subsidize
BEVs so industry can build 'guzzlers'; taxes & inflation & deficit all up as is system CO2 and
fossil fuel btus! Looks more to me like a 'guzzler protection ace than reducing overall cost, oil
and CO2 greenhouse gas. More specifically, a 101 mpg BEV may not reduce gasoline demand
because it could allow 1.5 23.6 mpgg vehicles instead of 1.5 54.5 mpgg, or 1.5 23.6 mpgg
vehicles requires 6.36 gg for 150 miles traveled vs. 2.75 gg for 1.554.5 mpgg, a net increase of
3.61 gg which when I credit to the BEV (for allowing the 'guzzlers') I calc reality a 101 mpgge
BEV could be 29.4 mpgge when all it's possible National results duly credited! And if Govt
allows a 2 multiplier the mpgge 29.4 would drop to 17.2 mpgge Bundling a few BEVs &
18-80
-------
Analysis of Estimated Costs, Economic and Other Impacts
'guzzlers' with other vehicles can obscure impact and changing the mix of other vehicles from
ICEs to HEVs and/or improved technologies can obscure totally, even show improvement!
[EPA-HQ-OAR-2010-0799-8041-A1, p. 4]
Additional relevant comments: [EPA-HQ-OAR-2010-0799-8041-A1, p. 6]
Nation needs much more efficient for Nation energy and money and CO2 products. I also
recognize car companies are a business and have to watch their bottom lines; and I understand
their desire to minimize investment, minimize risk and maximize return and early. So to me the
answer is for Govt to get involved big time (a Manhattan Project) so development is supported,
risk is protected and prices held down by Govt support. After all how do we get the tanks and
planes the Nation's military needs, the Govt funds the development and risk and buys the
products. Why not use same approach with some mods, e.g., for all Govt vehicle, light and heavy
duty, procurements spec vehicles at what the Nation needs and a subsidy for non Govt vehicles
based on actual gasoline/Diesel powered real mpg, i.e., higher mpg, higher subsidy, e.g., for
Light Duty vehicles costing less than 20 $K then sliding scale to 30$k and over $ 30 $K they
should be expected to 'pay their own way' to get the vehicles the Nation needs? As a discussion
starting point for Light Duty vehicles I'd suggest Govt offer a $ 250 subsidy for each non Govt
Light Duty system mpgge a vehicle gets above that years new vehicle target mpg (I'd even
consider adjusting the subsidy up or down based on driver's historical miles per year); and with
2013 target set at 33 mpgge, 2015 at 38, 2018 at 50, 2020 and after at 75mpgge and by 2020
project future dates for more than 75 mpgge (system). The subsidies to be paid for as much as
practical as used, i.e., at purchase not a delayed tax rebate, with 'real' today's money; and to
benefit from Govt program businesses cannot also engage in counterproductive actions like
promoting 'guzzlers' because they are more profitable per vehicle produced and businesses have
to show, commit to and get approval by Govt a plan (research, development and production)
with measurable by Govt 'benchmarks' and progress reviews. And Govt doesn't have to give
money away, i.e., any Govt monies can be repayable loans or stock of equivalent value. And if
Congress fails to provide necessary Law for private sector make sure info is clearly articulated,
and current Law permitting, consider Govt to sell Govt Spec vehicles to Public and/or Govt buy
excess vehicles for resale to Public or Govt require mfgrs to offer Govt equivalent vehicles to
Public or update Govt fleet sooner so more resale vehicles are offered to Public. And the Press
needs to do and report full & accurate information based on thorough investigative reporting by
qualified & objective individuals. [EPA-HQ-OAR-2010-0799-8041-A1, pp. 6-7]
This leaves where does the money come from, how about 'scooping' up other monies of lesser or
no equivalent value to Nation's wellbeing: No corn ethanol subsidies and no ethanol mandates,
no plug-in subsidies, bump up the gas tax, 'guzzler' tax for individual vehicles not meeting target
(e.g., $ 250, or more, for each total to Nation "fossil fuel' gpmgge over target), reduce vehicle
emissions testing to minimum based on actual statistical need for most cost-effective necessary
plan, no NASA Mars mission (this money and the technical talent can do far more for solving
Nation's problems than an interesting venture that doesn't improve citizens lifestyles here on
earth), 'capture' some of consumers savings (with hard facts to show savings; e.g., savings per
vehicle mile with my Mid or Max technology plan vs. Govt & Industry E36 'smoke and mirrors'
54.5 mpgg plan and longer lasting vehicles to lower purchase cents/mile); Govt & Industry plan
18-81
-------
EPA Response to Comments
cost per mile up big time when 'honest' analyses used. Put Nation's resources to use where it
benefits the Nation & all citizens the most. [EPA-HQ-OAR-2010-0799-8041-A1, p. 7]
2. EPA Draft Regulatory Impact Analysis 'Proposed Rulemaking for 2017-2025 Light-Duty
Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards'
EPA-420-D-11-004 November 2011
Organization: Knapp, B.
With our economy remaining is a severe slump, this is no time to increase the cost of a vehicle.
[EPA-HQ-OAR-2010-0799-8255-A1, p. 1]
Organization: Lipetzky, P.
This will only lead to higher fuel and vehicle cost and in the end will amount to the same. [EPA-
HQ-OAR-2010-0799-8184-A1, p. 1]
Organization: Marshall, C
Historically, there have been two topics of pushback by those who would oppose this standard.
[EPA-HQ-OAR-2010-0799-5917-A2, p. 1]
Regarding increased costs, my hunch is that the greater than $2K in the added cost of new cars is
a worst-case analysis. As a contractor for both EPA and OSHA in rulemaking matters, there
were reasons that cost estimates for compliance tended to be higher than what happened in
reality under a regulation. We couldn't easily take into account control cost savings that were
expected because of innovation. I suggest putting further thought into finding methods of
affordability for people to pay for the incremental capital costs of vehicles. Perhaps an
affordability improvement mechanism could be implemented after the regulatory review is
performed in 2021 (or 2019) and might depend on revised costs at that time taking into account
improvements in powertrain technologies and advances in carbon and composite materials for
replacing steel. [EPA-HQ-OAR-2010-0799-5917-A2, p. 1]
Organization: National Association of Clean Air Agencies (NACAA)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 41.]
Measures that could lead to greater penetration to vehicles earlier in the programs could bring
down vehicle cost.
Organization: National Automobile Dealers Association (NADA)
18-82
-------
Analysis of Estimated Costs, Economic and Other Impacts
NADA is also urging NHTSA and EPA to conduct and include in its final rule a worse case cost
scenario reflecting a $12,349 average per vehicle cost to comply with the proposed mandate for
MY 2025. This suggestion is being made to reflect the fact NHTSA and EPA are engaged in a
rulemaking earlier than necessary aimed at applying mandates further out than necessary where
many dynamic and hard to forecast variables are involved. These factors include conventional
fuel costs, alternate fuel availability and costs, compliance technologies and their costs, interest
rates, the general economy, etc. [EPA-HQ-OAR-2010-0799-9575-A1, p. 5]
If NHTSA and EPA were practiced at setting far-in-the-future standards based on hard to
forecast variables, NADA would not be concerned. However, both agencies have historically set
new CAFE and emissions mandates consistent with specific statutory time frames and in
conformance with the statutory requirements for lead time and duration discussed in detail
below. That is, with one major exception. [EPA-HQ-OAR-2010-0799-9575-A1, p. 5]
In the mid to late 1990s, EPA began the process of setting new tailpipe standards for on-road
commercial trucks and engines, culminating in rules issued in 1997, 2000, and 2001 for MYs
2004-2010. Largely due to EPA's failure to accurately forecast compliance technologies and
costs far into the future, these rules underestimated compliance costs by some 2-5 times what
actually were incurred. In addition to detailing this forecasting failure, the attached look-back
paper reviews some of the devastating impacts these truck mandates generally had on the new
truck marketplace, and in particular on new truck customers, on truck and engine manufacturers
and suppliers, and on dealers. [EPA-HQ-OAR-2010-0799-9575-A1, p. 5]
In summary, given this recent and devastating example of what can happened when mandates are
set too far into the future, the final rule should include a worse case MY 2025 cost scenario of
$12,349 per vehicle, which approximates roughly 4.2 times the $2,936 NHTSA cost estimate
discussed above. [EPA-HQ-OAR-2010-0799-9575-A1, p. 5]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 69-71.]
And, third, the proposal dramatically underestimates cost impacts on new vehicles.
To work, fuel economy rules must require improvements that are affordable. Why? Because you
can mandate what the manufacturers must build but you can't dictate what consumers will buy. If
our customers do not purchase these products, we all lose.
Not that we're not suggesting the proposal is technologically infeasible. For example, my
manufacturer Ford Motor Company has or can develop the engineering and manufacturing
expertise necessary to comply, but at what costs. Our concern is for our customers and the prices
that they will face.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 55-56.]
18-83
-------
EPA Response to Comments
The total cost of the administration's three fuel economy rules is approximately 210 billion. To
put this figure into perspective, that's more than twice the amount of total government aid to the
auto industry in 2009 and '10. The $157 billion proposal is by far the costliest auto regulation
ever, and comes on the heels of the 2010 record-setting $51 billion fuel economy rule. I always
have to remember that a billion is a thousand million.
And of course, these new regulatory costs will be borne by customers. And they exclude the
billions of dollars in other new regulations you and California regulators have planned. No one in
the government seems to be looking at the bigger picture of what all this regulatory activity is
doing to the affordability for the average American.
Organization: Natural Resources Defense Council (NRDC)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 199.]
Under the rule, the U.S. would invest about $300 billion in new vehicle technologies bringing
cleaner, more fuel-efficient cars and trucks to the marketplace.
Organization: Pennsylvania Department of Environmental Protection
The Agencies Should Evaluate Fuel Costs, Availability, and Impacts of Higher Octane Gasoline.
Costs and Life-Cycle Costs. The extra cost for higher octane gasoline should be used to estimate
the costs for this rulemaking. It appears that EPA used the cost of regular gasoline in their RIA
(p. 3-15) for this rulemaking. Also, the increased performance that EPA is expecting to achieve
from turbocharging and other technologies seems to be based on the vehicle using higher octane
fuel. [EPA-HQ-OAR-2010-0799-7821-A1, p. 3]
All potential costs and environmental impacts must be considered such as supply chain burdens,
transportation availability, market transition costs, capital investments for higher octane gasoline
and/or for production of additional ethanol or alkylates and the possibility of shortages in some
areas of the country. [EPA-HQ-OAR-2010-0799-7821-A1, p. 3]
Nevertheless, we are concerned that much of the nation's gasoline supply will require higher
octane levels to meet these GHG standards and that EPA has not considered the implications.
EPA either needs to address (in the face of manufacturers' current recommendations) why more
mid-grade gasoline will not be needed to run turbocharged, high-compression engines or the
implications of greater use of higher octane gasoline should be fully evaluated. [EPA-HQ-OAR-
2010-0799-7821-A1, p. 5]
Organization: Ross, D.
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 242.]
18-84
-------
Analysis of Estimated Costs, Economic and Other Impacts
Anticipated net savings could be much greater if the real price of gasoline rises between now and
2025 as seems all too plausible given rising demand for fossil fuels in low income countries,
political and economic unrest in oil-rich regions, and the eventual recognition by the public and
political elites of the dire consequences of human-influenced climate change.
Organization: Smith, Frank Houston
State of current ICE technology and Comparative Costs
This clearly demonstrates that the worst case average 'diesel vehicle price premium' is less than
$1,800 for European small displacement diesels ... offering a minimum gain in fuel economy of
50% [18 mpg(US)]. [NHTSA-2010-0131-0240-A2, p.2]
For example the new Chevrolet New MY 2012 Aveo l.SVCDi eco (95PS) (US Sonic?), and Kia
5 door '1 Air' 1.1 CRDi 74bhp ISO Rio are NEDC rated above 78 mpg(Imperial) [-65 mpg(US)]
combined. After excluding value add (VAT) and other EU taxes, both should have list export
prices below $15,000 USD including the less than a $1,500 premium for 62% and 40% fuel
economy improvements over their respective significantly less fuel frugal gasoline counterparts
rated 48 and 56 mpg(Imp) combined, again NEDC. [NHTSA-2010-0131-0240-A2, p.2]
The 1.6 TDCi 95 Edge Econetic Fiesta Titanium offers similar fuel economies for about $18.9k
and only roughly $1.3K more than its' 48.7 mpg(Imperial) [-41 mpg(US)] combined 1.6 Liter
gasoline counterpart. The 1.6 L diesel Edge Econetic should export for roughly $16.9K with a
possibility of 1.5 gallons/100 miles. [NHTSA-2010-0131-0240-A2, p.3]
In fact there is an 8.5K pound GVW diesel Sprinter 2500 planned for the US in 2013 expected to
provide an average 30 mpg(US) in mixed driving... better than the base Sonic. Size/weight may
not be the major issues. [NHTSA-2010-0131-0240-A2, p.3]
This leads to the question of which models might already have been (or might be) seen on US
highways and what is the best fuel economy they currently offer outside the US results in the
following analysis. [NHTSA-2010-0131-0240-A2, p.3] [[See Tables 2 &3 in Docket Number
NHTSA-2010-0131-0240-A2, pp.3-4]]
Organization: Tarazevich, Yegor
Introduce gas tax that will gradually grow to $2 per gallon by 2025 to reduce air pollution and oil
dependence. Otherwise with high MPG cars will just drive more. With high MPG cars people
will still pay less for car ownership than they do today. [NHTSA-2010-0131-0199, p.l]
Organization: Van Voorhies, M
It is lunacy to think that driving up the cost of cars and trucks is worth the time, effort and cost!!
[EPA-HQ-OAR-2010-0799-1629-A1, p. 1]
18-85
-------
EPA Response to Comments
Organization: Volkswagen Group of America
The 2012-2016 rulemaking will, according to the agencies, cost automakers more than $52
billion - a higher cost than any rulemaking has ever imposed on any regulated industry.
Volkswagen continues to make significant investments to both improve our conventional
technologies and introduce advanced concepts into the US market. We have crafted a product
portfolio that will be attractive to consumers while also achieving compliance with stringent
2012-2016 CO2 and fuel economy targets. [EPA-HQ-OAR-2010-0799-9569-A1, p. 3]
Cost of compliance for manufacturers weighted more towards light truck sales is projected to be
on the order of $1,300-1,600 for 2012-2021. A Wall Street Journal article that appeared online
on July 18, 2011 ('White House Offers Auto Makers Concessions to Win Mileage Support')
describes how proposals to improve the fuel economy of pickups and sport utility vehicles at a
slower pace than passenger cars would 'benefit Detroit manufacturers.' [EPA-HQ-OAR-2010-
0799-9569-A1, p. 10]
Response:
Regarding the comments from AFPM that the potential need to restrict recharging times
could adversely impact market penetration of electrified vehicles, we do not believe that the
market penetrations shown by our analysis (-2% increase in EVs and PHEVs in the 2025MY,
see Table 111-29 of the preamble) will have sufficient impact on the electrical grid to require any
such restrictions to recharging times. As for the AFPM comment that we have not properly
analyzed the impacts on carbon emissions that could result from increased electricity demands,
this is not correct. We have accounted for increased electricity demands in our analysis as well
as the increased carbon and other emissions associated with that increased demand. See
preamble section III.F.l and Table 111-64 (showing quantified estimates of upstream electricity
and associated GHG emissions attributable to EVs, as there explained, electricity emission
factors used in those estimates were derived from EPA's Integrated Planning Model). AFPM
also commented that we have made an unrealistic assumption by assuming that the consumer
market is sufficient to absorb the expected number of EVs without subsidies. Again, we
disagree. We believe that the low penetration rates of EVs and PHEVs shown in our analysis
can be made up by early adopters and the kinds of consumers that want such vehicles despite
their payback characteristics. Further, we have not suggested that EVs or PHEVs are as cost
effective as more traditional technologies; this is why their predicted penetration rate for MY
2025 is quite modest and why they are not projected to be needed at all to meet the MY 2021
standards. What we have shown is that the final standards provide significant public benefit and
a path exists toward attaining both the standards and those benefits.
The Defour Group argues that the agencies have deviated from using mainstream
economic assumptions to estimate costs in favor of new and unorthodox methodologies. It is not
clear what methodologies the commenter considers to be unorthodox. If the meaning is that our
use of teardown studies to estimate technology costs was unorthodox, then we disagree strongly.
We believe, and nearly all commenters have agreed, that teardown studies represent the best
method of estimating technology costs. See Chapter 3.1.1.1 of the j oint TSD where we describe
the teardown studies conducted for our GHG rules, the peer reviews that have been done and
18-86
-------
Analysis of Estimated Costs, Economic and Other Impacts
changes made in response to them. Further, we believe that our technology cost estimates
represent the best and most up-to-date estimates available today. The commenter also questions
our accounting procedures used to estimate costs. The commenter claims that, if the
government's cost estimates are too low, auto makers may find themselves building vehicles that
consumers are unwilling to purchase. We believe that recent trends suggest otherwise, such as
the unexpectedly high sales of the Ford EcoBoost engine despite its higher cost relative to lower
fuel economy engine choices for the same vehicle model. Further, at least thirteen automakers
have expressed strong support for the proposed standards. We do not believe that they would
have done so if they believed the standards compelled production of unsalable vehicles. See also
the detailed responses to the Walter and Drake study and critique in section 18.1 above.
Regarding comments from Growth Energy, we have based on EV/PHEV cost estimates
on the ANL BatPaC model (battery pack costs) and on FEV teardown studies (electric motors,
etc.). We believe that the costs we are using are the best available cost estimates for EV/PFIEV
technology available. We have also used our High 1 and High 2 markups to estimate indirect
costs, and have applied learning effects that are in line with the literature. We disagree with
Growth Energy when they claim that we have not estimated costs reliably. Importantly, the
information upon which Growth Energy appears to have based this claim is the NAS 2011
report. In that report, NAS states the following about their report, "The cost estimates represent
estimates for the current (2009/2010) time period to about 5 years in the future." (See
"Assessment of Fuel Economy Technologies for Light-Duty Vehicles," National Academy of
Sciences 2011, Summary at page 1.) Therefore, the NAS costs are not applicable for the MYs
2017-2025 rulemaking timeframe. We have discussion of this in RIA Chapter 3.11.7 Further,
our final analysis does not project a significant penetration of EV/PHEV technology so the
impacts on our program costs are not significant. Lastly, we conducted a sensitivity surrounding
our battery-pack costs and our indirect cost markups (which would also impact battery-pack
costs) and neither sensitivity suggests significant impacts on the program.
Regarding the comment from Mr. Haroldson, we disagree that vehicles will become too
expensive to purchase, especially in light of the significant savings that owners will realize on
lower fuel expenditures. Our analysis shows that the cumulative fuel savings will exceed
cumulative costs in just over 3 years, well within the typical vehicle ownership period, and that
consumers purchasing new vehicles with credit will see immediate reductions in monthly
payment amount. See preamble tables 111-84 and 111-85 and accompanying text. As for safety,
we also disagree that vehicles will become too small to be safe to drive. In fact, our analysis was
done assuming that vehicles would not change size at all (footprint will not change and, thus,
passenger volume will not change). As explained in preamble section II.C and II.G, the footprint
attribute removes inherent incentives to downsize as a compliance strategy (downsizing just
makes the fleet average more stringent), and the agencies have developed safety neutral
compliance paths limiting use of mass reduction as a compliance pathway for lower weight
vehicles. Indeed, there were pointed comments (e.g. from CBD and ACEEE) that the proposed
standards created incentives to upsize the fleet. Although we disagree with those comments,
they stand in stark contrast to the assertions made here. Lastly, while reducing our dependence
on foreign oil is a significant benefit of our standards, the primary intent is to reduce GHG
emissions. That cannot be done by simply replacing consumption of foreign oil with
consumption of domestic oil without a corresponding reduction in oil consumption and related
vehicular GHG emissions.
18-87
-------
EPA Response to Comments
Regarding comments from ICCT, we have not included a sensitivity using the 2011 NAS
costs. We agree with the commenter that the costs contained in the 2011 NAS report were meant
for the more immediate timeframe and are not necessarily appropriate for use in the 2017-2025
timeframe.
Regarding the comments from Mr. Jackson, the primary point of the comments appears
to be that EPA has conducted a faulty analysis in support of the proposal. Mr. Jackson also
appears to be concerned that we have assumed certain technology penetration rates to ensure that
our rule has the appearance of being beneficial while, if different penetration rates were to occur,
our rule would have different costs and benefits. This is incorrect. EPA's OMEGA modeling,
the source of the technology penetration rate projections, is entirely transparent and refutes this
unfounded comment in all respects. See, e.g. RIA sections 3. Ito3.11. Thus, we have not
prejudged the technology penetration outcome nor have we forced certain technologies into the
mix with the intent of forcing them on the American car buyer. Instead, we have demonstrated
what we believe to be the most cost effective approach for each individual auto maker to reach
compliance with the final standards given the makeup of that particular manufacturer's fleet.
EPA's technology penetrations projections are not binding in any way on the manufacturers, and
manufacturers are free to choose any technology pathway for the fleets so long as they are
meeting their CO2 target compliance levels. The possible technology outcomes are the result of
the standard in conjunction with the footprint basis of the standard and, of course, the
technologies available to reach the standards. The outcomes are not predetermined by EPA.
Therefore, it is true that a different fleet mix might result in different program costs and benefits,
but the fleet mix that will exists in the 2025MY will be driven by the auto makers and the vehicle
buying public within the constraints of the standards, not by EPA. Mr. Jackson is also concerned
about the multiplier credit available to EVs as a means of encouraging the development of EV
technology, which is addressed in Section 4 of this document as well as in preamble section
III.C.2.
Regarding comments from Mr. Knapp and Mr. Lipetzky, we disagree that the final rule
will result in higher fuel costs—why would fuel costs rise when so much less gasoline will be
used—and we disagree with the implication that our rule will be harmful to our slumping
economy. In fact, our analysis suggests that the final rule will not only provide significant public
benefit, but it may also increase sales and jobs (see preamble sections III.H. 11 and 12 and
Chapter 8 of the final RIA).
Regarding the comment from Mr. Marshall, we agree that regulatory cost estimates
probably overstate reality in general. However, this is a very difficult thing to prove or even
analyze. That said, we have attempted to estimate the impacts of learning by doing in making
our cost estimates (see preamble section II.D.2.d and Chapter 3.1.3 of the joint TSD). While not
overly aggressive in that attempt, we believe that our learning effects strike the proper balance
between being conservative and respectful of auto maker and supplier ingenuity.
Regarding the comment from the NACAA, we assume that the claim that, if vehicles
equipped with the technologies needed to meet the MY 2025 emissions were introduced earlier
then the additional cost per vehicle should be lower than $2000, is a reference to learning effects
starting earlier and resulting in lower costs by 2025. While that may be true, one cannot lose
sight of the need to introduce new technologies at a sustainable and reasonable pace. We have
18-88
-------
Analysis of Estimated Costs, Economic and Other Impacts
attempted to provide auto makers sufficient time to introduce new technologies on a pace that
will not result in scrapping of new model introductions or requiring model introduction outside
of the existing model redesign schedules (thus serving to reduce costs67) and on a pace that will
not result in costly mistakes and technology failures, in addition, a more rapid phase-in of the
standards than we have provided for may well reduce some technology costs by 2025 (due to a
longer learning period) but may also increase warranty costs and stranded capital costs, etc..
Regarding the comments from NAD A, we have conducted a separate analysis of
NADA's (incorrect) claims about the impacts of our heavy-duty highway 2007-2010 rulemaking
on the industry. That analysis, given its length and detail, is presented in its entirety at the end of
this response section 18.2 as a supplemental response to NADA Exhibit B.. In short, we disagree
with NADA's claims and NADA's assertions that we should apply a 4.2x factor to our cost
estimates to shed light on the "worse case" (sic) scenario. NADA also claims that the rule will
result in cars that consumers do not want to buy and, if so, we all lose. We agree that we all lose
in that scenario, but disagree that the scenario will play out. In fact, we believe that, for the most
part, 2025MY vehicles will look and feel much the same as today's vehicles. There is no reason
to believe that the highly boosted and downsized engines upon which the final rule
overwhelmingly relies will be unattractive to consumers. In fact, Ford is selling considerably
more of its turbocharged and downsized engine equipped F150 pickups than they expected and
fewer of the F150s equipped with more traditional V8 naturally aspirated engines. And this is
true in a market segment - large pickup trucks - that has traditionally been the one of the least
concerned with fuel economy and the most reluctant to accept smaller engines.
NADA also expressed concerns about the high costs of the Administration's three fuel
economy/greenhouse gas emission rules. These rules certainly have costs, which the agencies
have estimated carefully, but the rules also provide unparalleled savings to consumers and
benefits to society that far outweigh the expected costs. We discuss NADA's inappropriate
accounting of costs for the rules in section 18.2.1, below. Moreover, these rules have been
actively supported by the auto manufacturing industry. EPA strongly doubts that the industry
would offer this strong support if manufacturers' believed that the increased costs of installing
new technology was either unaffordable or led to unmarketable vehicles.
Regarding comments from the Pennsylvania Department of Environmental Protection,
we do not agree that higher octane fuel will be necessary for high compression turbocharged and
downsized engines to prevent the onset of combustion knock. EPA assumed no change in the
octane of certification or in-use gasoline within its analysis and the effectiveness values used for
the high BMEP engines reflect that fact. The current Ford EcoBoost turbocharged GDI engines
do not require the use of premium fuel, although those engines are not operating at BMEP levels
as high as those expected under our rule. Importantly, a combination of both intake charge
dilution (e.g., cooled EGR) and in-cylinder evaporative fuel cooling (e.g., direct injection) are
expected to allow higher BMEP GDI engines to operate on regular grade gasoline. All packages
67 See 75 FR at 25451 describing increased costs associated with introduction of major vehicle changes
outside the normal redesign cycle ("[t]he amortized cost of the capital necessary to produce a new vehicle design
will increase by 23%, from one-fifth of the capital cost to one-fourth ... This would be on top of the cost of the
emission control equipment itself. ... The capital costs associated with vehicle redesign go beyond CO2 emission
control and potentially involve every aspect of the vehicle and can represent thousands of dollars").
18-89
-------
EPA Response to Comments
at 27 bar BMEP analyzed by EPA included cooled EGR to allow higher BMEP operation and
prevent the onset of combustion knock on current certification or in-use fuels. See Joint TSD p.
3-88 ("Use of GDI systems with turbocharged engines and air-to-air charge air cooling also
reduces the fuel octane requirements for knock limited combustion and allows the use of higher
compression ratios.")
Regarding the comment from D. Ross, we agree that fuel savings will be greater should
future fuel prices be higher than projected in the AEO 2012 early release. However, we believe
that the AEO projections are the best available projections and that they represent the best
projected fuel prices for use in our analysis.
Regarding the comment from Frank Houston Smith, the primary point of the comment
appears to be that small engine displacement diesel vehicles like those popular in Europe and
other countries provide a possible bridge technology to a future fleet with much lower CO2
emission characteristics. EPA has no preference for the technologies chosen by auto makers, our
only requirement is that the standards be met. While it is true that some technologies are
receiving credits in the final rule, those credits are meant to incentivize newer and/or emerging
technologies. Also, Mr. Smith suggests that it might be necessary to relax the NOx standard
such that small engine displacement diesels could more easily meet criteria emissions standards
in the US (NOx standards are generally lower for diesels in other parts of the world). This is an
idea that EPA opposes for reasons discussed at length in our Tier 2 Highway rulemaking where
we took a fuel neutral approach to setting criteria emission standards (see 65 FR 6698 at page
6728, February 10, 2000).
Yegor Tarazevich suggested that EPA introduce a gas tax that would grow to $2 per
gallon by 2025 as a means of reducing air pollution and oil dependence. Such an approach is
outside EPA's regulatory authority and outside of the scope of this rulemaking.
Michelle Van Voorhies believes that it is lunacy to think that driving up the cost of cars
and trucks is worth the time, effort and cost. There are no other details to suggest why Ms. Van
Voorhies believes this. We disagree with this comment, since our Benefit Cost Analysis
provides considerable detail to support our belief that the new standards will results in significant
public benefits and significant savings of fuel resulting in significant reductions of GHG
emissions despite the expected increase in new vehicle costs.
In their comment, the Volkswagen Group of America suggests that the costs of
compliance for makers of pickups and SUVs is lower than the costs for auto makers whose fleets
consist of only cars. Further, the commenter appears to suggest that the standards are structured
to benefit the domestic auto makers over other auto makers. Neither comment is true. In fact,
each auto maker has a unique standard based on the makeup of its fleet. Likewise, each auto
maker has a unique starting point, or baseline or reference point, from which it is starting based,
again, on the makeup of its fleet. Another critical factor is the power-to-weight ratio of the
vehicles in each manufacturer's fleet, so a vehicle with a footprint of 50 square feet and a high
power-to-weight ratio may experience higher costs of compliance than another 50 square foot
footprint vehicle with a low power-to-weight ratio. Such is the nature of the footprint based
standard. (Many of the manufacturers of these vehicles also chose to pay fines, rather than
comply with earlier year CAFE standards. As a result, they have further catching up to do, and
18-90
-------
Analysis of Estimated Costs, Economic and Other Impacts
hence higher costs.) The point is that the costs for full line manufacturers (i.e., makers of cars
and pickups and SUVs) may be lower than for makers of cars only as a result of power-to-weight
ratio characteristics more than fleet makeup. A good example of this would be Hyundai and Kia,
who have fleet makeups similar to Volkswagen (mostly cars, some SUVs and cross-over utility
vehicles/vans, no pickups), but costs of compliance in line with the full line auto makers.
Supplemental response to NAD A Exhibit B, "A Look Back at EPA's Cost and Other
Impact Projections for MY 2004-2010 Heavy-Duty Truck Emissions Standards", attached to the
comments of the National Automobile Dealers Association (on the EPA/NHTSA proposal,
"2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate
Average Fuel Economy Standards," EPA-HQ-OAR-2010-0799-9575).
In general, and as discussed in detail below, EPA believes NADA's statements included
in Exhibit B to its public comments related to the costs of past heavy-duty criteria emission
standards are irrelevant to the Light-Duty Vehicle GHG standards and are incorrect in any case.
Heavy-Duty Vehicle Focus in NADA 's Exhibit B
Exhibit B in NADA's comments focuses on Class 4 through 8 heavy-duty trucks. In the
exhibit, NADA does not describe the relationship between these heavy-duty vehicles and the
light-duty market, which consists primarily of passenger vehicles, or how concerns in one market
are relevant to the other market. Further, NADA ignores the Class 2b-3 segment of vehicles
which share a stronger resemblance to light-duty vehicles in terms of vehicle types, fuels used to
power the vehicles, purchasers, uses, and manufacturers.
There are significant differences between the light-duty and the Class 4-8 heavy-duty
vehicle markets. Light-duty vehicles include passenger cars, crossover vehicles, sport utility
vehicles (SUVs), minivans, and light pickup trucks. On the other hand, the vehicles that NADA
discusses in its comments include vehicles such as tractor-trailers, delivery trucks, cement
haulers, utility trucks, street sweepers, and urban buses. There is also a significant difference in
the engines used in light-duty vehicles when compared to heavy-duty vehicles. Light-duty
vehicles are dominated by the use of gasoline engines, while heavy-duty market contains a mix
of gasoline and diesel engines but heavy-duty vehicles are predominately diesel powered. The
purchasers also differ. Consumers typically purchase light-duty vehicles for their own personal
transportation. In contrast, heavy-duty vehicles are most often purchased by commercial fleets
and municipalities for the purpose of moving freight or conducting vocational activities, such as
street sweepers.
In Exhibit B, NADA ignores the segment of light heavy-duty vehicles which is
dominated by the Class 2b-3 pickup trucks. These Class 2b-3 pickup trucks closely resemble
their light-duty pickup truck counterparts and are more relevant to any light-duty vehicle
discussion. All three of the major U.S. manufacturers offer a light-duty truck, which are often
referred to as "half ton" trucks and are sold as the Ford F150, Ram 1500, and GM
Silverado/Sierra 1500. The same manufacturers also offer "three-quarter ton" and "one ton"
versions of these pickup trucks sold as the Ford F250/350, Ram 2500/3500, and GM
18-91
-------
EPA Response to Comments
Silverado/Sierra 2500/3500 trucks. The Class 2b-3 trucks are considered heavy-duty vehicles
because their gross vehicle weight rating is over 8,500 pounds. The light and heavy pickup
trucks share a number of vehicle characteristics, including some common components and, to
some extent, the typical vehicle use. See 76 FR at 57160-61 (Sept. 15, 2011).
Table 1 includes a summary of the vehicle characteristics of the light-duty vehicles
covered under the MYs 2017-2025 Light-Duty Vehicle GHG rule, the heavy-duty vehicles
discussed in NADA's Exhibit B, and the heavy-duty pickup trucks and vans which were not
discussed by NAD A in Exhibit B.
Table 2: Light-Duty and Heavy-Duty Vehicle Characteristics
Light-Duty Vehicles
Covered by LD Vehicle
GHG Rule
Heavy-Duty Vehicles
Discussed in NADA
Exhibit B
Heavy-Duty Vehicles Not
Included in NADA's
Exhibit B Discussion
Vehicle
Architectures
Passenger cars, SUVs,
crossover vehicles,
minivans, light pickup
trucks (like Ford F150)
Tractor-trailers, delivery
vehicles, construction
vehicles, utility trucks,
buses, and many others
Heavy-duty pickup trucks
and vans (like the Ford
F250)
Fuel Use
Significant majority are
gasoline powered vehicles
Majority are diesel powered
vehicles
Split between gasoline and
diesel powered vehicles
Typical
Purchaser
Individual consumer
Commercial fleets,
municipalities, utility
companies, and single truck
owners
Mix of individual
consumers and small
businesses (such as
landscape companies)
Vehicle
Purposes
Personal transportation.
Hauling and towing
primarily limited to light
trucks and vans.
Delivery of freight or other
goods, transportation of
people, transportation to
worksite, worksite power
Mix of personal
transportation and
hauling/towing.
Major Vehicle
Manufacturers
Chrysler, Ford, General
Motors, BMW, Mercedes,
Toyota, Honda, Kia,
Nissan, and many others
Daimler Trucks, PACCAR,
Navistar, Volvo, Hino,
Ford, and others
Chrysler, Ford, General
Motors, Isuzu, Daimler,
Nissan, and others
NADA 's Market Disruption Claim
NADA claims that "Implementation of EPA's MY 2004-2010 emission mandates
directly resulted in higher truck prices, increased operating costs, reduced reliability, and lower
fuel economy performance, which caused dramatic disruptions to the new truck marketplace."
(Exhibit B, page 3) NADA's exhibit goes on to state that "Many informed prospective new
truck purchasers rushed to 'pre-buy' trucks with pre-compliant technologies to avoid the effects
of EPA's mandates." (Exhibit B, page 3) NADA uses the heavy-duty exhibit as support for its
(strident) assertion that setting standards "further out than necessary" may have "devastating
18-92
-------
Analysis of Estimated Costs, Economic and Other Impacts
impacts" on the marketplace (NADA comments, Docket EPA-HQ-OAR-2010-0799-9575, page
5). EPA believes that NADA's heavy-duty market disruption claims are not relevant to the
Light-Duty Vehicle GHG proposal because of the differences in vehicle types, usage, and
markets as discussed above. NADA did not make any claim of pre-buy relative to the heavy-duty
pickup trucks and vans (the most analogous heavy-duty vehicle segment, as just explained), and
EPA did not find any evidence to support pre-buys in that vehicle segment. Further, EPA
discusses three additional reasons why any heavy-duty market disruption claim is irrelevant to
the MYs 2012-2017 light-duty vehicle rulemaking.
First, there is a significant difference in the regulatory structure between the heavy-duty
standards for criteria pollutants and the light-duty vehicle GHG standards. NADA's pre-buy
argument is not applicable to the light-duty vehicle GHG program because of this difference in
structure. Under the Clean Air Act Section 202(a)(3)(C), the heavy-duty criteria emission
standards are required to apply for a period of no less than three model years, which is
commonly referred to as the stability requirement.68 As NADA points out in Exhibit B, EPA
promulgated new heavy-duty criteria pollutant emission standards in 2004 and 2007, with the
2007 standards phased in through 2010. However, unlike heavy-duty vehicle and engine
emission standards, the Clean Air Act does not require a minimum stability period for light-duty
vehicle emission standards. NHTSA and EPA have structured the light-duty vehicle fuel
economy and GHG final standards such that they require annual improvements for MYs 2017 to
2025. This builds on the MYs 2012-2016 light-duty vehicle GHG and fuel economy standards.
The annual increase in CAFE standards for light-duty trucks actually began for MY 2005 and the
annual increase for passenger cars for MY 2011.69 In addition, the light-duty vehicle GHG
standards are a fleet average standard where each manufacturer may select a different standard
and compliance path unique to its fleet. For example, some vehicles may see changes in one
model year, while others will remain constant. As such, the light-duty vehicle market is not
expected to experience a significant change in the vehicles available for sale in any given year.
NADA's claim that pre-buys disrupt markets is therefore not relevant to the light-duty vehicle
GHG standards because the light-duty program requires modest, annual incremental increases in
the stringency and costs of emission standards which are unlikely to have a substantial effect on
purchasing behavior.
Second, it is not appropriate to apply NADA's claim of "pre-buy" in the heavy-duty
market, in response to the costs of heavy-duty criteria pollutant emission rules, to the light-duty
vehicle GHG standards because of the significant financial benefit to consumers accruing from
the GHG rules. As documented in the proposal and final rule, the standards will result in a
significant improvement in fuel economy and therefore reduce operating costs. Though the
standards increase the upfront costs of the vehicles, owners will experience lower operating costs
due to the improved fuel economy and reduced GHG emissions. In fact, in the MYs 2012-2016
light-duty vehicle GHG rule, EPA projected an increase in vehicle sales in the 2012 through
2016 timeframe if consumers take into consideration at least five years' worth of fuel savings
68 United States Code, Title 42, Chapter 85. May be accessed at http://epa.gov/oar/caa/title2.html
69 U.S. National Highway Traffic Safety Administration. May be accessed at http://www.nhtsa.gov/fuel-
economy.
18-93
-------
EPA Response to Comments
when considering whether to buy a new vehicle.70 Similarly, as highlighted in the proposal, a
light-duty vehicle consumer who purchases a vehicle in the 2017 through 2025 timeframe would
not have any financial incentive to avoid the purchase because the average consumer would see a
payback in the upfront costs in less than four years and on average gain a net savings of $3,000
to $4,400 over the lifetime of the vehicle based on the proposed standards (discount rates of both
seven and three percent, respectively).71 Consumers purchasing vehicles on credit would see
immediate savings because monthly fuel savings more than offset the increase in monthly loan
payment amount. Preamble section 1C.
Third, finalizing light-duty vehicle standards for the MYs 2017-2025 timeframe now
provides regulatory certainty to auto manufacturers and suppliers along with the opportunity for
long-term planning and time for continued development and deployment of GHG emission
reducing technologies across the light-duty vehicle fleet. By setting standards with a significant
amount of lead time, EPA is addressing one of the concerns raised by a General Accounting
Office (GAO) study related to the 2007 heavy-duty standards.72 GAO suggested that EPA
should address concerns raised by purchasers about whether new engines will be ready in time
for validation testing by the vehicle manufacturers and truck fleets to help prevent any potential
pre-buy of older engines before 2007. Longer lead times, such as those provided in the 2017-
2025 light-duty vehicle GHG program, could help consumers be more confident in the
performance and durability of these new technologies because it provides the time for auto
manufacturers and suppliers to develop and implement technologies in a robust manner and with
sufficient time to ensure durability and reliability targets are met.
Finally, NADA's assertions that the 2004 and 2007/2010 heavy-duty emission standards
caused the heavy-duty truck sales fluctuations over the past decade are mistaken. EPA believes
that there are many factors that impact truck sales in any given year. For example, the American
Trucking Associations develops the U.S. Freight Transportation Forecast based on factors such
as the change in the U.S. gross domestic product, consumer confidence, housing, capital
equipment purchases, government spending, imports and exports, bond yields, and truck capacity
utilization. 3 Figure 1 below shows the annual sales of heavy-duty trucks (those with a gross
vehicle weight rating of over 14,000 pounds) and the annual rate of change of the U.S. Gross
Domestic Product (GDP) since 2000. Although the figure is not intended to imply causality,
because other factors are expected to influence vehicle sales, it does provide an indication that
factors such as the annual growth rate of the U.S. GDP may have an impact on truck sales.74
70 U.S. Environmental Protection Agency and National Highway Traffic Safety Administration. 75 Federal
Register, May 7, 2010. Pages 25517-25518.
71 U.S. Environmental Protection Agency and National Highway Traffic Safety Administration. 76 Federal
Register, December 1, 2011. Pages 74972-74973. See also section I.C to preamble to final rules.
72 U.S. General Accounting Office. "EPA Could Maximize the Benefits from the 2007 Diesel Emissions Standards
by Better Addressing Industry Concerns." Appendix III - Comments from the Environmental Protection Agency.
May be accessed at http://www.gpo.gov/fdsys/pkg/GAOREPORTS-GAO-04-313/html/GAOREPORTS-GAO-04-
313.htm
73 American Trucking Associations, Inc. U.S. Freight Transportation Forecast to 2022. Pages 10-12 and 52-53.
2011.
74 The correlation between the truck sales and the annual GDP percent change was +0.78.
18-94
-------
Analysis of Estimated Costs, Economic and Other Impacts
U.S. Heavy Duty Truck Sales and the U.S. GDP Annual Change
600,000 10
500,000
400,000
300,000
_
u
l/
200,000
100,000
0
-Heavy Duty TruckSales
•U.S. Annual GDP Change
2000
2002
2004
2006
2008
2010
-6
2012
Figure 1: U.S. Class 4-8 Truck Sales and U.S. GDP Annual Growth Rate
75
Projected Cost of Compliance
NADA's Exhibit B also discusses EPA's projected fixed and operating costs of medium
and heavy heavy-duty engines related to the 2004 and 2007/2010 criteria pollutant emission
standards. NADA claims that by setting standards seven to ten years before implementation,
EPA "dramatically underestimated" the costs associated with the program (Exhibit B, page 3).
NADA makes no attempt to comment on the specific details of EPA's detailed cost analysis for
the proposed MYs 2017-2025 light duty vehicle standards (with the exception of indirect costs
which we address in responding to NADA's Exhibit A) and NADA's discussion is focused on
costs that are not related to the light-duty vehicle GHG standards. We nonetheless explain why
NADA is incorrect as to that other rule.
As stated in the 2007/2010 heavy-duty emissions rule, EPA developed the compliance
costs of the NOx standard assuming that NOx adsorbers would be the most likely technology
75 U.S. Truck Sales represent Class 4-8 truck sales from Ward's Auto Group's "U.S. Truck Sales by GVW
by Month" 2000 through 2011. U.S. Gross Domestic Product percent change based on current dollars from the
Bureau of Economic Analysis. Last accessed on May 8, 2012 at http://www.bea.gov/national/index.htm#gdp
18-95
-------
EPA Response to Comments
applied by industry in order to meet the NOx standards.76 As noted in the 2007/2010 HD rule,
we recognized that manufacturers had several years before implementation of the standards and
we expected research would lead to enhanced emission control technologies with focused
research efforts on drawbacks, such as fuel economy impacts, in an effort to minimize any
potential negative effects.77 As a result of the industry's research and development efforts, most
heavy-duty engine manufacturers selected a technology path that included selective catalytic
reduction (SCR) for 2010 NOx compliance rather than NOx adsorbers. There are several
reasons why manufacturers selected this technology for the market. For one thing,
manufacturers introduced SCR into the European heavy-duty market in the 2006 timeframe to
meet the Euro V emission standards.78 The earlier introduction of the technology in Europe
provided engine manufacturers time to gain experience with the technology in the marketplace
before it was implemented in the United States. The use of SCR in the U.S. also provides global
engine manufacturers with ability to use the research and development experience that they
gained in Europe in addition to the potential economies of scale to reduce costs. SCR also
provides the manufacturers with the flexibility to balance engine-out NOx emissions and fuel
consumption to meet market demands. We believe, and manufacturers have provided
confidential business information to support, that manufacturers have the ability to raise the
engine-out NOx emissions of 2010 engines equipped with SCR to levels above the 2004 NOx
levels in an effort to improve fuel consumption while remaining in compliance with NOx
emission standards.
We would expect the cost analysis conducted by NADA to show that the compliance
costs and manufacturer surcharges with respect to the 2007/2010 rule are different for two
reasons. First, EPA developed costs in the 2007/2010 rule for a different emission reducing
technology than the technology that was actually used in the market. Second, NADA used
manufacturer surcharges in the comparison. Manufacturer surcharges are not equivalent to
compliance costs. As would be expected, surcharges are often greater than the compliance cost
because they are set by the manufacturers based upon what they believe the market will bear.
This premise is supported by confidential business information submitted to EPA for the Heavy-
Duty Engine Nonconformance Penalty proposal.79
EPA attempted to conduct a retrospective analysis of our projected costs of the heavy-
duty gasoline engine emission standards. However, we were unable to develop a robust method
to identify the gasoline engine price (or cost) increases that were solely related to emissions
which were passed along to consumers in the heavy-duty pickup market.
However, EPA has conducted a simple analysis of the projected costs of the 2004 and
2007/2010 light heavy-duty diesel engine standards relative to the price increases that one major
manufacturer actually placed on their heavy-duty diesel pickup trucks. As noted above, these
pickup trucks are more similar to the half-ton pickup trucks included in the light-duty vehicle
segment than are the heavier trucks referred to by NADA. EPA is utilizing manufacturer
76 66 FR at 5090, January 18, 2001
77 66 FR at 5090, January 18, 2001
78 Cummins. Diesel Exhaust Fluid (DBF) Q &A. Last accessed on June 19, 2012 at
http://www.cumminsfiltration.com/pdfs/product_lit/americas_brochures/MB 10033.pdf
79 77 FR at 4736, January 31, 2012.
18-96
-------
Analysis of Estimated Costs, Economic and Other Impacts
surcharges in this analysis as a proxy for cost, similar to the approach taken in the NADA
analysis, though we have no reason to believe that these particular surcharges were equal to costs
associated with emissions abatement equipment.80 In the analysis below, EPA compares the cost
increase that we projected in the 2004 rule, adjusted to 2004 dollars, to the price difference of the
diesel engine option on a Ram 2500 pickup truck between 2003 and 2004. As shown in Table 2,
the cost increase projected by EPA for the 2004 standard was $541 and Chrysler increased the
price of the diesel engine option on the Ram 2500 by $330. By this comparison, EPA's
projected cost increase of the 2004 emission standards was $211 greater than the manufacturer's
actual price increase.
Table 3: EPA Cost Estimate and Manufacturer Price Increase for 2004 Light Heavy-
Duty Diesel Engine Standard (all values in 2004$)
Manufacturer Price Increase^13
EPA Cost Estimatec
Manufacturer Price - EPA Cost
$330
$541
-$211
Notes:
A Manufacturer Surcharge for Diesel Engines from Pickup Trucks.com
Standard Equipment and Options. 2003 Surcharge was $5,225. Last accessed
on May 7,2012 at http://www.pickuptrucks.com/dodge/ram-
2500/2003/standard-equipment/
B Manufacturer Surcharge for Diesel Engines from Pickup Trucks.com
Standard Equipment and Options. 2004 Surcharge was $5,555 (2004$). Last
accessed on May 7,2012 at http://www.pickuptrucks.com/dodge/ram-
2500/2004/standard-equipment/
c 2004 Light Heavy-Duty Emission Standard Cost was $485 (1999$). See 65
FR October 6,2000 at 59936.
Next, EPA compared the cost increase projected in the 2007 heavy-duty rule, adjusted to
2007 dollars, to the price difference of the diesel engine option on a Ram 2500 pickup truck
between 2006 and 2007. As shown below in Table 3, EPA's projected cost increase for the 2007
standard was $2,429 and Chrysler increased the price of the diesel engine option on the Ram
2500 by $545. EPA's projected cost increase of the 2007 emission standard was $1,884 more
than the price increase of the diesel engine option for this category of engines.
80 The Agency believes that the heavy-duty engine industry may not be a perfectly competitive market due
to the limited number of manufacturers. In a concentrated market like this, pricing strategies such as surcharges
may include additional costs for non-regulatory imposed features, non-emission-related regulatory imposed features
or additional profit margin.
18-97
-------
EPA Response to Comments
Table 4: EPA Cost Estimate and Manufacturer Price Increase for 2007 Light
Heavy-Duty Diesel Engine Standard (all values in 2007$)
Manufacturer Price Increase
EPA Cost Estimate^
Manufacturer Price - EPA Cost
$545
$2,429
-$1,884
Notes:
A Manufacturer Surcharge for Diesel Engines from Pickup Trucks.com
Standard Equipment and Options was $5,555 in 2006. Last accessed on May
7, 2012 at http://www.pickuptrucks.com/dodge/ram-2500/2006/standard-
equipment/
B Manufacturer Surcharge for Diesel Engines from Pickup Trucks.com
Standard Equipment and Options was $6,100 in 2007. Last accessed on May
7, 2012 at http://www.pickuptrucks.com/dodge/ram-2500/2007/standard-
equipment/
c 2007 Emission Standard Cost was $1,986 (1999$). Regulatory Impact
Analysis: Heavy-Duty Engine and Vehicle Standards and Highway Diesel
Fuel Sulfur Control Requirements (EPA 420-R-00-026), page V-38. Last
accessed on May 7, 2011 at http://www.epa.gov/otaq/highway-
diesel/regs/ria-v.pdf
Finally, we compare the cost increase projected in 2010 for the 2007/2010 heavy-duty
rule, adjusted to 2010 dollars, to the price difference of the diesel engine option on a Ram 2500
pickup truck between 2009 and 2010. As shown below in Table 4, the projected cost increase
for the 2010 standard was $2,046 and Chrysler increased the price of the diesel engine option on
the Ram 2500 by $2,060 in 2010. In this instance, the projected the cost increase of the 2010
emission standards was $14 less than the manufacturer's price increase for this category of
engines.
Table 5: EPA Cost Estimate and Manufacturer Price Increase for 2010 Light
Heavy-Duty Diesel Engine Standard (all values in 2010$)
Manufacturer Price Increase^
EPA Cost Estimate^
Manufacturer Price - EPA Cost
$2,060
$2,046
$14
Notes:
A Manufacturer Surcharge for Diesel Engines from Pickup Trucks.com Standard
Equipment and Options was $6,100 in 2009. Last accessed on May 7, 2012 at
http: //www. pickuptrucks. com/dodge/ram-2 500/200 9/standard-equipment/
^Manufacturer Surcharge for Diesel Engines from Pickup Trucks.com Standard
Equipment and Options was $7,615 in 2010. Last accessed on May 7, 2012 at
http://www.pickuptrucks.com/dodge/ram-2500/2010/standard-equipment/
c 2010 Emission Standard Cost was $1,601 (1999$). Regulatory Impact
Analysis: Heavy-Duty Engine and Vehicle Standards and Highway Diesel Fuel
Sulfur Control Requirements (EPA 420-R-00-026), page V-38. Last accessed on
May 7, 2011 at http://www.epa.gov/otaq/highway-diesel/regs/ria-v.pdf
In summary, the most relevant heavy-duty engine cost discussion for the light-duty
vehicle GHG standards did not show that EPA underpredicted costs by "two to five times the
actual costs" as incorrectly claimed by NAD A (Exhibit B, page 11).
18-98
-------
Analysis of Estimated Costs, Economic and Other Impacts
Conclusion
In conclusion, NAD A commented on the 2017-2025 Light-Duty Vehicle GHG proposal
by submitting a review of the costs of EPA's 2004-2010 heavy-duty standards and a discussion
on other impacts on heavy-duty vehicles. Two of the premises of the NADA exhibit were that
rulemakings which provide seven to ten years of lead time lead to misrepresented costs and
result in market disruptions. This memo discusses why EPA believes that any heavy-duty
market disruption claim is irrelevant for the Light-Duty Vehicle GHG program because the
regulatory structures of the programs are different and because the GHG program reduces
operator costs, unlike a criteria pollutant emission program. NADA fails to discuss any of the
market differences between passenger cars and commercial heavy-duty vehicles. In addition,
NADA ignores the most relevant segment of the heavy-duty market, the large pickup trucks, for
comparison to light-duty vehicles. EPA has examined the actual price increase for the heavy-
duty pickup trucks and found they were generally less than the EPA cost estimates, not greater as
NADA mistakenly asserts. In addition, we found no evidence of market disruptions for these
vehicles during the implementation of the 2004 or 2007/2010 emission standards.
18.2.1. Per Vehicle Average Costs
Organizations Included in this Section
American Petroleum Institute (API)
BMW of North America, LLC
Consumer Federation of America (CF A)
Cuenca, M.
Jackson, F.W.
National Association of Clean Air Agencies (NACAA)
National Automobile Dealers Association (NADA)
Ross, D.
Steyn, R.
Organization: American Petroleum Institute (API)
The market place will determine the need for premium (higher octane) fuel
The EPA and NHTSA note that their assessment of the cost of technologies adopted to comply
with the proposed CAFE and GHG standards was not predicated on the need for premium
gasoline, and they request comment on this assumption. API concurs with the approach used by
EPA and NHTSA in this regard. The market place will address and determine the octane needs
of motor vehicles - as it has done, successfully, for decades. There is no need for government
agencies to adopt a regulatory approach that pre-determines, prescribes, or specifies vehicle
octane requirements. [EPA-HQ-OAR-2010-0799-9469-A1, p. 11]
Octane needs are already addressed by the market and do not require government intervention
The market place will address octane needs of vehicles as it has done successfully for decades.
18-99
-------
EPA Response to Comments
There is no need for government agencies to pre-determine, prescribe, or specify vehicle octane
levels. [EPA-HQ-OAR-2010-0799-9469-A2, p. 2]
Questionable Vehicle Cost and Consumer Benefit Estimates
EPA and NHTSA state that the proposed standards "would have significant savings for
consumers." This is based on an average increased cost of $2,000 for a MY 2025 new vehicle
and a present value of fuel savings over the vehicle lifetime ranging from $5,200 to $6,600,
depending on whether a 7% or 3% discount rate is used. The uncertainty over increased vehicle
cost and the discount rate consumers would implicitly use to value fuel savings raises significant
questions about the EPA/NHTSA claim that a consumer would see a "net lifetime savings of
$3,000 to $4,400." [EPA-HQ-OAR-2010-0799-9469-A1, pp. 9-10]
As one example, it should be noted that the Energy Information Administration's Annual Energy
Outlook 2011 included a sensitivity case with a 6% per year increase in CAFE — reaching
approximately 55 mpg in 2025. That sensitivity case estimated that such a CAFE requirement
would increase the average cost of a new 2025 vehicles by about $4,600 relative to vehicles
meeting the existing 2016 mpg requirement. The EIA cost increment is more than twice that of
the EPA/NHTSA estimate, and likely reflects the use of a different set of assumptions that drive
significantly higher penetrations of electric vehicle and diesel technologies into the light-duty
vehicle fleet.22 Additionally, EIA uses a 15% consumer-relevant discount rate when evaluating
the economic cost effectiveness of new vehicle efficiency technologies. A 15% discount rate
would reduce the present value of fuel savings by about 40% to 50% compared to the
EPA/NHTSA calculations. Combining EIA's higher vehicle cost with a consumer relevant
discount rate would turn the EPA/NHTSA consumer net benefit conclusion into at best a
consumer break-even and more likely a consumer net cost. Furthermore, the EPA/NHTSA
conclusion that a consumer paying cash for a new MY 2025 vehicle would see the added vehicle
cost offset within 4 years by fuel savings would no longer be accurate. [EPA-HQ-OAR-2010-
0799-9469-A1, p. 10]
Given these uncertainties, it is not at all clear that the EPA/NHTSA proposal would, as claimed,
"preserve consumer choice - that is, the proposed standards should not affect consumers'
opportunity to purchase the size of vehicles with the performance, utility and safety features that
meets their needs." [EPA-HQ-OAR-2010-0799-9469-A1, p. 10]
22 When viewed in relation to projections made in similar studies conducted by the National
Research Council (http://www.nap.edu/catalog.php?record_id=12924) and by the Massachusetts
Institute of Technology (http://web.mit.edu/sloan-auto-
Iab/research/beforeh2/otr203 5/On%20the%20Road%20in%20203 5_MIT_July%202008.pdf),
one observes a substantial range in the estimates of future incremental automotive technology
costs, effectiveness and market penetrations, even in the near - to medium-term timeframe. In
this context, the longer term projections made by EPA and NHTSA for the subject NPRM are
particularly uncertain, reflecting, as they do, specific assumptions regarding future fuel prices,
18-100
-------
Analysis of Estimated Costs, Economic and Other Impacts
product lifecycles, impacts of other anticipated regulatory initiatives, etc., etc. [EPA-HQ-OAR-
2010-0799-9469-A1, p. 10]
Organization: BMW of North America, LLC
The projected cost increase of US $734 in MY 2021 and US $1946 in MY 2025 relative to 2016
in the joint draft TSD is only valid for the average new US vehicle. The actual cost increase for
the average BMW Group vehicle is much higher than projected in the joint draft TSD just
because of the higher E-mobility share needed for future compliance (as mentioned above) and
the need for much more expensive conventional improvement technologies (high-cost
lightweight materials, etc.). [EPA-HQ-OAR-2010-0799-9579-A1, enclosure p. 5]
Regarding the calculations of the projected cost increase per automaker in the joint draft TSD,
the projected cost increase for the BMW Group fleet at the level of a large volume manufacturer
or slightly lower is not at all accurate if considering the above mentioned high E-mobility share
needed for the BMW Group. [EPA-HQ-OAR-2010-0799-9579-A1, enclosure p. 6]
Organization: Consumer Federation of America (CFA)
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 61.]
The past 16 years, automobiles have increased an average of $500 a year. So this is a small price
to pay for extra fuel economy and extra savings.
Organization: Cuenca, M.
Transportation is critical to our quality of life and the EPA's regulation could increase the cost of
a new vehicle by $6,000 according to the Center for Automotive Research and $5,000 according
to the National Automobile Dealers Association. This price increase would lead to a reduction of
tens of thousands of jobs. [EPA-HQ-OAR-2010-0799-10142-A1, pp. 1-2] (Also in Section 18.8)
Organization: Jackson, F.W.
3. EPA 11/16/11 Article ' 2016 through 2025 model year. .. increase by $ 1,946 per vehicle'
Not so 'per vehicle', Le., while each individual by class vehicle average might increase by this
amount to incorporate the defined (e.g., turbochargers) technologies, there is also a class 'mix'
impact that does not appear to be factored in by EPA to obtain their $ 1946; e.g., if I take a 2016
Camry and spend $ 1,946 to increase its mpg, fine; but if I build one less Camry and build one
more Prius (both with same defined technologies upgrade) I also increase the cost another 4-6
$sK to convert to a Hybrid; and by not considering fleet 'mix' change impact the Hybrid cost
does not show! And building a plug-in (e.g., Volt with 'fast' charging stations) instead of an ICE
and the 4-6 $sK additional for a HEV grows to about 20 $s K per switch to a PHEV (e.g., Volt).
Even 15% (EPA proposal percentage ref 23.8-21-23) HEVs in 2025 at 4 K$s added would alone
be 600 $s - subtracting the $ 600 from the reported $ 1946 cost increase leaves $1346 for all
18-101
-------
EPA Response to Comments
other upgrades and ref. 2 shows up to $ 1426 for high level turbo boost, $ 338 for V-6 Direct
injection plus a number of other upgrades in the $100-200 range. We need to hear from EPA on
whether the 'mix' factor is included in their reported $ 1946 value but from my brief look at their
document it didn't appear to me it was in; the fact that EPA has one value ($ 1946) would
support mix impact not factored in, i.e., different mixes would have different numbers! I also
note in Ref. 2 EPA proposal fleet 2025 technology penetration 'low balls' cost by assuming low
(ref. 2 table 3.8-19) penetration of PHEVs (0%) & BEVs (2.8%) while to comply manufacturers
could opt for more Volts & LEAFs class vehicles so they could sell more 'guzzlers' these would
raise the 'mix' cost and with the more weight of the 'guzzlers', mpgge would be less than EPA
claim. [EPA-HQ-OAR-2010-0799-8041-A1, pp. 1-2]
Organization: National Association of Clean Air Agencies (NACAA)
Second, EPA projects the cost of new technology will add, on average, about $2,000 to the price
of a MY 2025 vehicle. NACAA recognizes that consumers will recoup this cost through fuel
savings. However, we believe that the average vehicle cost could be brought down if cleaner
vehicles were introduced earlier. If vehicles equipped with the technologies needed to meet MY
2025 emissions and fuel economy requirements are introduced earlier, then by 2025 the
projected additional cost should be lower than $2,000. In addition, early introduction of cleaner
vehicles will provide added assurance that the projected fleet performance is achieved by 2025.
Measures that lead to greater penetration of cleaner vehicles earlier in the program could bring
down vehicle costs in later years of the program. Further, zero-emission vehicles and alternative-
fuel vehicles would help to further reduce criteria pollutant emissions as well as GHGs. [EPA-
HQ-OAR-2010-0799-8084-A1, pp. 3-4]
[These comments were also submitted as testimony at the San Francisco, California public
hearing on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 36.]
Organization: National Automobile Dealers Association (NADA)
The proposal is drafted in a manner that makes it difficult to tease out the per vehicle costs
associated with compliance. There are several reasons for this:
1. As with all estimates made in the proposal and in supporting documents, NHTSA and EPA
struggle to forecast costs based on assumptions involving vehicles that will hit the market 5 to 13
years out into the future. Given the potential for extreme variability for any number of factors,
MY 2017-2025 predictions of average per vehicle cost/price are inherently suspect. [EPA-HQ-
OAR-2010-0799-9575-A1, p. 3]
2. Each agency uses different models to calculate different and, in some cases, a variety of
average per vehicle costs that do not mesh well together. This is just one example of why the so-
called 'single national program' is a misnomer. The final rule should harmonize and clearly
delineate a single set of average per vehicle costs, for both light-duty cars and trucks, using only
one marginal 'cost-to-consumer' number. NHTSA and EPA should strive to ensure that these cost
figures accurately depict for prospective purchasers what the final rule will cost, on average.
[EPA-HQ-OAR-2010-0799-9575-A1, p. 3]
18-102
-------
Analysis of Estimated Costs, Economic and Other Impacts
3. The proposal and related fact sheets and press releases obfuscate cost projections. Instead of
appropriately delineating costs, separately delineating benefits, and comparing the two, NHTSA
and EPA go out of their way to emphasize gross and net benefits with little or no reference to
costs. While by no means excusable, perhaps the unprecedented per vehicle and total costs have
influenced EPA and NHTSA to do so. Regardless, the final rule should clearly show the average
per vehicle costs prospective consumers should expect to have to pay up front. [EPA-HQ-OAR-
2010-0799-9575-A1, pp. 3-4]
For purposes of understanding how the proposal will impact prospective new vehicle purchasers,
these comments use the average per vehicle estimates NHTSA has set out in the proposal,
adjusted to 2010 dollars. Moreover, NADA takes the position that the MY 2011, 2012-2016, and
2017-2025 standards constitute a single post-EISA program. Thus, for purpose of its analyses,
NADA characterizes the government's total average per vehicle cost estimate to be $2936 (in
2010 dollars), reflecting $91 dollars for MY 2011 adjusted to $95, $903 for MY 2016 adjusted to
$945, and $1876 for 2025 adjusted to $1896. [EPA-HQ-OAR-2010-0799-9575-A1, p. 4]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 72-74.]
By EPA's own estimates, current prices would go up over today $3,200.1 heard different
numbers thrown around, but a third of that are the mandates that are just now going into effect
through 2016 and then another $2000, or a little over 2,000 on the mandates from 2017 to 2025,
which will total in today's dollars $3,200 over today's prices. This would raise payments between
$60 and $70 a month in a typical automobile loan.
A study that the NADA will release next month will raise significant concerns regarding how the
proposal calculates retail price impacts. By using a more realistic analytical approach, our initial
analysis shows the proposal underestimates the cost at retail and suggests a compliance-related
price increase in my showroom could be at least 60 percent higher than that which would be up
to $5,000 increase.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 53-55.]
Totaling the administration's final and proposed fuel economy mandates results in an average
vehicle cost increase of at least $3,200, a substantial amount that every new car buyer will have
to pay up front. As Don Chalmers explained last week, NADA believes that the actual total
increase will be even higher. Thus, customers who come into my showroom in 2025 will face
vehicles that, as a result of these rulings, are dramatically more expensive than they are today.
Moreover, the U.S. Energy Information Administration finds that this proposal will regulate out
of existence the most affordable cars on the market today. Adjusting for inflation, the Energy
Economic Information Administration claims that in 2025, there will no longer be new vehicles
on the market costing $15,000 or less. These are the vehicles I sell to smart frugal buyers, college
students and working families. How can a rule that eliminates the most affordable new cars on
the market be pro-consumer? You're right; it's not.
18-103
-------
EPA Response to Comments
Organization: Ross, D.
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 241-242.]
Critics see the new standards as a formula for sticker shock. With price increases of $2,000 to
$3,100, making automobiles unaffordable for low income consumers.
Well, history demonstrates that initial estimates of the cost of complying with new
environmental standards have proven grossly exaggerated as human ingenuity, when facing the
proper incentives, finds novel cost-effective solutions.
But suppose those purchase price estimates are accurate, at current, gasoline prices, the savings
and lower fuel costs over the lifetime of the vehicle would be approximately $6,000.
Organization: Steyn, R.
* Clearly, the proposed two-fold increase in CAFE standards is a "drastic" action that will likely
increase the cost of a new car by $5,000—$6,000. [EPA-HQ-OAR-2010-0799-8724-A1, p. 2]
Response:
The API questions EPA's estimates of consumer savings resulting from lower fuel
expenditures. They correctly point out that the savings as calculated in our analysis depend on
the discount rate used. EPA has shown savings using both a 3% and a 7% discount rate. These
discount rates are generally accepted rates at which social costs should be discounted. Clearly,
using a higher discount rate as suggested by API would result in lower present value fuel
savings. The goal behind our payback analysis was to shed light on the real situation rather than
attempting to determine how consumers might value future savings versus current and/or future
costs. While inflation in recent years has been extremely low, inflation in the 3-7% range is not
atypical. Inflation in the 15% range, in the United States, is not typical. Therefore, we do not
agree that discounting future fuel savings at 15% as the commenter recommends would be more
appropriate than what we have done. In the end, the point of our payback analysis is not to shed
light on when consumers would perceive the future savings to outweigh their costs, but rather to
shed light on when those savings actually would outweigh their costs. Lastly, we disagree that
our standards may have any negative impact on the ability of consumers to purchase the size of
vehicles with the performance, utility and safety features that meets their needs. The agencies'
cost estimates include the costs of preserving all of the utilities of the present vehicle fleet. See.
e.g. EPA RIA pp. 1-39 to 40. We believe that the compliance path we have shown maintains
utility of the existing fleet (with two limited exceptions as discussed in Chapter 1.3 of our RIA)
and maintains the safety characteristics of today's fleet as discussed in section II.G of the
preamble and in Chapters 3.4 and 4.4 of our RIA. Regarding octane requirements, we address
octane-related issues in section 11.2 of this Response to Comments document.
Regarding comments from BMW, we do not disagree that BMW's costs are likely to be
higher than the average. In fact, our analysis shows a 2025MY cost of $1910 for BMW, or $74
18-104
-------
Analysis of Estimated Costs, Economic and Other Impacts
higher than the average. Our analysis also shows a 9% full EV penetration rate for BMW, versus
the average penetration rate of 3%. While BMW might argue that those results suggest a BMW-
fleet utility considerably lower than their current utility (since full EVs, in our analysis, have a 75
to 150 mile range versus the typical gasoline vehicle range of roughly 400 miles), we suggest
that buyers of full electric BMWs are likely to purchase the full EV despite the shorter range for
reasons other than utility (i.e., status, prestige, environmental stewardship, etc.). Therefore, we
do not believe that those BMW buyers will perceive any loss in expected utility.
Regarding the Consumer Federation of America, we have not studied the average cost
increase of new vehicles over the past 15 years, so we will not comment on the claim that cars
have increased $500 per year for 15 years. However, we do not ascribe unthinkingly to the
comment that the cost of the final standards is a "small price to pay for extra fuel economy and
extra savings." In fact, an average $1800 cost increase is not a small price to pay. Many
commenters have expressed considerable concerns with the costs and we do not want to suggest
that it is insignificant. Instead, we want to focus on the net impact which shows that there will
be considerable social benefits that result from the final standards, these benefits vastly outweigh
the rule's costs, and the fuel savings of the rule pay back the increased vehicle costs in a
comparatively short time. We will all pay more for future vehicles, but we will certainly enjoy
the savings that we realize as a result.
Regarding the comment from Mr. Jackson, please refer to our earlier response to Mr.
Jackson in section 18.2.
Regarding comments from NACAA, please refer to our earlier response to NACAA in
section 18.2.
Regarding the comments from NAD A, we agree that there is uncertainty in our cost
analysis given the long timeframe between now and 2025. For that reason, we have conducted
several sensitivities surrounding costs and have found that the standards are very cost beneficial
in each of our sensitivity cases as well as in our primary analysis. We present this sensitivity
analysis in Chapter 3.11 of the RIA. NAD A also suggests that EPA and NHTSA should use one
marginal cost-to-consumer number and that, by not doing so, calling the rules a single national
program is a misnomer. We disagree with this assertion. In fact, each agency has a different set
of requirements to meet due to the different statutes that provide authority to each agency.
NHTSA has a model that helps them estimate costs and benefits within the constraints of its
statute. EPA has a model that helps it do the same. In fact, the estimated costs by each agency,
using its respective models and analytic techniques, are corroborative. EPA believes that these
corroborative analyses makes the overall conclusions more robust (and not in some way weaker,
as the commenter would have it). We note further that the costs estimated by each agency will
inherently be different for several reasons but, most notably, because NHTSA's standard does
not reflect the full array of AC-related improvements that EPA's does, and EPCA/EISA allows
manufacturers to pay fines rather than comply with the standards. Compliance is mandatory
under the Clean Air Act. However, even though manufacturers will not be able to pay fines to
comply with EPA standards (so that the ability to pay fines under the CAFE program becomes of
no practical consequence), NHTSA still analyzes its program as though those fines will be paid.
18-105
-------
EPA Response to Comments
As for NADA's claims that we have obfuscated cost projections, focusing only on
benefits, we simply do not understand. Far from hiding or disguising costs, there are many
prominent tables throughout the preamble and each agency's RIAs that clearly present the costs
of the programs. Nor are those costs aggregated in a way making it harder to evaluate
individualized impacts. EPA has estimated technology penetration and associated costs for each
manufacturer, for example. See e.g. preamble tables 111-25, 28, and 29.
Regarding the $2936 cost claimed by NAD A for the three recent fuel consumption and
GHG reducing rules, again we disagree. In addition, even if (against our view) we accept that it
is appropriate to aggregate the different rules' costs here, NADA has made a number of factual
errors in doing so. We have estimated the 2025MY reference case costs (i.e, the cost to meet the
2016 standards in the 2025MY) at $719 (see RIA Table 3.6-1). We have also estimated
2025MY control case costs (i.e., the cost to meet the 2025 standards in the 2025MY) at $1836
(see RIA Table 3.6-3). The total cost of the two rules would then be $2555, or $381 lower than
that suggested by NADA. In fact, the $719 value actually includes costs to meet NHTSA's
MY2011 standards in MY2025. To clarify, in the MYs 2012-2016 final rule, we estimated the
cost to meet the MY2011 standard in MY2016 at $89 (2007$) (see EPA-420-R-10-009, Table 4-
6 at page 4-18) which would probably be on the order of $50-$70 (2010$) for meeting the
MY2011 standard in MY2025. Therefore, the $2555 value stated here is slightly high since it
already includes the costs of meeting the MY2011 standard in MY2025. In adding their costs,
NADA has inappropriately added the costs presented in each of the rulemakings they mention.
However, the cost they used for the MYs 2012-2016 rule, or $903 adjusted to $945, is the cost of
complying with the 2016 standards in the 2016MY, not the 2025MY. To properly add the costs,
one needs to use the cost of the 2016 standards in the 2025MY as we have done here. Curiously,
NADA does not suggest adding together the cumulative benefits of these standards, which again
vastly outweigh the standards' cumulative costs.
Regarding NADA's comments on calculating retail price impacts, please refer to our
earlier response to NADA in section 12.3.2. Regarding NADA's claims about lower priced
vehicles and the ability of frugal buyers, students and working families to afford new cars, we
have a response to that argument in section 18.7.1, below.
Regarding comments from David Ross, EPA would like to thank Mr. Ross for his
comments and interest in our rule. As explained in section III.H.l 1 of the preamble, EPA agrees
that vehicles in the low-priced (economy-class) segment will bear technology costs needed to
meet the new standards, but it is not known how manufacturers will decide to pass on these costs
across their vehicle fleets, including in the low-priced vehicle segment. If manufacturers decide
to pass on the full cost of compliance in this segment, then it is possible that consumers who
might barely afford new vehicles may be priced out of the new-vehicle market or may not have
access to loans. However, the rule's impacts on availability of loans are unclear, because some
lenders do factor fuel economy into their loans, and it is possible that this trend may expand. In
addition, as the Union of Concerned Scientists comments, auto makers have some flexibility in
how both technologies and price changes are applied to these vehicles; auto makers have ways to
keep some vehicles in the low-priced vehicle segment if they so choose. Though the rule is
expected to increase the prices of these vehicles, the degrees of price increase and the impacts of
the price increases, especially when combined with the fuel savings that will accompany these
changes, are much less clear. See also responses in section 18.7.1 below.
18-106
-------
Analysis of Estimated Costs, Economic and Other Impacts
Regarding comments from Ruth Steyn and Mark Cuenca, we disagree that the rule will
result in new car costs increasing $5000-$6000 as made clear in the response to the NADA
comments above, and in our response in section 12.3, above.
18.2.2. Annual Aggregate Costs
No Comments received on this topic.
18.2.3. Consumer Payback Analysis
Organizations Included in this Section
Consumer Federation of America (CF A)
Consumer Reports
Consumers Union
Defour Group LLC
Delphi Corporation
Environmental Defense Fund (EDF)
International Council on Clean Transportation (ICCT)
National Automobile Dealers Association (NADA)
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
U.S. Chamber of Commerce
Volkswagen Group of America
Organization: Consumer Federation of America (CFA)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 40.]
Household gasoline expenditures set a record in 2011 reaching an average of over $2,850 per
year which means that gasoline expenditures were 40 percent higher than expenditures on home
energy, electricity, natural gas and heating oil. Ten years ago gasoline expenditures were 13
percent lower than home energy and that is why consumers are so troubled by gasoline prices.
But rising gasoline prices have also changed the structure of the cost of driving. Ten years ago
the cost of owning a vehicle as reported in the consumer expenditure survey was the largest
single component of the cost of driving by far, about three times as high as the cost of gasoline.
In 2011 the cost of gasoline will equal or exceed the cost of ownership in the consumer
expenditure survey. This is an entirely new automobile market.
IV. CONSUMER POCKETBOOK IMPACT: THE PROPOSED FUEL ECONOMY
STANDARDS WILL PROVIDE SIGNIFICANT CONSUMER COST SAVINGS
The impact of the standards on consumers can be measured in a variety of ways - pocketbook
cash flow, vehicle net benefit, and simple payback periods. By every consumer impact measure,
18-107
-------
EPA Response to Comments
the standards deliver substantial benefits to consumers. [EPA-HQ-OAR-2010-0799-9419-A1, p.
5]
As Exhibit S-4 shows, for the typical consumer who purchases a new auto that complies with the
2025 standard with a five year auto loan, the higher fuel economy lowers the cost of driving from
the first month because the reduction in gasoline expenditures is greater than the increase in the
monthly payment to cover the cost of fuel saving technology. [See Exhibit S-4 on p. 6 of Docket
number EPA-HQ-OAR-2010-0799-9419-A1] [EPA-HQ-OAR-2010-0799-9419-A1, p. 5]
At the end of the auto loan, the consumer will have saved an average of about $800.
By the tenth year, the vehicle will have generated an average of over $3,000 in savings, which
means resale values are likely to be much higher, by $1,000 to $2,000.
Simple payback periods for new cars are less than three years; for new trucks, it will be less than
two. [EPA-HQ-OAR-2010-0799-9419-A1, p. 5]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 39.]
Higher fuel economy standards lower the cost of driving from the first month. They are cash
flow positive because the reduction in gasoline expenditures is greater than the increase in the
monthly payment to cover the cost of fuel saving technology. At the end of the auto loan the
consumer will have saved an average of $800. By the tenth year the vehicle will have generated
an average of over $3,000 in savings. Therefore, the resale value of the vehicle is likely to be
much higher.
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 89.]
Almost two-thirds of respondents support a 60-mile per gallon standard as long as the payback
period is within three to five years. And that is the case with these standards.
There are several flaws in quantitative analysis that cause the agencies to seriously underestimate
the value of higher fuel economy standards. We have pointed out these flaws in past
analyses. [EPA-HQ-OAR-2010-0799-9419-A1, pp. 12-13]
• The rebound effect should not be included in the consumer pocketbook analysis.
Organization: Consumer Reports
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 167.]
Most are willing to pay extra for the extra fuel economy if the payback is — will mean a lower
overall cost of that vehicle over five years.
18-108
-------
Analysis of Estimated Costs, Economic and Other Impacts
Organization: Consumers Union
Once fully implemented, the standards will save most car buyers money in the very first month
of ownership. According to CNW Marketing Research, approximately two-thirds of new car
buyers finance their new vehicle purchases with an average five-year loan.4 Because average
monthly fuel savings is greater than the additional monthly payment from a higher purchase
price, consumers start saving right away. For car buyers who pay cash for a new vehicle, the
payback period is less than four years, even with EIA's modest fuel price projections. Although
consumers will be paying slightly more money for more efficient vehicles, they will more than
recover this investment through savings at the pump. [EPA-HQ-OAR-2010-0799-9454-A2, p.2]
4 - According to CNW Marketing Research, 67.38% of new-car purchases were financed in
2010. The average length of time for a new car loan in November 2011 was 57.22 months. See
Appendix B CNW Marketing Research on Financing Data and Appendix C CNW Marketing
Research on Payment Type for data tables.
Organization: Delphi Corporation
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 110.]
Third, this rulemaking will enable the consumer to experience the inherent value of technologies
that have a reasonable payback period.
Organization: Environmental Defense Fund (EDF)
C. PAYBACK PERIOD
EDF supports the use of a 5-year or greater payback period as an input to estimate the value of
fuel economy improvements to potential vehicle buyers. A payback period of anything less than
5 years would not accurately reflect the current and forecasted buying trends of consumers. In
2010, consumers owned vehicles for an average of 63.9 months, or just over 5 years.19 The
average length of ownership of new vehicles has been on a steady rise since the economic and
auto industry downturn in 2008 and is expected to continue to rise. 20 Therefore, the period of
time that potential vehicle buyers can be assumed to value fuel economy improvements in
making their purchasing decisions may also be increasing. For this reason, we strongly urge the
Agency to use a payback period that accurately reflects the forecasted purchasing behavior of
consumers. [EPA-HQ-OAR-2010-0799-9519-A1, p. 8]
Organization: National Automobile Dealers Association (NADA)
IV. THERE IS A NEED FOR ADDITIONAL CONSUMER INFORMATION ON LOWER
OPERATING COSTS AND FUEL ECONOMY 'PAY-BACK'
18-109
-------
EPA Response to Comments
Prospective purchasers able and willing to consider buying new vehicles covered by the proposal
could benefit from additional information designed to enable them to better understand the value
of investing in fuel economy performance. Current EPA/NHTSA fuel economy labels provide
prospective purchasers with the tools necessary to make good comparisons between new
vehicles, and between new and used vehicles. NADA is engaged with EPA on how best to use
this tool to educate interested prospective purchasers on comparative fuel economy performance.
In addition, dealers work with the Department of Energy to make available to consumers the
annual DOE/EPA Fuel Economy Guide. In additon, a wealth of useful information is found on
fueleconomy.gov and on other non-governmental websites devoted to the topic. [EPA-HQ-OAR-
2010-0799-9575-A1, pp. 9-10]
Section 105 of EISA specifically directed DOT, in consultation with DOE and EPA, to
implement a vehicle fuel efficiency and alternative fuel consumer education program. Pursuant
to that mandate, NADA urges NHTSA to exercise its authority to collect annually from vehicle
manufacturers, and to make available to the public, the actual cost of compliance with the so-
called 'National Program' for each make, model, and powertrain. This key piece of information,
not currently available, will enable prospective new vehicle shoppers to conduct a pay-back
analysis for each new vehicle they are considering by measuring actual compliance costs against
potential fuel savings. The availability of actual compliance cost data also will assist NHTSA
and EPA with determining how best to make further modifications to the 'National Program' so
as to improve its effectiveness. In short, enabling the transparency of actual compliance cost data
will help to maximize the efficiency of consumer fuel economy decision making and to
maximize net regulatory benefits. [EPA-HQ-OAR-2010-0799-9575-A1, p. 10]
The final rule should assume that, at most, buyers value any fuel savings associated with the
purchase of a new motor vehicle over a five-year period. As discussed above, except in rare
instances of high and increasing fuel prices, consumers who view fuel economy as an important
purchase criteria will be hard pressed to make the case for buying a more fuel efficient new
vehicle if the up-front capital costs associated with doing so cannot be recouped in short order.
[EPA-HQ-OAR-2010-0799-9575-A1, p. 10]
The benefits analysis used in the proposal uses an oversimplified pay-back method that
overstates potential fuel economy savings. Instead, for purposes of calculating any 'pay-back,'
real-world finance, opportunity, and additional maintenance costs should be accounted for. In
other words, the final rule should evaluate its potential impact on a vehicle's total cost of
ownership. An example of such a calculator is found at http://www.nadaguides.com/Cars/Cost-
to-Own. NADA would welcome the opportunity to discuss further with EPA and NHTSA how
prospective purchasers of new light-duty customers would be better served by a total cost of
ownership approach to understanding a given vehicle's future costs of operation. [EPA-HQ-
OAR-2010-0799-9575-A1, p. 10]
Dealers will continue their efforts to educate consumers on how best to make fuel efficient
purchases, and on how actual mileage may vary from that set out on Monroney labels. Through
efforts such as NADA's Green Campaign (http://www.nada.org/green), dealers also will
continue to educate customers on how to maximize in-use fuel economy performance. [EPA-
HQ-OAR-2010-0799-9575-A1, p. 10]
18-110
-------
Analysis of Estimated Costs, Economic and Other Impacts
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 94-95.]
Proponents of the model year 2017 through 2025 proposal assert that higher upfront costs will
pay back for purchases of the - in the form of fuel cost savings.
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
A consistent Consumer Federation Poll released in September of 2010 also showed consumers
are willing to pay more for greater fuel efficiency. A majority (62 percent) were willing to pay
more for efficiency if they recovered the added cost with a five-year payback period. 6 [EPA-
HQ-OAR-2010-0799-9549-A2, p. 2]
A more recent study by Deloitte reveals that Generation Y consumers show a strong preference
for electric vehicles and hybrids and will pay more for these advanced technology vehicles. A
strong majority (56 percent) prefer an electric vehicle over any other type of vehicle, while
almost half (49 percent) said they would pay $300 for each mile per gallon of fuel economy
improvement that a hybrid gets over a traditional model.7
The above mentioned polls and the Deloitte study support the agencies' use of a 5 year pay back
for the cost of technologies using a 3 and 7% discount rates. Significantly, the agencies find that
consumers who use a standard 5-year loan to purchase a new vehicle will begin saving they
when the drive off the lot, with monthly savings at the pump exceeding the increased loan
payments associated with fuel saving technologies by $12 per month (or more).
6 http://consumerfed.org/pdfs/Consumer_Savings_Survey_Fact_Sheet092710.pdf
Organization: Volkswagen Group of America
An implication of the lack of cost parity is the impact on consumer payback. The agencies state
that an average consumer will face just less than 4 years to achieve pay-back on the higher
upfront investment. Clearly the payback time for a consumer purchasing a passenger car will be
longer than a consumer purchasing a light truck, especially a larger pick-up. While Volkswagen
has not directly calculated what the expected implication could be on a consumer evaluating two
vehicles with different payback periods, it would seem anecdotally that in most cases the
consumers would tend towards the shorter period. [EPA-HQ-OAR-2010-0799-9569-A1, p. 10]
Organization: U.S. Chamber of Commerce
EPA states that the new rules will save consumers money under three scenarios: (1) the vehicle is
driven by one owner for its entire life span; (2) the customer pays cash and keeps the vehicle for
at least four years; or (3) the customer finances the car with a five-year loan and keeps the car for
at least those five years. EPA appears to imply that anyone in a typical two-, three- or four-year
18-111
-------
EPA Response to Comments
lease will pay more for their vehicle as a result of the new fuel economy standards. EPA also
appears to imply that anyone purchasing a vehicle with a loan that lasts less than five years will
pay more for their vehicle as a result of the new fuel economy standards. [EPA-HQ-OAR-2010-
0799-9521-A1, p. 2]
A large swath of the car buying public—i.e. anyone owning or leasing a new car for less than
four years—will therefore be exposed to higher vehicle costs as a result of the proposed rule.
Given that the driving force for this rule is fuel economy, if consumers are unwilling or unable to
pay the added cost for this benefit, EPA and NHTSA must be prepared to make changes to the
program. [EPA-HQ-OAR-2010-0799-9521-A1, p. 2]
Response:
Regarding comments from CFA, we agree that consumers will save money due to the
final standards through decreased fuel expenditures despite the higher new vehicle costs.
Furthermore, we do not include rebound miles driven in our consumer payback analysis,
although we do include rebound miles driven in our benefit-cost analysis. We present our
consumer cost of ownership (payback) analysis in section III.H.5 of the preamble and in Chapter
5.5ofEPA'sfmalRIA.
Regarding the comments from Consumer Reports and Consumers Union, our analysis
shows that the payback period will indeed be within 5 years for the average new vehicle
purchase (3.3 years using 3% discounting and a cash purchase). For credit purchases, the
savings being in the first month as the fuel savings outweigh the increased loan payments
assuming a 5 year loan at average national loan rates. We present our consumer cost of
ownership (payback) analysis in section III.H.5 of the preamble and in Chapter 5.5 of EPA's
final RIA.
We addressed the concerns expressed by the Defour Group in our section 18.1 responses
to the Defour Group.
We agree with the Delphi Corporation that the rule will enable the consumer to
experience in inherent value of technologies that have a reasonable payback period.
EPA would like to thank the Environmental Defense Fund for their comment and interest
in our rule.
Regarding comments from NAD A, that NHTSA should collect annually and make
available to the public the actual cost of compliance with the National Program for each make,
model, and powertrain, EPA doubts this could be done. It is one thing to require industry, any
industry, to make available its costs of doing business—this is required by the Security and
Exchange Commission for all public companies—but quite another to require that information at
the product level. What NADA suggests is akin to requiring Apple to make available to the
public the cost of producing a single iPad or iPhone. While no doubt interesting to the
consumer, such information is among the most closely guarded information within most public
companies. Further, it would require each auto maker to make available to the public their
pricing strategy for each of their vehicles. Regarding the time period over which consumers
18-112
-------
Analysis of Estimated Costs, Economic and Other Impacts
value fuel savings, we note that our OMEGA model runs calculate fuel savings, and discount
those fuel savings, over a five year period, consistent with NADA's recommendation. Our
payback analysis shows a 3.3 year payback, on average, for 2025MY cash purchases. Regarding
what NADA considers our oversimplified payback analysis, we note that our final payback
analysis includes increased maintenance costs as the commenter suggested (as well as sales
taxes, financing costs for credit purchases and increased insurance costs on the more valuable
vehicles, again consistent with the commenter's suggested approach).
Regarding comments from the Sierra Club, et al, we agree that a five year payback
period, as mentioned above in our response to NADA, is the appropriate period to use within
OMEGA when determining the packages of technologies that are most appropriate for achieving
compliance.
Regarding the comment from Volkswagen that the payback period for cars will be longer
than for trucks, VW appears concerned that comparison shoppers will gravitate toward the
shorter payback periods (trucks) and away from the longer periods (cars). Being largely a car
maker for the US market, this would be a concern for VW. However, the comment implies that
potential car buyers are comparison shopping against trucks and vice versa. It seems just as
probable, if not more so, that potential car buyers are shopping for a car while potential truck
buyers are shopping for a truck. As such, their comparisons would be within class and not across
class, at least for the most part. Nonetheless, while VW admits that they have not done the
calculations to know whether paybacks are longer or shorter for cars versus trucks, we have. As
noted, our payback period for a 2025MY cash purchase of the average vehicle is 3.3 years. For a
2025MY car, the payback would be 3.5 years, and for a truck would be 3.2 years. We doubt that
such a comparison would drive a potential car buyer to a truck since, despite a shorter payback
period, the overall fuel costs would presumably be higher for the truck than the car. But, we
leave it to VW to understand their potential customers.
Regarding comments from the U.S. Chamber of Commerce, there appears to be a
misunderstanding with respect to our payback, or consumer cost of ownership, analysis. In fact,
we fully acknowledge that MYs 2017-2025 vehicles are expected to have increased costs as a
result of this rule, and that those costs will be borne in part or in total by the purchasers of the
vehicles. The terms of the purchase do not matter in that respect - cars and light trucks are
expected to cost more regardless of purchase option. Our analysis was meant to highlight that,
despite the higher costs, consumers would actually save money through reduced fuel
expenditures. The point at which the savings outweigh the costs is when we consider the savings
to have "paid back" the increased costs. Since the cost side of the calculation varies depending
on the purchase option - cash vs credit via 5 year loan vs credit via 4 year loan vs lease vs etc. -
we chose to focus on what seemed to be the most prevalent purchase options. Those options
being cash purchase and credit purchase via 5 year loan. Focusing on those two purchase
options should not be interpreted as meaning that purchasers choosing other purchase options
will not experience the same fuel savings and/or nearly the same net savings.
18.3. Analysis of Reduction in Fuel Consumption and Resulting Fuel
Savings
Organizations Included in this Section
18-113
-------
EPA Response to Comments
Alliance of Automobile Manufacturers
American Council for an Energy-Efficient Economy (ACEEE)
American Petroleum Institute (API)
American Road & Transportation Builders Association (ARTBA)
BlueGreen Alliance
Consumer Federation of America (CF A)
Consumers Union
El00 Ethanol Group
Environmental Consultants of Michigan
Environmental Defense Fund (EDF)
Jackson, F.W.
Mass Comment Campaign (20) (Union of Concerned Scientists-1)
Mass Comment Campaign (39) (Unknown Organization)
National Association of Clean Air Agencies (NACAA)
National Automobile Dealers Association (NADA)
Natural Resources Defense Council (NRDC)
Northeast States for Coordinated Air Use Management (NESCAUM)
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Smith, G.
Organization: Alliance of Automobile Manufacturers
The importance of gasoline pricing (including tax policy) cannot be underestimated, particularly
for the post-MY 2020 timeframe, when policy makers are counting on a rapid transition to non-
petroleum transportation fuels. The report from Resources for the Future noted that "it is an open
question whether carbon prices at the levels currently under discussion will be sufficient, by
themselves, to bring 'new' fuel efficiency technology into the marketplace." Yet the Energy
Information Administration projects that fuel prices will be relatively stable over the next 15
years, with gasoline prices rising by less than 4 cents per year. [EPA-HQ-OAR-2010-0799-9487-
Al,p.l9]
What Impact are the New Requirements Having on Government Revenues and How Are
Governments Responding? [EPA-HQ-OAR-2010-0799-9487-A1, p.20]
As gas tax revenues decrease due to rising adoption of electric vehicles (EVs) and improved fuel
economy, both the federal government and the states will need to determine how to address
budget shortfalls resulting from falling gas tax revenues. In February 2009, the National Surface
Transportation Infrastructure Financing Commission released a study recommending a shift from
the present reliance on federal fuel taxes to fund federal surface transportation programs to a
federal funding system based on more direct forms of 'user pay' charges, in the form of a charge
for each mile driven (commonly referred to as a vehicle miles traveled or VMT fee system).
[EPA-HQ-OAR-2010-0799-9487-A1, p.20]
Recently, certain states have been considering a vehicle miles traveled (VMT) tax or an annual
registration fee on EVs as an alternative method to raise revenue for the state's transportation
system. Legislation has been introduced in several states attempting to recover these lost tax
18-114
-------
Analysis of Estimated Costs, Economic and Other Impacts
revenues. State legislators in Arizona, Washington, Oregon, Texas, Indiana and Mississippi have
attempted to address declining revenues with bills that would place fees (i.e., a road usage
charge) on EVs, and in some cases, hybrid motor vehicles. States are expected to intensify such
efforts to maintain their transportation infrastructure in light of these declining gas tax revenues.
If states begin to enact such legislation, the agencies will need to evaluate how this could impact
consumers' willingness to invest in advanced technology vehicles. [EPA-HQ-OAR-2010-0799-
9487-A1, p.20]
Organization: American Council for an Energy-Efficient Economy (ACEEE)
RECOMMENDATIONS
Include an estimate of the impact of the rule on vehicle sales. Use the approach taken for the
2012-2016 rule unless a better approach is available.
Include economic benefits of the decline in fuel price as a result of the rule. [EPA-HQ-OAR-
2010-0799-9528-A2, p.2]
[These comments were submitted as testimony at the San Francisco, California public hearing
on January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 109-110.]
We concur with the agencies' assessment that in order to thrive in the global automotive market,
domestic manufacturers will need to invest consistently in technologies to improve fuel
efficiency. We believe that the standards now proposed can help achieve that outcome. And in
our testimony, we make three points:
First, that there is a huge potential for cost-effective investments in energy efficiency
improvements across all sectors of the economy.
So what is that potential for cost-effective efficiency improvements? In a report we released two
weeks ago titled, The Long-Term Energy Efficiency Potential; What the Evidence Suggests, we
show that by investing in greater levels of energy productivity, we can slash the nation's energy
use by 40 to 60 percent by the year 2050 as we create nearly 2 million more jobs and save the
equivalent of $2600 per household annually across all sectors of the economy.
Second, fuel economy standards are a critical first step in capturing the full economic potential.
And third, promoting these standards will be good for jobs, even as the fuel economy
improvements will save household consumers and businesses money that almost immediately
will be respent in the broader economy.
How do fuel standards then become a critical step in that economic performance? Anytime we
can promote cost-effective alternatives to the current pattern of technologies and services, the
productivity of the economy is improved. And the evidence here suggests that improved fuel
economy provides a significantly improved alternative to the purchase of gasoline. Drawing on
data from EPA/NHTSA, we estimate that in constant 2009 dollars that efficiency might cost on
18-115
-------
EPA Response to Comments
the order of 50 cents to $1.20 per gallon of gasoline equivalent compared to the 4, 5 or 6 dollars
per gallon of gasoline we may have to pay in the year 2025.
Organization: American Road & Transportation Builders Association (ARTBA)
ARTBA appreciates both EPA and NHTSA's goals of decreasing emissions generated by the
burning of fossil fuels in automobile usage. There is already a well-documented history of
reductions in fossil fuel emissions occurring through advances in automotive technology.
According to the EPA, fuel economy is up 61 percent since 1975. [EPA-HQ-OAR-2010-0799-
9403-A1, p. 1]
In 2009, the average personal vehicle got 21.1 miles per gallon, while its 1975 counterpart only
managed 13.1 miles per gallon. 1 As America's fleet of vehicles become more and more fuel
efficient, they will become less and less carbon emitting. For example, tighter fuel economy
standards proposed in May 2009 by the Obama Administration will reduce vehicle greenhouse
gas emissions by an estimated 900 million metric tons between 2012 and 2016. This is the
equivalent of removing 177 million tons of today's automobiles from the nation's roadways.2
Additionally, CC>2 emissions are down 38 percent since 1975: A 2009 model car or light-duty
truck (SUV, minivan, pickup) generates 422 grams of CC>2 per mile compared a 1975 model car,
which emitted 679 grams per mile.3 [EPA-HQ-OAR-2010-0799-9403-Al, p. 2]
Further, data from the U.S. Environmental Protection Agency (EPA) and the Federal Highway
Administration (FHWA) shows substantial progress towards emissions reductions in a growing
economy. According to both agencies, despite substantial gains in population, employment,
gross domestic product (GDP), number of drivers, number of vehicles, and vehicle miles traveled
(VMT) since 1970, the nation's air quality has improved. Specifically, over the same time
period, the transportation sector has reduced volatile organic compounds (VOCs) by 73 percent,
nitrous oxides (NOX) by 41 percent, particulate matter (PM) by 50 percent, and carbon monoxide
(CO) by 62 percent. NOX and VOCs are precursors to ozone and associated with GHGs and
climate change. As levels of VOCs and NOX continue to decrease, so will ozone and
GHGs. [EPA-HQ-OAR-2010-0799-9403-A1, p. 2]
ARTBA supports efforts to reduce emissions and improve fuel economy. It is inappropriate,
however, to promulgate such proposals without acknowledging and attempting to mitigate the
adverse effect they would have on other areas of federal responsibility. ARTBA is particularly
concerned with the potential effect of EPA and NHTSA's proposed rule on revenues generated
for the Highway Trust Fund (HTF). The HTF was created in 1956 as an investment construct by
which users of the national highway infrastructure are charged a direct user fee to maintain and
improve the system on which they rely. Currently, 18.4 cents are directed to the federal HTF
from each gallon of gasoline purchased and federal highway investment accounts for 45 percent
of the national capital investment in highway and bridge construction. [EPA-HQ-OAR-2010-
0799-9403-A1, p. 2]
As fuel efficiency has increased and innovations in automotive technologies have progressed,
revenues into the HTF have been negatively impacted. These positive developments in reducing
the motor fuel usage, however, do not have to be inconsistent with the goal of meeting the
18-116
-------
Analysis of Estimated Costs, Economic and Other Impacts
nation's transportation infrastructure needs. Unfortunately, policymakers in the legislative and
executive branches have not increased the per gallon rate of the federal motor fuels user fee since
1993 and as a result the revenues flowing into the HTF and their corresponding purchasing
power has fallen further behind the documented needs of the nation's surface transportation
system. This problem affects the amount of funding that all 50 states receive from the federal
government to build and maintain their transportation infrastructure. [EPA-HQ-OAR-2010-
0799-9403-A1, p. 2]
To illustrate the magnitude of the effect of the proposed CAFE Standards on HTF revenues,
ARTBA has attached a memo which was distributed to Congress on July 28, 2011. According to
ARTBA's research, the proposed CAFE standards will result in a loss of $75,651.7 million
dollars through the year 2025. At a time when the nation is struggling to find funding for long
term solutions to pay for pressing transportation infrastructure needs, this kind of cut in HTF
revenues could put the nation's entire transportation program in jeopardy. [The memo can be
found on p. 4 of Docket number EPA-HQ-OAR-2010-0799-9403-Al] [EPA-HQ-OAR-2010-
0799-9403-A1, pp. 2-3]
ARTBA encourages the development and use of more energy efficient vehicles and supports the
EPA and NHTSA proposal to raise the CAFE standards. This proposal, however, should be
expanded to ensure it does not dilute existing or future federal HTF revenues. This adjustment
could include an increase in the federal motor fuels tax or some other method of generating
federal revenues that will accurately capture the benefit received by users of the system and
protect against the effects of inflation, increases in construction costs, and advances in fuel
efficiency. [EPA-HQ-OAR-2010-0799-9403-Al, p. 3]
1 Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends:
1975 Through 2009, U.S. Environmental Protection Agency, November 2009.
2 Obama Administration National Fuel Efficiency Policy: Good For Consumers, Good For The
Economy And Good For The Country, May 2009.
3 Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends:
1975 Through 2009, U.S. Environmental Protection Agency, November 2009.
Organization: BlueGreen Alliance
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 38-39.]
Some of the fuel savings created by the standard will go to cover the modest incremental cost of
higher performing vehicles. This diversion of spending from fuel to vehicle improvements also
has the effect of boosting job creation. This is because vehicle manufacturing is more labor
intensive per dollar spent.
18-117
-------
EPA Response to Comments
Organization: Consumer Federation of America (CFA)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 88-89.]
Seventy-five percent are concerned about gasoline prices and dependence on Mideast oil. They
think it is important to reduce oil consumption. They support higher fuel economy standards as a
good way to do so.
There are several flaws in quantitative analysis that cause the agencies to seriously underestimate
the value of higher fuel economy standards. We have pointed out these flaws in past
analyses. [EPA-HQ-OAR-2010-0799-9419-A1, pp. 12-13]
• The base case price of gasoline is too low. The Energy Information Administration has
recently raised its estimate of gasoline prices by an average 30 cents per gallon. [EPA-
HQ-OAR-2010-0799-9419-A1, p. 13]
Significant macroeconomic benefits of greater fuel economy have been ignored.
• A "price effect" must be included that recognizes that the reduction in U. S. gasoline
consumption lowers the world price of crude substantially. This is a true (consumption)
externality and the agencies have estimated its value at $0.30 per gallon, but failed to
include it in the analysis.
Organization: Consumers Union
As noted in the analysis of the proposed rule, the benefits of the rule far outweigh the costs of
compliance. The vast majority of the benefits are direct consumer benefits in the form of fuel
savings, while the costs are primarily investments in deploying (and to some extent, developing)
more efficient and alternative fuel technologies. In making its cost-benefit calculations, NHTSA
relies on the Energy Information Administration's (EIA) future forecasts of gasoline prices.
Consumers Union notes that since 2004, actual oil prices were significantly higher than EIA's
five and ten year forecasts had predicted.3 While it is not feasible for EIA to predict oil price
shocks—such as the one we experienced in 2008—with any certainty, the risks and costs of price
spikes are nonetheless very real and likely to occur again in the near future. Consumers Union
expects that the consumer savings will be even greater than the sizable benefits predicted by the
rule. [EPA-HQ-OAR-2010-0799-9454-A2, p.2]
3 - See Appendix A EIA Understimation of Oil Prices
Organization: El00 Ethanol Group
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 202.]
18-118
-------
Analysis of Estimated Costs, Economic and Other Impacts
If fully implemented, this plan would save 12 billion barrels of crude oil over the 14-year period
between 2012 and 2025. This represents only 26 percent of our crude oil imports for that time
period. Thus, it is not possible to achieve crude oil independence by increasing CAFE alone.
Organization: Environmental Consultants of Michigan
As a further the drawback of CAFE policy, the proposed higher fuel economy standards would
cost $76 billion in lost fuel tax revenue. [NHTSA-2010-0131-0166-A1, p. 3]
Organization: Environmental Defense Fund (EDF)
D. GASOLINE PRICE
Projected future fuel price is the key input in estimating the fuel savings to consumers and
society, which accounts for the majority of the proposed program's benefits. Therefore, the
agencies' choice of fuel price is very important as it impacts the perceived feasibility of the
proposed program. For this proposed rule, the agencies use the most recent fuel price projections
from the U.S. Energy Information Administration's (EIA) Annual Energy Outlook (AEO) 2011
reference case forecast. While we agree that the AEO is a very credible source for fuel price
forecast, it is important to remember that forecasts are based on models, which are not crystal
balls (i.e. there is always some amount of uncertainty). For example, the EIA's AEO2005
forecast for fuel prices for 2005 to 2010 underestimated actual prices over those six years on
average by 31%.21 This illustrates the importance of the use of a sensitivity analysis with
significantly higher gasoline prices. [EPA-HQ-OAR-2010-0799-9519-A1, pp. 8-9]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 173.]
With respect to economic security, combined again with the Phase 1 standards, the proposed rule
will provide families with more than $8,000 in fuel savings over the lifetime of the new vehicle
for a total of 1.7 trillion in national fuel savings over the life of the program.
Organization: Jackson, F.W.
".. .no amount of domestic production could offset... ."Increasing domestic production is a
lengthy process, where I've seen it documented it says, and I accept, from start to 1st barrel is at
least a decade. So, to have more domestic production available Bush would have to have
initiated it over a decade ago. So, not Obama's fault until several more years have passed; if
Republican's want to blame someone it's Bush and Congress of a decade ago. [EPA-HQ-OAR-
2010-0799-11785-A1, p. 1]
"... .little he could do in the short run to ease the pain at the pump" Let's change criteria to from
what he can do to what could be done that he could speak out for and lead: Pain at the pump is
more than posted price, e.g., drop ethanol mandate to lower per gallon price and require less
gallons because a less ethanol content a gallon would have more btus. And there are others, some
we have used before like reduced highway limits, politically very unpopular but would help (I do
18-119
-------
EPA Response to Comments
not recommend this but it is something that we could do). But the most important action would
be to implement a program that moves us as fast as practical to implement cost-effective
maximum efficient technologies - see more specifics starting on bottom of page 7 "Additional
relevant comments" and continuing on page 8; and this he could/should do today, i.e., embark on
lowest future cost and maximum efficiency , no smoke and mirrors fleet!! [EPA-HQ-OAR-2010-
0799-11785-A1, p. 2]
"... .US producing more oil than any time during the last eight years..." This comes from pre-
Obama actions, i.e., not traceable to Obama actions.
"Neither he nor anyone else can do much about oil prices,..." He now, I accept, but statement to
broad to be completely correct. Oil producers, e.g., Saudis, could increase production and lower
price, i.e., they qualify as anyone else; and while Obama has very little he can do today with
immediate price impact, he does have some, e.g., "lead" cut back on ethanol. And that is for
today, there is much he can do to lower future price and price volatility, see below table on page
5. " new fuel economy standards... .average nearly 55 mpg by...." Some "smoke and
mirrors" here. Question of how one calculates, i.e., if I take a NHTSA 97 mpgge Leaf with a 12
mpg guzzler I average (unweighted) 54.5 mpg but reality is if I take the gallons of gas equivalent
vehicles weighted average I get 21.4 mpggev. Big difference and the one that matters is how
many gallons, or ggeqv, in total to move the fleet, i.e., Govt always flashes the 54.5 ( and
reporters report), it sounds good but not reality as far as oil (the issue at hand) demand is
concerned! Obama has tried but he is following his advisers (or handlers) and while making
some future progress potentially not the max that Nation needs and could/should have.
Potentially is a key word: true CAFE unweighted Target raised to 54.5 mpg: problem is with
way calculated and big loophole for manufacturers (see above build one LEAF and you can build
a "Guzzler"), and unweighted mpg calc, i.e., reality is: weighted calc more fuel required than
advertised! [EPA-HQ-OAR-2010-0799-11785-A1, p. 2]
So, Obama has potentially moved the "goal posts" but with big "loopholes" which I expect will
be used, otherwise why were they put in! Obama not an Engineer so he may really believe the
54.5, but what about NHTSA&EPA they have technical talent, why do they not tell him, or do
they?? Anyway, here is what I calc for EPA 2025 Proposal with 36 BGals ethanol per year
mandate fleet (see EPA references) vs. 2016 35.5 mpg: [EPA-HQ-OAR-2010-0799-11785-A1,
p. 2]
201635.5 mpgE15 fuel: 23.17 total (to Nation) cents per mile 3.15 ggeq/100 miles, or 31.75
mpggeq EPA Proposal 2025 fleet 36 BGal ethanol per year: 23.56 total cents per mile and 2.24
gge/100 miles, or 44.6 mggeq, i.e., not 54.5; and at higher cost. [EPA-HQ-OAR-2010-0799-
11785-Al,pp. 2-3]
EPRI with it's 50% plugins: 29.71 total cents per mile and 2.36 ggeq/100 miles, or 42.4 mpggeq
at much higher cost!
Max technologies with minimum ethanol no hybrids or plugins: 17.83 total cents per mile and
1.18 gg/100 miles, or 84.75 mpggev [EPA-HQ-OAR-2010-0799-11785-A1, p. 3]
18-120
-------
Analysis of Estimated Costs, Economic and Other Impacts
Pretty clear plug-in and ethanol both very expensive and require more energy on-board vehicle
(and in total) than Max (and or Min) technologies, e.g., EPRI with high plug-in % over the
174,000 mile life of a vehicle (vs. Max) of $ 20,671 added total cost per vehicle (and with an
assumed Taxes & inflation 50 % pass throughs $ 31,007) - quite a load. Even EPA's Proposal
case $ 9,970 added cost vs. Max (and with 50 % for Taxes & inflation pass throughs $14,955!
And as I believe manufacturers will continue to find larger more powerful vehicles more
profitable I believe EPA's proposal case cost understated and actual mpgge overstated. [EPA-
HQ-OAR-2010-0799-11785-A1, p. 3]
Bottom line: while Obama has moved the goal posts on gge from 35.5 mpg, it is at added cost (
and potentially much more added cost with methods of calc and/or plugins) with "smoke and
mirrors" numbers offered while better alternatives (Mid, Max) available that reduce fuel demand
far more while actually saving consumers & taxpayers a bundle! Obama needs to realize the
problem is high cost and increasing cost more to Nation, as he is currently promoting,
undefendable and is a lost cause if/when the truth gets out; better now than September &
October. The President is on exceedingly treacherous thin ice and needs to move now while he
has time to demonstrate a new much better for Nation direction; and 36 BGals ethanol was
instituted in 2007 before he came to office; the longer Obama continues to promote 36 BGals,
the more difficult disowning it will be. And removing the faulty 54.5 analyses & claims now
with President orchestrating the information release rather than his adversaries next fall will be
far less treacherous during November!!! And he needs to officially chastise NHTSA and EPA for
faulty analyses and claims and openly send message he is not happy with Govt performance and
wants full and "honest" information in the future from all Govt entities. [EPA-HQ-OAR-2010-
0799-11785-A1, p. 3]
Otherwise he depends on the other candidate to look so bad that he still looks the better choice in
November. "Drill baby drill" not a better alternative at least a decade for impact and probably
inadequate price impact as world demand for oil increases and turmoil in producing areas
continue and depletes our reserves at a faster rate, why speed up the date we run out?? And even
though Obama's approach is better than "drill baby drill" the voters could be so blinded by
unhappiness with Obama's performance in this area as to blindly opt for a change without
rationally recognizing they will have two choices in November and unhappiness with continuing
the one they have and are not happy with may get them to take a chance that I am confident they
would later regret. [EPA-HQ-OAR-2010-0799-11785-A1, p. 3]
More information:
To:
EPA&NHTSA
1/27/12 Rev. D 2/18/12 [EPA-HQ-OAR-2010-0799-11785-A1, p. 3]
Subject: Updated (mainly at paragraphs at end Re: messages sent to oil exporters) comments on
Docket ID Nos. EPA-HQ-OAR-2010-0799 and NHTSA-2010-0131 "2017 and Later Model
18-121
-------
EPA Response to Comments
Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel
Economy" [EPA-HQ-OAR-2010-0799-11785-A1, p. 4]
Per my above table let's examine Govt proposal with 60 BGals corn ethanol vs. 2016 35.5 mpg
standard using gasoline; and then compare against other options: Max technologies gasoline
fueled. [See table on pp. 3-4 of Docket number EPA-HQ-OAR-2010-0799-8041-A1] [EPA-HQ-
OAR-2010-0799-11785-Al,p. 11]
2016 35.5 CAFE gasoline fueled 20.98 cents/mile system 2.97 gg/100 miles. Vs. EPA proposal's
E36 (36 BGals corn ethanol of 23.56 cents/mile and 1.41 gal gas/100 miles; or, at 174,000
lifetime miles deltas of 2.69 more cents/mile to reduce gasoline 1.56 gg/100 miles. Doing the
math (includes backing out the 20 % fuel discount to get $s we are used to seeing, i.e., about
$100/brl): lifetime gasoline reduced but at a cost of $ 1.72 more per gal reduced; adding in the
$3.00 for gasoline yields $ 4.72 per gallon to drive vehicle. $ 4.72 equates to $ 198 per brl
gasoline or about $ 168 per brl crude offset. Wrong message to oil exporters, our alternative to
your $ 100/brl crude is to pay $ 168! [EPA-HQ-OAR-2010-0799-11785-A1, p. 11]
Now examine Max technologies ICEs at 17.83 cents per mile and 1.18 gg/100 miles; or save
3.15 cents per mile while saving 1.79 gg/100 miles. Much better message to oil exporters: our
alternative to your oil is to offset our demand for your oil several mbd while saving a couple of
hundred $Billion per year. And with significantly reduced demand, the crude cost should be
lower which would apply to all oil demand and would further increase our savings: e.g., if crude
price dropped from $100/brl to $ 50/brl and our demand dropped 6mbd (from 20mbd to 14) and
world followed and world demand dropped 20 mbd, I calc US crude savings at just under (0.47)
half a $ Trillion per year staying in Nation's economy; and with 0.065 $ Trillion less cost for
crude to US consumers &Taxpayers, I make it 0.535 $sT/year consumer/taxpayer savings . In
addition to savings at home more efficient military vehicles would require less fuel to support
missions meaning less frequent fuel convoys saving both money and lives! [EPA-HQ-OAR-
2010-0799-11785-A1, p. 11]
Factor in a large number of plugins (EPRI case) and I calc $ 347 per brl crude (vs. $ 168 for EPA
proposal, save $s for Max Tech). Need to stop showing oil exporters their oil as a bargain and
show them oil should be cost plus a "reasonable" profit!!!! [EPA-HQ-OAR-2010-0799-11785-
Al,p. 11]
Once we are moving on Mid & Max the numbers might convince some exporters that a stable for
5 or 10 year price for a guaranteed volume during the transition might be to both our & their
benefit; worth a try, especially close exporters. And we could make this more attractive by
working with them to reduce their domestic demand by increased efficiency allowing more to be
available for export instead of being used inefficiently (wasting a valuable saleable resource) at
home! [EPA-HQ-OAR-2010-0799-11785-A1, pp. 11-12]
I'd also consider increasing our online production capacity but capping it (and even some
existing) and buying low cost foreign oil when available; saves our oil until last and in the
interim it is available to help stabilize US "pump" price if world crude market goes wild. Keep
US price lowest by when National energy resources put out for bid include a condition as
18-122
-------
Analysis of Estimated Costs, Economic and Other Impacts
follows: crude and Nat Gas will be sold for use within US and in addition to current bid $s (up
front cost and royalties ) at not to exceed prices must be included as part of bid and lower price
needs to be properly accounted for Re: consumer cost; and Govt to have the right to reject all
bids if they believe it would be better (lowest consumer's prices) for Nation and all citizens for
Corps of Engineers to do the production. [EPA-HQ-OAR-2010-0799- 11785-A1, p. 12]
And as increased efficiency will reduce cost and jobs in fuel sector we need to apply these saved
resources to other areas to keep the economy & jobs at high level. So a question becomes where
to apply freed up resources in the most productive way for Nation to maximize goods & services
and foreign sales to pay down debt. [EPA-HQ-OAR-2010-0799-11785-A1, p. 12]
And there is more: many other areas (all need to be evaluated) should be likewise completely &
objectively evaluated; I'd start with the tax code. It shouldn't matter how you get your money
(earn it at work, earn it from investments or an inheritance) get so much less a base amount
based on number in family (max number children 2 - over 2 pay for your own hobby) then a
fixed %! Free enterprise Ideology, with Free enterprise focused on their bottom lines vs. taxes a
specious argument. Republican's declared Free enterprise the winners a decade ago promising a
great economy - well here we are a decade later. What really matters is what we get for our
resources and each action needs to stand on it's own merits; is free enterprise the way,
sometimes but not always; is Govt tax and spend better, sometimes but not always; or is it better
for Nation & citizens for individuals to use the resources as they see fit, also true sometimes but
not always! My answer: on a case by case basis it is not how we pay but what do we get for what
we pay regardless of how we pay - this needs to be the objective discussion: for each way, case
by case, what do we pay and what do we & Nation get, and how, case by case, do we maximize
short & long term, with strong emphasis on long term, benefit with availability and price
"stability" to Nation & citizens, i.e., get the resources to the sector that will make the best
investment - one that creates more value than the resources expended so economic activity is
sustainable and growing! [EPA-HQ-OAR-2010-0799-11785-A1, p. 12]
And all changes need to be fair and equitable Re. benefits & burdens to all, i.e., not politicians
protecting their special interests - every time politicians provide an advantage to a special
interest Consumers & Taxpayers have to pay for it; there is no free lunch for Consumers &
Taxpayers!!! Also true when Govt causes cost to go up for same output, e.g., cents per mile total,
fixed income citizens have to reduce support in other economic sectors thereby reducing
economic support & jobs there; e.g., while plugins add jobs in manufacturing plugins the less
money to support other economic sectors results in job losses in these other sectors. And in
addition to money and jobs, goods and services produced (miles traveled, houses built, food
produced, etc.) is what we get to support our lifestyle - we need to watch goods & services
criteria carefully as this sets our standard of living, which is what really counts and we need to
focus on! [EPA-HQ-OAR-2010-0799-11785-Al,pp. 12-13]
4. Additionally, Govt is mandating more expensive liquid fuel when all Govt actions counted,
Le., 36 billion barrels per year of ethanol most all of which I expect will be corn based, and do
not forget to include all impacts, including taxes & inflation. I calc cost to the Nation for 36
BBris ethanol to be another $ 3220 added fuel cost per vehicle for EPA's proposal mix
unaccounted for. [EPA-HQ-OAR-2010-0799-8041-A1, p. 2]
18-123
-------
EPA Response to Comments
Organization: Mass Comment Campaign (20) (Union of Concerned Scientists-1)
A strong clean car program is good for all Americans. The proposed standards would save the
average consumer $6,000 over the lifetime of a new 2025 vehicle, even after accounting for the
additional costs of clean car technology. This estimate assumes gas prices will remain below the
2011 average until at least 2025; if gas prices instead continue to rise, savings from increased
fuel efficiency will rise as well. [EPA-HQ-OAR-2010-0799-1558-A1_MASS, p.l]
Organization: Mass Comment Campaign (39) (Unknown Organization)
Aside from health benefits, I am especially impressed by how these standards can reduce the
nation's oil consumption by 12 billion barrels in the next 13 years. This will ultimately lead to a
decrease in our reliance on foreign oil, which is a great step forward for the United States
security. [EPA-HQ-OAR-2010-0799-1245-A1_MASS, p.l]
Organization: National Association of Clean Air Agencies (NACAA)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 41.]
In addition, earlier introduction of cleaner vehicles will provide added assurance that the
projected fuel performance is achieved by 2025.
Organization: National Automobile Dealers Association (NADA)
[Supplemental comments to the testimony]
VI. Any "Savings" Related To Particular Purchases Will Vary Depending On an Individual's or
Household's Transportation Profile
In addition to falling prey to a "if they build it, they will come" mentality, several folks testifying
at the hearings, along with EPA and NHTSA, mistakenly used macro data to back into assertions
of "consumer savings." It is both inappropriate and overly simplistic to suggest that a new
vehicle fleet phased-in over a certain number of years which may result in gross reductions in
fuel use compared to a base scenario, necessarily will result in "the average consumer saving X
dollars, " assuming an average vehicle miles travelled (VMTs)and a certain fuel price. [NHTSA-
2010-0131-0267-Al,p.5]
Such an analysis raises at least two significant problems. First, to make assumptions so many
years in advance based on historically volatile variables is an inherently weak proposition.
Second, if and to what extent a given household may achieve a "pay-back" depends on its
individual baseline, not on an assumed national average. NHTSA and EPA should conduct a
more nuanced analysis of potential "fuel savings," including a careful review of the economic
status of prospective purchasers, of whether new vehicle purchases will serve as replacements or
as new additions, of the spectrum of VMTs for a set of foreseeable fuel price scenarios, etc,
18-124
-------
Analysis of Estimated Costs, Economic and Other Impacts
rather make crude, backed-into estimates of "consumer savings" using macro assumptions.
[NHTSA-2010-0131-0267-A1, p.5]
Organization: Natural Resources Defense Council (NRDC)
EPA and NHSTA should update fuel price inputs to reflect current forecasts which are higher
than those used by the agencies and demonstrate that the agencies took a conservative approach
in setting stringency. [EPA-HQ-OAR-2010-0799-9472-A2, p. 3]
NHTSA's baseline sensitivities based on voluntary overcompliance should be excluded from the
final rule. [EPA-HQ-OAR-2010-0799-9472-A2, p. 4]
III. Design of the Standards
A. Stringency
1. Stringency Should be Higher Based on Most Recent Fuel Price Forecasts
The 54.5 mpg standards are strong but stronger standards are feasible and cost-effective,
especially under higher fuel prices predicted by the Energy Information Administration (EIA).
To develop an economically feasible and cost-effective standard, the agencies used a projection
of fuel prices from the EIA Annual Energy Outlook (AEO) 2011. Since the proposal, the EIA
has published AEO 2012 Early Release Reference Case, which projects prices to be $0.24 -
$0.34 per gallon higher than the AEO 2011 Reference Case during 2017 to 2035. The higher
gasoline prices would increase the fuel-saving technologies that could be applied cost effectively
and justify a higher standard. [EPA-HQ-OAR-2010-0799-9472-A2, p. 9]
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Transportation Program Funding
The overall reduction in fuel consumption resulting from this rule will affect fuel tax revenues
and by extension, transportation funding that relies on per-gallon fuel taxes. While such revenue
losses are a legitimate concern, this issue should not be a determinant of the final GHG standards
adopted under this rule. For many reasons, federal and state agencies responsible for
transportation infrastructure are faced with having to consider non-traditional mechanisms to
ensure sustained funding into the future. Funding for transportation infrastructure should be
addressed in a broader context outside of this regulatory proceeding. [EPA-HQ-OAR-2010-
0799-9476-A1, p. 3]
As expected, a 6 percent annual rate of improvement in fuel economy would have a modestly
greater impact on fuel tax revenues compared to the 5 percent rate proposed in the regulation. In
either case, a reduction in tax revenue equates to a tax savings of the same amount for
consumers. Over a span of 9 years (2017 - 2025) under the proposed 5 percent scenario, total tax
revenue in the NESCAUM region from gasoline sales is estimated to be between $28 and $39
billion, depending on the discount rate applied to the net present dollar value. Under the 6
18-125
-------
EPA Response to Comments
percent scenario in the same timeframe, this amount would be reduced by between $130 and
$190 million, or around 0.5 percent of total revenues. By year 2025, the percentage reduction in
revenues would be around 1.3 percent and from that point would gradually increase due to
continued attrition of older vehicles in the fleet and top out in approximately 20 years at around a
3.5 percent reduction in revenues. [EPA-HQ-OAR-2010-0799-9476-Al, p. 3]
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
Consider more realistic gas price projections: When considering gas prices, the agencies use
AEO's 2011 Reference Case. AEO's forecast assumes that gas prices will average $3.54 per
gallon in 2025 (in 2009 dollars). According to EIA's own "This Week in Petroleum," gas prices
the week of February 6, 2012 averaged $3.48 per gallon nationwide.33 It is shocking to think
that gas prices will barely rise from 2012-2025. Although the agencies do consider higher gas
prices in sensitivity analyses, when considering setting standards and the benefits derived from
those standards, the agencies should place greater emphasis on the high gas price scenarios. We
have attached comments submitted to the docket previously by Sierra Club regarding gas price
assumptions. [See Docket number EPA-HQ-OAR-2010-0799-9549-A3 for previous
comments.] [EPA-HQ-OAR-2010-0799-9549-A2, 10]
33 http://www.eia.gov/oog/info/twip/twip_gasoline.html
Organization: Smith, G.
'Save families an estimated $8,200 in fuel savings over the lifetime of a new vehicle by 2025, for
a total of $1.7 trillion in national fuel savings over the life of the program.' They fail to point out
the 1) extra cost of fuel efficiency in vehicles 2) discomfort of the considerably smaller vehicles
we will have to drive 3) loss of sales by domestic auto companies because they are perceived as
not being able to build good small cars. [EPA-HQ-OAR-2010-0799-8438-A1, p. 1]
Organization: Union of Concerned Scientists (UCS)
(g) Gasoline Prices
As noted above, the Energy Information Administration's Annual Energy Outlook (AEO) has
become a common source used in many energy-related projections. However, that fact does not
justify applying the AEO "reference case" projection, when there are very clear indications that
the price projection is poor at best. According to AEO2011 - the projection used in this proposed
rule - gasoline prices will range from $3.25-$3.55 per gasoline (in 2009 dollars) between 2017
and 2025. It is hard to accept this as reasonable, given that the actual 2011 average price was
$3.53, a mere two cents per gallon shy of EIA's 2025 gasoline price projection. Further,
AEO2011 projects regular gasoline prices will rise to a peak of $3.71 per gallon in 2035, a pump
price not infrequently seen across the nation today. Clearly, the use of AEO2011 reference case
gasoline price projection is inappropriate and should not be used in the agencies' final rule, as it
18-126
-------
Analysis of Estimated Costs, Economic and Other Impacts
unfairly diminishes the monetary value of fuel saved under the program. [EPA-HQ-OAR-2010-
0799-9567-A2, p. 13]
Within the past few weeks, EIA issued the AEO2012 Early Release, which includes a notable
increase in gasoline prices over AEO2011. For the 2017-2035 window, AEO2012 Early Release
reflects per-gallon prices $0.24 to $0.34 higher than AEO2011 values (converted to 2010
dollars). EPA and NHTSA should, at a minimum, adopt the higher AEO2012 price projections,
and investigate the historical accuracy of AEO's High Price scenarios. If it is deemed that AEO's
High Price scenarios have, over the past 15 years, been better predictors of actual pump prices,
the agencies should utilize High Price Scenario prices for assessing monetary benefits of fuel
savings at the pump. [EPA-HQ-OAR-2010-0799-9567-A2, p. 13]
Finally, as UCS has noted in prior comment submissions, AEO's projection does not account for
inevitable price spikes that will occur during the lifetime of the vehicles assessed under this rule.
Such spikes are closely tied to our nation's inflation and GDP, and thus can have serious
economic consequences. With this in mind, the agencies should attempt to quantify the benefits
of reduced susceptibility to such spikes, and incorporate them into the program's benefits writ
large. [EPA-HQ-OAR-2010-0799-9567-A2, p. 13]
Response:
The Alliance of Automobile Manufacturers suggests that, if states begin to enact
legislation to maintain their transportation infrastructure to offset declining gas tax revenues,
EPA will then need to evaluate how this could impact consumers' willingness to invest in
advanced technology vehicles. However, our analysis shows that compliance can be achieved
with less than three percent EVs and PHEVs and just five percent strong HEVs, and those
percentages are relative to today's fleet, not the 2025 reference case fleet. See preamble section
III.D.6 generally and Table 111-52. So our analysis is not heavily reliant on the advanced
technology vehicles of which API speaks. Of course, EPA expects to continue conducting
analyses of our new standards—most notably for the mid-term review—and will analyze the
necessary and pertinent issues as they arise.
Regarding the recommendations from ACEEE, we address the impact of the rule on
vehicle sales in Chapter 8.1 of our final RIA and in section 18.7, below. We address the fuel
price issue in section 18.5, below. Regarding ACEEE's comments on the "Baseline and other
scenarios," we note that these comments appear directed to NHTSA as EPA has not done any
analysis assuming that fuel economy will improve after the 2016MY absent any new regulatory
requirements.
Regarding comments from ARTBA suggesting that the proposal should include a method
of generating federal revenues to offset lost revenue on fuel taxes, we note that EPA and NHTSA
do not have the authority to enact revenue generating programs. Such programs must be enacted
by Congress. We show the estimated lost revenue in Chapter 5.4 of the final RIA. Our estimates
suggest lost tax revenue of roughly $17 billion for the calendar years 2017 through 2025 due to
the MYs 2017-2025 standards, and $51 billion over the lifetimes of MYs 2017-2025 vehicles
(which includes calendar years 2017 to beyond 2050 for the longest running 2025MY vehicles),
both of which are considerably less than the $76 billion through 2025 suggested by ARTBA.
18-127
-------
EPA Response to Comments
Regarding the comments from BlueGreen Alliance, we discuss vehicle sales in preamble
section III.H.ll, in Chapter 8.1 of our final RIA and in section 18.7, below.
Regarding comments from CFA, we have used the most recent projected fuel prices
available to us at the time modeling inputs had to be locked down. Those fuel prices are taken
from the AEO 2012 Early Release. The AEO Early Release projections reflect detailed analysis
and are used government-wide. EPA regards this estimate as a reasonable projection (although,
like any such projection, actual prices over this period may deviate from those estimated). See
also further response on this issue below. Regarding the "price effect," we respond to these
comments in section 18.5, below.
Regarding comments from Consumers Union regarding fuel price projections, we agree
that predicting future oil and fuel prices is very difficult. EPA leaves that task to the experts at
EIA. We believe that the projections provided by EIA represent that best future fuel prices for
use in our analysis.
Regarding the comment from the El00 Ethanol Group, we agree that we cannot achieve
crude oil independence by increasing CAFE, or GHG standards, alone. However, we can reduce
our dependence on foreign oil, consistent with that goal.
Environmental Consultants of Michigan point out that the standards would cost $76
billion in lost fuel tax revenue. EPA agrees that fuel tax revenue will fall if current tax rates
remain in place (fewer gallons consumed results in less tax revenue). However, as stated above,
our estimates suggest lost tax revenue of roughly $17 billion for the calendar years 2017 through
2025 due to the MYs 2017-2025 standards, and $51 billion over the lifetimes of MYs 2017-2025
vehicles (which includes calendar years 2017 to beyond 2050 for the longest running 2025MY
vehicles), both of which are considerably less than the $76 billion suggested by the commenter.
The Environmental Defense Fund commented similarly to the Consumers Union, above.
Please refer to our response to Consumers Union. As for sensitivities around fuel prices, we
have not done this because doing so would be far more complex than it appears on the surface.
To conduct a fuel price sensitivity correctly, we would need to generate unique fleet projections
since our fleet projections depend on a macro-economic outlook that would change were we to
use different projections of future fuel prices. We have two projected fleets already in our final
rule (2008 and 2010 based reference fleets) and could not have added more given the time
constraints we had. An alternative approach would have been to use our existing fleet
projections and simply use higher/lower fuel prices. However, this would simply show how
much our estimated benefits would change with different fuel prices given our existing fleet
projections. This would simply show the program to be more or less cost beneficial and, given
the magnitude of our fuel savings, higher or lower fuel prices would not change the conclusion
that the rule is very cost beneficial.
EPA would like to thank Francis Jackson, the commenters that were part of the mass
comment campaigns and NACAA for their comments and interest in our rule.
NADA commented that our payback analysis was not appropriate for every household.
EPA does not disagree. However, we cannot calculate the payback period for every household
18-128
-------
Analysis of Estimated Costs, Economic and Other Impacts
given, as noted by NAD A, that the payback period depends on each unique household's
transportation profile, their current vehicle's fuel consumption, the new vehicle's fuel
consumption, etc. We have attempted to make clear that our payback analysis assumes the
average driver that purchases the average vehicle and drives the average number of miles
purchasing fuel at the prices projected by AEO in the 2012 Early Release. We have stated that
drivers driving more miles will experience a shorter payback while those driving fewer miles
will experience a slower payback. We have not meant to imply that everyone that purchases a
new 2025MY car will experience the payback we have estimated. For the final rule, we have
also included a payback estimate for purchasers of used vehicles to shed light on how their
payback might differ from purchasers of new vehicles. We also analyze the issue of low priced
vehicles in preamble section III.H.ll.b and in section 18.7.1, below.
NRDC suggests that we update our fuel price inputs. We have done so since the proposal
and are now using the AEO 2012 Early Release projections. As for standard stringency, we
address such comments in section 2 of this Response to Comments document as well as in
section HID of the preamble to the final rule.
NESCAUM commented that funding for transportation infrastructure in light of falling
gasoline tax revenues should be addressed in a broader context outside of this regulatory
proceeding. We agree and are not addressing this issue in this rule.
Sierra Club, et al, commented that we should use higher fuel price projections in our
analysis. We disagree that we should place greater emphasis on the high gas price scenarios
rather than the reference case projections generated by EIA. In the AEO 2012 Early Release,
EIA states that the Reference case focuses on the factors that shape U.S. energy markets in the
long term, under the assumption that current laws and regulations remain generally unchanged
throughout the projection period. They further state that the AEO2012 Reference case provides
the basis for examination and discussion of energy market trends and serves as a starting point
for analysis of potential changes in U.S. energy policies, rules, or regulations or potential
technology breakthroughs. As such, we believe that the reference case prices represent the best
prices for use in our primary analysis.
Gerald Smith commented in opposition to the rule. Mr. Smith incorrectly claims that
supporters of the rule fail to acknowledge the cost of fuel efficiency in vehicles. We have made
quite clear in our proposal and our final rule that we expect the cost of new vehicles to increase.
For the final rule, we have estimated that cost at $1836 for a 2025MY vehicle meeting the
2025MY standards when compared to one meeting the 2016MY standards. Mr. Smith also
suggests that future vehicles will be considerably smaller and less comfortable than today's
vehicles. Again, we disagree. Our analysis assumes no change in vehicle size will result from
the new standards, and we have still shown a very cost effective path to compliance. Mr. Smith
also claims that domestic auto makers will lose sales due to the perception that they cannot build
good small cars. Again, we disagree. The new Ford Fiesta and Focus and the Chevy Cruze and
Sonic prove that the domestic auto makers can and do produce small cars that consumers want.
The Union of Concerned Scientists commented that we should update our fuel prices to
use the AEO 2012 Early Release. We have done so. UCS also commented that we should
consider using the AEO high price projections rather than or in addition to the reference case
18-129
-------
EPA Response to Comments
projections. Please refer to our responses to the Environmental Defense Fund and Sierra Club, et
al, above. Lastly, UCS suggests that we attempt to quantify the benefits of reduced susceptibility
to fuel price spikes that can result from inflation and GDP and can have serious economic
consequences. We have not done so for the final rule.
18.4. Benefits of Reduced GHGs and Non-GHG Emissions
18.4.1. Estimated GHG Emissions Reductions Benefits (Including Social
Cost of Carbon)
Organizations Included in this Section
Center for Biological Diversity
Environmental Defense Fund (EDF)
Institute for Energy Research (IER)
Institute for Policy Integrity, New York University School of Law
National Association of Clean Air Agencies (NACAA)
Natural Resources Defense Council (NRDC)
18.4.1.1 Comments about Social Cost of Non-COi GHG Emissions
Organization: Center for Biological Diversity
B. The Agencies' Cost-Benefit Analysis is Faulty
Our January 31, 2012 comments to the DEIS contain an extensive discussion of the ways in
which the Agencies' cost-benefit analysis must be corrected. We incorporate that discussion
here, but add the following observations. [EPA-HQ-OAR-2010-0799-9479-A1, p. 6]
The Agencies acknowledge that they fail to quantify the benefits and costs of a number of the
environmental impacts of the rulemaking. These benefits or costs, however, do not have a value
of zero, and a number of them can be estimated and those estimates quantified. For example,
monetized GHG benefits "exclude the value of reductions in non-CO2 GHG emissions (HFC,
CH4 and N2O) expected under this proposal." The Agencies do not dispute that the value of
these benefits is not zero and can be ascertained - indeed, they set themselves a deadline to do
so. The decision to delay the analysis is arbitrary and capricious. Similarly, the Agencies exclude
the costs of maintaining a U.S. military presence to secure imported oil supplies from unstable
regions "because their attribution to particular missions or activities is difficult." "Difficulty"
does not justify conducting a cost-benefit analysis that improperly puts a thumb on one side of
the scale.33 [EPA-HQ-OAR-2010-0799-9479-A1, p. 7]
33 CBD v. NHTSA, 538 F.3d at 1198. [EPA-HQ-OAR-2010-0799-9479-A1, p. 7]
18-130
-------
Analysis of Estimated Costs, Economic and Other Impacts
34 ICCT Comments at 7, 8. The ICCT Comments contain other examples of Agency
overestimation of costs and underestimation of technology improvements. [EPA-HQ-OAR-
2010-0799-9479-A1, p. 7]
Organization: Environmental Defense Fund (EDF)
IV. AGENCIES SHOULD INCLUDE MORE COMPREHENSIVE ESTIMATION OF
BENEFITS
F. EPA SHOULD INCLUDE A QUANTIFICATION OF THE SOCIAL BENEFITS OF NON-
CO2 GREENHOUSE GAS REDUCTIONS
EPA's Regulatory Impact Analysis does not currently include estimates for the monetized
impacts of this rule for reductions of non-CO2 greenhouse gases. 28 The Interagency Working
Group on SCC did not estimate the social costs of non-CO2 GHGs when it developed the current
SCC values. The agency has requested comment on whether the "global warming potential
(GWP) approach" should be used as an interim approach to valuing the costs of non-CO2 GHGs
(as it did in their proposed New Source Performance Standards (NSPS) for oil and gas
exploration). This approach uses the GWP of non-CO2 gases to estimate CO2 equivalents and
then multiplies these CO2 equivalent emission reductions by the social cost of CO2. Further, the
agency has requested comment more broadly regarding methodologies for monetizing the
benefits of reductions of non-CO2 GHGs. [EPA-HQ-OAR-2010-0799-9519-A1, pp. 11-12]
EPA should include a range of estimates for the monetized benefits of reduced emissions of non-
CO2 GHGs that will result from this rule (methane, nitrous oxides, hydrofluorocarbons). While
there remain uncertainties associated with the currently available methodologies for estimating
these benefits, it is clear that there are real benefits; they are most certainly not zero. Therefore,
the omission of any estimate at all is unsatisfactory, and EDF strongly recommends the agency
include and consider a range of potential estimates. [EPA-HQ-OAR-2010-0799-9519-A1, p. 12]
There are currently two useful quantification methods available for the benefits of reducing non-
CO2 GHGs. First, Marten and Newbold estimate the social costs of methane and nitrous oxide in
a recent National Center for Environmental Economics working paper,29 and second, the GWP
method, while imperfect, is better than not estimating the benefits at all, and can be used as a
proxy. The agency should use these tools to report a range of monetized benefits for the rule.
Since the agency has a quantitative foundation in the form of two methodologies for estimating
the social costs of these non-CO2 GHGs, it should provide monetized benefits using both of these
methodologies (accompanied by an explanation of any limitations and/or uncertainties in each
methodology, as necessary). [EPA-HQ-OAR-2010-0799-9519-A1, p. 12]
In Marten and Newbold, the authors directly calculate the social cost of methane and nitrous
oxide using the methodology used by the Interagency Working Group on the SCC, with some
updates. This direct method would be the most straightforward, defensible, and consistent with
earlier valuation efforts of greenhouse gases. As Marten and Newbold's method is a valid and
analytically supportable method, EPA should include figures calculated using their
approach. [EPA-HQ-OAR-2010-0799-9519-A1, p. 12]
18-131
-------
EPA Response to Comments
The GWP method consists of converting the non-CC>2 GHG emission reductions to CO2-
equivalent using global warming potentials (GWPs), then multiplying the resulting CC>2e figure
by the SCC. As noted by Marten and Newbold, this approximation of the climate benefits of
methane and nitrous oxide reductions has the potential for significant error: in 2010 emission
reductions for methane valued using the 100 year GWP could be underestimated by as much as
36% while nitrous oxide could be overvalued by as much as 60%, depending on the discount
rate. However, they specifically point out that for some policies, such as the light duty vehicle
ruleSO where non-CC>2 gases represent only a fraction of the anticipated GHG reductions, the
error induced by using the GWP method may be small. And most importantly, the authors also
note, "... if estimates of the social cost are not available, the value of non-CC>2 GHG reductions
estimated using GWPs and the SCCO2 will typically have lower absolute errors than default
estimates of zero." In other words, using GWP and the SCC to calculate the value of non-CC>2
emissions reductions is more accurate than not calculating the value, particularly in the case of
policies such as this one where the reductions of non-CC>2 gases are a small portion of the overall
GHG reductions. If EPA is unable to include directly-calculated social costs in support of the
final rule due to methodological problems and uncertainties, it should (after identifying and
explaining those problems) include an estimate of climate benefits calculated using this GWP
method. [EPA-HQ-OAR-2010-0799-9519-A1, pp. 12-13]
Regarding the specific GWP values, EPA should be commended for using the most recent
Intergovernmental Panel on Climate Change (IPCC) GWP value for methane (25) from the
Fourth Assessment Report in this rule proposal. However, even the most recent IPCC GWP from
the Fourth Assessment Report may somewhat undervalue methane's strength as a climate
forcer. [EPA-HQ-OAR-2010-0799-9519-A1, p. 13]
EPA should, at least, include a sensitivity analysis using the more recent estimate from Shindell
et al. (2009) of 33.31 EPA should provide a range of benefits yielded from the various methods
and assumptions (c.f table 1 in Marten and Newbold), as well as a clear, tabular, demonstration
of how it has calculated the monetized benefits. [EPA-HQ-OAR-2010-0799-9519-A1, p. 13]
Organization: Institute for Policy Integrity, New York University School of Law
The Agencies Should Work Toward Developing Non-Carbon Dioxide Benefits Estimates
The Working Group had also planned to develop better methods for estimating the benefits of
reducing non-carbon dioxide greenhouse gases within the same two-year timeframe mentioned
above.70 The SCC does not smoothly translate into damage figures for other greenhouse gases
like methane and hydrofluorocarbons, because of different radiative forcing, atmospheric
lifetimes, and environmental impacts.71 As a result, the proposed rule excludes the monetized
value of non-carbon dioxide greenhouse gas reductions, even though such reductions make
important contributions to the program's climate benefits. [EPA-HQ-OAR-2010-0799-9480-A1,
p. 11]
Organization: Natural Resources Defense Council (NRDC)
18-132
-------
Analysis of Estimated Costs, Economic and Other Impacts
Our recommendations regarding the GWP method and SCC are summarized as follows [Note:
NRDC recommendations regarding SCC are listed below in section 18.4.1.2]:
1) GWP Method. Because models directly estimating climate mitigation benefits for other gases
are still in their early stages of development, GWPs should be used to calculate climate benefits
from reducing non-CO2 greenhouse gases (Recommendation #1). In so doing, 100 year GWPs
should be used, following domestic and international conventions. Further, the most recent GWP
estimates from the IPCC's Fourth Assessment Report should be used (rather than GWP estimates
from the Second Assessment Report, as was recently used in the proposed oil and gas new
source performance standards for methane). For methane calculations and carbon monoxide,
EPA should do a sensitivity analysis using the most recently published GWP estimates (Shindel
et al.4) (Recommendation #2); in addition, CO2 fertilization benefits need to be adjusted to
reflect non-CO2 gases actual contribution of CO2 to the atmosphere, which is less than direct
CO2 emissions (Recommendation #3). [EPA-HQ-OAR-2010-0799-9472-Al, p. 5]
Response:
EPA reviewed the comments regarding monetization of non-CO2 GHG impacts (CFLj,
N2O, HFCs) and recognizes that the rulemaking will achieve non-zero, economic benefits
through reductions in these gases. EPA estimated the non-CO2 GHG benefits in a sensitivity
analysis for the final rule using the GWP approach because directly modeled interagency
estimates are not available. The GWP approach entails converting the reductions of each non-
CO2 gas to CO2-equivalents using the GWP and then valuing the CO2-equivalents with the SCC.
EPA presented these estimates for illustrative purposes and did not include them in our total
benefits estimate for this rulemaking because of the following GWP approach limitations.
While the GWP approach would provide an approximation of the monetized value of the
non-CO2 GHG reductions anticipated from this rule, it produces estimates that are less accurate
than those obtained from direct model computations for a variety of reasons, including the
differences in atmospheric lifetime of non-CO2 gases relative to CO2. This is a potentially
confounding issue given that the social cost of GHGs is based on a discounted stream of
damages—i.e., they are not constant over time—and that are non-linear in temperature. For
example, CH4 has an expected adjusted atmospheric lifetime of about 12 years and associated
GWP of 25 (IPCC Fourth Assessment Report (AR4) 100-year GWP estimate). Gases with a
relatively shorter lifetime, such as methane, have impacts that occur primarily in the near term
and thus are not discounted as heavily as those caused by longer-lived gases such as CO2, while
the GWP treats additional forcing the same independent of when it occurs in time. Furthermore,
the baseline temperature change is lower in the near term and therefore the additional warming
from relatively short-lived gases will have a lower marginal impact relative to longer-lived gases
that have an impact further out in the future when baseline warming is higher.
In addition, impacts other than temperature change also vary across gases in ways that are
not captured by GWP. As noted in NRDC's comments, CO2 emissions, unlike CH/j, N2O, or
HFCs, will result in CO2 passive fertilization to plants. EPA recognizes this limitation but
cannot, as NRDC recommended, simply adjust the GWP to account for the difference. The only
way to adequately resolve this limitation is to directly model each non-CO2 gas cycle. As
18-133
-------
EPA Response to Comments
discussed further below, EPA believes there are several key modeling issues that must be
addressed before non-CC>2 gases can be modeled, and thus the interagency group has not yet
directly modeled non-CC>2 GHGs.
A limited number of studies in the published literature explore the implications of using a
GWP versus a direct estimation approach to quantify the benefits of changes in non-CC>2 GHG
emissions from a given policy. One recent working paper (Marten and Newbold, 2011), found
that the GWP-weighted benefit estimates for CH4 and N2O are likely to be lower than those that
would be derived using a directly modeled social cost of these gases for a variety of reasons.81
The GWP reflects only the integrated radiative forcing of a gas over 100 years. In contrast, the
directly modeled social cost differs from the GWP because the differences in timing of the
warming between gases are explicitly modeled, the non-linear effects of temperature change on
economic damages are included, and rather than treating all impacts over a hundred years
equally, the modeled social cost applies a discount rate but calculates impacts through the year
2300.
EPA has determined that key modeling issues must be addressed before directly
modeling CH/i, N2O, HFCs in a manner consistent with the 2009-2010 interagency modeling
exercise. For example, a challenging issue in estimating the social cost of non-CC>2 GHGs is that
the integrated assessment models vary in how they represent the atmospheric chemistry for these
gases. DICE (Dynamic Integrated Climate and Economy) in particular poses a challenge
because it does not directly model the atmospheric gas cycle for any GHG other than CC>2.
Instead, it jointly represents all non-CC>2 GHGs through a single net radiative forcing vector.
The other integrated assessment models, PAGE (Policy Analysis of the Greenhouse Effect) and
FUND (Climate Framework for Uncertainty, Negotiation, and Distribution), directly represent
the atmospheric chemistry for several non-CC>2 GHGs (noting that for PAGE not all gas cycles,
such as methane, were used in the analysis).
There are options to incorporate a defensible cycle for methane in the DICE model, such
as supplementing DICE with changes in radiative forcing estimates from MAGICC, a climate
model that incorporates important interactions between various gases in the atmosphere.82 This
modification, however, would differ from the methodology established by the 2009-2010
Interagency Work Group.
In addition, EPA has reviewed the comments recommending use of alternative GWPs, in
particular Shindell et al's recent estimate of 33 for a 100-year GWP of methane. However, EPA
is continuing to use the 100-year GWP approach recommended by the IPCC, consistent with the
UNFCCC reporting requirements and the values used in the regulations and analyses for this
rule. EPA believes it would be inappropriate to use alternative GWP estimates in the analyses,
81 Marten, A. and S. Newbold. 2011. "Estimating the Social Cost of Non-CO2 GHG Emissions: Methane
and Nitrous Oxide." NCEE Working Paper Series #11-01.
http://yosemite.epa.gov/ee/epa/eed.nsf/WPNumber/2011-017opendocument. Accessed May 24, 2012.
82 For example, see Marten and Newbold (2011) "Estimating the Social Cost of Non-CO2 GHG Emissions:
Methane and Nitrous Oxide." NCEE Working Paper Series #11-01.
http://yosemite.epa.gov/ee/epa/eed.nsf/WPNumber/2011-017opendocument. Accessed May 24, 2012.
18-134
-------
Analysis of Estimated Costs, Economic and Other Impacts
even in sensitivity analyses, that have received relatively less scrutiny than those cited in the
IPCC reports.
The results of the sensitivity analysis are presented for illustrative purposes in preamble
section III.H.6 and in Chapter 7 of EPA's RIA. In sum, the total net present value of annual
2017 through 2050 GHG benefits for this rulemaking would increase by about $3 billion to $50
billion, depending on discount rate, or roughly 10 percent if these non-CC>2 estimates were
included. Given the magnitude of this increase in the context of the total costs and benefits
considered in this rule and other critical decision factors related to technical issues, inclusion of
these estimates in the primary analysis would not affect any of the decisions regarding the
appropriateness of the standards EPA is adopting here.
Regarding presentation of the non-CC>2 GHG benefits, EPA agrees that a clear, tabular
summary would be useful to the reader and has therefore included them in Table 111-89 in the
RIA for illustrative purposes.
EPA has responded to comments regarding improvements to the social cost of CC>2 in the
next section, 18.4.1.2.
Finally, EPA has responded to several of the comments above in other sections. For a
response to comments about the treatment of "costs of maintaining a U.S. military presence to
secure imported oil supplies from unstable regions," please see section 18.5 in this document.
Regarding comments that the agencies should incorporate potential benefit revisions in the mid-
term evaluation process and account for the net upstream emissions from electric vehicles, please
see section 2.4 (mid-term evaluation) and section 4 (electric vehicles) for EPA's response.
18.4.1.2 Comments about Social Cost of COi (Support for and recommendations to
improve estimates)
Organization: Environmental Defense Fund (EDF)
IV. AGENCIES SHOULD INCLUDE MORE COMPREHENSIVE ESTIMATION OF
BENEFITS
A. AGENCIES SHOULD ACCOUNT FOR ALL QUANTITATIVE AND QUALITATIVE
BENEFITS
EDF recommends, where feasible, the agencies must estimate the monetized health,
environmental and economic benefits. We also recommend that where monetization is not
feasible, the Agency must present a qualitative list of benefits and explain why it is not feasible
to monetize such benefits. This recommendation is in accordance with a January 2011
Presidential Executive OrderlS: "It must take into account benefits and costs, both quantitative
and qualitative." "(c) In applying these principles, each agency is directed to use the best
available techniques to quantify anticipated present and future benefits and costs as accurately as
possible. Where appropriate and permitted by law, each agency may consider (and discuss
18-135
-------
EPA Response to Comments
qualitatively) values that are difficult or impossible to quantify, including equity, human dignity,
fairness, and distributive impacts." [EPA-HQ-OAR-2010-0799-9519-A1, pp. 7-8]
E. SOCIAL COST OF CARBON
It is critical that NHTSA and EPA collaborate with other agencies and carry out their
responsibilities to accurately account for the Social Cost of Carbon (SCC). Cf. Ctr. for Biological
Diversity v. Nat'l Highway Traffic Safety Admin., 538 F.3d 1172, 1185 (9th Cir. 2008) (finding
a NHTSA fuel economy rule arbitrary and capricious where "[t]he value of carbon emissions
reduction [was] nowhere accounted for in the agency's analysis, whether quantitatively or
qualitatively"). [EPA-HQ-OAR-2010-0799-9519-A1, p. 9]
The social cost of carbon is a monetary measure of the incremental damage resulting from
greenhouse gas (GHG) emissions. The SCC assigns a net present value to the marginal impact of
one additional ton of carbon dioxide-equivalent emissions released at a specific point in time.
EDF commented extensively on the consideration of the SCC in the first light-duty greenhouse
gas rulemaking, the heavy-duty greenhouse gas rulemaking, and the Notice of Intent for Draft
EIS. Those comments are hereby incorporated. [EPA-HQ-OAR-2010-0799-9519-A1, p. 9]
It is imperative that the Agencies rigorously and transparently account for the SCC in carrying
out responsibilities under NEPA, EISA, and EPCA. In the proposal, it is noted that the Agencies
adopted an approach that relies on estimates of the social cost of carbon (SCC) developed by the
Interagency Working Group on Social Cost of Carbon. While we support the collaboration and
work of the Group, the SCC used should always be based on models reflecting the latest science,
as the Agency has itself committed to do. All three modeling teams, whose work led to the report
by the Interagency Working Group, have since updated their models to reflect the latest research
and methodological developments. At the very least, the SCC used should be updated using the
current versions of the models. [EPA-HQ-OAR-2010-0799-9519-A1, p. 9]
We make additional suggestions below as to how current modeling approaches can and should
be improved in order to meet the Agency's commitment to update the social cost of carbon as the
underlying models and methodologies are improved22: [EPA-HQ-OAR-2010-0799-9519-A1, p.
9]
• Declining discount rate over time: In assigning a dollar value to reductions in CO2
emissions, the Agencies use the social cost of carbon and the discount rates included in
the Interagency Working Group on Social Cost of Carbon. This includes the use of 5
percent, 3 percent and 2.5 percent discount rates. Recent advances in economic theory
indicate that it is not appropriate to use such high and constant discount rates in the
context of the social cost of carbon analysis, with a constant 5 percent discount rate being
particularly inappropriate. A certainty-equivalent approach, for example, would yield
much lower constant discount rates than those currently used. At the very least, we
encourage the Agency to use a range of discount rates of 3 percent and below in its SCC
analysis. We strongly recommend, however, that the Agency move as soon as possible to
the use of a declining social discount rate. Appropriately accounting for uncertainty
around the discount rate over long time horizons generates a discount rate that declines
18-136
-------
Analysis of Estimated Costs, Economic and Other Impacts
over time. As demonstrated at an academic workshop convened by Resources for the
Future on Intergenerational Discounting, September 22-23, 2011, there is broad support
for the use of declining discount rates within the relevant community of experts.23 These
declining rates reflect the scientific, economic, and ethical complexities and uncertainties
inherent in intergenerational discounting. [EPA-HQ-OAR-2010-0799-9519-A1, pp. 9-10]
• Evaluating catastrophic risks: The SCC numbers currently used seriously undervalue
low-probability/high-consequence climate impacts. Functional form assumptions in the
models used in the Interagency Report misrepresent these risks and lead to inaccurately-
low SCC numbers. In particular, they cut off the tails of distribution functions too
quickly, ignoring potentially catastrophic climate risks.24 The SCC numbers used should
reflect the uncertainty range around different functional forms and standard assumptions
around risk aversion in order to more accurately value potentially catastrophic climate
impacts.25 [EPA-HQ-OAR-2010-0799-9519-A1, p. 10]
• Evaluating Non-Monetized Benefits: GHG reduction policies can significantly
undervalue benefits simply because some of these benefits are not easily quantifiable.
The White House Office of Management and Budget recognizes that some costs and
benefits will be difficult to monetize, but directs agencies to consider other means of
quantification.26 We request that the social cost calculations be updated to include the
latest results on newly monetized benefits. All additional climate impacts omitted from
the models should at the very least be identified explicitly. A table should be provided
that lists, for each economic model, what impacts were not included in the model's
estimate of monetized damages. Accompanying text should serve to explain and
complement the table entries but not be a substitute for them. Below, we have provided
an example table listing impacts typically omitted from SCC models. [EPA-HQ-OAR-
2010-0799-9519-Al,p. 10]
[See list on p. 12 of Docket number EPA-HQ-OAR-2010-0799-9519-A1]
Organization: Institute for Policy Integrity, New York University School of Law
The rule would raise the corporate average fuel economy standards for new automobiles and
restrict the levels of greenhouse gases that vehicles may emit. While the proposed rule will
generate large net social benefits, prior to the rule's final publication, the agencies should
consider adopting several refinements to their calculation of benefits and their approach to
vehicle attributes. [EPA-HQ-OAR-2010-0799-9480-A1, p. 1]
• The agencies should increase estimates of climate benefits to more accurately value the chance
of catastrophic damages. Substantial economic literature, including much published in the last
two years, supports the conclusion that current models do not place enough emphasis on
catastrophic scenarios and, consequently, that some adjustment to the calculation of benefits is
necessary. Disagreement over the exact size of that adjustment does not suggest the risk of
catastrophe should be valued at zero. [EPA-HQ-OAR-2010-0799-9480-A1, p. 1]
• The agencies should increase estimates of climate benefits to account for risk aversion. Climate
change is a categorically different kind of social problem: no single government can self-insure
against the risk of irreversible, planet-wide damages. The government, therefore, should be risk
18-137
-------
EPA Response to Comments
averse toward climate change. Though the degree of risk society faces is a subject of contention,
most economists believe there is some non-negligible amount of risk that must be accounted for.
A risk premium should be incorporated, either as an adder to the value of climate benefits, or as a
downward adjustment to discount rates. [EPA-HQ-OAR-2010-0799-9480-A1, p. 1]
• The agencies should continually revise estimates of climate benefits to reflect the most recent
scientific and economic knowledge. Even if a better estimate of benefits will not change the
stringency or structure of the proposed rule, accuracy remains important. Professional and legal
norms for economic analysis require it; accurate benefits estimates will increase confidence in
the justifications for the rule and inform the public debate; and the agencies' impact analysis will
set a precedent for future rulemakings. The agencies should take the lead on adjusting estimates
to account for risk and catastrophic damages, as well as the latest climate science. [EPA-HQ-
OAR-2010-0799-9480-A1, p. 2]
• The agencies should make several other improvements in the valuation of climate benefits,
including development of non-carbon dioxide estimates, incorporation of potential benefit
revisions in the mid-term evaluation process, and accounting for the net upstream emissions from
electric vehicles. [EPA-HQ-OAR-2010-0799-9480-A1, p. 2]
Part I. Climate Benefits
The proposed rule will significantly reduce greenhouse gas emissions and takes an important
step in addressing climate change. However, the proposed rule underestimates the benefits of
these emissions reductions. In so doing, it understates the need for increased reductions and sets
standards that are more lenient than socially optimal. Developing the most accurate estimates of
climate benefits and the appropriate stringency for emissions standards will set a valuable
precedent for all future rulemakings that affect greenhouse gas emissions. [EPA-HQ-OAR-2010-
0799-9480-A1, p. 2]
The agencies should make several improvements to their calculation of the rule's climate
benefits. Most importantly, the agencies should update the social cost of carbon (SCC) estimate
to: (1) reflect risk aversion, (2) appropriately weigh the possibility of catastrophic climate
change, and (3) incorporate the most recent scientific advances on the relationship between
greenhouse gas emissions and climatic stability. [EPA-HQ-OAR-2010-0799-9480-A1, p. 2]
Disagreement over the size of risk aversion and catastrophic risk does not mean they should be
valued at zero. Without more fully accounting for risk aversion and catastrophic climate
outcomes, the SCC estimates used in the rule will be too low. [EPA-HQ-OAR-2010-0799-9480-
Al,p.2]
The SCC revision process should be understood as an on-going activity that continually updates
estimates to reflect the most recent science. The state of science on this issue continues to expand
at a rapid pace, and it is important that the agencies incorporate recent insights as quickly as
possible. The agencies should also seek to develop estimates for the benefits of non-carbon
dioxide reductions, and the SCC revision process should be extended and incorporated into the
18-138
-------
Analysis of Estimated Costs, Economic and Other Impacts
mid-term evaluation of the regulation. Finally, the agencies should rethink the way they calculate
emissions from alternative fuel vehicles. [EPA-HQ-OAR-2010-0799-9480-A1, p. 3]
Background on the Social Cost of Carbon
The social cost of carbon (SCC) is an "estimate of the monetized damages associated with an
incremental increase in carbon emissions in a given year. It is intended to include (but is not
limited to) changes in net agricultural productivity, human health, property damages from
increased flood risk, and the value of ecosystem services due to climate change."2 Theoretically,
the SCC includes all the economic losses associated with global climate change. An interagency
working group (Working Group), which included both EPA and DOT, released initial estimates
of the SCC in February 2010.3 [EPA-HQ-OAR-2010-0799-9480-A1, p. 3]
That report harmonized the federal government's approach to valuing climate benefits and
developed an initial set of four alternative estimates. The four estimates were built around the
results from three integrated assessment models (lAMs), which "translate emissions into changes
in atmospheric greenhouse concentrations, atmospheric concentrations into changes in
temperature, and changes in temperature into economic damages." 4 The proposed rule discusses
all four SCC estimates, but relies mostly on the "central" value, which is based on a 3% discount
rate. 5 However, both the Working Group and the proposed rule note that the lAMs and the
current SCC estimates contain significant limitations: incomplete treatment of catastrophe,
uncertainty in the extrapolation of damages to high temperatures, and underdeveloped
assumptions about risk aversion.6 The agencies seek comment on the assumptions used to
determine the SCC.7 [EPA-HQ-OAR-2010-0799-9480-A1, p. 3]
The Agencies Should Increase the SCC Estimates to More Accurately Value Catastrophic
Change
The possible levels of climate damages are often modeled as a distribution describing the
probabilities of various economic outcomes. The Working Group estimated the SCC by
analyzing probability distributions generated by three lAMs, using those distributions to
calculate the expected climate damages society would experience at various concentrations of
greenhouse gases. LAMs, however, generally undervalue the possible damages associated with
catastrophic climate change by reducing the complexity of the problems—though scientific
research predicts a non-negligible chance of a planet-wide, truly disastrous climate catastrophe,
LAMs do not give much weight to such low-probability scenarios that exist on the far end of the
probability distribution curves.9 [EPA-HQ-OAR-2010-0799-9480-A1, p. 3]
In short, the true probability distribution of climate damages has a longer and fatter right-hand
tail than is represented in lAMs. 10 Weitzman argues that considering such "fat tails" increases
the expected damages significantly, which could exert enormous influence on society's
willingness to pay for emissions abatement. 11 That is, because extreme climate outcomes would
impose such enormous economic losses, even relatively unlikely scenarios can shift the expected
damages from climate change dramatically to the right. Should the possibility of these outcomes
be great enough, the effect of such catastrophic damages could dominate the analysis. Tol notes
similar difficulties with IAMs,12 and the National Academy of Sciences found that lAMs
18-139
-------
EPA Response to Comments
insufficiently measure the totality of these effects. 13 (The fact that both Weitzman and Tol find
similar problems with IAMsl4 [EPA-HQ-OAR-2010-0799-9480-A1, p. 4]
In early 2010, the Working Group suggested that scholarly disagreement warranted further
investigation before it would be appropriate to adjust the SCC to account for catastrophic
damages, is notable given their history of disagreement over optimal mitigation policies.)
Because the Working Group's analysis relied heavily on lAMs that do not fully account for the
possibility of catastrophic damages, the agencies should adjust SCC estimates upward to
properly value expected climate damages. 15 The Working Group referred to the work of
Nordhaus,16 Pindyck,17 and Newbold and DaigneaultlS to support its decision to delay
addressing catastrophic damages. While Nordhaus's work is seminal in many ways, it is often
recognized as undervaluing catastrophic outcomes. He relies heavily on one JAM (namely,
DICE) that suffers from the problems explained above: it fails to fully account for the influence
of catastrophic climate outcomes. 19 Newbold and Daigneault's results indicate that basing
substantial SCC adjustments on catastrophic damages would depend heavily on the values
assigned to model parameters. This merely shows that calculation of expected values is difficult
and that extreme results such as Weitzman's20 do not always hold. Their basic conclusion that
current lAMs inadequately account for catastrophic damages21 still cuts in favor of some
upward adjustment to the SCC, not waiting for further research. Pindyck finds only moderate
expected utility differences when considering a wide distribution of climate outcomes.22
However, he uses a simplified LAM with different damage and growth functions that do not
assume fat tails. Yet it is fat tails and the growing possibility of extreme outcomes that drives
much of the catastrophic damage analysis. [EPA-HQ-OAR-2010-0799-9480-A1, pp. 4-5]
The Working Group claimed that "further research in this area is needed before its practical
significance can be fully understood and a reasonable approach developed to account for such
risks in regulatory analysis."23 In fact, no amount of research can lead to a "full understanding"
of this problem. Nevertheless, a practical approach to treating catastrophe can be developed and
implemented. Indeed, because a greater possibility of catastrophic damages exists than is
included in the lAMs used by the Working Group (the Working Group essentially admits that
this is the case24), the practical approach is to adjust the SCC upward. The fact that there is
disagreement about the size of this catastrophic damage adjustment does not suggest that it
should be zero.25 [EPA-HQ-OAR-2010-0799-9480-A1, p. 5]
Moreover, a substantial amount of research has been published since the Working Group's
report, adding to a growing body of literature that highlights the limitations of lAMs with regard
to catastrophic damages. In the next revision of the SCC estimates, the agencies and the Working
Group must address the relevance of work by Pycroft, Vergano, Hope, Paci, and Ciscar, 26
Millner,27 Ackerman, Stanton, and Bueno,28 Dietz,29 and Gerst, Howarth, and Borsuk.30
Combined with the work of climate scholars like Weitzman and Tol,31 the economic literature
supports the proposition that LAMs do not place enough emphasis on catastrophic damages and,
consequently, some adjustment should be made to account for this limitation. [EPA-HQ-OAR-
2010-0799-9480-A1, p. 5]
The studies that attempt to calculate the amount of adjustment necessary generally find it to be
large. Yohe and Tol opine that increasing the SCC by 50% "is not out of the question" given the
18-140
-------
Analysis of Estimated Costs, Economic and Other Impacts
non-zero risk of catastrophic climate change. 32 In stylized conditions of structural uncertainty,
Weitzman shows that the SCC might be infinite.33 This seems implausible, and several studies
react by restricting the damage function to avoid this result.34 Pycroft, Vergano, Hope, Paci, and
Ciscar find that allowing for the possibility of different tail sizes in both the climate sensitivity
parameter and the damage function lead to increases in the SCC of 33% to 115%.35 A number of
other studies suggest methods for addressing the problem of catastrophic changes. [EPA-HQ-
OAR-2010-0799-9480-A1, pp. 5-6]
Rather than waiting an indefinite amount of time for further insights, the agencies and the
Working Group should evaluate the existing literature, make a decision about the best way to
apply it, and begin incorporating greater consideration of catastrophic damages into the analysis
to produce the most accurate SCC estimates available. If the agencies do not make an adjustment
to the SCC estimates for catastrophic damages, the rule will underestimate greenhouse gas
reduction benefits and will risk setting a precedent for future emissions standards to be less
stringent than socially optimal. [EPA-HQ-OAR-2010-0799-9480-A1, p. 6]
The Agencies Should Increase the SCC Estimates to Account for Risk Aversion36
Climate change outcomes are uncertain: the exact damages each additional unit of greenhouse
gas emissions will cause are unknown. Consequently, each unit of emissions contributes
additional risk that climate damages will be worse than expected. [EPA-HQ-OAR-2010-0799-
9480-A1, p. 6]
This risk can be valued by thinking of climate abatement as an investment. Most people are
naturally risk averse; when investments involve risk, people are willing to pay for greater
certainty than when only considering the expected returns of the investment. 3 7 For example, an
investment option with less risk will typically sell at a higher price than a risky investment, even
if the two alternatives have an equal expected payout. In portfolio theory, that price differential
represents the risk premium that risk-averse actors demand for holding a risky asset. Investors
also mitigate risk by buying investments that co-vary so that, ideally, when one investment
performs poorly, the other performs well, increasing the certainty that the total investment
portfolio will have positive returns. Thus, when investing in a range of assets, the covariance of
the assets helps determine the price investors will pay for those assets. [EPA-HQ-OAR-2010-
0799-9480-A1, p. 6]
The Working Group decided in early 2010 to continue "investigating" the issue of risk aversion
in lieu of including a risk premium in the SCC. The Working Group did note that Anthoff, Tol,
and Yohe found that risk aversion is at least as important as the rate of time preference 38 —a
topic that the Working Group discusses in great detail. However, without citing studies with
different results, it still concluded that further investigation was necessary before including a risk
premium in the SCC. [EPA-HQ-OAR-2010-0799-9480-A1, p. 6]
It failed to mention the work of Heal and Kristrom,39 Heal,40 Hennlock,41 Tol,42 Yohe and
Tol,43 or additional work by Weitzman,44 among many others that suggest the use of significant
risk premiums. In short, the decision to delay inclusion of a risk premium in the SCC is
inconsistent with the literature. Although scholars use different methods for calculating risk
18-141
-------
EPA Response to Comments
premiums and arrive at different results, disagreement over the size of these values does not
suggest that they should be zero.45 The degree of risk society faces is a subject of contention,
but most economists believe that there is some non-negligible risk premium that must be
accounted for in the SCC.46 [EPA-HQ-OAR-2010-0799-9480-A1, p. 7]
More important than the precise value is the realization that positive risk aversion warrants
incorporating a positive risk premium into the SCC.47 There are two different pathways for risk
aversion to be important for calculating the value of greenhouse gas abatement. In the first,
mitigation steps taken today can be understood as an investment that is part of a larger portfolio
of investments made by society. Under this framework, risk aversion can lead to a higher or
lower social cost of carbon, depending on whether the value of greenhouse gas emissions in the
future are correlated with the overall growth rate of the economy. To the extent that many of the
effects of climate change will involve non-market impacts—the decimation of coral reefs, for
example, or widespread extinction of terrestrial species—they may be substantially unrelated to
the returns in the economy as a whole. If a substantial share of the damages from climate change
is expected to be uncorrelated to returns in the economy as a whole, the discount rate should
move toward the risk-free rate. [EPA-HQ-OAR-2010-0799-9480-A1, p. 7]
For policymakers today, there is also a great deal of uncertainty about the relationship between
the greenhouse gas emissions and climate outcomes. Resolution of that uncertainty is
structurally similar to the realization of a risk that is uncorrelated with market returns, and can be
thought of as serving the same function within an investment portfolio. [EPA-HQ-OAR-2010-
0799-9480-A1, pp. 7-8]
In addition, the relationship between reductions in greenhouse gas emissions and economic
growth reflects causation as well as correlation. Severe climate change could bear negatively and
directly on overall economic productivity. For example, sea level rise could threaten large parts
of the coastal United States, especially low-lying areas like Florida. In effect, such a causal
relationship will be a source of negative correlation between the benefits of mitigation and
broader market returns. In climate scenarios with greater temperature change, total damages from
climate change will be higher, but total economic activity will be lower (ceteris paribus)—
marginal damages and therefore marginal benefits of mitigation will be high (due to convexity of
damages) while the returns to the broader economy will tend to be low (the productivity
effect). [EPA-HQ-OAR-2010-0799-9480-A1, p. 8]
The second pathway for risk aversion to impact the SCC concerns how investment in climate
change mitigation reduces the variance of expected outcomes for the economy as a whole. The
distribution of possible climate outcomes is a function of emissions, such that each ton of
emissions can amplify the variance of aggregate economic damages and thereby further increase
systematic risk. This means that, in addition to increasing the likelihood of catastrophic
outcomes, each additional unit of emissions also increases the uncertainty about which outcome
will occur. Thus, a full risk premium in the climate change context values the ability of
emissions abatement to reduce the variance of outcomes. [EPA-HQ-OAR-2010-0799-9480-A1,
p. 8]
18-142
-------
Analysis of Estimated Costs, Economic and Other Impacts
Despite these justifications, the Working Group noted that government is usually risk neutral and
questioned whether the climate change context merits different treatment. In fact, the nature of
the climate problem requires government to be risk averse. For most social problems, the
government is large enough that it can self-insure against disaster and act without aversion to
risk. But because climate change is qualitatively different than other social problems involving
risk, the agencies should treat it differently. The Working Group noted the suggestion in the
Office of Management and Budget's Circular A-4 that government agencies should "generally"
assume the perspective of a risk neutral actor. But it also observed that society should not always
be risk neutral, that Circular A-4 "allows for a different assumption on risk preference in
regulatory analysis if it is adequately justified,"48 and that agencies should deviate from the risk
neutral perspective when necessary.49 The global nature of climate change catastrophes requires
such a deviation. Circular A-4 endorses the use of expected values without a risk premium—
here, the average damages of all possible climate outcomes—only when society is risk neutral.
However, society will not be neutral when risks cannot be offset by other investments.
Compensating for the loss of habitability on Earth is impossible; the ability of the planet to
sustain human life is irreplaceable. The magnitude of the damages associated with the risk of
catastrophic climate change overwhelms the ability of society to match these damages with gains
from other investments.5OThis suggests that risk aversion is necessary for society to account for
the uniquely problematic nature of climate change. [EPA-HQ-OAR-2010-0799-9480-A1, p. 8]
The Working Group attempted to account for risk aversion by including a 95th percentile SCC
estimate at a 3% discount rate. 51 The decision to include consideration of risk aversion in one of
four estimated SCC values misses the point. Risk and uncertainty are systematic in the climate
change context. Consequently, all SCC estimates should include risk premiums to account for
these factors. Furthermore, it is not clear whether the selection of the 95th percentile SCC
estimate was chosen based on a reasoned connection to the risks under consideration, or out of
simple convenience. [EPA-HQ-OAR-2010-0799-9480-A1, pp. 8-9]
Studies that either calculate a risk premium or that include a risk premium when estimating the
SCC generally find such premiums to be substantial. Heal finds a premium between 0.1% and
8.13% of national income.52 Tol calculates a risk premium with "conservative assumptions"
around $6-$7/ton of carbon dioxide.53 Antoff, Tol, and Yohe report SCCs from about $16/ton of
carbon dioxide to over $5,000/ton when incorporating uncertainty into the calculation.54 Finding
that uncertainty and equity interact to increase the SCC, they report a final SCC estimate of more
than $50/ton of carbon dioxide.55 [EPA-HQ-OAR-2010-0799-9480-A1, p. 9]
These studies constitute several ballpark examples of premium size. Other studies suggest both
higher 56 and Iower57values for risk premiums. Different assumptions about the degree of risk
aversion and parameters in lAMs can radically change modeling outcomes. The point is that the
values under consideration are often very large relative to current SCC estimates. The presence
of many high estimates for risk premiums suggests that they should be given substantial weight
in determining the SCC. [EPA-HQ-OAR-2010-0799-9480-A1, p. 9]
The wealth of studies on this subject provides the agencies with sufficient know-how to
incorporate a risk premium into the SCC estimates. The agencies and the Working Group should
analyze the range of approaches toward risk and implement the best method for incorporating a
18-143
-------
EPA Response to Comments
defensible risk premium into the SCC. In particular, the agencies should consider including
either a "risk adder" or a downward adjustment of the discount rate. SSWithout a risk premium,
the SCC estimates will be too low and the rule will undervalue benefits from greenhouse gas
reductions, setting a precedent for future emissions standards to be inefficiently lenient. [EPA-
HQ-OAR-2010-0799-9480-A1, p. 9]
Risk Aversion and Catastrophic Damages Likely Interact, Necessitating Even Larger SCC
Values
The combination of risk aversion and uncertainty about catastrophic damages implies an even
greater upward adjustment to SCC estimates may be necessary. Millner, Deitz, and Heal argue
that differences among complex climate change models expose large gaps in our knowledge
regarding climate damages.59 Substantial uncertainty remains for a variety of IAM
parameters.60 In the presence of risk aversion, this deep uncertainty coupled with the possibility
of catastrophic climate damages implies that the risk adjustment may need to be very large to
account for society's desire to avoid catastrophic climate damages. Each unit of emissions
reduction not only decreases the average expected future damages, but also thins the fat tails in
damage probability distributions, thereby reducing the likelihood of catastrophic outcomes.61 If
the government is risk averse, the SCC should include a large risk premium to account for all of
these effects. [EPA-HQ-OAR-2010-0799-9480-A1, pp. 9-10]
The Agencies Should Continually Revise the SCC to Reflect the Most Recent Scientific
Knowledge
Since the Working Group report, there have been substantial advances in climate science that
should be taken into account in the models that underlie the SCC. Several arguments favor
revising the SCC to account for the most recent scientific advances as soon as possible in
advance of the final rulemaking. First, professional and legal norms for accurate cost-benefit
analysis require doing so. Executive Orders instruct federal agencies to accurately weigh the
costs and benefits of regulation and base decisions on "the best reasonably obtainable scientific,
technical, [and] economic . . . information."62
Although the stringency of the proposed emissions standards was negotiated prior to the
rulemaking,63 and the rule will remain cost-benefit justified even with the underestimated SCC
values, developing an accurate cost-benefit analysis for the final rule is still important. Given that
the tremendous private benefits of the rule are somewhat controversial (though they are clearly
real and should be counted),65 accuracy in the estimation of social benefits will help increase
confidence in the judgment that total benefits will outweigh costs. Moreover, in addition to
aiding the choice between regulatory alternatives, cost-benefit analysis is a way of presenting
information to the public and decisionmakers.66 The analysis shapes the public debate not just
about this rule, but about future related rulemakings on climate or efficiency. [EPA-HQ-OAR-
2010-0799-9480-A1, p. 10]
Second, regulatory impact analysis often builds off of methodologies established in previous
rulemakings. EPA and DOT's regulatory impact analyses in particular have a history of setting a
precedent for other federal—and even state—agencies to consider the SCC in their own
18-144
-------
Analysis of Estimated Costs, Economic and Other Impacts
rulemakings. 67 Even if improving the accuracy of the SCC will not affect the stringency or
structure of the present rulemaking, it could influence future emissions and efficiency standards
developed in other rulemaking contexts or by other agencies. EPA and NHTSA therefore have a
responsibility to include the most accurate SCC values, reflecting the most up-to-date scientific
and economic literature, in their final rulemaking. [EPA-HQ-OAR-2010-0799-9480-A1, p. 10]
Third, by incorporating the latest scientific developments, the agencies ensure that their analyses
do not fall out of date, and can help encourage climate research. Revising the SCC to account for
the most recent scientific developments will signal to researchers that the government cares
deeply about better understanding these issues, stimulating additional research into these topics.
The agencies can even use the revision as an opportunity to identify key outstanding questions,
in order to direct future research. [EPA-HQ-OAR-2010-0799-9480-A1, p. 10]
In its February 2010 report, the Working Group committed to "updating these [initial] estimates
as the science and economic understanding of climate change . . . improves" and "revisiting the
SCC values within two years or at such time as substantially updated models become
available."68 The agencies can make good on this commitment by ensuring that the SCC used in
the final rulemaking is based on the most recent climate science.69 [EP A-HQ-OAR-2010-0799-
9480-Al,pp. 10-11]
Conclusion
The agencies should increase their estimates of climate benefits to more accurately value the
chance of catastrophic damages. Substantial economic literature, including much published in
the last two years, supports the conclusion that current models do not place enough emphasis on
catastrophic scenarios and, consequently, that some adjustment to the calculation of benefits is
necessary. Disagreement over the exact size of that adjustment does not suggest the risk of
catastrophe should be valued at zero. [EPA-HQ-OAR-2010-0799-9480-A1, p. 20]
The agencies should increase their estimates of climate benefits to account for risk aversion.
Climate change is a categorically different kind of social problem: no single government can
self-insure against the risk of irreversible, planet-wide damages. The government, therefore,
should be risk averse toward climate change. Though the degree of risk society faces is a subject
of contention, most economists believe there is some non-negligible amount of risk that must be
accounted for. A risk premium should be incorporated, either as an adder to the value of climate
benefits, or as a downward adjustment to discount rates. [EPA-HQ-OAR-2010-0799-9480-A1, p.
20]
The agencies should continually revise their estimates of climate benefits to reflect the most
recent scientific and economic knowledge. Even if a better estimate of benefits will not change
the stringency or structure of the proposed rule, accuracy remains important. Professional and
legal norms for economic analysis require it; accurate benefits estimates will increase confidence
in the justifications for the rule and inform the public debate; and the agencies' impact analysis
will set a precedent for future rulemakings. The agencies should take the lead on adjusting
estimates to account for risk and catastrophic damages, as well as the latest climate
science. [EPA-HQ-OAR-2010-0799-9480-A1, p. 20]
18-145
-------
EPA Response to Comments
The agencies should make several other improvements in the valuation of climate benefits,
including development of non-carbon dioxide estimates, incorporation of potential benefit
revisions in the mid-term evaluation process, and accounting for the net upstream emissions from
electric vehicles. [EPA-HQ-OAR-2010-0799-9480-A1, p. 20]
2 INTERAGENCY WORKING GROUP ON SOCIAL COST OF CARBON, U.S. GOV'T,
TECHNICAL SUPPORT DOCUMENT: SOCIAL COST OF CARBON FOR REGULATORY
IMPACT ANALYSIS UNDER EXECUTIVE ORDER 12,866, at 2 (2010) [hereinafter
"WORKING GROUP REPORT"].
3 Id.
4 Id. at 5.
5 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate
Average Fuel Economy Standards, 76 Fed. Reg. 74,854, 74,895, 75,292 fn. 774 (proposed Dec.
1, 2011) [hereinafter "Proposed Rule"].
6 WORKING GROUP REPORT, supra note 2, at 29-31; Proposed Rule, supra note 5, at 75,127.
7 Proposed Rule, supra note 5, at 74,930, 74,933.
8 See NAT'L RES. COUNCIL, NAT'L ACAD. OF SCI, HIDDEN COSTS OF ENERGY:
UNPRICED CONSEQUENCES OF ENERGY PRODUCTION AND USE 256-57 (2009).
9 See Martin Weitzman, On Modeling and Interpreting the Economics of Catastrophic Climate
Change, 91 REV. ECON. & STAT. 1, 1 (2009).
10 See NAT'L RES. COUNCIL, supra note 8, at 293; Martin Weitzman, Fat-Tailed Uncertainty
in the Economics of Catastrophic Climate Change, 5 REV. ENVTL. ECON. & POL'Y 275
(2011).
11 See generally Weitzman, supra note 9.
12 See generally Richard S. J. Tol, Is the Uncertainty About Climate Change Too Large for
Expected Cost-Benefit Analysis?, 56 CLIMATE CHANGE 265 (2003).
13 NAT'L RES. COUNCIL, supra note 8, at 256-57.
14 Compare Weitzman, supra note 9, with Tol, supra note 12.
15 See WORKING GROUP REPORT, supra note 2, at 29-31. The Working Group does not
completely differentiate between the discrete effects of risk aversion and expected utility
18-146
-------
Analysis of Estimated Costs, Economic and Other Impacts
calculations when considering catastrophic damages, most likely because the scholars writing on
these issues often consider both effects simultaneously.
16 WILLIAM NORDHAUS, A QUESTION OF BALANCE: WEIGHING THE OPTIONS ON
GLOBAL WARMING POLICIES (2008); William D. Nordhaus, An Analysis of the Dismal
Theorem (Cowles Found., Discussion Paper No. 1686, 2009). For an update, see William D.
Nordhaus, The Economics of Tail Events with an Application to Climate Change, 5 REV.
ECON. & POL'Y 240 (2011).
17 Robert S. Pindyck, Uncertain Outcomes and Climate Change Policy (NBER Working Paper
No. 15,259, 2009). For more recent work, see Robert S. Pindyck, Fat Tails, Thin Tails, and
Climate Change Policy, 5 REV. ENVTL. ECON. & POL'Y 258 (2011).
18 Stephen C. Newbold & Adam Daigneault, Climate Response Uncertainty and the Benefits of
Greenhouse Gas Emissions, 44 ENVTL. & RES. ECON. 351 (2009).
19 See, e.g., Weitzman, supra note 10, at 280; Carolyn Kousky, Robert E. Kopp & Roger Cooke,
Risk Premia and the Social Cost of Carbon: A Review 5 (Economics: The Open-Access, Open-
Assessment E-Journal, Discussion Paper No. 2011-19, 2011).
20 See Weitzman, supra note 9, at 16 (finding that, in some circumstances, the possibility of
catastrophic damages will result in a theoretical infinite willingness to pay to avoid climate
catastrophes).
21 See generally Newbold & Daigneault, supra note 18.
22 See Pindyck, Uncertain Outcomes and Climate Change Policy, supra note 17, at 3-4.
23 WORKING GROUP REPORT, supra note 2, at 29.
24 See id. at 31.
25 See, e.g., Ctr. for Biological Diversity v. NHTSA, 538 F.3d 1172, 1200 (9th Cir. 2008)
("[W]hile the record shows that there is a range of values, the value of carbon emissions
reduction is certainly not zero.").
26 Pycroft et al., A Tale of Tails: Uncertainty and the Social Cost of Carbon Dioxide
(Economics: The Open-Access, Open-Assessment E-Journal, Discussion Paper 2011-36, 2011)
(finding that tail shape can change the SCC dramatically and suggesting fatter tails may be more
reasonable).
27 Antony Millner, On Welfare Frameworks and Catastrophic Climate Risks, in SOCIAL
SCIENCE RESEARCH NETWORK (2011) (arguing that satisfactory treatment of climate
modeling requires consideration of catastrophe).
18-147
-------
EPA Response to Comments
28 Frank Ackerman et al., Fat Tails, Exponents, Extreme Uncertainty: Simulating Catastrophe in
DICE, 69 ECOLOGICAL ECON. 1657 (2010) (finding that plausible increases in both the
climate sensitivity and damage exponent parameters results in disastrous economic decline).
29 Simon Dietz, High Impact, Low Probability? An Empirical Analysis of Risk in the
Economics of Climate Change, 108 CLIMATE CHANGE 519 (2011) (discussing one method of
bounding damages to avoid infinite willingness to pay for abatement).
30 Michael D. Gerst, Richard B. Howarth & Mark E. Borsuk, Accounting for the Risk of
Extreme Outcomes in an Integrated Assessment of Climate Change, 38 ENERGY POL'Y 4540
(2010) (finding that without aggressive abatement, the probability of catastrophic damages is
high).
31 See Weitzman, supra note 9; Tol, supra note 12. Participants at an EPA/DOE workshop
following the interagency process likewise noted that existing research already suggests that
lAMs could better assess high-end warming scenarios. ICF INT'L, DRAFT WORKSHOP
REPORT: IMPROVING THE ASSESSMENT AND VALUATION OF CLIMATE CHANGE
IMPACTS FOR POLICY AND REGULATORY ANALYSIS—PART 1, at 6 (2011), available
at http://yosemite.epa.gov/ee/epa/eerm.nsf/vwAN/EE-0564-50.pdf/$file/EE-0564-50.pdf
32 See Gary W. Yohe & Richard S. J. Tol, The Stern Review and the Economics of Climate
Change: An Editorial Essay, 89 CLIMATE CHANGE 231, 237 (2008).
33 See generally Weitzman, supra note 9.
34 See, e.g., Pindyck, Uncertain Outcomes and Climate Change Policy, supra note 17.
35 See Pycroft et al., supra note 26.
36 Some of the literature on risk premiums distinguishes risk and uncertainty based on Knight's
definitions: risk involves known probabilities, while uncertainty involves the inability to
determine the probabilities of different outcomes. FRANK H. KNIGHT, RISK,
UNCERTAINTY, AND PROFIT (1921). However, the distinction between uncertainty and risk
is not always clear. We do know that climate damages are not certain. We also know that people
are willing to pay to increase the certainty of damages. For the sake of simplicity, these
comments recommend a "risk" premium to account for the affects of aversion to both risk and
uncertainty.
37 See Sonia Quiroga & Ana Iglesias, A Comparison of the Climate Risks of Cereal, Citrus,
Grapevine and Olive Production in Spain, 101 AGRICULTURAL SYSTEMS 91, 98-99 (2009)
(specifying risk premium in relation to risk aversion among Mediterranean agricultural
producers); Howard C. Kunreuther & Erwann O. Michel-Kerjan, Climate Change, Insurability of
Large-Scale Disasters, and the Emerging Liability Challenge, 155 U. PA. L. REV. 1795 (2007)
(discussing calculations for insurance policies amid climate change); Alicia N. Rambaldi & Phil
Simmons, Response to Price and Production Risk: The Case of Australian Wheat, 20 J.
FUTURES MKTS. 345 (2000). See also Joseph E. Aldy et al., Designing Climate Mitigation
18-148
-------
Analysis of Estimated Costs, Economic and Other Impacts
Policy 14 (Res. for the Future, Discussion Paper 08-16, May 2009) (noting that proper risk
premium estimate is the subject of dispute, and that it varies with estimates of the marginal
utility of consumption net of climate damages); David Anthoff, Richard S. J. Tol, & Gary W.
Yohe, Risk Aversion, Time Preference, and the Social Cost of Carbon, 4 ENVTL. RESEARCH
LETTERS 1 (2009) (distilling from historical data values for the elasticity of marginal utility
with respect to consumption, and identifying salience of uncertainty in SCC calculation).
38 WORKING GROUP REPORT, supra note 2, at 31 (citing Anthoff et al., supra note 37, at 1
("[T]he assumed rate of risk aversion is at least as important as the assumed rate of time
preference in determining the social cost of carbon.")).
39 Geoffrey Heal & Bengt Kristrom, Uncertainty and Climate Change, 22 ENVTL. RESOURCE
ECON. 3 (2003) (analogizing climate change to insurance markets).
40 Geoffrey Heal, The Economics of Climate Change: A Post-Stern Perspective, 96 CLIMATE
CHANGE 275 (2009) (identifying the effects of uncertainty and risk aversion and suggesting
that society will pay to avoid climate change risks).
41 Magnus Hennlock, Robust Control in Global Warming Management: An Analytical Dynamic
Integrated Assessment (University of Gothenberg, Working Papers in Economics No. 354, 2009)
(finding that the preference for avoiding uncertainty entails a higher SCC due to the need for an
ambiguity premium).
42 Richard S. J. Tol, The Social Cost of Carbon: Trends, Outliers, and Catastrophes 2
ECONOMICS: THE OPEN-ACCESS, OPEN-ASSESSMENT E-JOURNAL (2008).
43 Yohe & Tol, supra note 32.
44 Martin L. Weitzman, Additive Damages, Fat-Tailed Climate Dynamics, and Uncertain
Discounting, 3 ECONOMICS: THE OPEN-ACCESS, OPEN-ASSESSMENT E-JOURNAL 1
(2009); and Martin L. Weitzman, GHG Targets as Insurance Against Catastrophic Climate
Damages (NBER, Working Paper No. 16136, 2010).
45 See, e.g., Gary Yohe, Toward an Integrated Framework Derived from a Risk-Management
Approach to Climate Change, 95 CLIMATE CHANGE 325, 329 (2009) (suggesting the need to
account for risk and uncertainty in climate change policy); Yohe & Tol, supra note 32, at 237
(arguing that the optimal carbon tax must be augmented by a non-zero risk premium); Heal &
Kristrom, supra note 39; Heal, supra note 40; Hennlock, supra note 41; Antony Millner, Simon
Dietz, & Geoffrey Heal, Ambiguity and Climate Policy (Center for Climate Change Economics
and Policy, Working Paper No. 28, 2010) (finding that aversion to uncertainty in some cases
leads to very large "ambiguity" premiums); Gerst et al., supra note 30 (showing that ignoring
uncertainty underestimates climate damages); and Robert E. Kopp et al., The Influence of the
Specification of Climate Change Damages on the Social Cost of Carbon (Economics: The Open-
Access, Open-Assessment E-Journal, Discussion Paper No. 2011-22, 2011) (finding that
uncertainty and risk aversion can significantly increase the SCC). Much of this literature review
is based on Kousky, supra note 19. See also Ctr. for Biological Diversity, supra note 25.
18-149
-------
EPA Response to Comments
46 See, e.g., Anthoff et al., supra note 37, at 5 (finding SCC estimates over $5,000 per ton of
carbon dioxide for some parameter values); Millner et al., supra note 45; Kousky et al., supra
note 19, at 14 (concluding after surveying the literature on risk and uncertainty premiums that
these premiums could be "quite large").
47 See generally Yohe, supra note 45; Yohe & Tol, supra note 32, at 237 ("While reasonable
people disagree how much of a risk premium should be placed on top of the Pigou tax, it should
be clear that no reasonable person would argue that this premium should be zero."); Kousky et
al., supra note 19. See also Klaus Keller, Gary Yohe, & Michael Schlesinger, Managing the
Risks of Climate Thresholds: Uncertainties and Information Needs, 91 CLIMATE CHANGE 5
(2008) (discussing the proper portfolio of mitigation policies).
48 See WORKING GROUP REPORT, supra note 2, at 31.
49 See id. at 30 (citing OFFICE OF MGMT. & BUDGET, EXECUTIVE OFFICE OF THE
PRESIDENT, CIRCULAR A-4, 42 (2003)).
50 See Weitzman, supra note 9, at 11.
51 See WORKING GROUP REPORT, supra note 2, at 30.
52 See Heal, supra note 40, at 287.
53 See Tol, supra note 42, at 6.
54 See Anthoff et al., supra note 37, at 5-6.
55 See id. at 6.
56 See, e.g., Dietz, supra note 29.
57 See, e.g., Robert Mendelsohn, Is the Stern Review an Economic Analysis?, 2 REV. ENVTL.
ECON. & POL'Y 45 (2008).
58 Reducing the discount rate is one way to account for risk aversion. See Kousky et al., supra
note 19, at 4. However, the effect of emissions abatement investments on the overall level of risk
in the economy does not affect the discount rate as described by modern portfolio theory. There
are also independent reasons for lowering the discount rates used by the Working Group, see
Letter from Institute for Policy Integrity & Environmental Defense Fund, to Lisa P. Jackson,
Administrator, EPA, 15 (Nov. 27, 2009) available at http://www.policyintegrity.org. Any
downward adjustment to the discount rate to account for risk should not diminish those
independent reasons to also lower the discount rate.
59 See Millner et al., supra note 45.
18-150
-------
Analysis of Estimated Costs, Economic and Other Impacts
60 See, e.g., Pindyck, Uncertain Outcomes and Climate Change Policy, supra note 17; Newbold
& Daigneault, supra note 18.
61 See, e.g., Kousky et al., supra note 19, at 3.
62 Exec. Order 12866, § l(b)(6)-(7); Exec. Order 13563 § l(c) ("each agency is directed to use
the best available techniques to quantify anticipated present and future benefits and costs as
accurately as possible").
63 WHITE HOUSE, DRIVING EFFICIENCY (2011), available at
http://www.whitehouse.gov/sites/default/files/fuel_economy_report.pdf.
65 See infra Part II.
66 See Nathaniel Keohane, The Technocratic and Democratic Functions of the CAIR Regulatory
Analysis, in REFORMING REGULATORY IMPACT ANALYSIS at 33 (Harrington, W.,
Heinzerling, L., & Morgenstern, R. eds., 2009).
67 See WORKING GROUP REPORT, supra note 2, at 3-4.
68 WORKING GROUP REPORT, supra note 2, at 3.
69 In its Preliminary Regulatory Impact Analysis from November 2011, NHTSA simply
repeated the two-year timeline without noting any concrete next steps. See NHTSA, PRIA, at
654 (2011), http://www.nhtsa.gov/staticfiles/rulemaking/ pdf/cafe/2017-
25_CAFE_PRIA_fmal.pdf. The proposed rule itself even more vaguely refers to a revision "in
the next few years." Proposed Rule, supra note 5, at 75,127. Though EPA and Department of
Energy have co-hosted two workshops over the past two years bringing together top climate
modelers, see http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/ ClimateEconomics.html, the
agencies have not publicly committed to any specific plans to reconvene the interagency working
group and update the SCC as of the date of these comments.
70 WORKING GROUP REPORT, supra note 2, at 12 ("The goal is to develop these estimates
by the time we issue revised SCC estimates for carbon dioxide emissions.").
71 Id.
Organization: National Association of Clean Air Agencies (NACAA)
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 33.]
The estimated benefits of this proposal include a reduction in oil consumption of 4 billion barrels
and a reduction in greenhouse gas emissions of 2 billion metric tons, fuel savings on the order of
347 to $444 billion, at a monetized net benefit to society in the range of 311 to $421 billion.
18-151
-------
EPA Response to Comments
Organization: Natural Resources Defense Council (NRDC)
EPA and NHTSA should use a social cost of carbon estimated using an improved methodology.
NRDC's recommendations authored by Dr. Laurie Johnson, Chief Economist of NRDC's
Climate and Clean Air Program, have been submitted as a separately docketed item from these
broader comments. [See pp. 1-24 of Docket number EPA-HQ-OAR-2010-0799-9472-A1 for
more detail on social cost of carbon.] [EPA-HQ-OAR-2010-0799-9472-A2, p. 4]
In the Regulatory Impact Analysis accompanying the proposed light-duty vehicle greenhouse gas
and CAFE rulemaking, EPA and DOT included benefits estimates for CO2 emission reductions
—a monetized value of the marginal benefit of reducing a ton of CO2—using the social cost of
carbon (SCC) as estimated by the Obama Administration's Interagency Working Group on the
Social Cost of Carbon (February 2010). Because the use of the Working Group's SCC in this
proposed ruling has implications beyond this regulation, we are submitting these comments
separately from our more specific comments on the proposed motor vehicle standards. Most of
our comments are recommendations for improving the methodology for estimating the SCC for
future regulations. NRDC recognizes that implementing many of these recommendations will not
be possible within the time frame of this ruling. Nevertheless, they should inform what the
agencies decide to do in both the short- and longer-term. [EPA-HQ-OAR-2010-0799-9472-Al,
p. 2]
Our recommendations regarding the GWP method and SCC are summarized as follows [Note:
NRDC recommendations regarding the GWP method are listed above in Section 18.4.1.1]:
2) Improved SCC.
a. Use the updated versions of the social cost of carbon models that were used for the 2010
estimates to re-estimate the SCC for this rulemaking (Recommendation #4). [EPA-HQ-OAR-
2010-0799-9472-A1, p. 5]
b. Use a lower discount rate. We recommend 0.7%, the average return on 6 month U.S. Treasury
Notes (Recommendation #5), for several reasons (see discussions in Section 1.2. and d) and e) in
Section II. At a minimum, whatever discount rates the agencies adopt, it needs to include an
estimate of the SCC using the government's own recommended lower bound sensitivity value
for intergenerational discounting, of 1% (OMB, Circular A-4).5 The choice by the Working
Group not to use the lower bound was not justified, and should not be continued. If the agencies
elect not implement this recommendation, we request it provide a justification (Recommendation
#6). [EPA-HQ-OAR-2010-0799-9472-A1, p. 5]
c. Short of our preferred 0.7% rate, the agencies should at least use a more representative set of
discount rates that take into account long run uncertainty in interest rates. The range should
include Weitzman6 and UK Greenbook7 declining discount rate schedules, not just the Newell-
Pizer estimate already used by the Working Group (Recommendation #7). If the agencies elect
not implement this recommendation, we request it provide a justification. [EPA-HQ-OAR-2010-
0799-9472-A1, pp. 5-6]
18-152
-------
Analysis of Estimated Costs, Economic and Other Impacts
3) Transparency of SCC. EPA should provide a more transparent presentation of the social cost
of carbon used in the calculations, such that it better conveys the limitations of the models to
handle catastrophic risks and many damage categories, by
a. Providing a detailed list of damages included and excluded from the models in tabular format
(Recommendation #8). If the agencies elect not implement this recommendation, we request it
provide a justification.
b. Providing the 99th percentile social cost of carbon estimates (Recommendation #9). If the
agencies elect not implement this recommendation, we request it provide a justification. [EPA-
HQ-OAR-2010-0799-9472-A1, p. 6]
4) Recommendations for the Interagency Working Group. The agencies should recommend to
the Interagency Working Group, along with Recommendations above, that the Group:
a. Incorporate risk aversion according to different available methodologies as summarized in
Kosky and Kopp (2011)8 (Recommendation #10). [EPA-HQ-OAR-2010-0799-9472-A1, p. 6]
b. In addition to incorporating risk aversion, better integrate the very high and catastrophic
damages to which individuals are risk averse into all three models. Specifically, the Working
Group should 1) use Weitzman's analysis (2009)9 to 'extend the grid' in the Monte Carlo
simulations; 2) for catastrophic outcomes, consider using as an estimate of damages Weitzman's
implied ?value of statistical life on Earth as we know it,? the VSL (value-of-a-statistical life),
multiplied by world population; 3) reduce the amount of low cost adaptation assumed in the
models; and 4) modify damage functions to reflect cross-sectoral damages (Recommendations
#11, 12, 13, 14). [EPA-HQ-OAR-2010-0799-9472-A1, p. 6]
c. Conduct sensitivity analyses equity weighting the SCC according to different available
methods (Recommendations #15, 16). [EPA-HQ-OAR-2010-0799-9472-A1, p. 6]
d. Review the literature for estimates of the ratio between non-use and use values, and develop a
methodology to apply a multiplication factor (or factors) to relevant use values included in the
models (Recommendation #17). [EPA-HQ-OAR-2010-0799-9472-A1, p. 6]
e. Dedicate full time staff to collecting and reviewing new climate science and economic
modeling on an ongoing basis, and regularly incorporate these developments into the SCC
models. As they become available, post findings on a public website with links to sources
(Recommendations #18, 19). [EPA-HQ-OAR-2010-0799-9472-Al, p. 6]
f Update the models to reflect recent research on agricultural changes, which suggest the CO2
fertilization is overestimated in the FUND model, and that much, if not all, fertilization benefits
may be cancelled out by negative impacts on agriculture (e.g. extreme heat, pests, and weeds)
(Recommendation #20). [EPA-HQ-OAR-2010-0799-9472-A1, p. 7]
18-153
-------
EPA Response to Comments
g. Examine whether the upper ends of the 612 to 889 ppm of CC>2 in the four business-as-usual
scenarios used by the Working Group reflect current worse-case estimates (Recommendation
#21). [EPA-HQ-OAR-2010-0799-9472-A1, p. 7]
Section I below provides a more detailed summary discussion of these comments and
recommendations, while Sections II and III provide extended discussions of discounting and
equity weighting, and catastrophic risk representation in Monte Carlo analysis, respectively. [See
Docket number EPA-HQ-OAR-2010-0799-9472-A1 pp. 8-24 for Sections I, II, and III] [EPA-
HQ-OAR-2010-0799-9472-A1, p. 7]
4 Shindell, DT, Faluvegi, G, Koch, DM, Schmidt, GA, Unger, N and Bauer, SE (2009).
Improved attribution of climate forcing to emissions. Science vol 326: 716-718.
5 In 2008, EPA suggested an even lower bound ,of 0.5%.Technical Support Document on
Benefits of Reducing GHG Emissions. U.S. Environmental Protection Agency, June 12, 2008.
As EPA notes in the beginning of the document, it began developing most of the information in
the report in support of the Executive Order 13432 for developing CAA (Clean Air Act)
regulations that would reduce GHG emissions from motor vehicles.
6 Weitzman, M (2001). Gamma Discounting. American Economic Review, American Economic
Association, vol. 91(1): 260-271.
7 Lowe, J (2008). Intergenerational wealth transfers and social discounting: supplementary
greenbook guidance. UK Treasury. http://www.hm-treasury.gov.uk/d/4(5).pdf. Note that the
schedule in this supplement to the greenbook subtracts out an implicit positive value for the pure
rate of time preference, appropriate for intergenerational discounting.
8 Kousky, C, and Kopp, RE (2011). Risk Premia and the Social Cost of Carbon: A Review.
Economics: The Open-Access, Open-Assessment E-Journal. Discussion Paper No. 2011-19.
http://www.economics-ejournal.org/economics/discussionpapers/2011-19.
9 Weitzman, M (2009). On Modeling and Interpreting the Economics of Catastrophic Climate
Change. Review of Economics and Statistics 9(1): 1-19
Response:
EPA appreciates the commenters' recommendations to modify the methodology
underlying the SCC estimates and has considered each one in the context of this rulemaking.
The interagency group committed to update the SCC estimates as the science and economic
understanding of climate change and its impacts on society improves over time. To help motivate
and inform this process, DOE and EPA hosted a series of workshops. The first workshop focused
on conceptual and methodological issues related to integrated assessment modeling and valuing
climate change impacts, along with methods of incorporating these estimates into policy
18-154
-------
Analysis of Estimated Costs, Economic and Other Impacts
OQ
analysis. The second workshop reviewed research on estimating impacts and valuing damages
on a sectoral basis.84
In sum, EPA has determined that the SCC methodological recommendations require
additional research, review, and public comment before it can apply them to a rulemaking
context. EPA has therefore presented the SCC estimates developed through the 2009-2010
interagency process in this rulemaking. EPA will continue to consider these comments and will
share the recommendations with the interagency group for consideration in future reviews of the
current SCC estimates.
Regarding comments that the agencies should rethink the way they calculate emissions
from alternative fuel vehicles, please see section 6.5 of this document for EPA's response.
The remainder of this section provides more detailed responses to the recommendations.
Recommendations regarding treatment of uncertainty, catastrophic impacts, and risk.
The interagency group specified three parameters—climate sensitivity, socioeconomic
and emissions trajectories, and discount rate—as inputs into three integrated assessment models,
leaving other key parameters unchanged from those specified by the authors but ran the models
probabilistically for purposes of formal uncertainty analysis in the interagency modeling
exercise. A probability distribution was specified for climate sensitivity and used as an input in
the three models. A probability distribution was not specified for the other two parameters
because of uncertainty about how to model them probabilistically for purposes of formal
uncertainty analysis. For example, while models can project potential emissions pathways,
assigning probability weights to different states of the world in an analytically rigorous way
proved challenging given the dearth of information on the likelihood of a full range of future
socio-economic pathways. Likewise, there is broad disagreement in the published literature on
what discount rate is appropriate to use in an intergenerational setting. Therefore, the modeling
exercise used multiple scenarios that span a range of socio-economic parameters and multiple
values for the discount rate.
EPA recognizes the need to review how the models incorporate catastrophic damages and to
account for uncertainties and risks in its analysis. EPA also agrees that it is important to account
for these issues and notes that the rulemaking documents, in particular the SCC TSD, provide a
thorough discussion about these considerations, the ongoing challenge to incorporate them into
the SCC estimates, and the implications for the benefits analysis (for example, see Section V of
the SCC TSD).
EPA has continued to explore the literature and assess it in the context of its SCC
analysis. For example, the DOE/EPA workshop series on integrated assessment modeling
reviewed the emerging literature about treatment of economic catastrophes and risk aversion.
Overall, the discussions revealed progress in understanding the implications of potential
83 For workshop proceedings, see http://go.usa. gov/426
84 For workshop proceedings, see http://go.usa. gov/42F
18-155
-------
EPA Response to Comments
catastrophes while underscoring the need for additional research regarding optimal ways to
incorporate such information into regulatory rulemakings. Likewise, EPA carefully reviewed
the commenters' synthesis of the emerging literature regarding treatment of risk aversion,
catastrophic impacts, and the calculation of a risk premium, but continues to believe that
additional deliberation is required to better characterize these issues and identify the optimal way
to modify the interagency group's methodology and incorporate it in rulemakings. Furthermore,
other federal agencies use the SCC estimates to analyze benefits of rulemakings and it is
important to ensure consistency in the SCC estimates used across the government analyses. This
is not consistency for the sake of consistency, but rather using well-documented, scientifically
supported estimates, while at the same time continuing the iterative process of analyzing,
reviewing, and updating the SCC to reflect best available science. Therefore, EPA will continue
to research these important issues and to include the submitted comments in any review process
to update the SCC estimates.
Recommendations regarding model vintage.
EPA has also begun to explore the updated versions of DICE, FUND, and PAGE.
Additional analysis of the model updates is required before EPA can incorporate them in
rulemakings. Furthermore, other federal agencies use the SCC estimates to analyze benefits of
rulemakings and it is important to ensure consistency in the SCC estimates used across the
government analyses.
Recommendations regarding CO2 fertilization.
EPA considered the comments regarding CC>2 fertilization benefits in FUND and has
determined that additional research would be required to implement these recommendations.
EPA has recognized the need for a thorough review of damage functions in all three models that
the interagency group used to estimate SCC. In addition to supporting the 2010-2011 DOE/EPA
workshop series that explored treatment of impacts in the models, EPA initiated a review of the
literature in agriculture and other sectors to help researchers more easily improve representation
of damages. Consistent with the commenter's recommendation, EPA is particularly interested in
examining recent publications about the role of assumptions regarding carbon fertilization. EPA
appreciates the references provided by the commenter and will continue to analyze the
components of agricultural impacts.
In the meantime, EPA determined that modifying the FUND structure would be
counterproductive, given that the latest version incorporates changes in the estimation of
agricultural impacts. These changes are undergoing peer review and EPA looks forward to
exploring these changes.
Furthermore, introducing changes beyond those implemented by the model authors
would conflict with the methodology established by the interagency working group. A key
objective of the interagency process was to enable a consistent exploration of the three models
while respecting the different approaches to quantifying damages taken by the key modelers in
the field. After conducting an extensive literature review, the interagency group selected three
sets of input parameters (climate sensitivity, socio-economic and emissions trajectories, and
18-156
-------
Analysis of Estimated Costs, Economic and Other Impacts
discount rates) to use consistently in each model. All other model features were left unchanged,
relying on the model developers' best estimates and judgments.
Recommendations regarding omitted impacts.
EPA disagrees with the comments that the agency has not responded to repeated requests
for more information about how the models treat climate change impacts, i.e., which impacts are
therefore included or excluded from the monetized estimates. Specifically, EPA has published
written responses to this same comment in other rulemakings—see Light-Duty Vehicle
Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards, EPA
Response to Comments Document for Joint Rulemaking and Greenhouse Gas Emission
Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles,
EPA Response to Comments Document for Joint Rulemaking. In short, it is not possible at this
time to provide a precise list of each model's treatment (i.e., included, excluded) of climate
impacts. Instead, the SCC TSD presents a robust discussion of this key analytical issue, e.g.,
how each model estimates climate impacts, the known parameters and assumptions underlying
those models, and the implications of incomplete treatment of impacts (catastrophic and non-
catastrophic) for the SCC estimates. Moreover, the discussion in the SCC TSD underscores the
difficulty in accurately distilling the models' treatment of impacts in table-form. Most notably,
the use of aggregate damage functions—which consolidate information about impacts from
multiple studies—in two of the models poses a challenge in listing included impacts. For
example, within the broad agricultural impacts category, some of the sub-grouped impacts are
not explicitly modeled but are highly correlated to other subcategories that are explicitly
modeled. Therefore, it may be misleading to identify these kinds of impacts as either "included"
or "omitted" from the model. Along those lines, impacts may be included in models but not
directly; the Dynamic Integrated Climate and Economy (DICE) model represents adaptation
implicitly through the choice of studies used to calibrate the aggregate damage function, and the
Climate Framework for Uncertainty, Negotiation, and Distribution (FUND) model includes
adaptation both implicitly and explicitly (see the SCC TSD for details).
Recommendations regarding discount rate.
Regarding the recommendations for discount rate selection, EPA finds it to be defensible
and transparent given its consistency with the standard contemporary theoretical foundations of
benefit-cost analysis. The basis for the current discounting approach is discussed in detail in the
SCC TSD. In sum, the interagency group applied three constant certainty-equivalent discount
rates (2.5, 3, and 5 percent) to the SCC estimates to account for various perspectives about risk
and uncertainty. The upper value of 5 percent accounts for the view that there may be a high
correlation between climate damages and market returns while the rest of the SCC analysis
centers on a discount rate consistent with concerns about risk aversion. The SCC TSD also
summarizes the consideration of the literature about handling uncertainty in discounting (e.g.,
Newell and Pizer (2003), Weitzman (2001), and the UK's "Green Book" for regulatory analysis)
and concludes that the proper way to model discount rate uncertainty remains an active area of
research.
18-157
-------
EPA Response to Comments
In addition, EPA finds this approach to be consistent with OMB Circular A-4. Circular
A-4 discusses the analytical challenges for discounting in an intergeneration context and
concludes that agencies "might consider a further sensitivity analysis using a lower but positive
discount rate in addition to calculating net benefits using discount rates of 3 and 7 percent."
Specifically, Circular A-4 states that "estimates of the appropriate discount rate" in an
intergenerational context ranged from 1 to 3 percent." Two of the three discount rates used in
the interagency exercise fall within this range.
However, EPA recognizes the limitations of the discounting approach used in the
interagency modeling exercise. Accordingly, EPA funded a workshop on discounting in
September 2011 that invited world-recognized experts to discuss how the benefits and costs of
regulations should be discounted for projects with long horizons. In particular, it explored what
principles should be used to determine the rates at which to discount the costs and benefits of
regulatory programs when costs and benefits extend over very long horizons. The charge
questions that were the subject of the workshops discussion focused on three main areas: (1)
whether and in what context it is appropriate to apply a Ramsey discounting framework in an
intergenerational setting; (2) whether and how to directly estimate discount rates over long time
horizons; and (3) how to apply discounting in a regulation where some costs and benefits accrue
intra-generationally while others accrue inter-generationally. See
http://rff.org/Events/Pages/Intergenerational-Discounting-Workshop.aspx for a summary of the
main discussion points. EPA is in the process of evaluating next steps with regard to possible
methodological improvements in intergenerational discounting.
Recommendations regarding SCCpresentation.
Regarding the recommendation to provide the 99th percentile estimates of the social cost
of carbon, EPA notes that these estimates are presented in the Appendix, Table A2, in the SCC
Technical Support Document, "Social Cost of Carbon for Regulatory Impact Analysis Under
Executive Order 12866 SCC TSD," (SCC TSD), which is referenced in both the preamble and
RIA. The SCC provides extensive information about the SCC estimates and the underlying
parameters, which serve as the basis for the estimates of methane co-benefits. For example, the
SCC TSD shows how SCC values for 2010 vary across model, scenario, and discount rate; it also
presents the distribution of SCC estimates, including benefit estimates at the 95th and 99th
percentiles for each model. EPA has determined that it is more appropriate to place such
detailed technical information in the rulemaking's technical supporting documents, i.e., the SCC
TSD, rather than the co-benefits section of the RIA, which gives an overview of the calculation
as well as a detailed table with the methane co-benefit estimates. The RIA also provides
references to the SCC TSD for those seeking further information about the distribution.
Recommendations regarding global estimates of SCC.
EPA agrees with the comment regarding use of a global SCC value and notes that the agencies
have in fact used global estimates to assess the benefits of this rulemaking. See preamble
Section III.H.6 and Chapter 7 of the RIA for the SCC estimates.
18.4.1.3 Comments about Social Cost of COi (Opposition to estimates)
18-158
-------
Analysis of Estimated Costs, Economic and Other Impacts
Organization: Institute for Energy Research (IER)
Furthermore, EPA's cost-benefit analysis utilizes the "social cost of carbon." The estimates
developed through EPA's social cost of carbon analysis are arbitrary and capricious as the social
cost of carbon is an unsupportable metric for use in federal rulemaking. Even on its own terms,
the social cost of carbon estimate is inapplicable for EPA's analysis, because of what is called
"leakage" in the climate change literature. Specifically, EPA ignores the possibility that its rule
will increase greenhouse gas emissions outside of the United States, through mechanisms such as
a lower world price of oil due to restricted American demand. [EPA-HQ-OAR-2010-0799-9573-
Al,p.2]
In addition to basing its case on an assumption that households and businesses irrationally fail to
reap advantageous fuel economy savings, EPA's estimates also incorrectly deploy the concept of
"Social Cost of Carbon" (SCC) from the climate change literature. Although the SCC is a useful
theoretical concept in discussions of worldwide carbon taxes or other frameworks, there are
several problems with EPA's invocation of the concept in the context of US-based fuel economy
mandates. [EPA-HQ-OAR-2010-0799-9573-A1, p. 9]
5. The "Social Cost of Carbon" is used improperly in the EPA's assessment
Besides the problems with overriding consumers' voluntary choices, part of EPA's analysis is
methodologically flawed because EPA uses the "social cost of carbon" in its cost-benefit
analysis. As a concept, the social cost of carbon has the appearance of specificity without
necessarily reflecting reality in a meaningful way. [EPA-HQ-OAR-2010-0799-9573-A1, p. 21]
EPA and NHTSA explain the social cost of carbon thusly:
EPA has assigned a dollar value to reductions in CO2 emissions using global estimates of the
social cost of carbon (SCC). The SCC is an estimate of the monetized damages associated with
an incremental increase in carbon emissions in a given year. It is intended to include (but is not
limited to) changes in net agricultural productivity, human health, property damages from
increased flood risk, and the value of ecosystem services due to climate change. [EPA-HQ-OAR-
2010-0799-9573-A1, p. 21]
EPA argues that by reducing greenhouse gas emissions, this rule would produce benefits, as
measured by the social cost of carbon, of a discounted present value of $32.8 billion (using a 5%
discount rate) to $522 billion (using a 3% discount rate) and 95th percentile social cost of carbon
assumption. But these amounts are almost certainly overestimates. As EPA admits, this rule will
only reduce global temperature by 0.0076-0.0184 °C by 2100. Even in the scenario with the
most warming, a 0.02°C reduction in temperature is not enough to have any impact on the
damages EPA claims will occur with higher temperatures—i.e. "changes in net agricultural
productivity, human health, property damages from increased flood risk, and the value of
ecosystem services due to climate change." Without having an impact on these damages, there
are no real benefits. [EPA-HQ-OAR-2010-0799-9573-A1, p. 21]
18-159
-------
EPA Response to Comments
In the economics of climate change literature, the social cost of carbon (SCC) is calculated by
reducing the absolute amount of greenhouse gas emissions by one (carbon-dioxide-equivalent)
ton and estimating the corresponding reduction in the present-discounted value of total long-run
climate damages. [EPA-HQ-OAR-2010-0799-9573-A1, pp. 21-22]
EPA's cost-benefit methodology assumes that a proposal that reduces greenhouse gas emissions
by a certain quantity R will therefore yield social benefits (from reduced climate damages) of R x
SCC. However, this overstates the benefits, because of a phenomenon called "leakage." The
calculation of benefits using SCC assumes that if the United States foregoes greenhouse gas
emissions as a result of this rule, then those emissions will not happen. This fails to include the
impact of these rules outside the United States. Specifically, it is not the case that global
emissions from all other sources will be unaffected by the proposed rules. For example, the new
rules (and accompanying higher prices for new vehicles) will lead motorists to drive their older,
less fuel efficient cars for longer than they otherwise would have, and in the extreme more
people will emigrate to jurisdictions that have looser standards and buy more vehicles from
exempt manufacturers than would otherwise have occurred. Another major consideration is that
reduced U.S. demand for oil will depress world oil prices and lead to greater fuel use by
motorists around the world. In the aggregate and over several decades, the actual reduction in
global emissions will be lower—and possibly significantly lower—than a naive estimate would
indicate. [EPA-HQ-OAR-2010-0799-9573-A1, p. 22]
EPA's cost-benefit analysis utilizes the "social cost of carbon," which estimates in this proposed
rule demonstrate to be an arbitrary and unsupportable metric for use in federal
rulemaking. [EPA-HQ-OAR-2010-0799-9573-A1, p. 23]
Response:
EPA disagrees with the commenter's characterization of the SCC as an "unsupportable
metric for use in federal rulemaking." While there are inherent uncertainties associated with
modeling climate and economic systems over long time spans, the SCC estimates used in the
rulemaking analysis were developed from three integrated assessment models that synthesize
available scientific and economic research and have been used in the IPCC assessment.
Integrated assessment models are particularly well suited to the estimation of SCC because they
combine climate processes, economic growth, and feedbacks between the climate and global
economy into a single modeling framework. See the SCC TSD for a complete discussion about
the three models used to develop the SCC estimates. See also Coalition for Responsible
Regulation v. EPA, No. 09-1322 (D.C. Cir. June 26, 2012) slip op. p. 27 ("State and Industry
Petitioners assert that EPA 'delegated' its judgment to the IPCC, USGCRP, and NRC by relying
on these assessments of clime-change science. This argument is little more than a semantic
trick... .EPA simply did here what it and other decision-makers often must do to make a science-
based judgment: it sought out and reviewed existing scientific evidence to determine whether a
particular finding was warranted. It makes no difference that much of the scientific evidence in
large part consisted of 'syntheses' of individual studies and research. Even individual studies
and research papers often synthesize past work in an area and then build upon it. This is how
science works. EPA is not required to re-prove the existence of the atom every time it
approaches a scientific question.")
18-160
-------
Analysis of Estimated Costs, Economic and Other Impacts
In addition, EPA disagrees that SCC overstates the benefits of mitigation. The SCC
estimates do not include all significant climate changes damages and are therefore likely
underestimates. In addition, the SCC estimate is for CO2 only, as noted in the previous comment
response. As a result, EPA has supplemented the quantified benefit estimates with a qualitative
discussion about benefits.
Furthermore, EPA disagrees with the commenter's conclusions about the potential for
emission leakage—in this case, the potential for the rule to "increase greenhouse gas emissions
outside of the United States, through mechanisms such as a lower world price of oil due to
restricted American demand"—and that SCC is therefore irrelevant. First, EPA disagrees that
the rule would necessarily result in emission leakage. The analysis conducted for this rule
estimates that the world price of oil will fall modestly in response to lower U.S. demand for
refined fuel (see preamble section III.H.S.c for discussion). One potential result of this decline in
the world price of oil would be an increase in the consumption of petroleum products,
particularly outside the U.S. In addition, other fuels could be displaced from the increased use
of oil worldwide. For example, if a decline in the world oil price causes an increase in oil use in
China, India, or another country's industrial sector, this increase in oil consumption may displace
natural gas usage. Alternatively, the increased oil use could result in a decrease in coal used to
produce electricity. An increase in the consumption of petroleum products particularly outside
the U.S., could lead to a modest increase in emissions of greenhouse gases, as well as criteria air
pollutants, and airborne toxics from their refining and use. However, lower usage of, for
example, displaced coal would result in a decrease in greenhouse gas emissions. Therefore, any
assessment of the impacts on GHG emissions from a potential increase in world oil demand
would need to take into account market impacts in all segments of the global energy sector.
Given the complexity of analyzing these multiple market impacts globally, the agencies'
analyses have not attempted to estimate these effects.
Second, even if emissions leakage were relevant to this rulemaking, it would affect the
estimate of total emissions, not the estimate of the value of damages per ton. In other words,
emission leakage is not relevant to the value of a one ton reduction in CO2 emissions (i.e., SCC).
As discussed in the preamble we have assumed that this rule would result in small (marginal)
impacts on cumulative global emissions. Even in the unlikely event that emissions leakage
occurred under this rulemaking, it would be unlikely to alter the cumulative global emissions
trajectory underlying the SCC estimates.
18.4.2. Estimated Non-GHG Health and Environmental Impacts
Organizations Included in this Section
American Lung Association
Boyden Gray & Associates PLLC
Environmental Defense Fund (EDF)
Growth Energy
Mass Comment Campaign (20,500) (Union of Concerned Scientists-3)
Mass Comment Campaign (375) (Union of Concerned Scientists-2)
18-161
-------
EPA Response to Comments
Mass Comment Campaign (9,570) (Unknown Organization)
Pennsylvania Department of Environmental Protection
Union of Concerned Scientists (UCS)
Organization: American Lung Association
The benefits anticipated from the proposed standards are significant. The preferred alternative
directly reduces emissions of carbon dioxide, but should also result in reduced emissions of
sulfur dioxide, PM2.5, volatile organic compounds (VOCs), nitrogen oxides, benzene, and diesel
particulates. [EPA-HQ-OAR-2010-0799-9902-A2, p. 1]
Many of the emissions reduced because of the proposed rule directly impact the health,
particularly the lung health, of millions of Americans. The American Lung Association's 2011
State of the Air report found that half the nation - over 154 million Americans - continues to live
in areas with dangerous levels of ozone or paniculate matter. Current studies warn of significant
and complex impacts on particulate matter and tropospheric ozone from climate change. Areas
already suffering from poor air quality will find it much harder to clean up ozone and particulate
matter, as well as other emissions because of the added burden from the changes to climate. The
proposed rule helps to mitigate the short and long-term health impacts of these pollutants as well
as the targeted issue of climate change. [EPA-HQ-OAR-2010-0799-9902-A2, p. 1]
Response:
EPA agrees that the benefits of the standards are significant and clearly outweigh the
costs. In the RIA that accompanies the final rulemaking (Chapters 6 and 7), we discuss the
breadth of benefits associated with both reductions in GHG emissions and non-GHG emissions
associated with the standards, including (and especially) reductions in risk to human health and
welfare.
Organization: Boyden Gray & Associates PLLC
Supporting action to address these toxic compounds in gasoline in this rulemaking through use of
alternative fuels is EPA's own acknowledgement that increased fuel efficiency results in what is
known as the "rebound effect"—that is, an actual increase in driving that results from its lowered
cost due to greater efficiency. The increased driving in turn means increased tailpipe
emissions.30 EPA indicates that overall there is a decrease on these criteria pollutants because of
offsetting decreases in upstream emissions. But there are at least two gaps in EPA's
reasoning. [EPA-HQ-OAR-2010-0799-9506-A1, p. 9]
First, it is not at all clear that the upstream reductions can offset increases in tailpipe emissions
on a population-weighted basis, since tailpipe emissions occur on roadways, where the exposure
is greatest, as EPA acknowledges in this rulemaking.31 The goal of EPA regulations under the
CAA should be a reduction of human exposure to toxics, not simply the reduction of emissions
in general. In fact, motor vehicle tailpipe emissions are the largest single source of air pollution
affecting urban populations, and this exposure will not be significantly affected by upstream
18-162
-------
Analysis of Estimated Costs, Economic and Other Impacts
reductions.32 At the very least, EPA needs to address this point. [EPA-HQ-OAR-2010-0799-
9506-A1, p. 9]
Second, and perhaps more important, it is not clear how EPA is calculating the benefits in
Chapter 6 of the DRIA. EPA provides charts and citations (i.e., Fann et al., 2007) that calculate
the public health benefits per ton of reduction of "direct" PM at $300,000 per ton. At the same
time, EPA states that the heavy molecular weight components of gasoline create what EPA
classifies as "direct" PM emissions.33 These direct PM emissions are among those that will
increase at the tailpipe under the proposal due to the rebound effect, but it is unlikely that this
increase will be offset by upstream decreases, because these direct emissions are not associated
with upstream operations. And it is not clear that secondary aerosols are associated with
upstream operations, either. [EPA-HQ-OAR-2010-0799-9506-A1, p. 9]
In all of issues noted herein, EPA's proposal raises not merely questions of law but also
fundamental questions of regulatory costs and benefits. By undermining NHTSA's incentives for
CNG and alternative fuels, EPA will increase pollution. By requiring auto companies to reduce
carbon output, EPA will exacerbate non-GHG pollution, both through the "rebound effect" and
through the promotion of advanced engine technologies (such as direct injection) that increase
pollution when not paired with cleaner, higher-octane fuel. As EPA itself noted in the DRIA (at
p. 6-32), an accurate and thorough consideration of all costs and benefits is critically important to
ensure that the agencies' new standards will promote public health, not harm it. Accordingly,
EPA and NHTSA must revisit their cost-benefit analyses, to account for each of those adverse
effects of EPA's standards. [EPA-HQ-OAR-2010-0799-9506-A1, p. 11]
Organization: Growth Energy
The oversight with regard to potential PM increases due to widespread DGI use is important
because PM effects are a substantial consideration in the cost-benefit analysis. In summarizing
the benefits analysis, the proposal emphasizes PM benefits noting:
The benefits include all benefits considered by EPA such as GHG reductions, PM benefits,
energy security and other externalities such as reduced refueling time and accidents, congestion
and noise. [EPA-HQ-OAR-2010-0799-9505-A1, p. 39]
Organization: Union of Concerned Scientists (UCS)
In our original comments to the NOI, UCS urged the agencies to set standards based on the full
set of societal benefits, not just fuel savings. Specifically, we stated "monetization of the full set
of societal benefits should be assessed, including (but not limited to) improved energy security
through reduced oil consumption, lower carbon emissions, and enhanced economic security in
the face of likely gasoline price spikes." 19 [EPA-HQ-OAR-2010-0799-9567-A2, p. 5]
Response:
We refer the commenters to Preamble Section III.G. 1 and RIA Chapter 4 for a complete
discussion of the emissions impacts associated with this rulemaking and the methods used to
18-163
-------
EPA Response to Comments
estimate them. As the commenters note, we estimate that there will be slight emissions increases
associated with rebound driving as well as emission reductions associated with upstream sources
such as power plants, refineries, and related emission reductions due to reductions in upstream
distribution and transport of fuels (associated with the rule's fuel savings impacts).
The emission impacts associated with the standards serve as inputs to the non-GHG
photochemical air quality modeling analysis and the associated health impacts analysis. As
shown in RIA Chapter 6, our air quality modeling results indicate that there are very small non-
GHG impacts over the majority of the country. For PM, the results indicate that in 2030, a
population weighted average reduction of approximately 0.01 ug/m3 can be expected (see RIA
Chapter 6.3.1). For ozone, we estimate that in 2030, on a population-weighted basis, there is
virtually no change in ambient concentrations in ozone. For the commenter's reference, we
further discuss the impact of the rebound effect and advance engine technologies on emissions in
Section 17 of this response to comments document.
In terms of health impacts, however, it is clear that upstream reductions in emissions
related to ambient concentrations of both direct and indirect PM outweigh the slight emission
increases associated with rebound driving. In terms of PM-related health impacts, we estimate
that in 2030, emission reductions associated with the rule will result in between 110 to 280 fewer
premature mortalities across the U.S. Compared to the estimate of 1 to 3 additional ozone-
related premature mortalities associated with rebound-related emission increases, it is clear that
upstream emission reductions outweigh the slight downstream emission increases and in fact
improve health on a national basis. We note that EPA conducted full-scale photochemical air
quality modeling to capture the impacts both upstream and downstream emissions have on
ambient ozone formation direct and indirectly formed ambient PM2.5 formation. We also note
that all fine particles, regardless of their chemical composition, are equally potent in causing
health impacts. EPA has also concluded that the scientific evidence is not yet sufficient to allow
differentiation of effect estimates by particle type (See EPA's Integrated Science Assessment for
Paniculate Matter - http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546#Download).
Please refer to RIA Chapter 6 for a full discussion of the non-GHG health benefits associated
with the rule.
Finally, in response to the comment made by the Union of Concerned Scientists, we note
that on a nationally aggregated basis, our analysis shows that the standards do not increase
pollution but in fact significantly reduces GHG emissions and improves ambient concentrations
of PM. Our analysis in the final rulemaking (of all benefits categories such as GHG reductions,
non-GHG benefits, fuel savings, energy security and other externalities such as reduced refueling
time and accidents, congestion and noise) is an accurate and thorough consideration of all costs
and benefits, and demonstrates that the new standards will promote public health, not harm it.
Organization: Environmental Defense Fund (EDF)
I. EPA'S MONETIZED HEALTH BENEFITS OF AIR QUALITY IMPROVEMENTS ARE
UNDERESTIMATED
18-164
-------
Analysis of Estimated Costs, Economic and Other Impacts
As explained in the proposal and EPA's Draft Regulatory Impact Analysis (DRIA), EPA
calculates the premature-mortality-related effect coefficients that underlie the benefits per- ton
estimates of reductions in criteria pollutants from only the American Cancer Society cohort
(Pope et al. 2002). The Agency does not present the benefits-per-ton estimates using the Harvard
Six Cities cohort (Laden et al. 2006), even though EPA states, "If the benefit-per-ton estimates
were based on the Six-Cities study (Laden et al., 2006), the values would be approximately
245% (nearly two-and-a-half times) larger." (Proposal Preamble, page 75131; DRIA, Page 6-33)
In fact, EPA admits that, ".. .using the benefit per-ton value derived from the ACS study (Pope et
al., 2002) alone provides an incomplete characterization of PM2.5 benefits." [EPA-HQ-OAR-
2010-0799-9519-Al,p. 15]
In NHTSA's DEIS, the Agency provides the benefits-per-ton estimates from both studies side-
by-side. In fact, NHTSA states the reason it does so is because of a recommendation by EPA.
"EPA calculated the premature-mortality-related effect coefficients that underlie the benefits-
per-ton estimates from epidemiology studies that examined two large population cohorts - the
American Cancer Society cohort (Pope et al. 2002) and the Harvard Six Cities cohort (Laden et
al. 2006).. .According to EPA, both studies should be used to generate benefits estimates."
(DEIS, Page 4-24) [EPA-HQ-OAR-2010-0799-9519-A1, pp. 15-16]
EDF requests that EPA present the results based on both the Pope et. al. and the Laden studies to
ensure that a more transparent and comprehensive estimate of the monetized health benefits of
air quality improvements are developed. [EPA-HQ-OAR-2010-0799-9519-A1, p. 16]
Organization: Growth Energy
The proposed rule also acknowledges that the agencies' analysis includes no estimates of the
direct health or other benefits associated with reductions in emissions of criteria pollutants other
than PM. Therefore, two of the major drivers in the list of cost-benefit categories above, "other
air pollutants" and "increased driving due to the rebound effect" are determined by PM
emissions. The reason that PM dominates the EPA non- GHG analysis is that the damage cost in
Table II-8 is much greater for PM than for other criteria pollutants. [EPA-HQ-OAR-2010-0799-
9505-A1, pp. 39-40]
Response:
For the FRM, we are conducting full-scale air quality modeling to assess the rule's impact
on ambient concentrations of ozone and PM in 2030 and the associated quantified/monetized
health impacts. The analysis includes a co-equal presentation of PM-related premature mortality
based on Pope and Laden (Tables 111-85,111-87, and 111-89 of Preamble III, and corresponding
tables in Chapter 6 of the RIA) along with a full accounting of the morbidity impacts associated
with PM and ozone. Time and resource constraints preclude the agency from running air quality
modeling for the Model Year analysis. We therefore continue to use a dollar-per-ton method
(consistent with the 2012-2016 LD GHG approach) to monetize the PM-related benefits
associated with the standards over the lifetime of each 2017-2025 Model Year vehicle. Because
the difference between the Pope- and Laden-based estimates are so slight, relative to the other
cost and benefits monetized in the analysis (they represent between -1-3% of total benefits,
18-165
-------
EPA Response to Comments
depending on the study and discount rate), we chose to simplify the presentation of PM-related
benefits in the cost-benefit summary tables by presenting only the Pope-based value, while
qualitatively describing that the Laden-based estimate would increase PM-related benefits by
-2.5 times. Even though the Pope-based value is the more conservative end of the range of PM-
related benefits, the inclusion of Laden would not provide the reader with a meaningful
difference when assessing the comparison of total costs and benefits of the rulemaking.
We have, however, revised our text in Preamble Section III.H.7 (Table 111-90) and in
FRM TSD 4 - Joint Economic Assumptions (Table 4-13) to present, for reference purposes, the
range of Pope- and Laden-based dollar-per-ton values. We have also edited the text to more
clearly state that the presentation of the low end of the range of PM-related benefits is in no way
meant to convey a preference for one study over the other (see Preamble III.H.7.b and RIA
Chapter 6.3.2).
We continue to acknowledge that there are several health impact categories that EPA was
unable to quantify in the Model Year analysis due to limitations associated with using dollar-per-
ton estimates. Because NOx and VOC emissions are also precursors to ozone, changes in NOX
and VOC would also impact ozone formation and the health effects associated with ozone
exposure. Dollar-per-ton estimates for ozone, however, do not exist due to issues associated
with the complexity of the atmospheric air chemistry and nonlinearities associated with ozone
formation. However, given the magnitude of the ozone impacts modeled in the Calendar Year
analysis, it is reasonable to assume that the ozone-related impacts would be minimal and would
not make a difference when assessing the comparison of total costs and benefits of the
rulemaking.
Organization: Mass Comment Campaign (20,500) (Union of Concerned Scientists-3)
The proposal largely ignores the pollution released from power plants when electric cars are
recharged. The Environmental Protection Agency should require automakers to fully account for
their vehicles' pollution—whether from petroleum or power plants. [EP A-HQ-OAR-2010-0799-
10166-A2_MASS, p.l]
Organization: Mass Comment Campaign (375) (Union of Concerned Scientists-2)
The proposal largely ignores the pollution released from power plants when electric cars are
recharged. The Environmental Protection Agency should require automakers to fully account for
their vehicles' pollution—whether from petroleum or power plants. [EP A-HQ-OAR-2010-0799-
1246-A1_MASS, p.l]
Organization: Mass Comment Campaign (9,570) (Unknown Organization)
The proposal largely ignores the pollution released from power plants when electric cars are
recharged. The Environmental Protection Agency should require automakers to fully account for
their vehicles' pollution—whether from petroleum or power plants. [EPA-HQ-OAR-2010-0799-
9578-Al_MASS, p.l]
18-166
-------
Analysis of Estimated Costs, Economic and Other Impacts
Response:
EPA estimates the full range of pollution impacts from the standards, including emissions
at the tailpipe and emissions from "upstream" sources such as power plants, refineries, and fuel
transportation and distribution. Please refer to Preamble Section III.G. 1 and RIA Chapter 4 for a
complete description of the emissions impacts of the rulemaking and the estimation
methodology. Included in our analysis are power plant emissions related to increased
penetration of electric vehicles in the future light duty vehicle fleet. These emissions were
included in the air quality modeling conducted for this analysis, the output of which were used in
the health impacts analysis. Refer to Chapter 6 of the RIA for a description of both the air
quality modeling and health impact analyses. Taken together, the non-GHG emission changes
yield a net reduction in human health risk and contribute to the overall benefits of the standards.
Organization: Pennsylvania Department of Environmental Protection
Air Quality Effects. In addition to examining the air quality effects of the factors above [see
section 18.2 of this comment summary], the increase in volatile organic compounds (VOC)
emissions needs to be estimated due to the possible increase in Reid vapor pressure in gasoline
from the increased use of higher octane gasoline. Higher emissions of VOC can lead to increased
ground-level ozone concentrations. [EPA-HQ-OAR-2010-0799-7821-A1, p. 3]
Response:
Regarding comments from the Pennsylvania Department of Environmental Protection,
we do not agree that higher octane fuel will be necessary. As explained in section 3.3.1.8 of the
joint TSD, higher octane fuel is not necessary for high compression turbocharged and downsized
engines to prevent the onset of combustion knock. EPA therefore assumed no change in the
octane of certification or in-use gasoline within its analysis and the effectiveness values used for
the high BMEP engines reflect that fact.
In partial confirmation, the current Ford EcoBoost turbocharged GDI engines do not
require the use of premium fuel, although those engines are not operating at BMEP levels as high
as those expected under our rule. Importantly, a combination of both intake charge dilution (e.g.,
cooled EGR) and in-cylinder evaporative fuel cooling (e.g., direct injection) are expected to
allow higher BMEP GDI engines to operate on regular grade gasoline. All packages at 27 bar
BMEP analyzed by EPA included cooled EGR to allow higher BMEP operation and prevent the
onset of combustion knock on current certification or in-use fuels.
EPA estimates the full range of pollution impacts from the standards, including emissions
at the tailpipe and emissions from "upstream" sources such as power plants, refineries, and fuel
transportation and distribution. Please refer to Preamble Section III.G.I and RIA Chapter 4 for a
complete description of the emissions impacts of the rulemaking and the estimation
methodology. This includes both upstream and tailpipe VOC emissions associated with the final
standards. We use these non-GHG inventories to estimate the changes in ambient concentrations
of PM, ozone, and selected air toxics. Please refer to Chapter 6 of the RIA for a description of
both the air quality modeling and health impact analyses. Taken together, the non-GHG
18-167
-------
EPA Response to Comments
emission changes yield a net reduction in human health risk and contribute to the overall benefits
of the standards.
18.5. Energy Security Impacts
Organizations Included in this Section
American Council for an Energy-Efficient Economy (ACEEE)
America's Natural Gas Alliance (ANGA) and American Gas Association (AGA)
American Petroleum Institute (API)
American Public Gas Association (APGA)
Applied Materials
BlueGreen Alliance
Center for Biological Diversity (CBD)
Consumer Federation of America (CF A)
Defour Group LLC
Detroit NAACP
Ecology Center
Environmental Defense Fund (EDF)
International Council on Clean Transportation (ICCT)
Kobus, D.
Marks, R.
Michigan House of Representatives, 49th District
Michigan State Senate, District 18
National Wildlife Federation (NWF)
Pew Charitable Trusts
Renewable Energy Long Island
Securing America's Future Energy (SAFE)
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Smith, G.
Tesla Motors, Inc.
Union of Concerned Scientists (UCS)
Thirty Senators from the United States Senate
Lieutenant General Rick Zilmer (Retired)
Organization: American Council for an Energy-Efficient Economy (ACEEE)
At the same time, this kind of savings will put a downward pressure on the price of all petroleum
products. If that holds, then fuel economy standards might generate, we estimate, an additional
$25 billion in price-related fuel savings. That means even if you're not driving a new car, but if
you're heating your home with fuel oil, or if you're using petroleum as a chemical feed stock, or
if you're flying from San Francisco to Washington, D.C., you're benefiting from a lower price of
oil or gasoline, and that benefits everyone.
The agencies also decline to count the monopsony benefit of the rule, under which reduced U.S.
demand leads to lower oil prices globally. This is a departure from previous rules, and is justified
18-168
-------
Analysis of Estimated Costs, Economic and Other Impacts
by the argument that the monopsony benefit is of a "redistributive nature" when viewed from a
global perspective (NPRM p.74932). However, even if all petroleum were produced
domestically, reduction in the price of petroleum would bring a net economic benefit in terms of
job creation, for example, as explained previously, due to the low labor intensity of the energy
sector. Thus it is a mistake to exclude these effects from the analysis of the economic benefits of
the rule. The agencies also do not take into account the price reduction following from the fact
that reduced demand will generally mean that the most expensive sources of petroleum are not
used, which also reduces the price of all petroleum. [EPA-HQ-OAR-2010-0799-9528-A2, pp. 1-
2]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 111-112.]
Organization: America's Natural Gas Alliance (ANGA) and American Gas Association (AGA)
C. The Agencies' Analysis of the Benefits of this Rule Should Include More Complete Energy
Security Costs
Energy Security Costs [EPA-HQ-OAR-2010-0799-9548-A1, p. 5]
In response to the agencies' request for comment on whether to include costs of the relevant U.S.
overseas military presence in the energy security benefits analysis (76 FR 75136), AGA and
ANGA strongly support doing so. To include only "the macroeconomic disruption and
adjustment costs portion of the energy security benefits to estimate the monetary value of the
total energy security benefits of this program" (id. at 74932) ignores enormous costs that are
directly attributable to U.S. dependence on overseas oil supplies. A single example should
suffice: the express purpose of the Navy's Fifth Fleet - reestablished in 1995 and based in
Bahrain - is to secure the Persian Gulf sea-lanes, and the annual cost of maintaining this force is
in the billions of dollars. [EPA-HQ-OAR-2010-0799-9548-A1, pp. 5-6]
Organization: American Petroleum Institute (API)
Comments on Petroleum Consumption and Import Externalities
The issue of petroleum consumption and import externalities is discussed on page 74898 of the
Preamble, consisting of a one-paragraph summary of the issue. The Preamble notes the following
externalities are not reflected in the market price for crude: (1) higher price for petroleum
products from the effect of U.S. demand on world oil prices; (2) the risk of disruptions caused by
sudden reductions in the supply of imported crude; and (3) the expenses of maintaining a
military presence to secure imported oil supplies and for maintaining the strategic petroleum
reserve. This summary paragraph goes on to say that higher volumes of imported crude and
refined products increases the magnitude of these external economic costs (increasing the true
economic costs of transportation fuels above the resource costs of producing them), and that
reducing volumes of imports or reducing fuel consumption can reduce these external costs.
[EPA-HQ-OAR-2010-0799-9469-A1, p. 11]
18-169
-------
EPA Response to Comments
In the Preliminary Regulatory Impact Analysis (PRIA) developed for this rulemaking, NHTSA
stated the following with respect to issue of military expenses associated with protection of
supply (page 643): [EPA-HQ-OAR-2010-0799-9469-A1, p. 11]
NHTSA currently believes that while costs for U.S. military security may vary over time in
response to long-term changes in the actual level of oil imports into the U.S., these costs are
unlikely to decline in response to any reduction in U.S. oil imports resulting from raising future
CAFE standards for light-duty vehicles. U.S. military activities in regions that represent vital
sources of oil imports also serve a broader range of security and foreign policy objectives than
simply protecting oil supplies, and as a consequence are unlikely to vary significantly in
response to changes in the level of oil imports prompted by higher standards. [EPA-HQ-OAR-
2010-0799-9469-A1, pp. 11-12]
Neither the Congress nor the Executive Branch has ever attempted to calibrate U.S. military
expenditures, force levels, or deployments to any oil market variable, or to some calculation of
the projected economic consequences of hostilities in the Persian Gulf. Instead, changes in U.S.
force levels, deployments, and thus military spending in that region have been largely governed
by political events, emerging threats, and other military and political considerations, rather than
by shifts in U.S. oil consumption or imports. NHTSA thus concludes that the levels of U.S.
military activity and expenditures are likely to remain unaffected by even relatively large
changes in light duty vehicle fuel consumption. As a consequence, the agency's analysis of
alternative CAFE standards for MYs 2017-2025 does not include savings in budgetary outlays to
support U.S. military activities among the benefits of higher fuel economy and the resulting fuel
savings. [EPA-HQ-OAR-2010-0799-9469-A1, p. 12]
The above PRIA statements are important points with respect to military expenditures and the
protection of crude supply. They are very consistent with the points made by EPA during the
RFS2 rulemaking that were included in the "Renewable Fuel Standard Program (RFS2)
Summary and Analysis of Comments" document (page 7-248).25 Further, a 2010 report
prepared by the National Research Council also considered the issue of military protection of
crude supply and found the following: [EPA-HQ-OAR-2010-0799-9469-A1, p. 12]
Dependence on imported oil has well-recognized implications for foreign policy, and although
we find that some of the effects can be viewed as external costs, it is currently impossible to
quantify them. For example, the role of the military in safeguarding foreign supplies of oil is
often identified as a relevant factor. However, the energy-related reasons for a military presence
in certain areas of the world cannot readily be disentangled from the non energy-related reasons.
Moreover, much of the military cost is likely to be fixed in nature. For example, even a 20 per
cent reduction in oil consumption, we believe, would probably have little impact on the strategic
positioning of U.S. military forces throughout the world. [EPA-HQ-OAR-2010-0799-9469-Al,
p. 12]
Although NHTSA conducted a sensitivity analysis of the impact of some reduction in military
spending as a result of this rule, it was not included in the baseline assessment for the very good
reasons spelled out above. The Preamble should note the highly speculative nature of this kind of
18-170
-------
Analysis of Estimated Costs, Economic and Other Impacts
assessment and provide the reader with the appropriate caveats that were included by NHTSA in
thePRIA. [EPA-HQ-OAR-2010-0799-9469-Al,p. 12]
Organization: American Public Gas Association (APGA)
APGA has long recognized that the United States' dependence on foreign oil is one of the
foremost threats to our nation both economically and militarily. The U.S. economy is
dangerously dependent upon crude oil for stability and economic growth and in no area is this
dependence more evident than in the transportation sector. Even slight increases in the price of
gasoline can send shock waves throughout the economy, reduce consumers' purchasing power
and spending, cause financial markets to tumble, and inhibit economic growth. [EPA-HQ-OAR-
2010-0799-9448-Al,p-.l]
Moreover, it is on the foundation of our economic strength that our military might depends. The
sad fact remains that the main sources of crude oil are outside the U.S. According to the Energy
Information Administration, the U.S. imports approximately 51 per cent of the oil it consumes
(2009 data), meaning that America's economic prosperity (and therefore its military strength) is
tied to purchasing crude oil from foreign countries, many of which have interests that are
antithetical to our own. In short, the U.S. sends billions of dollars to potentially hostile nations,
upon which it is dependent for its prosperity and ultimately its security. [EPA-HQ-OAR-2010-
0799-9448-A1, p. 1
Organization: Applied Materials
And we think that it's very important from a security standpoint, as several speakers have stated,
as well.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 201.]
Organization: BlueGreen Alliance
Every day our country sends an estimated $1 billion to foreign countries for oil. Strong standards
will keep more of the dollars here in the United States and move America to a more efficient
advanced vehicle fleet creating hundreds of thousands of jobs, economic opportunities both
inside and outside the auto industry.
In 2008 we saw the consequences when automakers had difficulty responding to consumer shifts
in response to volatile fuel prices. So these strong feasibility standards will provide long-term
certainty to the industry and ensure that innovation continues and recent investments in advanced
technology pay off. They will also set the stage for weaning America off oil dependence for
good and for the long-term reductions in greenhouse gas pollution we need to create a
sustainable clean energy economy.
In addition to the direct savings for those purchasing new cars and light trucks, the proposed
standard will also put downward pressure on gasoline prices by reducing demand. Simple
18-171
-------
EPA Response to Comments
demand-supply logic suggests that the standard will put downward pressure on the transportation
fuel prices by putting downward pressure on the demand for transportation fuels. All drivers will
benefit through lower gas prices than would be expected otherwise.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 38-39.]
Organization: Center for Biological Diversity
Similarly, the Agencies exclude the costs of maintaining a U.S. military presence to secure
imported oil supplies from unstable regions "because their attribution to particular missions or
activities is difficult." "Difficulty" does not justify conducting a cost-benefit analysis that
improperly puts a thumb on one side of the scale. [EPA-HQ-OAR-2010-0799-9479-A1, p. 7]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 59.]
Organization: Consumer Federation of America (CFA)
Given the burden on household budgets and the continuing problem of oil vulnerability, it is not
surprising to find that in our surveys, over a dozen in the past six or seven years, we find that
three-quarters or more of respondents are concerned about gasoline prices and dependence on
Mideast oil. They get the fact oil imports are a political problem.
They think it is important to reduce oil consumption and they support higher fuel economy
standards as a way to do so. Almost two-thirds of the respondents' records supported 60-miles-
per-gallon standards with a payback of three to five years, and this proposed standard meets and
exceeds that. They also think a higher standard will be good for automakers.
There are several flaws in quantitative analysis that cause the agencies to seriously underestimate
the value of higher fuel economy standards. We have pointed out these flaws in past
analyses. [EPA-HQ-OAR-2010-0799-9419-A1, pp. 12-13]
• Oil has a strategic and security value that must be reflected in the analysis. [EPA-HQ-
OAR-2010-0799-9419-A1, p. 14]
Indirect national security and economic benefits will be just over $40 billion (about 7 percent of
the total) and include progress on major national public policy goals, such as reducing oil
consumption and imports by almost 4 billion barrels and cutting the balance of payments deficit
by $370 billion, which will produce a major boost to domestic economic growth by driving down
the price of oil by $0.25 per gallon, lowering vulnerability to oil price shocks, and reducing the
need for national security expenditures. [EPA-HQ-OAR-2010-0799-9419-A1, p. 5]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 40-41.]
18-172
-------
Analysis of Estimated Costs, Economic and Other Impacts
Organization: Defour Group LLC
Most studies show that increases in fuel economy standards will not enhance energy security and
that the impacts on catastrophic global warming are negligible. To quote Michael Boskin, head
of the first President Bush's Council of Economic Advisers, concluded in testimony before the
National Academy of Sciences in 1991:
In my view, the presumption that U.S. energy security is directly tied to our level of gasoline
consumption does not withstand close scrutiny. Given the increasing integration of world
economies and the total integration of the world oil market, our energy security cannot be
defined independently of our trading partners. Moreover, when one considers our own situation
or, more properly, that of the world economy as a whole, even the most optimistic assessment of
the oil consumption effects of higher CAFE standards cannot conceivably push us past the
threshold where we would no longer have a vital security interest in the major oil-exporting
regions of the world.17 [EPA-HQ-OAR-2010-0799-9319-A1, p. 11]
Or in the words of Resources for the Future economists, Douglass Bohi and Michael Toman, in
their seminal 1996 study:
There is so much uncertainty about the costs used to calculate [energy security] premiums that it
is impossible to make a credible judgment about the correct magnitude of the premium that
should be attached to oil imports, oil consumption, or strategic oil storage. This very uncertainty
should engender great caution about any efforts to apply energy security premiums in energy
policy analysis. In particular, the energy security argument is a weak basis for supporting oil
import controls, conservation of oil consumption, or larger strategic oil stocks. Because of the
uncertainties, only win-win policies that offer prospects for benefits under a variety of
circumstances can be recommended unambiguously. Such policies include support for energy
1 &
research and development to improve energy efficiency and to diversity energy supplies. [EPA-
HQ-OAR-2010-0799-9319-A1, p. 11]
17 - Michael Boskin, Testimony on Fuel Economy Standards Before National Academy of
Sciences, July 10, 1991.
18 - Douglass R. Bohi and Michael A. Toman, The Economics of Energy Security, 1996,
Resources for the Future, page 71 (Emphasis Added).
Organization: Detroit NAACP
These standards mean reducing our dependence on foreign oil and it also, as was said earlier,
will strengthen national security. In 2010 the United States imported more than 4.3 billion barrels
of oil sending billions and billions of dollars to other nations where our economy suffered
immensely and struggled.
18-173
-------
EPA Response to Comments
These proposed standards will reduce oil consumption, greenhouse gas emissions, and air
pollution. They will reduce dependence on oil by 4 billion barrels which is very, very significant,
and it will slash 2 billion metric tons on greenhouse gas emissions.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 140.]
Organization: Ecology Center
We are especially supportive of the fact that the proposed rules will not only lead to significant
reductions in petroleum use and greenhouse gas emissions.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 189.]
Organization: Environmental Defense Fund (EOF)
With respect to the energy security, when combined with Phase 1 clean car standards, the
proposed rule's fuel economy and emissions standards will cut our oil consumption by over 2
million barrels a day, more than we import from the Persian Gulf.
Our nation's dependence on oil is a threat to national security. The U.S. consumes nearly 25
percent of the world's oil production, but controls less than 2 percent of the supply. And over
half of the oil we use each day is imported from foreign countries, many of which do not like us.
In 2008, we sent over $1 billion a day overseas to pay for oil, the majority of it going to nations
deemed "dangerous or unstable." The rate at which we consume oil helps our enemies by paying
to finance and sustain their unfriendly regimes. And the longer the U.S. remains dependent on
petroleum, the more the U.S. will have to engage in tough fights just to protect our energy
supplies. [EPA-HQ-OAR-2010-0799-9519-A1, p. 2]
Additionally, the high price of oil threatens our fragile economy. Gasoline and diesel fuel prices
remain high, leaving consumers with less money to spend elsewhere. More than 70 percent of
the oil we consume is for transportation, and more than 60 percent of that is used to fuel
passenger cars and light trucks. If we want to reduce our dependence on oil, we must address
fuel consumption from our fleet of highway cars and trucks. [EPA-HQ-OAR-2010-0799-9519-
Al,p.2]
One piece of the economic picture that is often not considered is the economic impact of
unexpected spikes in oil prices, price volatility. One of EOF's economists, Jamie Fine, has
worked with collaborators to show that policies that lower energy demand also provide a hedge
against rising energy prices. Their study - which will soon be published in the Journal, Energy
Policy - looked at the energy use that will be avoided and the resulting savings by California's
entire plan to reduce GHGs to 1990 levels by 2020, of which the current GHG standards are a
critical part. They found that cost savings from avoided gasoline and diesel use in the event of an
energy price shock in 2020 could be in the range of $2.4 to $5.2 billion for the state of California
alone. 11 [EPA-HQ-OAR-2010-0799-9519-A1, p. 2-3]
18-174
-------
Analysis of Estimated Costs, Economic and Other Impacts
Agencies should include additional Energy Security Benefit
Oil dependence has serious consequences. The US consumes nearly 19 million barrels of oil a
day, which is nearly a quarter of the oil consumed in the entire world, and more than all EU
nations combined. Over half of the oil we use each day is imported from foreign countries and
more than 70 percent of the oil we consume is used for transportation. Our addiction to oil
threatens our national security and puts our service men and women at risk. [EPA-HQ-OAR-
2010-0799-9519-Al,p. 13]
Our petroleum addiction also has significant environmental consequences. Extracting oil fouls
land and water, kills wildlife, and destroys habitat. Refining oil creates air pollution and water
pollution. Combustion of oil—burning oil and oil-based fuels in engines—releases CO2, which
causes global warming (about 42 percent of the world's energy-related CO2 emissions come from
oil). Emissions from oil refining and combustion also contribute to ozone, which worsens
asthma, causes premature death and contributes to other health problems.32 [EPA-HQ-OAR-
2010-0799-9519-Al,p. 13]
In addition, oil dependence makes the U.S. economy vulnerable to short-and long-term increases
in energy costs. In terms of imported oil, an increase in the price of imported oil could lead to
'imported inflation' and vulnerability of the local manufacturers and consumers alike. [EPA-HQ-
OAR-2010-0799-9519-Al,p. 13]
We commend the Administration for recognizing the importance of U.S. energy security and the
positive impact more efficient use of transportation rules would have. However, we believe the
Agencies have consistently undervalued the benefits of past fuel economy and GHG rules, and
this proposed rule, on U.S. energy security. Therefore, we recommend that the final rule include
the following additional inputs. [EPA-HQ-OAR-2010-0799-9519-A1, pp. 13-14]
In determining the full benefits of fuel consumption reduction and energy security, the Agencies
did not attempt to quantify the reduction in U.S. military spending associated with the reduction
in U.S. oil imports. The Agencies state in the proposal that "attributing military spending to
particular missions or activities is difficult." (Proposal preamble, page 75136) While we agree
that such a quantitative analysis would result in uncertainties, that is not a reason to assign the
benefits a zero value. It is important the Agencies develop a methodology to value the benefits of
reduced oil imports on U.S. military spending for this rule, and future rules that reduce our
dependence on foreign oil. We request that the Agencies at least report a range of estimates for
these benefits. [EPA-HQ-OAR-2010-0799-9519-A1, p. 14]
We also recommend that the Agencies consider cost estimation proposals such as that included
in Sen. Richard Lugar's (R-Ind.) Practical Energy and Climate Plan, S. 3464. See Attachment A.
This proposed legislation included both an extensive list of potential impacts of energy security
to be considered and an alternative approximation valuation methodology for the "external cost
of petroleum use" (i.e. this does not include the actual fuel savings). For inputs that the Agencies
cannot quantify, the final rule should include a list and explain that the benefits of the rule are
likely undervalued due to such factors. [EPA-HQ-OAR-2010-0799-9519-A1, p. 14]
18-175
-------
EPA Response to Comments
[These comments were also submitted as testimony at the Philadelphia, Pennsylvania public
hearing on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 287.]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 173.]
Organization: International Council on Clean Transportation (ICCT)
There are other advantages to society from reducing the amount of fuel we consume. The
benefits for energy security are the same as investing in new oil wells - reduced oil imports,
improved balance of trade, and downward pressure on worldwide oil prices. [EPA-HQ-OAR-
2010-0799-9512-Al,p. 13]
Organization: Kobus, D.
America's dependence on oil puts our environment, economy, and national security at risk. You
recently took an important step toward addressing this problem when you proposed new global
warming pollution and vehicle efficiency standards that would ensure new cars and light trucks
meet the equivalent of a 54.5 mpg fleet-wide standard by 2025. [EPA-HQ-OAR-2010-0799-
1370-A1, p. 2]
Organization: Marks, R
I question the use of CAFE to reduce oil consumption. For the last 40 years, CAFE has had the
opposite affect. People bought bigger cars and trucks and drove them more miles per year and
consumed more gallons of gas per vehicle. 40 years ago, we were 25% dependent on foreign oil
and today we are about 66% dependent. CAFE has not done what you claim, ever! The only
reason gas consumption has dropped recently is that the price of gas has risen to between $3 and
$4 per gallon. It has nothing to do with vehicle miles per gallon! Are you serious about our
dependence on oil or not? If you are serious, then this Nation needs a National Energy Policy
which will 1. Reduce our dependency on foreign oil, by using less, 2. Improve World climate
concerns through reduction in fossil fuel consumption, 3. Develop alternative fuel solutions in
both transportation and energy sectors, and 4. Keep America growing, moving forward and
secure. CAFE does not do this. [EPA-HQ-OAR-2010-0799-1680-A1, p. 1]
CAFE is stupid and there are much better market driven ways to create National security. Read
your history! CAFE does not work. [EPA-HQ-OAR-2010-0799-1680-A1, p. 1]
Organization: Representative from Michigan House of Representatives, 49th District
Greater fuel economy will also help reduce our dangerous addiction to foreign oil and keep the
members of our armed services out of danger. The United States imported more than 4.3 billion
barrels of oil in 2010. This dependency places increasing demands on American security forces
to keep the peace in many of the most dangerous areas of the world. [EPA-HQ-OAR-2010-0799-
7983-A1, p. 2]
18-176
-------
Analysis of Estimated Costs, Economic and Other Impacts
Organization: State Senator from Michigan State Senate, District 18
Greater fuel economy benefits all of us in four ways: firstly, it benefits our environment by
reducing greenhouse gas emissions; secondly, it secures our energy independence; thirdly, its
saves us money at the pump; and finally, it creates high-quality U.S. jobs that strengthen the
economy. [EPA-HQ-OAR-2010-0799-5594-Al, p. 1]
Increased fuel economy will first benefit the environment by reducing greenhouse gas emissions
and air pollution that stem from oil consumption. The proposed fuel economy standards will
reduce our dependence on oil by 4 billion barrels and slash 2 billion metric tons in greenhouse
gas emissions. [EPA-HQ-OAR-2010-0799-5594-A1, p. 1]
In turn, we will also be gaining energy independence. In 2010, the United States imported more
than 4.3 billion barrels of oil, sending billions of dollars to other nations while our own economy
struggled to recover from recession. This dependence on foreign oil has threatened our national
security and our economic progress for far too long. [EPA-HQ-OAR-2010-0799-5594-A1, p. 1]
Organization: National Wildlife Federation (NWF)
Our reliance on oil is a fundamental threat to wildlife, as well as to people and the economy
Our members and millions of Americans like them want to see America's outdoor heritage
sustained for their children. All too often, our heavy dependence on oil stands in the way. [EPA-
HQ-OAR-2010-0799-9887-A2, p. 2]
Carbon pollution is warming our climate locally and worldwide. These changes threaten people
and global security right now, and they are the most profoundly threatening force against the
future of wildlife. Rising temperatures, floods, fires, droughts and ecosystem alterations are
creating direct habitat loss, increased invasive species and other threats for wildlife species -
many may never adapt. [EPA-HQ-OAR-2010-0799-9887-A2, p. 2]
The 20 million barrels of oil America uses every day (mostly for transportation) account for 40%
of the US carbon pollution that causes climate change. 1 [EPA-HQ-OAR-2010-0799-9887-A2, p.
2]
Meanwhile, when drilling projects go wrong, whole ecosystems are threatened by disasters like
the Deepwater Horizon spill in 2010. And smaller leaks and spills, like the recent Enbridge oil
spill in Michigan, do grave harm right in our backyards: to residents, to wildlife like herons,
muskrats, ducks, geese, and to decades of community efforts to restore rivers like the
Kalamazoo. [EPA-HQ-OAR-2010-0799-9887-A2, p. 2]
These standards make real and significant steps to reduce these threats [EPA-HQ-OAR-2010-
0799-9887-A2, p. 2]
18-177
-------
EPA Response to Comments
The proposed 2017 through '25 standards will double the fuel economy for our cars, SUVs and
pickups from today's levels to an average of 54.5 miles per gallon by 2025. These vehicles will
save Americans 4 billion barrels of oil and 2 billion metric tons of carbon pollution.
Together these standards will cut our demand for oil by 3.4 million barrels per day; more than all
the oil we get today from the Persian Gulf, Venezuela and Russia combined.
As we are ensuring that every car and truck uses less fuel, steady expansion of electric and
advanced vehicle technology can lead us even further into mass markets, high performance
vehicle fleet that uses little oil and produce nearly zero pollution.
[These comments were also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 28-30.]
Organization: Pew Charitable Trusts
We have also sought to inform the public and policymakers across the nation about the dangers
of U.S. oil dependence to our nation's economy, national security and to the lives of the U.S.
servicemen and women who defend oil transit routes and chokepoints around the world. The
RAND Corporation estimates that the U.S. military spends between $67 and $83 billion annually
defending oil chokepoints around the world. [EPA-HQ-OAR-2010-0799-9496-A2, p. 1]
As you know, the public strongly supports reducing U.S. oil dependence through higher fuel
economy. Our bipartisan poll commissioned in July 2011 found that 91 percent of Americans
identify U.S. dependence on foreign oil as a threat to our national security, and significant
bipartisan majorities in every region of the country believe that adopting stronger fuel economy
standards is the best way to lessen that dependence. [EPA-HQ-OAR-2010-0799-9496-A2, p. 2]
[This comment was also submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2009-2010-1788, pp. 190-20.]
Organization: Renewable Energy Long Island
America's deepening dependence on oil puts our economy, environment, and national security at
risk. I am writing to applaud you for taking an important step to confront the dangers of this
dependence by proposing new global warming pollution and vehicle efficiency standards that
would ensure new cars and light trucks meet the equivalent of the 54.5-mpg fleetwide standard
by 2025. [EPA-HQ-OAR-2010-0799-7933-Al, p. 1]
The projected annual benefits of such standards by 2030 are enormous:
• $45 billion in savings at the gas pump
• 23 billion gallons of gasoline saved
• 280 million metric tons of global warming pollution avoided [EPA-HQ-OAR-2010-0799-
7933-Al,p. 1]
18-178
-------
Analysis of Estimated Costs, Economic and Other Impacts
Organization: Securing America's Future Energy
More than 70 percent of the oil consumed in the United States is used to fuel our transportation
sector. The more than 240 million cars and light-duty trucks on the road in the United States in
2010 accounted for approximately 40 percent of total oil demand and those vehicles were fueled
almost entirely by oil or other liquid fuels. Throughout the entire transportation sector, 93
percent of delivered energy is derived from oil. Simply put, our economy is heavily dependent
on oil, and there are no substitutes available at scale today. [EPA-HQ-OAR-2010-0799-9518-A1,
p. 2]
We have made tremendous strides in reducing the petroleum intensity as traditionally measured.
In terms of barrels of oil consumed per dollar of gross domestic product (GDP), we have reduced
petroleum intensity by about 50 percent since the early 1970s, as shown in Figure 2. Yet, despite
this progress we remain highly dependent on oil to fuel our economy. It remains our primary
transportation fuel and demand remains highly inelastic, especially in the short-term. It also is
important to appreciate that the price of oil is set in a dynamic global market and our reduced use
of several million barrels a day over a period of 15 years as the result of improved fuel economy
is just as likely to result in lower production of oil as resulting in a lower price. Stated
differently, over time, reducing domestic demand for oil will not necessarily lead to lower prices
but might instead lead to production levels that are adjusted downward by producers based on
expectations that increased fuel economy will reduce aggregate demand; in fact, oil prices can
easily rise even in periods of shrinking domestic demand. [Figure 2 can be found on p. 5 of
Docket number EPA-HQ-OAR-2010-0799-9518-A1] [EPA-HQ-OAR-2010-0799-9518-A1, p.
4]
A different measure of petroleum intensity than the traditional measure of barrels per $1,000 of
GDP, our degree of dependence on oil is approaching levels we reached in the late 1970s. While
our economy is becoming more fuel efficient and oil demand is stable in recent years, we are
spending a growing portion of our national income on oil, even with relatively stable demand,
due to rising oil prices. Although fuel economy requirements last year were at their highest level
ever, our overall expenditure on oil and oil related products of $900 billion was far above
historic levels, as shown in Figure 3. This represents about 6 percent of GDP, nearly twice the
levels in the 1990s (see Figure 2), though we consumed approximately the same volume of oil.
[Figure 3 can be found on p. 6 of Docket number EPA-HQ-OAR-2010-0799-9518-A1] [EPA-
HQ-OAR-2010-0799-9518-A1, pp. 4-5]
Stated most simply, a portion of the benefit of increased fuel economy is being lost to high oil
prices. And in a world with rising demand for oil, in which demand is being met by oil that is
increasingly complex and expensive to produce, we must recognize that while improving fuel
economy is an important measure, it cannot fully address the challenge posed to our energy and
national security by persistently high and volatile oil prices. [EPA-HQ-OAR-2010-0799-9518-
Al,p.5]
This oil dependence constrains our foreign policy and forces the United States military to accept
the responsibility of securing the world's oil supply. A RAND Corporation study showed the
ongoing expense of oil dependence to the U.S. military is between $67.5 billion and $83 billion
18-179
-------
EPA Response to Comments
annually, while the cost of the constraints imposed on our foreign policy by our oil dependence
may be impossible to calculate. Oil dependence also imposes significant costs on the nation's
economy. Sending about $1 billion abroad each day to pay for expensive oil drains our economic
resources and strengthens oil-exporting countries that are often hostile to U.S. interests. In 2011
alone, American businesses and consumers spent nearly $900 billion on gasoline, diesel and
other refined petroleum products. This is part of an upward trend that has hit the average
household particularly hard as oil prices have risen in recent years. As shown in Figure 1, annual
household expenditures on gasoline have risen from about $1,800 in 2000 (representing 4.4
percent of median household income) to $4,050 in 2011 (representing 8.2 percent of median
household income). Separate from the out-of-pocket costs for oil incurred by consumers,
Department of Energy researchers at Oak Ridge National Laboratory have estimated the
economic cost of U.S. oil dependence to be more than $5 trillion since the early 1970s. [Figure 1
can be found on p. 3 of Docket number EPA-HQ-OAR-2010-0799-9518-A1] [EPA-HQ-OAR-
2010-0799-9518-A1, pp. 2-3]
In recognition of the threat to our nation posed by reliance on a single fuel whose market is
dominated by governments that often share neither our interests nor our values, the United States
has made genuine progress toward advancing energy security since we first became aware of the
problem in the early 1970s. Most importantly, fuel economy has improved by more than 110
percent, from 13.6 MPG in 1974 to 29.6 MPG in 2011 (although much of that progress was
made between 1975 and 1986), helping reduce the petroleum intensity of the economy by nearly
50 percent over the same period. This means that we are both spending less on oil, and that we
are less affected by oil price volatility than we would have been in the absence of improved fuel
economy. [EPA-HQ-OAR-2010-0799-9518-A1, pp. 3-4]
These improvements in fuel economy certainly have enhanced our economic and national
security. Although we have faced serious challenges as a nation over the past forty years as a
result of our dependence on oil, there is no question that they would have been far more serious
without the progress we have made thus far. [EPA-HQ-OAR-2010-0799-9518-A1, p. 4]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 149-150.]
There's no question that using less oil is better than using more oil, especially for the
environment. And these standards are an important tool to help us achieve that goal. But from an
energy-security perspective, this rule is really requiring simply to maintain our current level of
security. It's often overlooked that our dependence on oil arises not from how much oil we use
but from how much we spend on oil, the volatility of that total expenditure, and the effect of
volatility on the economy.
The price of oil is set in a dynamic global market, and our reduced use of several million barrels
per day over a period of 15 years is just as likely to result in lower production as it is to result in
higher prices. As we all know, growing demand from the developing world is increasing upward
pressure on oil prices.
18-180
-------
Analysis of Estimated Costs, Economic and Other Impacts
And, in fact, just yesterday, the EIA posted on its website the early release of the 2012 Annual
Energy Outlook, which is calling for oil prices to reach up to $146 per barrel in 2010 dollars by
the end of the forecast period. In fact, if you look at the chart which I handed out and we'll stick
in the record, what you can see here is, even if the energy intensity of the economy is improved
over the past several decades, the actual percentage of our economy that we are spending, the
percentage of GDP that we're spending on oil is actually increasing, which goes directly to the
question of oil dependence.
The only way to address this price volatility, which is a threat of our nation, we believe, is to stop
using oil.
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
As we noted in our report to hear on the issues of the American Securities Project, much of our
oil comes from countries at high risk of instability several of which work actively against U.S.
interests. Recent developments with Iran are yet another reminder of this fact.
By 2030 we will be using 1.5 million barrels less oil every day due to these standards.
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 122-123.]
Organization: Smith, G.
'Reduce oil consumption by an estimated 2.2 million barrels a day by 2025 more than our daily
2010 oil imports from the entire Persian Gulf Here they fail to point out that by opening up and
encouraging exploitation of our domestic oil and gas, we will not need to be reliant on any
imports. [EPA-HQ-OAR-2010-0799-8438-A1, p. 1]
Organization: Tesla Motors, Inc.
Enacting a final rule that forces alternative technology is necessary to reduce dependence on the
monopoly of oil in transportation fuel for national security, the economy and the environment;
[EPA-HQ-OAR-2010-0799-9539-A2, p. 1]
Reducing our dependence on petroleum in the transportation sector is a national imperative. By
shifting the transportation sector to electricity, the United States can significantly reduce GHGs.
Displacing traditional internal combustion engines with EVs can assist significantly in meeting
this goal. EVs such as the Tesla Roadster, the Model S, and Model X generate zero greenhouse
gases. Thanks to the over 2,500 all electric Roadsters in 31 countries on the roads today, Tesla
customers have accumulated nearly 20 million pure EV miles displacing the need to utilize
nearly 50,000 barrels of oil. Even when taking into consideration the source of the electricity
stored on the vehicles, the GHG profile of EVs is lower than their internal combustion engine
counterparts. A study by the Natural Resources Defense Council (NRDC) and the Electric Power
Research Institute (EPRI) demonstrated that on a well-to- wheels comparison, use of plug-in
18-181
-------
EPA Response to Comments
hybrid electric vehicles (PHEVs) would result in reductions of anywhere from 3.4 to 10.3 billion
metric tons of GHGs from 2010 to 2050 depending on the penetration level of PHEVs. With EVs
that utilize no gasoline whatsoever, this reduction should be even higher. With the impacts of
climate change caused by excessive GHGs evident today, switching away from traditional ICE
equipped vehicles is an environmental imperative. [EPA-HQ-OAR-2010-0799-9539-A2, p. 3]
In addition to the environmental benefits, there are other compelling justifications for moving
away from oil dependent modes of transportation. The United States currently accounts for 25%
of world oil consumption. According to the Department of Energy, the U.S. transportation
system remains dependent on petroleum for 97% of its energy needs. This dependence has left
our nation vulnerable to various externalities that have placed undue burdens on the domestic
economy. In fact, a 2005 study by Oakridge National Laboratory confirmed that the U.S.
economy has lost trillions of dollars in the past 30 years due to our oil dependence. A recent blog
post in the Washington Post put this figure in real terms: [EPA-HQ-OAR-2010-0799-9539-A2,
p. 3]
In 2011, the United States paid about $125 billion more for oil imports than it did in 2010
(thanks, in part, to the disruptions caused by civil war in Libya). That "oil tax" was essentially
enough to wipe out the entire stimulative effects of Barack Obama's middle-class tax cut. A
similar oil spike this year would cancel out a hefty chunk of the benefits of extending the $200
billion payroll tax cut bill that Congress is fighting over. [EPA-HQ-OAR-2010-0799-9539-A2,
pp. 3-4]
The recent volatility and steady rise in oil prices highlights the economic vulnerability of
America to foreign sources of oil. For example, OPEC forecasted revenues of over $1 trillion
dollars for 2011, which represents a 32.5% increase since 2010. For comparison, this is
approximately 1.6% of global GDP in 2010. With a trade deficit of nearly $500 billion for 2010,
eliminating our dependence on foreign oil could cut that deficit nearly in half. These economic
benefits are in addition to the number of jobs created by moving to clean technology vehicles
like Tesla EVs. As noted earlier, Tesla projects total employment of over 3,000 employees by
end of 2012. [EPA-HQ-OAR-2010-0799-9539-A2, p. 4]
Moreover, being dependent on foreign sources of oil from volatile regions of the world requires
the U.S. to spend more and more of its military budget on assisting in stabilizing these regions,
even as the war in Iraq has ended. Iran's recent threats to close the Strait of Hormuz (through
which about 20 percent of the world's oil flows) required redeployment of a U.S. Navy carrier
group in order to ensure the security of that oil flow. Maintaining a strong and continuous
military presence in the Middle East necessitates large expenditures by the federal government to
support these operations. Such spending can and does contribute to the national deficit. More
importantly, this puts America's young men and women serving in the military in harm's way to
feed our national thirst for ever more oil resource. Reducing our dependence on foreign oil is,
therefore, more than an environmental issue; it is a matter of economic and national
security. [EPA-HQ-OAR-2010-0799-9539-A2, p. 4]
The U.S.'s dependence on oil - both of foreign and domestic origin, has been due in part to a
verifiable lack of competitive market alternatives. Due to developments by innovative companies
18-182
-------
Analysis of Estimated Costs, Economic and Other Impacts
like Tesla Motors, alternative technologies are emerging as true competitors to the oil dominated
marketplace. EPA and NHTSA are in a unique position to help push this innovation through a
robust GHG/CAFE final rule. In fact, as is demonstrated below the case for EV technology is so
compelling, EPA's and NHTSA's proposed standards are not only a step in the right direction;
they can be further strengthened to encourage cost-effective, feasible EV technology. [EPA-HQ-
OAR-2010-0799-9539-A2, p. 4]
Organization: Union of Concerned Scientists (UCS)
Energy Security & Oil Savings
The proposed standards will also dramatically reduce U.S. oil consumption by as much as 1.5
million barrels per day (mbd) - roughly 23 billion gallons of gasoline annually - in 2030 alone.
This is equivalent to 2010 U.S. imports from Saudi Arabia and Iraq combined. And the
cumulative oil savings of the National Program (MYs 2012-2025) could result in a total
reduction in U.S. oil consumption of nearly 3.5 mbd in 2030, nearly double the amount the U.S.
currently imports from the entire Persian Gulf. No other federal policy has delivered greater oil
savings, energy security benefits, or greenhouse gas emissions reductions to the country. [EPA-
HQ-OAR-2010-0799-9567-A2, p. 4]
It appears that the agencies did not fully account for key societal benefits in the proposed rule.
Specifically, the agencies did not account for the economic benefits from reduced oil imports for
either the 'monopsony' effect or U.S. military expenditures. In both cases, real-world experience
would dictate there are clear benefits to the United States. First, the U.S. spends significant
resources defending oil shipping channels around the world and responding to threats of
terrorism, which are often funded with profits from oil sales.20 We appreciate the agencies
concern that it is a challenge to quantify these costs, however, such potentially significant costs
cannot be discounted. For instance, a recent peer-reviewed study found that the U.S. military
spent $7.3 trillion maintaining aircraft carriers in the Persian Gulf from 1976-2007.21 Since this
presence is largely purposed to protect key oil shipping lanes, it provides an indication of the
significant cost to the U.S. economy as a result of our reliance on oil. [EPA-HQ-OAR-2010-
0799-9567-A2, pp. 5-6]
Further, the agencies state that they did not include the benefits of the monopsony effects
because of "the redistributive nature of this 'monopsony effect' when viewed from a global
perspective." The agencies elaborate: "Although there is clearly a benefit to the U.S. when
considered from a domestic perspective, the decrease in price due to decreased demand in the
U.S. also represents a loss to other countries." This argument runs counter to the original intent
of the CAFE program and its stated requirement to consider the need of the United States to
conserve energy (49 U.S.C. 32902). Congress has consistently set CAFE standards for the exact
purpose of delivering "energy security through improved vehicle fuel economy."24 Energy
security includes, though is not limited to, reducing U.S. exposure to volatile global oil markets,
regardless of whether this results in an economic loss to oil-producing nations. To exclude this
benefit when it is so fundamentally tied to the goals of the CAFE program is an abdication of
NHTSA's statutory responsibility. [EPA-HQ-OAR-2010-0799-9567-A2, p. 6]
18-183
-------
EPA Response to Comments
Our continued dependence on oil puts our economy at risk from the effects of oil price volatility
and energy insecurity. Oil price spikes were associated with most of the U.S. recessions in the
past 40 years. The United States currently sends $1 billion each day to foreign countries to pay
for oil and other petroleum products—that is equivalent to more than half of the average daily
U.S. trade deficit over the last decade. [EPA-HQ-OAR-2010-0799-9713-A1, p. 2]
Finally, as UCS has noted in prior comment submissions, AEO's projection does not account for
inevitable price spikes that will occur during the lifetime of the vehicles assessed under this rule.
Such spikes are closely tied to our nation's inflation and GDP, and thus can have serious
economic consequences. With this in mind, the agencies should attempt to quantify the benefits
of reduced susceptibility to such spikes, and incorporate them into the program's benefits writ
large. [EPA-HQ-OAR-2010-0799-9567-A2, p. 13]
20 See, for example, The Saudi Connection: How billions in oil money spawned a global terror
network. U.S. News & World Report. December 7, 2003.
http://www.usnews.com/usnews/news/articles/031215/15terror.htm. Accessed February 10,
2012. [EPA-HQ-OAR-2010-0799-9567-A2, p. 6]
21 http://www.princeton.edu/oeme/articles/US-miiltary-cost-of-Persian-Gulf-force-
projection.pdf [EPA-HQ-OAR-2010-0799-9567-A2, p. 6]
24 The 2007 Energy Independence and Security Act contained increases to CAFE standards
under Title 1, which carried the title "ENERGY SECURITY THROUGH IMPROVED
VEHICLE FUEL ECONOMY" [EPA-HQ-OAR-2010-0799-9567-A2, p. 6]
America's dependence on oil puts our health and our environment and our national security at
risk. Whether it's the threat of international terrorism, the devastating impact of global climate
change or lost income and jobs due to oil price shocks, the damage caused by American's heavy
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 215-216.
Organization: Thirty Senators from the United States Senate
The proposed standards have broad industry support, but they will also reduce petroleum use and
pollution on an aggressive schedule, as Congress required in the 2007 statute. As the latest
Energy Information Administration's Annual Energy Outlook has concluded, increases in fuel
economy have contributed to our declining dependence on oil imports. [NHTSA-2010-0131-
0264-Al,p.l]
Further progress will be made with the implementation of the proposed standards, which taken
together with the recently adopted standards for model years 2012 to 2016, will remove the need
for as much as 3.8 million barrels of petroleum per day by 2030. Consumers will save thousands
18-184
-------
Analysis of Estimated Costs, Economic and Other Impacts
of dollars at the pump over the lifetime of their vehicles, and both our economy and our security
will be less dependent on imported oil. [NHTSA-2010-0131-0264-Al, p.2]
Organization: Lieutenant General Rick Zilmer (Retired)
On 01/19/2012 at Philadelphia, PA, Lieutenant General Rick Zilmer (Retired) testified in support
of this rule. Highlights from his testimony are below:
- He discussed the findings of a recently completed study entitled, "Ensuring America's Freedom
of Movement, a National Security Imperative to Reduce U.S. Oil Dependence", developed by the
Military Advisory Board at the Center for Naval Analyses (CNA). He testified that
"[t]his... study looked a little bit outside of our lane by bringing it into looking at what the
potential would be for incorporating the use of alternative fuels to reduce our dependency on
U.S. oil and U.S. oil imports into this nation." He went on to testify that there are about 11
members on the Military Advisory Board and between them, they have 400 years of collective
experience.
- In the study, it concluded that ".. .if the Strait of Hormuz closed for 30 days, it would bring our
trucking industry to its knees, it would reduce our gross domestic product by somewhere in the
order of four billion dollars just over a 30-day period."
- The study concluded that "[w]e could reduce our consumption within ten years by 30 percent,
and we could take some of these emergent technologies of alternatives fuels that are not yet
ready for marketplace forces. They need more support. They need policy, national leadership,
that is going to create the environment through which these emergent technologies can develop."
- Finally, he testified that "[the energy security/fuel issue is] not going to get solved by hoping
and praying that we can drill more. That's not the answer. It's looking to efficiency. And in
closing, thank you again, and we do strongly from CNA support and urge the National Highway
Traffic Safety Administration and EPA to finalize these rules that will set the bar at 54 and a half
miles per gallon by 2025 for this simple reason, better gas mileage is simply a matter of national
security."
Response:
The American Council for an Energy-Efficient Economy (ACEEE), America's Natural
Gas Alliance (ANGA) and American Gas Association (AGA), American Public Gas Association
(APGA), Applied Materials, BlueGreen Alliance, Consumer Federation of America, Detroit
NAACP, Ecology Center, Environmental Defense Fund, International Council on Clean
Transportation, National Wildlife Federation, a Representative from the Michigan House of
Representatives (489* District), a Senator from the Michigan State Senate (District 18), Pew
Charitable Trusts, Renewable Energy Long Island, Securing America's Future Energy, Sierra
Club, Environment America, Safe Climate Campaign, Clean Air Council, Tesla Motors Inc.,
Union of Concerned Scientists, and thirty Senators from the United States Senate and a couple of
private citizens (Kobus, Smith) all commented that the U.S. transportation sector is highly
dependent upon foreign oil, and that this rule will have the beneficial effect of reducing that
18-185
-------
EPA Response to Comments
dependency. R. Mark questioned the effectiveness of previous CAFE standards and suggested
that the current rule would have little impact on U.S. oil import reductions. We agree with the
vast majority of commenters that this rule will reduce U.S. oil consumption and imports of oil
and improve the energy security position of the U.S. Using detailed estimates of future
technology penetration and vehicle fleet projections, EPA estimates that this rule will reduce oil
consumption in the U.S. by 3.87 billion barrels over the lifetimes of the 2017 to 2025 model year
vehicles covered by this rule, which, in turn, will reduce U.S. oil imports. (See Section ID.2 of
the Preamble.)
EPA received numerous comments about the treatment and valuation of energy security
benefits from this rule. The American Council for an Energy-Efficient Economy (ACEEE), the
Union of Concerned Scientists and the BlueGreen Alliance recommended that the monopsony
benefit of the rule be included in EPA's overall estimates of the energy security benefits, since it
is a benefit to the U.S. Alternatively, instead of focusing simply upon the economic benefits of
lower petroleum prices on consumers, ACEEE specifically commented that the lower price of oil
would result in job creation in the U.S. According to ACEEE, the employment benefits of the
lower oil prices from the rule should be counted as a benefit to the U.S. as well as the
monoposony benefit. EPA continues to view energy security from a global perspective, and
therefore excludes the monopsony benefit to the U.S. since this benefit is offset by losses to
foreign oil producers. (See Section III.H.S.c of the Preamble for more discussion of this topic.)
Also, EPA has not been able to develop a robust estimate of the impacts of lower oil prices on
overall economic activity or employment in the U.S. as a result of this rule. Therefore, we cannot
draw conclusions as to the employment impacts of a decline in the world price of oil on the U.S.
economy. (See Section III. H. 12.c. of the Preamble for more discussion of this topic.)
In contrast, the other portion of the energy security premium, the U.S. macroeconomic
disruption and adjustment cost that arises from U.S. petroleum imports, does not have offsetting
impacts outside of the U.S., and is thus included in the energy security benefits estimated for this
program. Therefore, EPA has included only the macroeconomic disruption portion of the energy
security benefits to estimate the monetary value of the total energy security benefits of this
program. EPA has calculated energy security in very specific terms, as the reduction in both
financial and strategic risks caused by potential sudden disruptions in the supply of imported
petroleum to the U.S. Reducing the amount of oil imported reduces those risks, and thus
increases the nation's energy security. (See Section III.H.S.b of the Preamble for more discussion
of this topic.)
The Defour Group commented that there is no relationship between the energy security
benefits of the U.S. and reduced oil consumption by the U.S., since the world economies are all
tied together, thus calling into question estimates of the energy security benefits of these rules.
As mentioned above, EPA does not count economic transfers between countries as a part of the
energy security benefits of this rule, but we do count the macroeconomic disruption component
of the energy security premium, which directly influences the performance of the U.S. economy.
The macroeconomic disruption component of the energy security premium is specific to the U.S.
Moreover, the Defour Group believes there is too much uncertainty in generating energy
security premiums, and asserted that the energy security premiums are not a credible approach to
providing estimates of energy security benefits of the rule. The EPA sponsored an extensive peer
18-186
-------
Analysis of Estimated Costs, Economic and Other Impacts
review of the methodology on which the energy security benefits for the rule is based. (See
Section III.H.S.b of the Preamble for more discussion of this topic.) The methodology of
estimating the energy security benefits of particular actions, policies, and rules has been well
documented and is well accepted by the energy security community. Thus, EPA continues to use
the current methodology for estimating the energy security benefits of our rules.
Many commenters in both written comments and at the public hearings expressed their
belief that these standards will have significant benefits for U.S. military-related energy and
national security. A number of commenters, including consumer advocacy and environmental
organizations, organizations representing labor, and state and local governments, as well as
energy security advocates and numerous private individuals, felt that the EPA should quantify, to
the extent possible, a military component of the energy security benefits associated with this
rulemaking. These commenters felt that, although they understand that the EPA would have
difficulties in determining a point estimate of the energy security benefits from reduced military
costs as a result of the rule, that even ranges would be useful. The American Petroleum Institute
suggested that quantification of this category of benefits—U.S. energy security and national
security benefits—was too difficult, and it should be left unquantified.
As Lieutenant General (Ret.) Richard Zilmer, commander of U.S. coalition forces in
Anbar province in Iraq in 2006-2007, testified at the Philadelphia public hearing in support of the
proposed standards: "better gas mileage is simply a matter of national security." Lt. Gen. (Ret.)
Zilmer contributed to a report of the Center for Naval Analyses (CNA) that discussed the
implications of oil import reductions and energy security. The report focused on changes in the
American transportation sector, in terms of fuel efficiency, alternative fuels, and transportation
habits that would be needed in order for the U.S. economy to have enough resilience to sustain a
drastic disruption in oil supply. Among its findings and recommendations, the report states that
"[t]he federal government fuel economy standards have proven to be effective at increasing
efficiency and reducing the use of oil...These standards should be supported and strengthened as
a means of making our nation more secure." The report states that "[t]he benefits of efficiency
are so obvious and sizeable that it is amazing to consider how or why our country has failed to
insist on (or at least incentivize) it up to now."
One of the goals of a U.S. military presence in the Persian Gulf is to avoid the impacts oil
price shocks from a supply cut-off on the U.S. economy. Although CNA did not conduct an
economy-wide analysis of an oil supply shock, it did consider the impact of such a shock on one
industrial sector that is heavily dependent on petroleum: the U.S. trucking transportation
industry. CNA then considered a 100 per cent disruption in the flow of oil, lasting 30 days in the
Strait of Hormuz. They estimated that such a disruption would have caused losses of $3.3 billion
or 2.9 percent of the U.S. trucking industry's output in 2009. According to CNA, this disruption
would have caused 37,500 truckers to lose their jobs. This analysis concludes with "[i]f the U.S.
- and this industry in particular - could reduce its use of petroleum by 30 percent, the effect of
such supply disruptions would be nearly zero." Although CNA's report focused on the trucking
sector, EPA believes that these findings are The Department of the Navy has also stated that the
Navy and Marine Corps rely far too much on petroleum, which "degrades the strategic position
of our country and the tactical performance of our forces. The global supply of oil is finite, it is
becoming increasingly difficult to find and exploit, and over time cost continues to rise." In
remarks given to the White House Energy Security Summit on April 26, 2011, Deputy Security
18-187
-------
EPA Response to Comments
of Defense William J. Lynn, III noted the direct impact of energy security on military readiness
and flexibility. According to relevant to this rule since both the heavy-duty and light-duty
vehicles in the U.S. are highly dependent upon petroleum.
Moreover, the military itself is heavily dependent on oil. To maintain such military
effectiveness and flexibility, the Department of Defense identified in the Quadrennial Defense
Review that it is "increasing its use of renewable energy supplies and reducing energy demand to
improve operational effectiveness, reduce greenhouse gas emissions in support of U.S. climate
change initiatives, and protect the Department from energy price fluctuations." Deputy Security
Lynn, "Today, energy technology remains a critical element of our military superiority.
Addressing energy needs must be a fundamental part of our military planning."
EPA's analysis of energy security benefits from reducing U.S. oil imports did not include
an estimate of potential reductions in costs for maintaining a U.S. military presence to help
secure stable oil supply from potentially vulnerable regions of the world because attributing
military spending to particular missions or activities is difficult.
SAFE commented on a study by RAND that showed the ongoing expense of oil
dependence to the U.S. military. RAND considered military force reductions and cost savings
that could be achieved if oil security were no longer a consideration. Taking two approaches,
and guided by post Cold-War force draw downs and by a top-down look at the current U.S.
allocation of defense resources, RAND concluded that $75-$91 billion, or 12-15 per cent of the
U.S. defense budget in 2009 could be reduced if U.S. dependence on imported oil were
eliminated entirely. However, the study also concludes that the reduction in military costs from
a partial reduction in the U.S. dependence on imported oil would be minimal.
America's Natural Gas Alliance, the American Gas Association, and Tesla Motors, Inc.
pointed specifically to the expense of maintaining naval forces in the Persian Gulf as an
important factor in this rulemaking. EPA reviewed a study by Stern that presents an estimate of
military cost for Persian Gulf force projection, addressing the challenge of cost allocation with
an activity-based cost method. Stern used information on actual naval force deployments rather
than budgets, focusing on the costs of aircraft carrier deployment. For the 1976-2007 time
frame, Stern estimated an average military cost of $212 billion per year and $500 billion for
2007 alone, that could be potentially reduced will lower oil imports.
Although these recent studies provide significant, useful insights into the military
components of U.S. energy security, they do not provide enough substantive analysis to develop
a robust methodology for quantifying the military components of energy security for this
rulemaking. Even for studies that provide insight into the attribution of specific missions to the
objective of securing international oil production and distribution, they provide little guidance on
the degree to which incremental reductions in the U.S. dependence on imported oil would reduce
or eliminate those missions or programs. Thus, while EPA plans to continue to review newer
studies and literature to better estimate the military components of U.S. energy security benefits,
for this rulemaking EPA continues to exclude military cost components in our quantified energy
security benefits. (See Section III.H.S.e of the Preamble for more discussion on this topic.) To
summarize, EPA has been unable to calculate the monetary benefit that the United States will
receive from the improvements in national security expected to result from our standards.
18-188
-------
Analysis of Estimated Costs, Economic and Other Impacts
18.6. Other Impacts
Organizations Included in this Section
National Wildlife Federation (NWF)
Organization: National Wildlife Federation (NWF)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 28-29.]
The 20 million barrels of oil America uses every day accounts for 40 percent of the U.S. carbon
pollution load that causes climate changes. Meanwhile, when drilling projects go wrong, whole
ecosystems are threatened by disasters like the Deepwater Horizon spill in 2010, and smaller
leaks and spills like the recent Enbridge oil spill here in Michigan. Recent pipeline spills do
grave harm right in our backyards: to residents, to wildlife like herons, muskrats, and ducks and
geese and destroy decades of community efforts that were intended on restoring rivers like the
Kalamazoo. Today we have real opportunity to combat these threats.
Response:
EPA has estimated that there will be significant fuel savings associated with the final
standards. In addition to the monetized fuel savings benefits EPA has estimated in its cost-
benefit analysis, it is likely that there are many additional impacts associated with the standards
that have gone unqualified due to data, methodological, or resource limitations (for example,
see RIA Chapter 6). To the extent that there are omitted beneficial impacts associated with
reducing fuel consumption like those listed by the commenter, our benefits analysis can be
considered conservative. However, such an analysis was beyond the scope of this rulemaking.
18.6.1. Added Costs from Congestion, Accidents, and Noise
Organizations Included in this Section
American Road & Transportation Builders Association (ARTBA)
Mercedes-Benz USA, LLC
Organization: American Road & Transportation Builders Association (ARTBA)
Further, to improve traffic flow and reduce emissions and fuel waste, we must increase surface
transportation system capacity. VMT has grown by over 150 percent since the 1970s. In stark
contrast, the number of new lane miles in the United States has increased by only six percent.
Providing additional lane miles requires a significant investment in our nation's future and we
must update the HTF to adequately reflect changing circumstances. [EPA-HQ-OAR-2010-0799-
9403-A1, p. 3]
Congestion levels have grown continuously between 1982 and 2007. Since 1982, the number of
hours spent in congested traffic in the nation's largest metropolitan areas increased from 21
18-189
-------
EPA Response to Comments
hours to 51 hours. In addition to losing valuable time in traffic, travelers are also wasting an
estimated 4.2 billion gallons of fuel due to congestion. 4 Simply put, the nation's road system is
falling far behind growth in usage. The direct consequence is rampant traffic congestion and,
with it, unnecessarily increased emissions and pollution. [EPA-HQ-OAR-2010-0799-9403-Al,
p. 3]
Insufficient capacity already produces specific bottlenecks cause 50 percent of total congestion
on the nation's freeways. In 2004, a study of the nation's most severely congested highways
highlighted the reality that significant reductions in emissions require a reduction in vehicle time
traveled, not vehicle miles traveled. The study concluded that modest improvements to traffic
flow at 233 bottlenecks would reduce carbon dioxide emissions by as much as 77 percent and
conserve more than 40 billion gallons of fuel over a 20-year period. 5 These fuel savings translate
directly into lower CO2 emissions. [EPA-HQ-OAR-2010-0799-9403-Al, p. 3]
4 Texas Transportation Institute, 2009 "Urban Mobility Report,"2009.
5 Unclogging America's Arteries, Effective Relief for Highway, Cambridge Systematics, Inc.,
February 2004
Organization: Mercedes-Benz USA, LLC
The Relationship Between Congestion, Fuel Use and GHG Emissions Is Well Established
Congestion has a direct and well-documented impact on fuel economy and emissions. As shown
through a 2010 Urban Mobility Report developed by the Texas Transportation Institute, traffic
congestion has resulted in billions of gallons of wasted fuel each year: [See chart on p. A-9 of
Docket number [EPA-HQ-OAR-2010-0799-9483-Al] [EPA-HQ-OAR-2010-0799-9483-A1, p.
A-8]
Response:
While consideration of the need to increase surface transportation system capacity to
improve traffic flow and reduce emissions and fuel waste is beyond the scope of this rulemaking,
EPA does account for the fact that increased vehicle use associated with the rebound effect
contributes to increased traffic congestion. As described in Joint TSD 4.2.7 and Preamble
III.H.9, EPA monetizes the higher costs imposed by added delays to drivers and other vehicle
occupants in the form of increased travel time and operating expenses.
18.6.2. Benefits of Increased Driving
No comments were received on this topic.
18.6.3. Benefits of Less Frequent Refueling
No comments were received on this topic.
18-190
-------
Analysis of Estimated Costs, Economic and Other Impacts
18.7. U.S. Vehicle Sales Impacts
Organizations Included in this Section
Alexandria Hyundai
Alliance of Automobile Manufacturers
American Council for an Energy-Efficient Economy (ACEEE)
American Fuel and Petrochemical Manufacturers (AFPM)
Ceres
Consumer Federation of America (CF A)
Defour Group LLC
Edmunds.com
Environmental Defense Fund (EDF)
National Automobile Dealers Association (NADA)
National Wildlife Federation (NWF)
Natural Resources Defense Council (NRDC)
Northeast States for Coordinated Air Use Management (NESCAUM)
Ross, D.
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Union of Concerned Scientists (UCS)
United Automobile Workers (UAW)
U.S. Coalition for Advanced Diesel Cars
Volvo Car Corporation (VCC)
Organization: Alexandria Hyundai
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 66-67.]
The agencies have acknowledged the technologies needed to meet regulations will increase the
cost of vehicles. Thus for all stakeholders involved, including consumers, auto dealers and
manufacturers, we must have a clear understanding of how much vehicle costs will increase, and
whether consumers will perceive sufficient value in those increases to pay for them.
Organization: Alliance of Automobile Manufacturers
Automakers today are driving this country's economic recovery. Yet, in light of the uncertainty
over consumer valuation of fuel savings and other factors, the agencies have not included an
estimate of sales or employment impacts in the NPRM or supporting documents. [EPA-HQ-
OAR-2010-0799-9487-A1, p.20] [This comment can also be found in sectionlS.8 of this
comment summary.]
The agencies need to understand and take these impacts into account to assure that the
standards being put in place for MY 2022-25 do not reverse the economic gains and
environmental benefits that have come from the industry's recent recovery. [EPA-HQ-OAR-
18-191
-------
EPA Response to Comments
2010-0799-9487-A1, p.20] [This comment can also be found in sectionlS.8 of this comment
summary.]
Organization: American Council for an Energy-Efficient Economy (ACEEE)
For the MY2012-2016 rule, the agencies projected an increase in vehicle sales, using an
approach that is equally applicable to the current proposal. The approach considers five years of
discounted fuel savings, minus the incremental cost of a more efficient vehicle, as the net added
value to the buyer at the time of purchase. As noted in the current NPRM, the change in sales is
among the factors determining the impacts of the rule on auto sector employment (NPRM
p.75155). Despite this, the agencies do not quantify the sales impacts of the MY2017-2025 rule.
We believe that the approach previously taken is reasonable and yields a better estimate than a
default value of zero (for change in sales). [EPA-HQ-OAR-2010-0799-9528-A2 p.2]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 112.]
One important question, clearly: What will the higher cost per vehicle do to car sales? This effect
can be challenging to predict. But recent evidence from new polls and industry trends suggest a
growing demand for fuel economy by consumers. And there, moreover, appears to be a strong
link between consumer confidence and the purchase of new cars. So by enacting the proposed
standards, EPA and NHTSA could positively influence consumer confidence, pushing it up, and
by ensuring that we are moving in a positive direction with our energy use, they are likely to
stimulate consumer spending in highly positive ways which, in turn, would result in greater gains
from the proposed fuel economy standards. And equally critical, that would drive the positive job
and other financial benefits to the U.S. economy.
Organization: American Fuel and Petrochemical Manufacturers (AFPM)
These standards are based on an unreasonably aggressive expectation of increased electrification.
The agency predicts that annual sales of hybrids, plug-in hybrids and all electric vehicles could
represent 15% of new sales by 2025 (see footnote 13 at 76 Federal Register 74860; 17 - 35% in
Figure 5 at 76 Federal Register 75081 for manufacturers with annual sales above 500,000
vehicles; about 30% in Figure 6 at 76 FR 75082 for manufacturers with annual sales 30,000 -
500,000 vehicles). [EPA-HQ-OAR-2010-0799-9485-A1, p.5]
In reality, electric vehicle sales have been a huge disappointment for automakers. The Chevy
Volt, the American-made plug-in hybrid that General Motors had high hopes for going into
2011, fell short of GM's planned sales target of 10,000 units for the year. [EPA-HQ-OAR-2010-
0799-9485-A1, p.5]
This exuberant and unwarranted optimism also extends to hybrid electric vehicles as shown
below: [EPA-HQ-OAR-2010-0799-9485-A1, p.5] [For the figure 'shown below' please refer to
EPA-HQ-OAR-2010-0799-9485-Al,p.6]
Organization: Ceres
18-192
-------
Analysis of Estimated Costs, Economic and Other Impacts
The analysis concluded that, under the proposed standards, the auto industry as a whole is likely
to see sales improve by 4.7%, and profits by 4.2%. The Detroit 3 are in the best position; they
are likely to see sales increase by 5%, and profits by 5.2%. The rest of the industry, while
benefiting from the standards, does not fare quite as well as the Detroit 3; it is likely to see sales
increase by 4.4% and profits by 3.4%. [EPA-HQ-OAR-2010-0799-9475-A1, p. 1]
Organization: Consumer Federation of America (CFA)
VII. AUTOMAKER INCENTIVES: THE AUTO INDUSTRY HAS STRONG INCENTIVES
TO COMPLY WITH THE STANDARDS
Globalization of the auto industry means it is no longer possible to be a successful automaker
without being able to compete globally. [EPA-HQ-OAR-2010-0799-9419-A1, p. 8]
As shown in Exhibit S-7, the proposed standard brings U.S. standards up to international levels.
[Exhibit S-7 can be found on p. 10 of Docket number EPA-HQ-OAR-2010-0799-9419-A1]
[EPA-HQ-OAR-2010-0799-9419-A1, p. 8]
The proposed standard reduces the supply-side risk of introducing new fuel savings technologies
and triggers competition around fuel economy. [EPA-HQ-OAR-2010-0799-9419-A1, p. 8]
Automakers know they can sell quality. As shown in Exhibit S-8, according to statistics
compiled by the Bureau of Labor Statistics, which is responsible for the Producer Price Index,
[Exhibit S-8 can be found on p. 11 of Docket number EPA-HQ-OAR-2010-0799-9419-
Al] [EPA-HQ-OAR-2010-0799-9419-A1, p. 10]
• Over the past fifteen years, automakers have added three times as much value (and cost)
with optional improvements in quality than mandatory (safety and environmental)
improvements.
• The overall increase in MSRP tends to track closely to the increase in real disposable
income.
• The cost increases that the long-term standards will require over the next 15 years are
well below the cost of quality improvement over the past 15 years.
• Unlike most other quality additions, fuel economy improvements deliver pocketbook
savings to consumers.
• In today's market, fuel economy is a major determinant of vehicle quality that the market
can easily absorb. [EPA-HQ-OAR-2010-0799-9419-A1, p. 10]
And that leads me to the fourth and most important reason. There is no sticker shock here, none
whatsoever. There is no big jump year to year. It's a slow increase in prices. There are uniform
price increases across all manufacturers because they all have to comply.
The cost of driving goes down. The value of vehicles goes up. There is no reason to believe that
consumers will not buy these vehicles. And in fact, they've shown by their attitudes and the
behaviors they are ready to do so.
18-193
-------
EPA Response to Comments
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 59.]
Car dealers have expressed concern about jobs and dealerships, implying that the standards
might further hurt them.
Organization: Defour Group LLC
IV. Impact of the Standard on Industry Sales and Employment
Assuming the agencies' baseline sales of 17 million units in 2025, assuming a baseline combined
auto and light truck retail transactions price of $28,000 per light duty vehicle ($2009), and
assuming, with the agencies, a -1.0 industry demand price elasticity, our lower bound estimate of
$1900 per vehicle net welfare loss yields a loss of 1.1 million industry combined car and light
truck sales in 2025 relative to the MY 2016 baseline. Further assuming, also with the agencies,
that every 1,000 unit sales provides 11.3 auto and supplier jobs yields a loss of just over 100,000
auto industry and supplier jobs. We estimate another 35,000 jobs lost at auto dealers, based on
BLS data, which brings the total to a loss of 135,000 jobs in MY 2025 (rounded to the nearest
5,000 jobs). [EPA-HQ-OAR-2010-0799-9319-A1, p. 9]
Our mid-range estimate for industry sales losses is 1.8 million units relative to the baseline,
which translates into a loss of 155,000 jobs in manufacturing and supply, plus another 50,000
jobs in distribution for a total job loss of 205,000 jobs in auto manufacturing, supply, and
distribution. [EPA-HQ-OAR-2010-0799-9319-A1, p. 9] [Cross-referenced with section 16.8]
By comparison, the EIA estimates a loss of 8% of industry sales in 2025 for a 46.1 mpg standard
relative to the baseline. Scaling this estimate up to the mandated 49.6 mpg yields a loss of 10.3%
of industry sales or 1.8 million units off the 17 million unit baseline sales —the same as our mid-
range estimate. This further translates into the identical loss of 205,000 in the manufacture,
supply, and distribution of cars and light trucks. [EPA-HQ-OAR-2010-0799-9319-A1, p. 9]
All of these estimates are extremely conservative because they assume the 34.1 mpg mandate for
MY 2016 as their baseline. This is inconsistent with the mainstream research cited in Part II and
that found baselines of 23 mpg much closer to the level beyond which consumers would be
unwilling to pay for increases in fuel economy. The laws of declining marginal benefits (utility)
and increasing marginal costs imply that the actual level of net consumer welfare losses and the
attendant sales and employment losses are exponentially higher. [EPA-HQ-OAR-2010-0799-
9319-Al,p. 9]
Organization: Edmunds.com
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 103-104.]
Decreased competition or innovation of any features, including fuel economy, poses the risk that
vehicles will be less differentiated, and thus offer decreased utility to certain consumers,
18-194
-------
Analysis of Estimated Costs, Economic and Other Impacts
especially those who strongly value the affected features. This could decrease new car sales, if
consumers are less motivated to replace their cars as frequently and/or if consumers turn to used
cars. Given the sizable contribution of auto sales to the U.S. economy, any slowdown in auto
sales has the potential to generate significant adverse effects in other parts of the economy as
well.
Secondly, the current proposal needs to demonstrate a fuller understanding of consumer demand
for vehicles and how adding higher prices, decreased innovation and choice, and excessively
complex information could affect consumer decision-making on new vehicle purchases and
potentially result in lower auto sales.
Organization: Environmental Defense Fund (EDF)
H. FINAL RULE SHOULD INCLUDE QUANTITATIVE ESTIMATES OF VEHICLES
SALES AND AUTO MANUFACTURING EMPLOYMENT BENEFITS
EPA and NHTSA conducted quantitative vehicle sales and auto manufacturing employment
analyses in previous rulemakings and had prepared an estimate of these same indices for the
rulemaking action at issue here using the same methodologies. However, the results of these
analyses were not included in the published proposal. The changes occurred during the OMB
review process. The docket for this rulemaking includes interagency drafts of the proposal
submitted to OMB with the quantitative analyses included. The docket also includes the request
by OMB to remove the quantitative analyses from the proposals3 and responses from EPA and
NHTSA stating the importance of the quantitative analyses and requesting they be left in the
final proposal.34 See Attachment B. We incorporate this document as an integral part of EDF's
comments for inclusion in the administrative record for this rulemaking action. [EPA-HQ-OAR-
2010-0799-9519-Al,p. 14]
We respectfully request that the quantitative vehicle sales and auto manufacturing employment
benefits be included in the final rule to fully reflect the comprehensive societal benefits of the
proposed program. [EPA-HQ-OAR-2010-0799-9519-A1, p. 14]
[The above comments can also be found in section 18.8 of this comment summary.]
i. VEHICLE SALES
EPA and NHTSA conducted a vehicle sales analysis in previous rulemakings by comparing the
up-front costs of the vehicles with the present value of five years' worth of fuel savings. The
Agencies used the same methodology to quantify vehicle sales impacts for the current proposed
standards, finding that in 2025, combined new car and light truck sales could increase by an
estimated 644,000 vehicles.35 However, these results were not included in the final proposed
rulemaking, which states, "This rule takes effect for MY 2017-2025. In the intervening years, it
is possible that the assumptions underlying this analysis, as well as market conditions, might
change." (Proposal preamble, page 75,151) The proposal therefore concludes, "In light of the
relevant uncertainties, the agency therefore decided not to include a quantitative sales
estimate..." (Proposal preamble, page 75,320) While we agree that uncertainties indeed exist in
18-195
-------
EPA Response to Comments
such an analysis, we strongly believe that a quantitative analysis should at the very least have
been presented in the proposal for the public to review and comment on. We strongly encourage
the Agencies to include quantitative vehicle sales estimates in the final rule to reflect full
transparency and the true estimated benefits of the proposed standards [EPA-HQ-OAR-2010-
0799-9519-A1, pp. 14-15]
Organization: National Automobile Dealers Association (NADA)
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 69-71.]
But dealers are concerned about the accelerated schedule in this proposal. The mandates for
model year 2011 to 2016 just now being implemented aggressively move up the 2020 goal of 35
miles per gallon by four years. If this proposal aims to set mandates for model years 2017
through 2025, five of the thirteen years out in the future will more than double the fuel economy
of the vehicles I now sell.
The showroom realities I see suggest that we should take the time to evaluate how consumers
react to the higher-mileage/higher-cost vehicles manufacturers will build in the next few years.
In other words, if we want, if we wait two years, manufacturers would still have the time
necessary to comply and we would all have better data on which to make decisions. Sales of new
vehicles were 12.7 million last year, a far cry from the 17-plus million in the high water market
in the mid 2000s, but much better than the 10.4 million sold in 2009.
Dealers embrace the pivotal role we are playing to help lead our nation back to the road of
prosperity, but we are wary of anything that might depress sales and turn back the gains being
made. Simply put, before rushing head-long into a new set of mandates aimed at doubling
today's fleet fuel economy, we need to know better what the ramifications will be.
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 94.]
Next month NADA intends to release a detailed analysis of the proposal's impact on sales,
especially with respect to certain sensitive market segments.
[Supplemental comments to the testimony]
IV. Consumers Unable to Afford or Unwilling to Pay Higher Prices Have Other Options
New light-duty vehicle sales plummeted in 2008 and 2009, largely due to the recession. The
measurable increases in average new light-duty vehicle fleet fuel economy performance which
have occurred since then must be balanced against a dramatic reduction fleet turnover. Currently,
the in-use fleet is the oldest it has ever been (almost 11 years, on average). Annual new light-
duty sales have increased steadily since 2009, but have a long way to go before reaching the once
"normal" 16 million vehicles per year level. As noted in NADA's comments, effective fuel
economy mandates must enhance new light-duty sales and fleet turnover, not retard them,
18-196
-------
Analysis of Estimated Costs, Economic and Other Impacts
especially given that increases in average new vehicle fuel economy otherwise is expected to
occur "naturally" as fuel prices trend higher. [NHTSA-2010-0131-0267-A1, p.4]
Organization: National Wildlife Federation (NWF)
Overall, in 2011, a new study out this week confirms month by month increases in new vehicle
fuel efficiency, while, despite continued economic uncertainty, vehicle sales were up about 10%
- far outpacing overall economic growth. 6 7 [EPA-HQ-OAR-2010-0799-9887-A2, p. 4]
6 http://www.umich.edu/~umtriswt/EDI_sales-weighted-mpg.html
7 http://www.ihs.com/products/global-insight/industry-economic-report.aspx?id=l065931875
Organization: Natural Resources Defense Council (NRDC)
EPA and NHTSA should include a sales impact assessment using a methodology consistent with
previous rules. [EPA-HQ-OAR-2010-0799-9472-A2, p. 4]
NHTSA should not use a vehicle choice model in its CAFE assessment without opportunity for
public review and comment. [EPA-HQ-OAR-2010-0799-9472-A2, p. 4]
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 71.]
As part of the basis for the proposed rates of improvement, EPA projects that battery electric
vehicles and plug-in hybrid electric vehicles will account for as little as one percent of sales in
2021 and three percent of sales in 2025.
Yet nearly every major auto manufacturer will have EVs and PHEVs in production within the
three years — within three years.
EPA and the Department of Transportation previously estimated that a fleet-wide six-percent
annual rate of improvement could be achieved with as little as four percent combined sale share
of EVs and PHEVs in 2025, provided that sales of conventional hybrids continue to increase.
Four counts of significant reductions in the weight and cost of electric vehicle technologies
further support our conclusion that the most increase in sales of these advanced technology
vehicles require to achieve a fleet-wide six-percent annual rate of improvement is viable.
Organization: Ross, D.
18-197
-------
EPA Response to Comments
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 243.]
Now some automobile dealers groups claim harm through lost sales and lost jobs. In reality, all
else equal, the projected drop in the net cost of vehicle ownership will result in an increase in
sales.
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
The new proposed standards will continue push improved technologies into the market and boost
auto sales. In their initial submission to OMB, the agencies conducted a basic sales analysis and
concluded that the effect on vehicle sales would be positive. Assuming a 3% discount rate, the
agencies found that car sales would increase by 319,700 in 2025 and truck sales would increase
by 324,600.13 This analysis was similar to that done in the 2012-16 rule. The final rule should
include ta sale analysis consistent with that done for the prior rule. [EPA-HQ-OAR-2010-0799-
9549-A2, p. 4]
13 EO12866 Review-Interagency Review material Part 1- 2017-2025 Vehicle GHG and Fuel
Economy Standard and NPRM 2060 AQ54, Document ID: EPA-HQ-OAR-2010-0799-1224,
pgs. 891-892 of PDF [EPA-HQ-OAR-2010-0799-9549-A2, p. 4]
Organization: Union of Concerned Scientists (UCS)
Sales of new light-duty vehicles are also projected to increase under these standards. The Ceres
analysis found an increase of light-duty vehicles sales compared to business as usual, resulting in
an additional $37.4 billion in sales 2030.8 While not included in the proposed rule, interagency
review documents show that EPA has projected a 2.8% increase in car sales and a 5.7% increase
in light truck sales compared to business as usual.9 [EPA-HQ-OAR-2010-0799-9567-A2, p. 3]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 217-218.]
A recent report from CERES found that standards similar to those proposed by the agencies
would create nearly 500,000 new jobs nationwide in 2030.
Moreover, better fuel efficiency and greenhouse gas performance will improve the
competitiveness of the American auto industry.
In 2008, in the face of rising gas prices and declining economy, American auto makers were ill
prepared to meet consumers' needs. These standards will ensure that manufacturers continue to
innovate over the coming decade, providing consumers clean and efficient vehicle choices that
will help them fight for years to come.
18-198
-------
Analysis of Estimated Costs, Economic and Other Impacts
8 Ceres. More Jobs Per Gallon. Management Information Services, Inc. July, 2011. p. 14 [EPA-
HQ-OAR-2010-0799-9567-A2, p. 3]
9 Interagency review document, EPA-HQ-OAR-20100799-1224, Joint Rulemaking to Establish
2017 and Later Model Year Light Duty Vehicle GHG Emissions and CAFE Standards, p. 891-
892. [EPA-HQ-OAR-2010-0799-9567-A2, p. 3]
Organization: United Automobile Workers (UAW)
Unfortunately, this has become as much a political concern as an analytical one, which the UAW
believes is to the detriment of a broader view of the demand for light-duty vehicles in the United
States. New vehicle sales are largely driven by employment and income levels and the need for
replacement vehicles as older vehicles are taken out of service. For example, the drastic
reduction in vehicle sales that occurred in model year 2009 was caused by the economic crisis,
and nearly all observers agree that auto sales will increase only to the extent that the economy
continues to recover. [EPA-HQ-OAR-2010-0799-9563-A2, pp.6-7]
The history of light-duty vehicle sales over the period that CAFE has been in effect shows that
economic factors, not changes in CAFE requirements, are the main determinant of vehicle sales.
The chart below provides a quick visual reference that shows no evident relationship between
CAFE and sales when viewed in the context of the overall level of sales. [EPA-HQ-OAR-2010-
0799-9563-A2, p.7] [To see the chart below please refer to EPA-HQ-OAR-2010-0799-9563-A2,
p.7]
While the UAW believes that efforts to understand how sales are affected by increased vehicle
prices for more efficient vehicles are worthwhile and should be continued, the history of new
vehicle sales makes it clear that the best way to increase vehicle sales to former levels is to focus
on efforts to improve the economy and increase employment. [EPA-HQ-OAR-2010-0799-9563-
A2, p.7]
Organization: U.S. Coalition for Advanced Diesel Cars
Overstated Residual Value: In its 2012-2016 Final Rule, EPA discussed the importance of a
vehicle's residual value retention over time as a component of the consumer's total cost of
ownership. This language appears again in the current NPRM as EPA states, "it is reasonable to
estimate that the added technology to improve CO2 level and fuel economy will retain the same
percentage of value when the vehicle is five years old." In the case of hybrid pickup trucks, the
marketplace has proven EPA's estimation to be entirely unreasonable. Leading consumer
websites, such as Edmunds and Kelley Blue Book, project hybrid pickup trucks depreciate faster
than trucks with standard engine, resulting in the loss of thousands of dollars to consumers at
trade-in time. Indeed, the extra depreciation caused by the hybrid content can erase much, if not
all, of the fuel savings which can potentially accrue to the consumer. [NHTSA-2010-0131-0246-
Al,p.5]
18-199
-------
EPA Response to Comments
Organization: Volvo Car Corporation (VCC)
The proposed regulations are, and will be, very challenging. One of the challenges is to identify
the correct pacing of the introduction to the market of the Advanced Technology Vehicles (ATV)
that are anticipated in the proposal. EPA and NHTSA are trying to clarify the environmental
needs that are to push a more intensified introduction of ATV's. The intensified introduction of
ATV's will create many significant challenges and require risk taking for VCC. [EPA-HQ-OAR-
2010-0799-9551-A2, p.2]
Response:
These comments show a diversity of opinion on whether this rule will affect vehicle sales
either positively or negatively. Some put the emphasis on up-front costs and predict reductions
in vehicle sales; others put the emphasis on the net savings to consumers, based on fuel savings
outweighing technology costs over the vehicle's lifetime, and say that vehicle sales will increase.
The UAW states that vehicle sales are mostly determined by the overall state of the economy.
ACEEE says that enacting the proposed standards could lead to a positive effect on consumer
confidence, and thus contribute to stimulating the economy. AFPM expresses concern over "an
unreasonably aggressive expectation of increased electrification" of the vehicle fleet, while
NESCAUM says that sales of EVs sufficient to meet even more stringent standards than those
set here are viable.
As ACEEE, EOF, Sierra Club et al., and UCS note, in the MYs 2012-16 GHG and CAFE
rule, EPA conducted a vehicle sales analysis based on a comparison of the tradeoff between the
desirability of additional fuel savings and the up-front costs of new vehicles (including sales tax,
insurance, and vehicle financing costs). Several of these organizations recommended that we
conduct an analysis using the same methodology for this rule. As discussed in Preamble III.H. 11
and RIA Chapter 8.1, we do not quantify vehicle sales impacts, because of uncertainties involved
in the responses of consumers and automakers in the time horizon of this rule. As the United
Auto Workers points out, for instance, the state of the economy is a major, if not the primary,
determinant of total vehicle sales. The impact of the rule on sales may therefore depend, among
other factors, on changes in the state of the economy. Other commenters discussed the
importance of consumer confidence, fuel prices, and even of publicity over fuel prices, in
consumers' interest in additional fuel economy. EPA agrees that these factors are important;
indeed, fuel prices play an important role in estimating the fuel savings used in analyzing vehicle
sales, as discussed in RIA Chapters 5.4 and 8.1.1. For other factors, including consumer
confidence and publicity over fuel prices, we acknowledge their potential for impacts on vehicle
sales. Even if we did quantify vehicle sales, though, we are not sufficiently confident in
quantitative estimates of the impacts of those factors to develop numerical estimates.
Another method to estimate effects on vehicle sales is to model the market for vehicles.
Consumer vehicle choice models estimate what vehicles consumers buy based on vehicle and
consumer characteristics. As discussed in Section III.H. 1.a, Chapter 8.1.2.8 of the RIA, and
Section 18.1 of this Response to Comments, EPA has been exploring use of a consumer vehicle
choice model, but we consider it premature to use the model in this rulemaking.
18-200
-------
Analysis of Estimated Costs, Economic and Other Impacts
The studies by Ceres and by the Defour Group (including the 2011 EIA study cited by the
latter) show how the results of vehicle sales analyses depend on the underlying assumptions.
The Ceres and Defour analyses, like the method that EPA has used in the past, are based on an
adjusted consumer price that reflects the increase in vehicle cost less a proportion of the expected
future fuel savings; the EIA study does not consider consumer fuel savings. The per-vehicle
technology cost estimates in Ceres' study (for MY 2020) appear to be somewhat lower than
EPA's estimates; EIA's cost estimates are higher; and the Defour Group's cost estimates are
oc
substantially higher. In the Ceres and Defour cases the estimates take into account estimates of
the amount of fuel savings that vehicle buyers consider when deciding what vehicles to buy; EIA
does not consider fuel savings. Ceres estimates that vehicle buyers consider 7 years of fuel
savings, with sensitivity analysis of 3 to 15 years; we estimate that the Defour Group's estimate,
of 25 percent of expected lifetime fuel savings, corresponds roughly to an assumption that buyers
consider less than 3 years of fuel savings. Because the Defour Group and EIA analyses uses
higher costs and lower benefits than the Ceres analysis, it is unsurprising that the three studies
come up with very different vehicle sales estimates. EPA does not endorse the results of any of
these studies.
As discussed in Section III.D.6 of the Preamble, in this final rule we project very low
rates of EV penetration as part of a compliance strategy for the rule - around 2 percent in MY
2025 - and a combined penetration of strong HEVs, EVs, and PHEVs of around 7 percent (see
Preamble Table 111-52). We consider these penetration rates to be low enough that the new
vehicle market will absorb these vehicles. We note that automakers are not obliged to use
electrification as part of their strategies for compliance.
We agree that enacting these standards should contribute to the development and use of
advanced technologies that will have applicability for meeting standards in other countries. As a
result, vehicles built in the U.S. are more likely to achieve international standards. The ability to
design vehicles that meet standards in foreign as well as domestic markets can be expected to
reduce costs of design for automakers.
We agree that the macroeconomy both affects and is affected by the auto industry's
condition, and by the level of production and sales of autos. The vehicle sales projections that
we use for the rule analysis, as discussed in TSD Chapter 1, are based on models that incorporate
projections of the economy into the future.
We disagree with Edmunds that there will be decreased competition or innovation of any
features. As discussed in Preamble III.H. 1, RIA Chapter 8.1, and Section 18.1 of this Response
to Comments, it is possible for automakers to achieve both improved fuel economy and
maintained levels of other vehicle attributes, including fleet diversity; it should thus be possible
for automakers to improve both fuel economy and other vehicle attributes, if consumers are
85 The Defour Group's cost estimates are based on the technology costs of MYs 2011-25 rulemakings, not
the costs just of this rule. EPA considers it appropriate to examine the costs and benefits of this rule, with the
impacts of other rules included in its baseline for analysis. In addition, the Defour Group assumes that indirect costs
for all technologies equal the direct costs, by using a retail price equivalent multiplier of 2.0; EPA's cost estimates
take into account that indirect costs for new technologies vary with the complexity of the technology and the time
frame since its adoption. This issue is discussed in detail in TSD Chapter 3.1.2.2.
18-201
-------
EPA Response to Comments
willing to pay for those other attributes. The agencies' cost methodology in fact includes cost of
preserving all vehicle utilities found in the present fleet. See EPA RIA at pp. 1-39 to 40. The
rule provides a thorough review of the literature on consumer demand for vehicles and how fuel
economy affects it, in Preamble III.H.l and RIA Chapter 8.1.2.
We do not understand what Edmunds means in expressing concern over "excessively
complex information." Vehicle technology has been increasing in complexity probably since the
invention of the automobile. For most vehicles, technologies that will satisfy the rule, such as
improved transmissions, require little, if any, additional explanation, because their use is unlikely
to play much of a direct role in vehicle purchase decisions.
The U.S. Coalition for Advanced Diesel Cars calls into question application of the same
residual value to hybrid vehicles as to other vehicles in the cost of ownership analysis. The cost
of ownership analysis (see Preamble III.H.5 and RIA Chapter 5.5) does not make use of residual
value. The vehicle sales analysis that EPA has used in the past does take into account residual
value, as described in RIA Chapter 8.1.1. That vehicle sales analysis was done at an aggregate
level, though; it does not have the precision to separate effects for individual models or classes.
For that purpose, we consider the use of an average residual value to be appropriate.
18.7.1. Access to Auto Loans and Effects on Low-Income Consumers
Organizations Included in this Section
Consumer Federation of America (CF A)
Consumers Union
Defour Group LLC
Michigan House of Representatives, 49th District
National Automobile Dealers Association (NADA)
Ross, D.
Union of Concerned Scientists (UCS)
Organization: Consumer Federation of America (CFA)
• Automakers adjust MSRP and discounts and auto financing in response to much larger
changes in affordability. [EPA-HQ-OAR-2010-0799-9419-A1, p. 10]
Concerns about a negative impact of the standards on consumers and the auto market are
unfounded, even in the case of low income consumers because they rest on faulty assumptions
that are contradicted by the above analysis. [EPA-HQ-OAR-2010-0799-9419-A1, p. 10]
• When the costs of driving go down, vehicle ownership becomes more affordable, so
output and employment in the industry will expand. [EPA-HQ-OAR-2010-0799-9419-
Al,p. 10]
• Households with income below $20,000 made up approximately 22 percent of all
households in 2010, but they accounted for only 2 percent of the money spent on new
vehicles. [EPA-HQ-OAR-2010-0799-9419-A1, p. 11]
18-202
-------
Analysis of Estimated Costs, Economic and Other Impacts
• Gasoline expenditures are a much bigger problem for these households. In 2010,
households with incomes below $20,000 spent 7.3 times as much on gasoline as they
spent on new car payments. [EPA-HQ-OAR-2010-0799-9419-Al, p. 11]
• Low-income households are much more involved in the used car market, in which we see
an increase in supply of vehicles and lower prices as the standards accelerate the fleet
turnover. [EPA-HQ-OAR-2010-0799-9419-A1, p. 11]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 61.]
So we are not worried about the increase in price associated with the technology because that
increase in price will be paid back to the consumer who takes a typical five-month [sic] loan out
during that very first month [sic].
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 39.]
By far, the single largest benefit is the reduction of consumer expenditure on gasoline and the
decrease in the cost of driving. For the typical consumer who purchases a new auto that complies
with the 2025 standard with a 5-year auto loan, the average life of auto loans these days,
consumer pocketbook savings will be immediate and substantial.
Organization: Consumers Union
III. Low-Income Households Benefit from the Standards
Car prices have been remarkably stable over the last two decades, even as new features have
proliferated and enormous safety gains have been achieved. Improving fuel economy is likely to
have a modest price impact at most, while the savings on fuel will be tremendous. These net
savings will benefit nearly all consumers, particularly low-income consumers. We are not aware
of an in-depth, independent study that analyzes the impact of the proposed standards on low-
income households. However, our best estimate is that they will see even greater net benefits.
Low-income households pay a disproportionately large portion of their income on fuel, so will
benefit greatly from greater fuel economy. At the same time, they are primarily insulated from
the costs of the new standards because they account for a very small portion of new car buyers.
[EPA-HQ-OAR-2010-0799-9454-A2, p.4]
Low-income consumers are the most vulnerable to price spikes in gasoline. Energy expenses in
general and gasoline in particular constitute a disproportionately greater burden for low-income
households.9 Decreasing national demand for oil by creating a gas-sipping fleet will help relieve
this burden for low-income households. The Consumer Federation of America calculated that in
2010, households with incomes below $20,000 spent 7.3 times as much on gasoline as the spent
on new car payments. 10 In comparison, households with incomes above $70,000 spent 1.2 times
as much on gasoline as they did on new car payments. 11 Reducing demand for gasoline and
making vehicles more efficient is a very effective tool to combat vulnerability to gas price
spikes, which is a real threat to low-income households. Some financial institutions already
18-203
-------
EPA Response to Comments
recognize that lower operating costs lower credit and default risk and offer consumers lower
interest rates for vehicles with superior fuel economy. 12 [EPA-HQ-OAR-2010-0799-9454-A2,
pp.4-5]
Low-income households are more likely to buy used rather than new vehicles, and as a
consequence, they have lower depreciation costs than those absorbed by new car buyers. New
vehicles lose an average of 65% of their value after five years of purchase. 13 If the average cost
increase for a new car is approximately $2,000, then the average cost increase of a five-year old
car that meets the new standards would be about $700 (35%). The amount of savings depends
largely on the starting point for the original vehicle's fuel economy, but earning back the
difference (assuming 10% interest loan: $770 difference, assuming cash purchase: $700) could
be recouped quickly by fuel savings. For example, moving from 20 to 24 mpg, from 28 to 36
mpg, or from 32 to 44 mpg would provide this level of savings within 2 years. 14 Each of these
examples is well within the expected average improvement that will result from the new
standards, and average savings from the new standards are likely to be even greater. In addition,
the standards are likely to diminish the premium often charged for more efficient used vehicles,
making "efficiency" as an attribute relatively cheaper. [EPA-HQ-OAR-2010-0799-9454-A2,
pp.5-6]
Consumer Reports survey data show that low-income households want more efficient vehicles
and support the fuel economy standards. While 59% of respondents in moderate and high-
income households expect their next vehicle purchase to have better fuel economy, 71% of low-
income households expect to choose a model with better fuel economy. 15 While an impressive
78% of moderate and high-income households support fuel economy standards that increase to at
least 55 mpg by 2025, an even greater number (85%) of low-income households support these
standards. 16 Although more expensive cars create a greater initial hardship for low-income
households than for higher-income households, 79% of low-income respondents are still willing
to pay extra for a more fuel efficient vehicle if they can recover the additional cost through lower
fuel costs within five years (compared to 86% of moderate and high-income respondents). 17
[EPA-HQ-OAR-2010-0799-9454-A2, p.6]
9 - See the Urban Institute's 'Impact of Rising Gas Prices on Below-Poverty Commuters',
September 2008 accessed at: http://www.urban.org/UploadedPDF/411760_rising_gas_prices.pdf
10 - CFA's calculations are based on the Bureau of Labor Statistics' Consumer Expenditure
Survey, accessible at: http://www.bls.gov/cex/2010/Standard/income.pdf
11 - Id.
12 - Examples include U.S. Bank, Everence, and Truliant Federal Credit Union.
13 - Kelley Blue Book's 2012 Residual Value Analysis estimates the 60-month residual values
for 2012 model-year vehicles average 35.5 percent of their original MSRP after five years of
18-204
-------
Analysis of Estimated Costs, Economic and Other Impacts
ownership, accessed at: http://mediaroom.kbb.com/kelley-blue-book-releases-2012-residual-
value-analysis.
14 - See Appendix E CR Fuel Saving Chart.
15 - See Appendix D at 24.
16 - See Appendix D at 27.
17 - See Appendix D at 26.
Organization: Defour Group LLC
VI. Impact of the Standards on the Poor
The agencies' assessment of the impacts of their fuel economy proposal fails to consider the
proposed standard's severely adverse impacts on the poor and otherwise disadvantaged. A recent
study by Professor Mark Jacobsen (University of California at San Diego) found that fuel
economy standards are "sharply regressive" and that the costs of fuel economy mandates "fall
disproportionately on low-income households." He found, for example, that "low-income
households" buying ten-year-old vehicles are "suffering welfare losses (as a fraction of income)
90
more than three times as large as those of the high-income group." [EPA-HQ-OAR-2010-0799-
9319-Al,p. 13]
This finding is important because used cars play an essential role in the escape from inner-city
poverty. Studies show that car ownership rates are lower among minority groups, and this
appears to be a significant factor in explaining the lower employment rates of these groups. A
study conducted by researchers at the University of California at Berkeley estimated that raising
minority car ownership rates to the white car ownership rate would eliminate 45 percent of the
black-white employment rate differential and 17 percent of the comparable Latino-white
91
differential. By raising the cost of vehicle ownership, fuel economy standards work in precisely
the opposite direction. [EPA-HQ-OAR-2010-0799-9319-A1, p. 13]
20 - Mark R. Jacobsen, "Evaluating U.S. Fuel Economy Standards in a Model of Producer and
Household Heterogeneity," Working Paper, January, Stanford and the University of California at
San Diego, January 2010.
21 - Steven Raphael and Michael Stoll, "Can Boosting Minority Car-Ownership Rates Narrow
Inter-Racial Employment Gaps?" Working Paper WOO'002, Berkeley Program on Housing and
Urban Policy, Institute of Business and Economic Research, Abstract.
Organization: Representative from Michigan House of Representatives, 49th District
18-205
-------
EPA Response to Comments
The standards will also save consumers at the pump and help insulate them, especially those on
fixed incomes like retirees and seniors, from the volatility of gas prices. As we have a debate
here in Michigan about how to adequately invest in our roads and bridges, I will be working to
make sure any solution considers how it impacts middle-class families that are already
struggling. Increased fuel economy will help them by putting more discretionary income in their
pockets so that they can spend more money on other goods and services. Over the lifecycle of a
model year 2025 vehicle, consumers will in fact save up to $6,600 in fuel costs, which they can
then use to help support local businesses and jobs. [EPA-HQ-OAR-2010-0799-7983-A1, p. 1]
Organization: National Automobile Dealers Association (NADA)
Second, prospective new light-duty vehicle purchasers must have the ability to make a purchase
or lease. Ability involves critical factors like financial wherewithal (for most consumers, this
means creditworthiness), a driver's license, and for certain alternative and new technology
vehicles, the availability of convenient refueling. Third, prospective new light-duty vehicle
purchasers must be willing to purchase, assuming they have the need and/or desire and the ability
to do so. [EPA-HQ-OAR-2010-0799-9575-A1, p. 2]
The proposal gives remarkably short shrift to these marketplace realities. A cynical view would
argue that, under a 'push' mandate, regulators need not care if the vehicles they are mandating
actually get sold or leased. These comments do not take that position, but instead suggest that a
careful consideration of actual customer behaviors and marketplace realities will enable NHTS A
and EPA to leverage customer demand to maximize fleet turnover, thus maximizing program
effectiveness. Doing so is critical given that, by a wide margin, the proposal is the costliest of
any ever considered for the U.S. automobile industry. [EPA-HQ-OAR-2010-0799-9575-A1, p.
3]
III. THE PROPOSED MY 2017-2025 STANDARDS WILL DRAMATICALLY IMPACT THE
ABILITY AND THE WILLINGNESS OF CUSTOMERS TO PURCHASE NEW LIGHT-
DUTY MOTOR VEHICLES.
As noted above, the demand for new light-duty motor vehicles, not unlike for most consumer
goods, derives solely from and to the degree prospective purchasers need or desire them.
Moreover, the demand for new light-duty vehicles is and always will be constrained by choices,
including the used vehicle marketplace, vehicle service and repair options, and a variety of
transportation alternatives that conceivably may satisfy those same needs and desires. [EPA-HQ-
OAR-2010-0799-9575-A1, p. 6]
Assuming the requisite need or desire, prospective purchasers of new light-duty vehicles must
have the ability to buy. For most households, a light-duty car or truck is the most expensive
consumer purchase they make. Unlike for most other consumer goods, in excess of 90% of
purchasers finance the new light-duty vehicles they acquire by means of a credit sale or lease,
with less than ten percent involved in all-cash transactions. Thus, the single most important
ability factor is creditworthiness. When prospective purchasers lack sufficient creditworthiness
to enable a lender or lessor to finance the new light-duty vehicle they need or desire, they must
consider other options. In addition to the alternate transportation choices noted above,
18-206
-------
Analysis of Estimated Costs, Economic and Other Impacts
prospective purchasers may be able to consider a less expensive new vehicle option that meets
their needs or desires but, as discussed below, at some point no such new vehicle option will be
available. [EPA-HQ-OAR-2010-0799-9575-A1, p. 6]
A. The Ability of Prospective Purchasers of New Light-Duty Purchasers to Pay for the Costs of
the Proposed Standards
However much prospective purchasers may need or desire new vehicles covered by the proposal,
they must be able to afford them. Of course, other ability factors often come into play, such as
meeting legal requirements for a license and obtaining liability insurance, or having reasonably
available refueling options for alternative fuel and plug-in vehicles. Importantly, it matters not
whether the new vehicles in question offer improved fuel economy performance characteristics
compared to the transportation options currently being used by prospective purchasers. When
underwriting loans or leases, lenders and lessors simply do not account for whether new vehicles
offer more torque or horsepower, improved fuel economy, reduced GHGs, ubiquitous cup
holders, or prettier paint. All that matters is whether prospective purchasers are creditworthy, that
is, whether they will comply with their payment obligations as spelled out in the loan or lease.
Regarding the new vehicles themselves, these decisions principally involve objective criteria and
one key factor: the total amount of the up-front cost being financed. [EPA-HQ-OAR-2010-0799-
9575-A1, p. 6]
Nowhere does the proposal properly account for ability to pay. Consequently, the proposal
significantly understates potential impacts on prospective new vehicle purchasers and overstates
regulatory benefits. The paper Attached as Exhibit C lays out, for three cost-increase scenarios,
how the proposal will impact on the ability of consumers to pay for vehicles covered by the rule,
assuming the need or desire, and willingness, of those prospective purchasers to do so. 13 Note
that these cost increase scenarios only reflect what it will cost prospective purchasers up front
due to the mandates imposed by the MY 2011-2025 standards. They do not take into account
other potentially significant regulatory costs above the assumed baseline, including compliance
with expected Tier III emissions standards and an array of new safety standards. [EPA-HQ-
OAR-2010-0799-9575-A1, pp. 6-7]
The attached paper analyzes Bureau of Labor Statistics Consumer Expenditure Survey data to
show how each average per vehicle cost increase scenario will impact the least expensive new
vehicle in the market. For example, a regulatory cost of $2,937 (in 2010 dollars) could increase
the cost of the least expensive new vehicle to approximately $15,700 versus the current $12,750.
In doing so approximately 6.8 million licensed drivers will no longer qualify for a loan on that
least expensive new vehicle and thus will have to turn to the other transportation options
discussed above. In fact, projected per vehicle average cost increases will knock licensed drivers
out of the market for all new light-duty vehicle segments, as illustrated by the fact that, at the
same average per vehicle price increase of $2,937, another 6.8 million licensed drivers will no
longer qualify for the purchase of the minimum cost new vehicle that accommodates more than 5
people (or more than 2 child safety seats), currently selling for approximately $20,000. EPA and
NHTSA must take these significant economic impacts into account, especially given that they
have will have the greatest effect on lower income families at the margins of the market. [EPA-
HQ-OAR-2010-0799-9575-A1, p. 7]
18-207
-------
EPA Response to Comments
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 54-55.]
Some tout that the cost of the proposal is essentially free because of fuel savings. But before any
fuel savings can be realized, customers must have the ability to buy. For over 90 percent of
Americans, the purchase of a new vehicle is contingent on getting approved for a loan or a lease.
If they don't qualify, they can't buy. They can't buy, they can't save money on fuel.
So as someone who works every day to secure financing for my customers, I'm unaware of
anybody who will fund auto loans based on the promises of fuel savings. Loan qualification is
based mainly on the income of the customer and on the vehicle price. What's clear is this
proposal will make it harder for many customers to obtain financing, eliminating their ability to
realize any fuel savings.
Specifically, NADA is preparing an analysis that conservatively estimates that about 7 million
licensed drivers will be priced out of the new car market entirely when this proposal is fully
implemented. But this consequence is not limited to those motorists who can only afford the
most inexpensive vehicle. Let's talk about the family buyer. For example, our study also
estimates that over 7 million licensed drivers would no longer qualify for financing to buy the
lowest cost family vehicle, such as the Dodge Journey, which accommodates more than five
people or more than two child passenger safety seats. This will be devastating for large families
or families with small children that would like to carpool. And the burden of this rule is not even
spread evenly. California, the most populous state, will see 662,000 of its citizens no longer able
to qualify for a new car loan. In Tennessee, 5 percent of licensed drivers will be shut out of the
new car market.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 53-55.]
Moreover, the U.S. Energy Information Administration finds that this proposal will regulate out
of existence the most affordable cars on the market today. Adjusting for inflation, the Energy
Economic Information Administration claims that in 2025, there will no longer be new vehicles
on the market costing $15,000 or less. These are the vehicles I sell to smart frugal buyers, college
students and working families. How can a rule that eliminates the most affordable new cars on
the market be pro-consumer? You're right; it's not.
[This comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 57.]
We all want fuel economy, but it's not free. By adding $3,200 to the cost of a car, over seven
million Americans will be priced out of the market, fleet turnover will be reduced and global
warning benefits will be delayed. [Supplemental comment to testimony]
II. Financing Constraints Limit New Light-Duty Vehicle Affordability
18-208
-------
Analysis of Estimated Costs, Economic and Other Impacts
NADA's February 13th comments discussed at length the incontrovertible fact that affordability
limits the new vehicle marketplace. For any given vehicle price increase, some portion of the
market for that vehicle will disappear to the extent that they will be unable to qualify for a loan
or lease. This issue is critical given that over 90% of all new vehicle transactions involve loans or
leases, but is by no means limited to price increases associated with fuel economy or emissions
mandates. At the same time, the fact that a vehicle's higher price is associated with an improved
performance characteristic (fuel economy or otherwise) is of no consequence to lenders and
lessors as they almost exclusively focus on the likelihood of prospective borrowers or lessees to
repay their prospective loans or leases in a full and timely manner. Testimony presented by the
Consumers Union (CU), the Consumer Federation of America (CFA), the National Resources
Defense Council (NRDC), Consumer Reports, and others ignored this critical affordability
factor, in all likelihood because of their lack of a real-world understanding of how and why
consumers actually buy new vehicles at retail. [NHTSA-2010-0131-0267-A1, pp.2-3]
Organization: Ross, D.
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, p. 242.]
And most low income consumers finance vehicle purchases so that their net out-of-pocket
expense would actually be lower from day one.
Organization: Union of Concerned Scientists (UCS)
(h) Impact on Entry-Level Vehicles
One of the criticisms leveled at the proposed rule in the media over the past few months is that
new standards will elevate costs of low-priced vehicles, pricing shoppers for those models out of
the market. This is faulty logic for a few reasons. First, increased costs to a given model will not
necessarily directly translate to increased price in those models. It is common knowledge that
entry-level models are a sought-after market by automakers, as they represent an opportunity to
build a long-term customer base through brand allegiance. Automakers seeking to reach that
market are likely to keep prices of those models down and use other higher-profit margin
vehicles to help defray costs of technology placed on entry-level models. [EPA-HQ-OAR-2010-
0799-9567-A2, pp. 13-14]
Even given that fact, however, it is important to note that the cost of technology in this market
segment is not untenably high. Take for example, the Hyundai Elantra. The 2010 model,
outfitted with stability and traction control but lacking the fuel-saving technologies that
subsequently appeared on the 2011 model, achieved a fuel economy of 26/34/29
(city/hwy/comb) at an MSRP of $17,845.38 The comparable 2011 Hyundai Elantra, by contrast
- a model outfitted with a host of fuel-saving, emissions reducing technologies such as an
efficient 1.8-liter engine and a 6-speed automatic transmission - achieved a fuel economy of
29/40/33 (city/hwy/comb) at an MSRP of $17,195. Thus, the 2011 model (a) offers a 12%
reduction in fuel use from the prior model, (b) already meets its GHG target through 2020, and
(c) does so at a price reduction of $650. While this is but one example, clearly there is flexibility
18-209
-------
EPA Response to Comments
in the way automakers distribute costs among their model offerings. [EPA-HQ-OAR-2010-0799-
9567-A2, p. 14]
Finally, arguments over the initial price of the vehicle ignore the substantial savings purchasers
of those vehicles will see due to the improvements under this proposal. These savings will
increase consumers' ability to afford vehicles because they can shift money from gasoline
expenditures to vehicle expenditures. As noted earlier in our comments, EPA has indicated that
such savings will drive an increase in vehicle sales, quite the opposite of pricing consumers out
of the market. [EPA-HQ-OAR-2010-0799-9567-A2, p. 14]
UCS urges the agencies to dismiss the argument that the MY2017-2025 standards unfairly
penalize shoppers of entry-level vehicles, and to dismiss any proposed modifications to
stringency based on that argument. [EPA-HQ-OAR-2010-0799-9713-Al, p. 2]
Response:
These comments raise several related, but somewhat separable issues: the impacts of this
rule on vehicle sales; the impacts of this rule on the ability of consumers to buy new vehicles; the
impacts of this rule on low-income households; and the impacts of this rule on low-priced
vehicles. Section 18.7 of this Response to Comments, along with Preamble III.H. 11.a, discuss
the impacts of this rule on vehicle sales. Here we focus on the latter three issues. We first note
that, in response to these comments, EPA has added a new section, III.H. 11 .b, to the Preamble,
and Chapter 8.1.3 to the RIA, that discuss these issues.
Vehicle Affordability
Comments on the impacts of the rule on the ability of consumers to buy new vehicles
discuss the role of costs, fuel savings, and the vehicle loan market. A number of organizations
find, as does EPA (see Preamble III.H.5 and RIA Chapter 5.5), that, for those who buy vehicles
on credit, the fuel savings exceed the up-front costs from the time of purchase; for those who buy
vehicles using cash, the payback period is 3.2-3.4 years (see RIA Chapter 5.5). For those who
buy used vehicles, the payback period is expected to be even shorter: the costs of the vehicles
(and thus the increased technology costs due to this rule) will go down, but the fuel-saving
technologies will maintain their effectiveness. These arguments suggest that the rule will
increase the affordability of new vehicles.
In contrast, NADA emphasizes the increase in up-front vehicle costs as a factor in
consumers' abilities to purchase. In particular, they state that new vehicle buyers may not be
able to get loans for vehicles that have become more expensive as a result of new standards,
because they cannot get access to sufficient credit for the additional cost. As a result, they will
be unable to participate in the new vehicle market even if the new vehicles offer significant fuel
savings. NADA says that auto lenders do not take into account the fuel economy of the vehicles
when they are deciding on providing loans; the lenders consider only consumers' debt-to-income
ratios. NADA provided an analysis that concludes that up to 6.8 million licensed drivers may no
longer have access to new vehicles as a result of the standards. According to NADA's analysis,
this estimate is the number of licensed drivers who live in the 3.1 - 4.2 million households that
could borrow $11,750, the loan amount for the least expensive new vehicle in 2011 after a $1000
18-210
-------
Analysis of Estimated Costs, Economic and Other Impacts
down payment, but could not borrow $14,750. This difference of $3,000 is meant to represent
what NADA views as the cost increase of new fuel economy standards, which EPA believes is
incorrect and responds to further below.
In assessing these comments, EPA finds that the NADA study does not provide a usable
estimate of those consumers in the market for new vehicles who might have trouble getting
loans, nor does it provide a usable estimate of the impacts of the rule on the new vehicle market.
Because the NADA study does not separate consumers in the market for new vehicles from
consumers who are not in the market for new vehicles, the 6.8 million licensed driver figure
significantly overestimates any impact of this rule on the new vehicle market. Preamble Section
III.H. 11 .b. includes a detailed response on the key issues raised in the NADA study. The key
points from that response include:
• The NADA study is based on the entire population of the U.S., not those who are in the
market for vehicles. Its results do not provide useful insights into the effects of the rule on
sales of low-priced vehicles, on vehicle sales overall, or on low-income households, because
the analysis is not based on households in the market for vehicles. For example, NADA cites
7 million licensed drivers who will not be eligible to get financing for a Dodge Journey. With
a total vehicle market estimated to be 17.2 million vehicles in 2025, it is highly unlikely that
7 million people were intending to buy the Dodge Journey but will not do so because of the
rule. Sales of the Dodge Journey are unlikely to be as high as 7 million, and even the most
negative estimates of vehicle sales impacts from this rule (a loss of 1.8 million vehicles,
estimated by the Defour Group; see Section 18.7 of this Response to Comments) do not
approach 7 million. We thus find that the NADA study does not provide policy-relevant
estimates of rule impacts.
• The NADA estimate of 6.8 million licensed drivers is not the appropriate measure within its
own study. In the NADA study, the unit of analysis for affordability is households. Even if
there are 6.8 million licensed drivers in those households, they are not independently
buying new vehicles; the households can barely afford one, much less multiple, new
vehicles. An accurate statement of the findings of the study is that there are 3.1 to 4.2
million households in the U.S. who could theoretically qualify to borrow $11,750 but not
$14,750, based purely on having a debt-to-income ratio less than 40 percent.87
• NADA's assumption of a $3,000 cost increase per vehicle is based on inappropriately
summing the costs of MY 2011, MYs 2012-16, and MYs 2017-25 rules, double-counting MY
2011 costs, and overstating MY 2016 costs. It is also not true that all vehicles will
experience the same price increase. See, for instance, RIA Tables 5.1-1, 5.1-6, and 5.1-7 for
the variation in costs predicted for different auto companies. It is likely, as discussed in
Preamble Section III.H.11.b, that auto makers have discretion to use different profit margins
in different vehicle segments; if the auto manufacturers want to preserve access to low-
priced vehicles, they are likely to have the ability to do so.
86 Wagner, D., P. Nusinovich, and E. Plaza-Jennings, National Automobile Dealers Association (February
13, 2012). "The Effect of Proposed MY 2017-2025 Corporate Average Fuel Economy (CAFE) Standards on the
New Vehicle Market Population." Docket EPA-HQ-OAR-0799.
87 As noted, these amounts are based on the cost of the least expensive vehicle in 2011, with $1000 down
payment, with the assumption that it will become $3000 more expensive as the result of three rulemakings, for MYs
2011, 2012-16, and 2017-25 (see Wagner et al., footnote 86).
18-211
-------
EPA Response to Comments
• It is incorrect that no lenders consider the fuel savings of more efficient vehicles in deciding
on vehicle loans. As Consumers Union points out and as EPA has found,88 a number of
financial institutions currently provide discounted loans for more efficient vehicles. Indeed,
it is possible (though unknown at this time) that the auto loan market may evolve to include
further consideration of fuel savings, as those savings play a significant factor in offsetting
the increase in up-front costs of vehicles. Thus, the premise underlying NADA's argument is
overstated or misplaced.
EPA recognizes that higher vehicle costs will be a disadvantage for vehicle buyers, and
that fuel savings will benefit owners of the more fuel-efficient vehicles. Our analysis shows, as
does that of a number of commenters, that the fuel savings will considerably outweigh the
technology costs and, considering that factor alone, the rule should increase the affordability of
new vehicles. See Preamble III.H.5. We recognize that negative impacts on the market for
vehicle loans due to these changes are possible, but it is also possible that the loan market may
expand its attention to consider fuel savings and thus reduce any negative impacts.
Impact on Low-Income Households
EPA agrees with CFA, CU, and others that low-income households are more likely to
buy used vehicles than new vehicles, and appear to be more vulnerable to swings in fuel prices
than other households. Because the payback period for used vehicles is shorter than that for new
vehicles (see Preamble III.H.5 and RIA Chapter 5.5), it is possible that low-income households
may benefit from the rule. As discussed in Preamble III.H. 11 .a, sales impacts in the market for
new vehicles may affect the availability of used vehicles.
The NADA analysis does not distinguish impacts on low-income households from
impacts in other sectors and thus does not provide insights into impacts on low-income
households.
The Defour Group suggests that the standards are regressive, with adverse impacts falling
disproportionately on low-income households, and possibly limiting their ability to obtain
employment because of limited mobility. As discussed in Preamble III.H. 11.b, the commenter's
OQ
regressivity assessment is based on an inappropriate application of the cited Jacobsen study.
Jacobsen examined the non-footprint-based fuel economy program; the disproportionate impact
on low-income households is based on the increased prices of used vehicles and the shift toward
smaller vehicles. As discussed above in Section III.H. 11 .a, EPA finds that the impact on the
used vehicle market depends on the impact of the rule on new vehicle sales, which we do not
quantify. Because the footprint-based standard sharply reduces incentives to downsize vehicles,
we do not accept the conclusion that the rule will result in buyers of used vehicles getting smaller
88 An internet search on the term "green auto loan" produced more than 50 lending institutions that provide
reduced rates for more efficient vehicles. See Helfand, Gloria (2012). "Memorandum: Lending institutions that
provide discounts for more fuel-efficient vehicles." Assessment and Standards Division, Office of Transportation
and Air Quality, U.S. Environmental Protection Agency, Docket EPA-HQ-OAR-0799.
89 Jacobsen, Mark. "Evaluating U.S. Fuel Economy Standards In a Model with Producer and Household
Heterogeneity." Working paper, University of California, San Diego, September 2010 (Docket EPA-HQ-OAR-
2010-0799).
18-212
-------
Analysis of Estimated Costs, Economic and Other Impacts
ones, with a consequent welfare loss. For these reasons, the regressivity finding from Jacobsen's
paper is not applicable to the effects of this rule.
Impact on Low-Priced Vehicles
The NADA analysis assumes that an average cost increase of $3000 per vehicle applies
to vehicles in the low-priced vehicle segment. See above in this section, under "Vehicle
Affordability," for our discussion of the cost estimate itself. This segment of the market is of
particular interest because it may be the entry class for first-time new vehicle buyers, who may
develop brand loyalty and later aim to purchase other new vehicles. NADA argues further that
this rule will eliminate from the market vehicles costing $15,000 or less, citing the Energy
Information Administration.
As discussed in Preamble III.H.l l.b, EPA agrees that some vehicles in the low-priced
(economy-class) segment will bear technology costs needed to meet the new standards, but it is
not known how manufacturers will decide to pass on these costs across their vehicle fleets,
including in the low-priced vehicle segment. As the Union of Concerned Scientists comments,
auto makers have some flexibility in which segments will bear more costs, and how those costs
will be passed along to consumers in vehicle prices. Because of this flexibility, it is difficult to
predict how costs will be translated into vehicle prices. UCS provides the example of the
Hyundai Elantra, where the MY 2011 model has higher fuel economy and a lower price than the
MY 2010 version, and meets its GHG target through 2020. Though this vehicle may not be
considered to be in the lowest-price segment, it demonstrates that added technology does not
necessarily translate directly into a higher price.
Moreover, because the standards are established as individual manufacturer fleet average
standards, manufacturers can choose the vehicles on which to add controls. It may be, for
example, that manufacturers will add fewer controls to smaller, less expensive vehicles, because
these vehicles may already be meeting their regulatory targets, because it is more cost effective
to add controls to larger less efficient vehicles, to preserve profit margins on lower-margin
smaller vehicles, or for a combination of these reasons.
In addition, the average per-vehicle cost increase EPA estimated for the entire industry
(both cars and trucks) varies by company. As shown in Table 111-25 of the Preamble, while the
average MY2025 cost increase for passenger cars across the industry is estimated to be $1,836,
EPA estimated that Ferrari's cost would be $7,864/car, Porsche costs would increase by
$4,044/vehicle, and Tata-Jaguar-LandRover would increase by $3,390/vehicle. At the same
time, several other companies had cost increases for passenger cars lower than the industry
average: Toyota at $1,407, Kia at $1,658, and Honda at $l,642/car. Companies such as Ferrari,
Porsche, Tata-Jaguar-LandRover, Daimler, and Geely-Volvo, all with estimated costs for
passenger cars higher than the industry average, do not sell cars in the lowest price segments of
the car market. However, companies such as Toyota, Kia, and Honda do sell to that market, and
EPA estimated these companies' cost increases for passenger cars to be lower than the industry
average.
18-213
-------
EPA Response to Comments
Qj-\
The Energy Information Administration's 2011 estimates cited by NADA are based on
more stringent standards than those in this rule; are based on cost estimates using a more
restricted set of technologies than those examined in this rule (and what appear to be higher
costs); and appear to have lower technology phase-in rates than estimated for this rule. Indeed,
the timing of the Annual Energy Outlook release is such that even the 2012 AEO analysis of the
rulemaking notes that, "due to the timing of the modeling process, [it] does not incorporate all
information from the pending rulemaking process, to assess potential energy impacts of the
regulatory proposal." l We thus do not consider it appropriate to base estimates of vehicle price
changes on the 2011 AEO analysis, which uses even less of the data from this rulemaking.
Though the rule is expected to increase the prices of low-price vehicles, the degrees of
price increase and the impacts of the price increases, especially when combined with the fuel
savings that will accompany these changes, are much less clear. We thus disagree that it is
inevitable that vehicles with prices less than $15,000 will disappear from the market.
18.8. Employment Impacts
Organizations Included in this Section
Alliance of Automobile Manufacturers
American Council for an Energy-Efficient Economy (ACEEE)
Anonymous public citizen 4
Axford, H.
Bassett, S.
BlueGreen Alliance
Business for Innovative Climate & Energy Policy (BICEP)
Cafagna, R.
Center for Biological Diversity
Ceres
Consumer Federation of America (CF A)
Cuenca, M.
Defour Group LLC
Detroit NAACP
Ecology Center
Environmental Defense Fund (EDF)
Faria, R.
Feinstein, C.
Ford Motor Company
International Council on Clean Transportation (ICCT)
Investor Network on Climate Risk (INCR) - Ceres
90 Energy Information Administration. "Increasing light-duty vehicle greenhouse gas and fuel economy
standards for model years 2017 to 2025." Annual Energy Outlook 2011,
http://www.eia.gov/forecasts/archive/aeol l/pdf/0383(201 l).pdf (Docket EPA-HQ-OAR-2010-0799).
91 Energy Information Administration. "Energy Impacts of Proposed CAFE Standards for Light-Duty
Vehicles, model years 2017 to 2025." Annual Energy Outlook 2012, Report Number DOE/EIA-0383(2012).
http://www.eia. gov/forecasts/aeo/TF_all.cfm#energyimpact (Docket EPA-HQ-OAR-2010-0799).
18-214
-------
Analysis of Estimated Costs, Economic and Other Impacts
Johnson, C.
Lennon, S.
Links, W.
Mass Comment Campaign (39) (Unknown Organization)
Michigan House of Representatives, 49th District
Michigan State Senate, District 18
National Association of Clean Air Agencies (NACAA)
National Wildlife Federation (NWF)
Natural Resources Defense Council (NRDC)
Parker, M.
Paul, M.
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Steffanoff, N.
Stirling, D.
Sullivan, T.
Union of Concerned Scientists (UCS)
United Automobile Workers (UAW)
Organization: Alliance of Automobile Manufacturers
Automakers today are driving this country's economic recovery. Yet, in light of the uncertainty
over consumer valuation of fuel savings and other factors, the agencies have not included an
estimate of sales or employment impacts in the NPRM or supporting documents. [EPA-HQ-
OAR-2010-0799-9487-A1, p.20] [This comment can also be found in sectionl8.7 of this
comment summary]
The agencies need to understand and take these impacts into account to assure that the standards
being put in place for MY 2022-25 do not reverse the economic gains and environmental
benefits that have come from the industry's recent recovery. [EPA-HQ-OAR-2010-0799-9487-
Al, p.20] [This comment can also be found in sectionl8.7 of this comment summary]
Organization: American Council for an Energy-Efficient Economy (ACEEE)
Economic Impacts
Benefits of the proposed rule include major macroeconomic benefits in the form of increased
jobs and GDP. The primary mechanism for these increases is the shifting of spending from the
energy sector to the broader economy, which employs more people per dollar spent, on average.
This shift comes about through consumer spending of the money saved on fuel expenditures. 1
The attached ACEEE testimony, delivered at the January 24th hearing on the NPRM in San
Francisco, provides a summary of this and related issues, as well as a preliminary quantification
of the magnitude of these effects. ACEEE is now refining these estimates in conjunction with
work with the BlueGreen Alliance and plans to submit this information to the record in the near
future. [EPA-HQ-OAR-2010-0799-9528-A2, p.2] [Refer to EPA-HQ-OAR-2010-0799-9528-A1
regarding the ACEEE testimony referenced above.]
18-215
-------
EPA Response to Comments
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 109-111.]
And third, promoting these standards will be good for jobs, even as the fuel economy
improvements will save household consumers and businesses money that almost immediately
will be respent in the broader economy.
But more importantly, by redirecting the investment in fuel efficiency savings into other sectors
of the economy, we support the increased number of jobs. How might that be? Tapping into the
evidence, the economic accounts for the U.S. turns out that, directly and indirectly, the total jobs
supported by a million dollars of the purchase of gasoline sales supports only 11 jobs per million
dollars. But the sale and manufacturing of automobiles, 17 jobs, and in the economy as a whole,
17 to 18 jobs. So anytime we cost-effectively redirect resources away from gasoline purchases
into those sectors, we support a net gain of six to seven jobs. Using that logic but in a more
sophisticated modeling exercise, we estimate these standards will provide, on average over the
period 2017 to 2025, about 300- to 400,000 jobs for the larger economy.
We're going to update those in about a month, but, in effect, the evidence shows that efficiency
and improved fuel economy provides more jobs per gallon equivalent.
1 - For a discussion of how energy efficiency creates jobs, see also
http://aceee.org/blog/2011/ll/how-does-energv-efficiencv-create-iob.
Organization: Anonymous public citizen 4
The added cost being forced on consumers will squeeze middle class Americans. They will no
longer be able to contribute to the support of those not working. [EPA-HQ-OAR-2010-0799-
10317, p.l]
Realize that most Americans do not have the income to support this proposal. Don't do anything
else to us that does not apply to ALL government workers including congress and the president.
[EPA-HQ-OAR-2010-0799-10317, p.l]
Organization: Axford, H.
Transportation is critical to our quality of life and EPA's regulation could increase the cost of a
new car up by $6,000 according to the Center for Automotive Research and $5,000 according to
the National Automobile Dealers Association. This price increase would lead to a reduction of
tens of thousands of jobs. [EPA-HQ-OAR-2010-0799-9149-A1, p. 2]
Organization: Bassett, S.
This is just another program to drive up auto prices, thereby eliminating jobs. [EPA-HQ-OAR-
2010-0799-8123-Al,p. 1]
18-216
-------
Analysis of Estimated Costs, Economic and Other Impacts
Organization: BlueGreen Alliance
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 58-60.]
Consumers looking to purchase vehicles in the next few years are expressing interest in higher
fuel economy. Building the next generation of advanced vehicles in the United States will create
tens of thousands of new engineering and manufacturing jobs and strengthen America's
rebounding sector.
Evidence already exists that bringing cleaner vehicles into the market creates American jobs. We
have, by example, the Advanced Technology Vehicle Manufacturing loan program that will
preserve or create nearly 40,000 jobs in the U.S. auto sector, retooling America's factories to
produce advanced technology vehicles and their key components.
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 38.]
Crucially, the proposed standard will help to create many thousands of jobs through net
consumer savings on fuel, as well as spending on higher performing vehicles. An initial
assessment of the job impact by the University of California Professor David Roland-Hoist finds
that the proposed standard will create more than 200,000 jobs by the year 2025 in California
alone.
Organization: Business for Innovative Climate & Energy Policy (BICEP)
Strong standards will lead to U.S. job growth by creating jobs in the auto industry, and more
broadly by diverting consumer spending away from fuel. The July 2011 report "More Jobs Per
Gallon: How Strong Fuel Economy/GHG Standards Will Fuel American Jobs;" an economic
analysis authored for Ceres by Management Information Services, Inc., found that a 54.5 mpg
fuel economy standards would create approximately 484,000 economy-wide new U.S. jobs,
with 43,000 in the auto industry and net job gains in 49 states in 2030. [EPA-HQ-OAR-2010-
0799-9450-A1, p. 1]
Further, under the proposed standard, the report found that in 2030 national gross economic
output, or sales, is projected to be $21.3 billion higher; personal income is projected to increase
by approximately $14.2 billion, and revenue for cash strapped federal, state and local
governments is projected to be approximately $12.7 billion higher in 2030. It is important to note
that the higher the standard, the greater the economic benefits;4 thus it is critical that the
standards be as strong as possible. [EPA-HQ-OAR-2010-0799-9450-A1, pp. 1-2]
Given its links to so many other sectors of the economy, the health of the auto industry has a
significant impact on the economy as a whole. Thus, we find the, recent analysis conducted by
Walter McManus of the School of Business Administration at Oakland University, Alan Baum
of Baum and Associates, and Dan Meszler of Meszler Engineering Services, in collaboration
with Ceres, to be of particular interest. The analysis looked at the impact of the proposed
18-217
-------
EPA Response to Comments
standards (approximately 40 mpg) on the auto industry in 2020. The analysis found that the
proposed standards will benefit the auto industry, a major creator of U.S. jobs, and a key player
in U.S. manufacturing. In addition, the analysis found that Detroit 3 will see greater benefits than
the rest of the industry. Finally, the analysis found that the proposed 2020 standard is cost-
effective at a fuel price of $1.50 per gallon. Since this is well below expected fuel prices in 2020,
it is clear that the standards will ensure significant savings in fuel costs for consumers, and
increase consumer spending in other sectors of the economy. [EPA-HQ-OAR-2010-0799-9450-
Al,p.2]
3 Approximately equivalent to the 4% scenario presented in EPA and NHTSA's Joint Notice of
Intent, "2017 and Later Model Year Light Duty Vehicle GHG Emissions and CAFE Standards;"
EPA 40 CFR Parts 85, 86, and 600; http://edocket.access.gpo.gov/2010/2010-25444.htm
4 For example, the report found that under a 6% improvement scenario, net job gains were
projected to be 684,000.
Organization: Cafagna, R.
Transportation is critical to our quality of life and EPA's regulation could increase the cost of a
new car up by $6,000 according to the Center for Automotive Research and $5,000 according to
the National Automobile Dealers Association. This price increase would lead to a reduction of
tens of thousands of jobs. Set the example, ride a burro or bicycle instead of S.U.V. Range
Rovers and will follow. Do what I tell you don't do what I do it does not work. EPA needs to go
to China India Korea to see How Much Pollution they produce instead of destroying jobs in the
U.S. Solar and wind DO NOT PUSH MY CAR TO WORK. [EP A-HQ-OAR-2010-0799-11689-
Al, pp. 1-2]
Organization: Center for Biological Diversity
We also note that the Agencies' initial submission of the rulemaking for review by OMB
included additional economic benefits in the form of consumer welfare, increased sales and
employment, and increased gross domestic product. These benefits have been deleted from the
NPRM without explanation. Absent a rational explanation for this deletion, it must be reversed.
[EPA-HQ-OAR-2010-0799-9479-A1, p. 7]
Organization: Ceres
We would like to call your attention to recent analysis conducted by Walter McManus of the
School of Business Administration at Oakland University, Alan Baum of Baum and Associates,
and Dan Meszler of Meszler Engineering Services, in collaboration with Ceres, on the impact of
the proposed standards (approximately 40 mpg) on the auto industry in 2020. The analysis found
that the proposed standards will benefit the auto industry, a major creator of U.S. jobs, and a key
player in U.S. manufacturing. In addition, the Detroit 3 will see greater benefits than the rest of
18-218
-------
Analysis of Estimated Costs, Economic and Other Impacts
the industry. [See Docket number EPA-HQ-OAR-2010-0799-9475-A2 for a comprehensive
presentation.] [EPA-HQ-OAR-2010-0799-9475-A1, p. 1]
Note that the underlying assumptions for this analysis were conservative; for example it assumed
a gas price of $3.50, equal to the average price in 2011, although increased demand from
countries such as China, India and Brazil is projected to result in higher prices by 2020. Note
also that the analysis found that the proposed 2020 standard would be cost-effective at a fuel
price of $1.50 per gallon, well below expected fuel prices in 2020. In fact, a 53 mpg standard
would be cost effective at current average gas prices of $3.50 per gallon. [EPA-HQ-OAR-2010-
0799-9475-A1, pp. 1-2]
Further, under the proposed standard, the report found that in 2030, national gross economic
output, or sales, is projected to be $21.3 billion higher; personal income is projected to increase
by approximately $14.2 billion, and revenue for cash strapped federal, state and local
governments is projected to be approximately $12.7 billion higher. It is important to note that the
higher the standard, the greater the economic benefits; thus it is critical that the standards be as
strong as possible. [EPA-HQ-OAR-2010-0799-9475-A1, p. 2]
In addition to increased profits to the auto industry, the proposed standards will also bring job
growth by creating jobs in the auto industry, and, more broadly, by diverting consumer spending
away from fuel. The July 2011 report "More Jobs Per Gallon: How Strong Fuel Economy/GHG
Standards Will Fuel American Jobs;" an economic analysis authored for Ceres by Management
Information Services, Inc., found that a 54.5 mpg fuel economy standard would create
approximately 484,000 economy-wide new U.S. jobs, with 43,000 in the auto industry and net
job gains in 49 states in 2030. [EPA-HQ-OAR-2010-0799-9475-A1, p. 2]
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 74-76.]
Ceres' July 2011 report, 'More Jobs Per Gallon: How Strong Fuel Economy/Greenhouse Gas
Standards Will Fuel American Jobs,' found that a 54.5 mpg standard will create about 484,000
economy-wide new U.S. jobs, including 43,000 in the auto industry alone and net job gains in 49
of the 50 U.S. states. National gross economic output would rise by tens of billions of dollars.
And it's very important to note that the higher the standard, the greater the economic gain. This is
from the report that we put out last summer.
A second report we collaborated on last year with Citi Investment Research, a bank in New
York, found that stricter fuel economy standards will bring economic benefits to auto
manufacturers, especially the Detroit 3 and their suppliers. The report shows that strong
standards will improve the competitive positioning of U.S. automakers and provide the
regulatory certainty needed to promote innovation and investment in the industries of the future.
Strong standards will reduce America's and California's dependence on foreign oil, save vast
amounts of money for consumers at the gas tank and as well as money for businesses and bolster
America's world-class vehicle technology companies, many of them based right here in
California.
18-219
-------
EPA Response to Comments
Organization: Consumer Federation of America (CFA)
Significant macroeconomic benefits of greater fuel economy have been ignored.
• A GDP multiplier must be included that recognizes increases in national output and
employment that result from reducing imports and puts more purchasing power in
consumer pockets. The estimation of this type of GDP multiplier is a routine practice in
policy analysis, and the agencies have calculated its value to be hundreds of billions of
dollars but failed to include them in the analysis. [EPA-HQ-OAR-2010-0799-9419-A1, p.
14]
Exhibit S-10 summarizes the key issues that should be addressed, giving a sense of how
important they are expressed as a percentage of the total national benefit in the bases case
NHTSA-EPA analysis. [See Exhibit S-10 on p. 14 of Docket number EPA-HQ-OAR-2010-
0799-9419-A1]
• We believe that the base case analysis underestimates the benefits by at least 20 percent.
In dollar terms, that is over $100 billion.
• Since the total cost of adding the fuel economy technologies necessary to meet the
standard is only $132 billion and the calculated benefits are in the range of $500 billion,
this underestimation of benefits is substantial.
• Inclusion of the GDP multiplier alone could raise the estimated benefits
substantially. [EPA-HQ-OAR-2010-0799-9419-Al, p. 14]
The estimates of benefits presented above include the first five factors, but not the last two.
Therefore, although our estimates of consumer and national benefits are higher than the agencies,
the actual benefits are likely to be even higher. [EPA-HQ-OAR-2010-0799-9419-A1, p. 14]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 90-91.]
Organization: Cuenca, M.
Transportation is critical to our quality of life and the EPA's regulation could increase the cost of
a new vehicle by $6,000 according to the Center for Automotive Research and $5,000 according
to the National Automobile Dealers Association. This price increase would lead to a reduction of
tens of thousands of jobs. [EPA-HQ-OAR-2010-0799-10142-A1, pp. 1-2]
Organization: Defour Group LLC
Our mid-range estimate for industry sales losses is 1.8 million units relative to the baseline,
which translates into a loss of 155,000 jobs in manufacturing and supply, plus another 50,000
jobs in distribution for a total job loss of 205,000 jobs in auto manufacturing, supply, and
distribution. [EPA-HQ-OAR-2010-0799-9319-A1, p. 9] [This comment can also be found
at section 18.7. of this comment summary.]
18-220
-------
Analysis of Estimated Costs, Economic and Other Impacts
Organization: Detroit NAACP
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 141.]
Promoting fuel efficiency will create high quality jobs right here in the United States. As said
earlier, one of the biggest things they outsourced in the past 20 years has been jobs, and the City
of Detroit has felt it more than anybody else, I would say.
Organization: Ecology Center
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 189-190.]
Equally impressive are estimates of job creation and benefits to the manufacturing sector.
According to research commissioned by Ceres more than 500,000 new jobs would be created as
a result of the new standards, many of them here in Michigan. Another study on the automotive
supply chain for fuel-efficient vehicle technologies found there were already more than 150,000
people employed in the advanced engine, transmission and other electric vehicle supply sectors
with over 38,000 of those jobs here in Michigan. Jobs in these automotive supply chains could be
expected to nearly double with the implementation of the new proposed standards.
It's important to note that while significant job losses have been sustained in the automotive
industry in recent years, investments and new fuel-efficient technologies now provide a strong
basis for new manufacturing job growth, providing even greater competitiveness for the U.S.
going forward. The proposed standards along with other policies to facilitate research,
development, and commercialization of new technologies will help to ensure those job gains
continue to be realized here in the region as well as in the U.S. more broadly.
Organization: Environmental Defense Fund (EOF)
H. FINAL RULE SHOULD INCLUDE QUANTITATIVE ESTIMATES OF VEHICLES
SALES AND AUTO MANUFACTURING EMPLOYMENT BENEFITS
EPA and NHTSA conducted quantitative vehicle sales and auto manufacturing employment
analyses in previous rulemakings and had prepared an estimate of these same indices for the
rulemaking action at issue here using the same methodologies. However, the results of these
analyses were not included in the published proposal. The changes occurred during the OMB
review process. The docket for this rulemaking includes interagency drafts of the proposal
submitted to OMB with the quantitative analyses included. The docket also includes the request
by OMB to remove the quantitative analyses from the proposals3 and responses from EPA and
NHTSA stating the importance of the quantitative analyses and requesting they be left in the
final proposal.34 See Attachment B. We incorporate this document as an integral part of EDF's
comments for inclusion in the administrative record for this rulemaking action. [EPA-HQ-OAR-
2010-0799-9519-Al,p. 14]
18-221
-------
EPA Response to Comments
We respectfully request that the quantitative vehicle sales and auto manufacturing employment
benefits be included in the final rule to fully reflect the comprehensive societal benefits of the
proposed program. [EPA-HQ-OAR-2010-0799-9519-A1, p. 14]
[The above comments can also be found in section 18.7 of this comment summary.]
ii. EMPLOYMENT
Additionally, the proposal fails to include the Agencies' results of the quantitative employment
analysis, which found that at a 3 percent discount rate, the proposed standards could add more
than 65,000 jobs by 2025.36 While the proposal acknowledges, ".. .this program is expected to
affect employment in the regulated sector (auto manufacturing) and other sectors directly
affected by the proposal...", the proposal also states, "EPA does not attempt to quantify the net
effects of the regulation on overall national employment." (Page 75,156) Again, we recognize
the inherent uncertainties in estimating these impacts, but believe the public should have the
opportunity to comment on the analysis and request the Agencies include the results of the
analysis in the final rule. [EPA-HQ-OAR-2010-0799-9519-A1, p. 15]
Organization: Faria, R.
Transportation is critical to our quality of life and EPA's regulation could increase the cost of a
new car up by $6,000 according to the Center for Automotive Research and $5,000 according to
the National Automobile Dealers Association. This price increase would lead to a reduction of
tens of thousands of jobs. [EPA-HQ-OAR-2010-0799-9834-A1, p. 2]
Organization: Feinstein, C.
America's dependence on oil should create jobs here at home. Let's make some jobs first before
imposing unreasonable burdens on citizens. [EPA-HQ-OAR-2010-0799-6745-A1, p. 1]
Organization: Ford Motor Company
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EP A-HQ-OAR-2010-0799-11786, p. 45.]
For example, if a lack of adequate infrastructure hinders the introduction of new fuel-saving
technologies or if fuel prices turn out to be substantially lower than anticipated, it might be
necessary to change the standards in order to avoid damage to American jobs and the U.S.
economy.
Organization: International Council on Clean Transportation (ICCT)
4. The benefits of the proposed rule on consumer welfare and jobs are very large and should be
included in the final rule. In particular, the economy-wide benefits from reduced fuel
18-222
-------
Analysis of Estimated Costs, Economic and Other Impacts
consumption on GDP, employment, and energy security are large and indisputable. [EPA-HQ-
OAR-2010-0799-9512-A1, p. 3]
4) Sales, Employment and GDP
As proposed, the 2017-2025 standards will have major economic benefits. Analyses conducted
for the initial submission for interagency review, but not included in the NPRM, concluded that:
• New vehicle sales will increase by more than 300,000 vehicles by 2025
• Net employment will increase by between 1,800 and 4,500 jobs in 2017 and between 22,300
and 56,100 jobs in 2025
• US GDP will increase by 0.26% in 2020 and by 0.88% in 2030 [EPA-HQ-OAR-2010-0799-
9512-Al,p. 13]
As discussed above, the cost to comply with the proposed requirements is likely to be
substantially less than estimated by EPA and NHTSA. The fuel savings will pay for the cost of
the technology many times over, effectively putting billions of dollars into consumers' pockets to
buy other products. This will raise the standard of living, increase GDP and create economy-
wide jobs. [EPA-HQ-OAR-2010-0799-9512-Al,p. 13]
Given these huge and obvious benefits, it is essential that the rule assess the beneficial impacts of
the rule on sales, jobs, and GDP. The initial submission for interagency review contains these
analyses, but they were not included in the final rule proposal. [EPA-HQ-OAR-2010-0799-9512-
Al,pp. 13-14]
These sales impact results are also required as input to other economic impact analyses, such as
employment and GDP. As a result of the lack of new vehicle sales impact data, the employment
impacts due to changes in the demand of new vehicles was not estimated in the proposed rule.
The initial submission for interagency review also conducted a careful analysis of associated
increases in employment. 13 The method for calculating employment effects included the
demand effect, or the labor required to build more vehicles; the cost effect, which represents the
labor required for new technologies manufacturing; and the factor shift effect, which looks at
labor intensity changes due to changes in technology. The effect on employment was originally
estimated to add between 1800 and 4500 jobs in 2017 and to add between 22300 and 56100 jobs
in 2025.14 ICCT supports these analyses and believes they are appropriate and should be
included in the final rule. [EPA-HQ-OAR-2010-0799-9512-A1, p. 14]
Most importantly, the effect of the rule on GDP was also not included in the proposed rule. The
initial submission for interagency review used computable general equilibrium (CGE) modeling
to evaluate the effects of this rule on consumer expenditure and predicted that the US GDP
would increase over time as a result of the increase in consumer expenditure (by 0.26% in 2020
and by 0.88% in 2030), 15 This is an appropriate methodology and clearly shows that, due to fuel
savings, consumer expenditure and consumer demand would increase, with substantial economy-
wide benefits on GDP and employment. [EPA-HQ-OAR-2010-0799-9512-A1, p. 14]
18-223
-------
EPA Response to Comments
ICCT has reviewed the methodology EPA used for estimating the impact on vehicle sales in the
initial submission for interagency review. We find that it is consistent with the approach in the
2012-16 light-duty GHG and CAFE rule, and in several previous CAFE rulemakings by
NHTSA. The method balances the changes in demand due to vehicle price increase and the
economic benefits of fuel economy using a 5-year payback period, and found an increase in new
vehicle sales of more than 300,000 vehicles by 2025 due to the fuel savings benefit, 12 [EPA-
HQ-OAR-2010-0799-9512-Al,p. 14]
The agencies state that the reason they do not include sales impact estimates is that there is no
good analytical basis to make this calculation: [EPA-HQ-OAR-2010-0799-9512-A1, p. 14]
USEPA: The empirical literature does not provide clear evidence on whether consumers fully
consider the value of fuel savings at the time of purchase. It also generally does not speak to the
efficiency of manufacturing and dealer pricing decisions. Thus, for the proposal we do not
provide quantified estimates of potential sales impacts. Rather, we solicit comment on the issues
raised here and on methods for estimating the effect of this rule on vehicle sales.' [EPA-HQ-
OAR-2010-0799-9512-Al,pp. 14-15]
NHTSA: 'As discussed below, for this analysis we have conducted a fresh search of the literature
for additional estimates of consumer valuation of fuel savings, in order to determine whether the
5 year assumption was accurate or whether it should be revised. That search has led us to the
conclusion for this proposed rule that consumer valuation of future fuel savings is highly
uncertain. A negative impact on sales is certainly possible, because the proposed rule will lead to
an increase in the initial price of vehicles. A positive impact is also possible, because the
proposed rule will lead to a significant decrease in the lifetime cost of vehicles, and with
consumer learning over time, this effect may produce an increase in sales. In light of the relevant
uncertainties, the agency therefore decided not to include a quantitative sales estimate and
requests comments on all of the discussion here, including the question whether a quantitative
estimate (or range) is possible. [EPA-HQ-OAR-2010-0799-9512-A1, p. 15]
ICCT is not in agreement with the agencies assertion that the analytical basis for sales,
employment, and GDP analyses is inadequate. While there are large uncertainties in how
customers behave, such analyses are widely used in other contexts (e.g. the CARB analysis of
the LEV III GHG rule uses CGE modeling and includes employment and GDP impacts) and are
appropriate here as well. Further, the uncertainty in consumer behavior does not change the fact
that the fuel savings will pay for the cost of the technology many times over. [EPA-HQ-OAR-
2010-0799-9512-Al,p. 15]
The ICCT strongly supports adding consumer welfare analyses back into the final rule, as they
provide relevant and important information regarding employment and GDP. In particular, the
economy-wide benefits from reduced fuel consumption are large and indisputable. [EPA-HQ-
OAR-2010-0799-9512-Al,p. 17]
While the ICCT believes it is clear that the standards will have a positive impact on vehicle sales
and direct vehicle-related employment, we do acknowledge that there is substantial uncertainty
in how consumers will react to the higher vehicle prices, new technology, and lower fuel
18-224
-------
Analysis of Estimated Costs, Economic and Other Impacts
payments. It is possible that the direct sales and employment benefits might be small. However,
it is inexcusable to ignore the economy-wide benefits from the large reduction in vehicle fuel
consumption. No matter how customers react, the fuel savings will pay for the cost of the
technology many times over. This will give customers billions of dollars to buy other products,
raising their standard of living, increasing GDP, and creating economy-wide jobs.20 [EPA-HQ-
OAR-2010-0799-9512-Al,p. 17]
There will be further economy-wide and energy security benefits from reducing oil imports and
helping our balance of trade. These economy-wide benefits are certain and their exclusion from
the proposed rule is inappropriate. [EPA-HQ-OAR-2010-0799-9512-A1, p. 17]
12 Summary of interagency working comments received on draft rule under EO 12866 review.
Pages 43 9-443.
13 Docket item EPA-HQ-OAR-2010-0799-1224, pages 454-455
14 Summary of interagency working comments received on draft rule under EO 12866 review.
Table 111-88, page 458
15 Docket item EPA-HQ-OAR-2010-0799-1224, pages 460-461
20 See, for example, the Nextl 0 study at http://nextlO.org/nextlO
jpublicationsjvehicle_efficiency.html.
Organization: Investor Network on Climate Risk (INCR) - Ceres
Strong standards will lead to job growth by creating jobs in the auto industry, and more broadly
by diverting consumer spending away from fuel. The July 2011 report "More Jobs Per Gallon:
How Strong Fuel Economy/GHG Standards Will Fuel American Jobs;"3 an economic analysis
authored for Ceres by Management Information Services, Inc., found that a 54.5 mpg fuel
economy standard would create approximately 484,000 economy-wide new U.S. jobs, with
43,000 in the auto industry and net job gains in 49 states. [EPA-HQ-OAR-2010-0799-9516-A1,
p. 1]
Further, under the proposed standard, the report found that national gross economic output, or
sales, is projected to be $21.3 billion higher; personal income is projected to increase by
approximately $14.2 billion, and revenue for cash strapped federal, state and local governments
is projected to be approximately $12.7 billion higher. It is important to note that the higher the
standard, the greater the economic benefits;4 thus it is critical that the standards be as strong as
possible. [EPA-HQ-OAR-2010-0799-9516-Al,pp. 1-2]
Independent analysis also indicates that stronger standards will benefit the auto industry, a major
creator of U.S. jobs, and a key player in U.S. manufacturing. Earlier this year, Ceres partnered
with Citi Investment Research to produce "Fuel Economy Focus: Perspectives on 2020 (Auto)
18-225
-------
EPA Response to Comments
Industry Implications," which found that strict fuel economy standards would bring economic
benefits to auto manufacturers, particularly the Detroit 3, and their suppliers. Strong standards
will improve the competitive positioning of U.S. automakers, and provide the regulatory
certainty needed to promote innovation and investment in the industries of the future, such as
clean tech and high tech sectors. [EPA-HQ-OAR-2010-0799-9516-A1, p. 2]
3 Approximately equivalent to the 4% scenario presented in EPA and NHTSA's Joint Notice of
Intent, "2017 and Later Model Year Light Duty Vehicle GHG Emissions and CAFE Standards;"
EPA 40 CFR Parts 85, 86, and 600; http://edocket.access.gpo.gov/2010/2010-25444.htm
4 For example, the report found that under a 6% improvement scenario, net job gains were
projected to be 684,000.
Organization: Johnson, C.
Passing ARBITRARY rules hurts the economy and hurts my employment. [EPA-HQ-OAR-
2010-0799-6528-A1, p. 1]
Organization: Lennon, S.
Transportation is critical to our quality of life and EPA's regulation could increase the cost of a
new car up by $6,000 according to the Center for Automotive Research and $5,000 according to
the National Automobile Dealers Association. This price increase would lead to a reduction of
tens of thousands of jobs. [EPA-HQ-OAR-2010-0799-9019-A1, p. 1]
Organization: Links, W.
Transportation is critical to our quality of life and EPA's regulation could increase the cost of a
new car up by $6,000 according to the Center for Automotive Research and $5,000 according to
the National Automobile Dealers Association. This price increase would lead to a reduction of
tens of thousands of jobs. [EPA-HQ-OAR-2010-0799-10348-A1, p. 2]
Organization: Mass Comment Campaign (39) (Unknown Organization)
These rules will lead to substantial savings for American families. They will keep more money in
American communities, and the economic multiplier will be a boon for the economy. [EPA-HQ-
OAR-2010-0799-1245-A1_MASS, p.l]
Finally, I strongly support the new technologies and innovations that will come from the
standards set fourth in this proposal, and the resulting high quality jobs that will be necessary to
create them. The new standards give automakers clear, long-term direction, and will help
American car companies compete in an increasingly efficient global market. [EPA-HQ-OAR-
2010-0799-1245-A1_MASS, p.l]
18-226
-------
Analysis of Estimated Costs, Economic and Other Impacts
I look forward to the improvements in public health, economy, environment, and national
security that will result from these proposed CAFE standards. [EPA-HQ-OAR-2010-0799-1245-
A1_MASS, p.l]
Organization: Representative from Michigan House of Representatives, 49th District
The standards will help create and retain the good paying automotive jobs essential to the
prosperity of states like Michigan and communities like Genesee County. A recent report by the
United Auto Workers (UAW), National Wildlife Federation (NWF), and Natural Resources
Defense Council (NRDC) found that Michigan employs the most at over 38,000 workers at 97
facilities in the manufacture of fuel-efficient parts of the automotive supply chain. That's not
news to Flint: local auto suppliers employ hundreds of workers and substantially contribute to
our region's economy. [EPA-HQ-OAR-2010-0799-7983-A1, p. 1]
Organization: Senator from Michigan State Senate, District 18
Finally, increased fuel economy standards will continue to create jobs: good paying jobs that
employ Michigan workers. A recent report by the Natural Resources Defense Council (NRDC),
National Wildlife Federation (NWF), and United Auto Workers (UAW) found that the auto
industry currently employs over 151,168 autoworkers at 504 facilities building cars with clean,
efficient technology-and 38,067 of those jobs are in 97 facilities right here in Michigan. It might
not surprise you to learn that Michigan has more autoworkers employed in building clean,
efficient cars, than any other state in the nation. [EPA-HQ-OAR-2010-0799-5594-A1, p. 1]
If you want proof, you do not have to go far to see how we are benefitting from the production of
this new technology. As we speak, the battery pack for the Chevy Volt is being produced in
Brownstown, and the vehicle is being built in Detroit. In my own district, Ford's hybrid electric
vehicle battery pack assembly is coming to the Rawsonville plant, a facility that was once slated
to close, and the vehicles will be fully constructed at the Michigan Assembly Plant in Wayne.
That is work that is being brought back from Mexico. [EPA-HQ-OAR-2010-0799-5594-Al, pp.
1-2]
Organization: National Association of Clean Air Agencies (NACAA)
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 34.]
Economic growth and the creation of high-quality jobs across the country due to the need for
innovative automotive technologies upon which the standards rely;
Organization: National Wildlife Federation (NWF)
Fuel economy standards are working now to build jobs.
18-227
-------
EPA Response to Comments
This past summer NWF, with the UAW and NRDC, released Supplying Ingenuity a report that
found 150,000 workers in 43 states employed today in more than 300 companies that make
technology that specifically contribute to increasing fuel economy. These jobs were spread
widely across traditional vehicles and components, materials, electronics, hybrids and batteries
and electric technology. 10 [Figure 3 can be found on p. 6 of Docket number EPA-HQ-OAR-
2010-0799-9887-A2] [EPA-HQ-OAR-2010-0799-9887-A2, pp. 6-7]
This study follows a 2010 study, Driving Growth that found that incremental net content added
to vehicles to achieve higher fuel economy means more manufacturing jobs. The study predicted
that achieving 40mpg by 2020 would add up to 150,000 manufacturing jobs in the US. 11 [EPA-
HQ-OAR-2010-0799-9887-A2, p. 7]
Also in 2011, More Jobs Per Gallon a report by Management Information Systems for Ceres
found that new 2017-2025 standards would add nearly 500,000 jobs once the economy wide
impacts of consumer and business net savings on fuel were taken into account. The study found
that stronger 2017-2025 fuel economy standards would also increase gross economic output,
personal income and tax revenues. 12 [EPA-HQ-OAR-2010-0799-9887-A2, p. 7]
Testing these studies against reality, Bureau of Labor Statistics data shows the auto sector added
100,000 direct jobs building and selling the next generation of clean cars and trucks in 2011
alone.
[This comment was also submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 32.]
These direct jobs anchor hundreds of thousands of additional jobs throughout American
communities. 13 [EPA-HQ-OAR-2010-0799-9887-A2, p. 7]
These manufacturing and technical jobs are critical today in an industry and in communities
which have seen deep job losses over the past decade, and to bolstering the overall strength of
the economy today and in decades to come. The standards help ensure the US auto
manufacturing captures its full share of today's competitive global auto market, and that
Americans are able to increasingly spend their money building jobs in their communities at
instead of leaving household and national budgets at the mercy of rising, volatile, global oil
prices. [EPA-HQ-OAR-2010-0799-9887-A2, p. 7]
These results show why it matters for America to lead in the clean energy economy. The
standards the agencies have proposed are essential to sustaining that progress. [EPA-HQ-OAR-
2010-0799-9887-A2, p. 7]
10 http://www.nrdc.org/transportation/autosuppliers/
11 http://www.nrdc.org/energy/files/drivinggrowth.pdf
18-228
-------
Analysis of Estimated Costs, Economic and Other Impacts
12 http://www.ceres.org/resources/reports/more-jobs-per-gallon
13 http://www.bls.gov/iag/tgs/iagauto.htm
Organization: Natural Resources Defense Council (NRDC)
EPA and NHTSA should dramatically improve the employment and economic impact analysis
by accounting for sales impacts using the methodology consistent with previous rules, creating
an alternative non-full employment scenario, and fully accounting for economy-wide impacts.
[EPA-HQ-OAR-2010-0799-9472-A2, p. 4]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 199.]
Making better vehicles means more U.S. jobs. A recent report from the investor group Ceres
estimates that the auto industry investments and consumer savings triggered by the proposed
standards would generate 484,000 jobs across the country. This is not surprising.
NRC recently partnered with the UAW and the National Wildlife Federation to quantify the jobs
being spurred by the current 2012 to 2016 standards. In our joint report, 'Supplying Ingenuity,'
we found that over 150,000 workers are currently employed in 300 automotive supply companies
across 43 states to make parts that enable cars and trucks to cut pollution and go further on a
gallon of gas.
Organization: Parker, M.
Transportation is critical to our quality of life and EPA's regulation could increase the cost of a
new car up by $6,000 according to the Center for Automotive Research and $5,000 according to
the National Automobile Dealers Association. This price increase would lead to a reduction of
tens of thousands of jobs. [EPA-HQ-OAR-2010-0799-9017-A1, p. 2]
Organization: Paul, M.
Transportation is critical to our quality of life and the EPA's CAFE mandates could...
INCREASE THE COST OF A NEW CAR BY $6,000 according to the Center for Automotive
Research AND... $5,000 according to the National Automobile Dealers Association. [EPA-HQ-
OAR-2010-0799-9027-A1, p. 2]
EITHER OF THESE PRICE INCREASES WOULD LEAD TO A REDUCTION OF TENS OF
THOUSANDS OR SORELY NEEDED JOBS due to people not being able to afford these more
expensive cars. Thus... the car companies will not have to produce as many cars, and as a
consequence, will employ fewer workers to produce fewer cars. [EPA-HQ-OAR-2010-0799-
9027-A1, p. 2]
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
18-229
-------
EPA Response to Comments
Council
Increasing sales and creating jobs: Increased vehicle sales and advanced vehicle technologies
will create jobs in the automotive manufacturing sector. In their initial submission to OMB, the
agencies estimated that between 22,300-56,100 jobs would be created in the vehicle
manufacturing sector as a result of these standards. 14 Outside groups have reached similar
conclusions that these standards will create jobs. A study by the investor network, Ceres, found
that the proposed standards would create 43,000 jobs in the automotive industry and 484,000
jobs economy-wide. The agencies' jobs and sales analyses, as proposed in the initial submission
to OMB, should stand in the final rule. [EPA-HQ-OAR-2010-0799-9549-A2, p. 4]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, p. 123.]
The report from Ceres estimates that nearly half a million jobs may be added to the economy
between jobs and the auto industry.
14 EO12866 Review-Interagency Review material Part 1- 2017-2025 Vehicle GHG and Fuel
Economy Standard and NPRM 2060 AQ54, Document ID: EPA-HQ-OAR-2010-0799-1224, pg.
907 of PDF [EPA-HQ-OAR-2010-0799-9549-A2, p. 4]
Organization: Steffanoff, N.
Transportation is critical to our quality of life and EPA's regulation could increase the cost of a
new car up by $6,000 according to the Center for Automotive Research and $5,000 according to
the National Automobile Dealers Association. This price increase would lead to a reduction of
tens of thousands of jobs. [EPA-HQ-OAR-2010-0799-9335-A1, p. 2]
Organization: Stirling, D
How many jobs will this cost? I am not in favor of the the government adding additional new
standards when I cannot be employed as an engineer with thirty five years of experience
designing computer equipment. [EPA-HQ-OAR-2010-0799-10065-A1, p. 1]
Organization: Sullivan, T.
Transportation is critical to our quality of life. EPA's regulation could increase the cost of a new
car up by $6,000 according to the Center for Automotive Research and $5,000 according to the
National Automobile Dealers Association. This price increase would lead to a reduction of tens
of thousands of jobs (at least). [EP A-HQ-OAR-2010-0799-10341-A1, p. 2]
Organization: Union of Concerned Scientists (UCS)
18-230
-------
Analysis of Estimated Costs, Economic and Other Impacts
The standards also deliver important economy-wide benefits. By spending less on oil, consumers
have more income to spend on other goods and services. This has a direct effect on both national
gross domestic product and U.S. employment. A recent report from Ceres found that standards
similar to those proposed by the agencies would create nearly 500,000 new jobs nationwide in
2030. The report also found that gross economic activity would increase more than $21 billion in
2030.3 [EPA-HQ-OAR-2010-0799-9567-A2, p. 2]
Strong standards that save drivers money can also support robust employment. Increasing
standards will promote new vehicle technologies and increase investment in the auto industry,
generating new jobs throughout that sector. The savings consumers realize at the pump will also
shift consumer purchases away from the petroleum and wholesale industries to other parts of the
economy that generate more jobs for every dollar spent. [EPA-HQ-OAR-2010-0799-9713-A1, p.
2]
The agencies' own analysis of the proposed standards showed similar positive economic benefits
to the U.S. economy. Specifically, EPA found that the proposed standards would increase U.S.
Gross Domestic Product (GDP) by over $100 billion in 2025 (a 0.48% increase) and over $400
(a 1.31% increase) in 2040. [EPA-HQ-OAR-2010-0799-9567-A2, p. 2]
These standards will not only deliver positive benefits to the American economy, they will also
benefit the domestic auto industry and its workers. Investing in fuel-saving and pollution
reduction technology will increase value throughout the supply chain, creating new jobs. A
recent report found that there are already over 151,000 people employed in the United States
building fuel efficient vehicles and components.5 Under the proposed standards, analysis by
Ceres projected that the automotive industry would gain an additional 43,000 jobs in 2030.6 EPA
also projects an increase in employment of 23,400-56,100 new jobs in the automotive sector as a
result of these standards.7 [EPA-HQ-OAR-2010-0799-9567-A2, p. 3]
In addition to job creation and increased sales, better fuel efficiency and greenhouse gas
performance will improve the competitiveness of the American auto industry. Unlike in 2008,
when American automakers faced severe financial hardship as a result of rising oil prices, these
standards will ensure that manufacturers continue to innovate over the coming decade resulting
in a product line that is both fuel efficient and at the forefront of automotive technology. Across
the world, consumers and government standards are demanding greater fuel efficiency and lower
emissions. These standards will help ensure that American automakers remain globally
competitive. A recent report by Citigroup and Ceres found that a fuel economy standard of 42
mile-per-gallon by 2020 (more stringent than the proposed standards) would increase the
profitability and competitiveness of American automakers. 10 [EPA-HQ-OAR-2010-0799-9567-
A2, p. 3]
As shown above, the literature and the agencies' own analyses demonstrate that the proposed
standards will deliver important benefits to consumers, the U.S. economy, automakers, and
American autoworkers. While the agency's economic analysis is discussed in the interagency
review documents, it is surprising that this data on increased vehicle sales, GDP, and
employment were not included in the proposed rule. UCS strongly encourages the agencies to
include these figures in the final rule in order to educate the public on the positive economic
18-231
-------
EPA Response to Comments
benefits of strong fuel efficiency and greenhouse gas standards. [EPA-HQ-OAR-2010-0799-
9567-A2, p. 3]
As has been stated in prior comments, UCS objects to the agencies' underestimation of long-
term fuel price projections. In this proposed rule, the agencies again rely on the Energy
Information Administration's (EIA) Annual Energy Outlook for long-term fuel price projections.
We elaborate more on gasoline price projections in Section II(g) below, and thus will only
remark here that EIA's core projections have consistently underestimated future fuel prices.
Moreover, EIA projects only very modest, steady changes in fuel prices, without any significant
volatility. Oil and gasoline price spikes have occurred about twice each decade for the last 30
years and almost every one was followed by a U.S. recession.25 Given these facts, the agencies
should include such price spikes in their projections. At a minimum, UCS encourages the
agencies to continually evaluate projections for future fuel prices and include sensitivity analysis
demonstrating potential cost-effectiveness at higher stringency levels under more realistic fuel
price scenarios. [EPA-HQ-OAR-2010-0799-9567-A2, p. 6]
By undervaluing the energy security costs and fuel-savings, the agencies are not fully evaluating
the potential cost-effectiveness of more stringent standards. If the agencies properly valued the
full set of societal costs and benefits, a more stringent standard of 143 g/mi and approximately
60 miles-per-gallon in MY 2025 would deliver greater net societal benefits. [EPA-HQ-OAR-
2010-0799-9567-A2, p. 6]
3 Ceres. More Jobs Per Gallon. Management Information Services, Inc. July, 2011.
http://www.ceres.org/resources/reports/more-jobs-per-gallon/view [EPA-HQ-OAR-2010-0799-
9567-A2, p. 2]
5 United Auto Workers, Natural Resources Defense Council, and National Wildlife Federation.
Supplying Ingenuity U.S. Suppliers of Clean, Fuel-Efficient Vehicle Technologies. August,
2011. [EPA-HQ-OAR-2010-0799-9567-A2, p. 3]
6 Ceres. More Jobs Per Gallon. Management Information Services, Inc. July, 2011.
http://www.ceres.org/resources/reports/more-jobs-per-gallon/view [EPA-HQ-OAR-2010-0799-
9567-A2, p. 3]
7 Interagency review document, EPA-HQ-OAR-20100799-1224, Joint Rulemaking to Establish
2017 and Later Model Year Light Duty Vehicle GHG Emissions and CAFE Standards, p., p.
907 [EPA-HQ-OAR-2010-0799-9567-A2, p. 3]
10 Citigroup & Ceres. Fuel Economy Focus: Perspectives on 2020 Industry Implications. March
2011. http://www.ceres.org/resources/reports/fuel-economy-focus [EPA-HQ-OAR-2010-0799-
9567-A2, p. 3]
25 http://wwwl.eere.energy.gov/vehiclesandfuels/facts/2009 fotw579.html [EPA-HQ-OAR-
2010-0799-9567-A2, p. 6]
18-232
-------
Analysis of Estimated Costs, Economic and Other Impacts
Organization: United Automobile Workers (UAW)
The UAW believes strongly that the proposed rules will strengthen the overall economy and the
domestic auto industry. The economy will benefit because consumers will spend less on fuel for
vehicles and more on other goods and services. [EPA-HQ-OAR-2010-0799-9563-A2, p.l]
This proposal will lead to significant net job creation. [EPA-HQ-OAR-2010-0799-9563-A2, p.l]
Increasing the efficiency of light-duty vehicles leads directly to the creation of jobs in the auto
industry because the technology needed to increase efficiency represents incremental net content
on each vehicle, and that additional content must be engineered and produced by additional
employees. [EPA-HQ-OAR-2010-0799-9563-A2, p.l]
Employment Effects [EPA-HQ-OAR-2010-0799-9563-A2, p.4]
The UAW represents about 150,000 members in the light-duty vehicle assembly and parts
sectors, so understanding the effects of significant rulemaking in the automobile industry is
important to the UAW and its members. The UAW has taken an active role in efforts to identify
and quantify how the drive to improve the efficiency of automobiles affects employment in the
domestic auto industry. [EPA-HQ-OAR-2010-0799-9563-A2, p.4]
The UAW believes very strongly that because improving the efficiency of light-duty vehicles
requires additional content on each vehicle, and that additional content requires more engineers
and production workers, developing and producing cleaner cars increases employment in the
auto industry. [EPA-HQ-OAR-2010-0799-9563-A2, p.5]
In 2010, the UAW, along with the Natural Resources Defense Council (NRDC) and the Center
for American Progress, published a report titled "Driving Growth" that used the net cost of
equipment added to increase vehicle efficiency to estimate how many jobs could be created by
the addition of enough fuel-saving technology for the new vehicle fleet to reach 40 miles per
gallon by 2020. [EPA-HQ-OAR-2010-0799-9563-A2, p.5]
The study found that the additional content needed to reach 40 miles per gallon would create
190,000 jobs of all types somewhere in the world. The number of jobs this would create in the
United States is dependent on how much of the additional content is produced domestically. The
results estimate that if 75% of the additional content were produced in the United States, as many
as 150,000 jobs would be created. The study is attached to these comments. [EPA-HQ-OAR-
2010-0799-9563-A2, p.5]
In 2011, the UAW, NRDC and the National Wildlife Foundation published a report titled
"Supplying Ingenuity," which was meant to identify the wide variety of jobs and locations
associated with clean car technology. The report identified 504 facilities across 43 states
employing over 500,000 people where some or all of the work is researching, developing or
producing clean-car technologies. One significant finding is that fully 67% of these jobs are
related to advanced conventional technologies such as better engines and transmissions and
18-233
-------
EPA Response to Comments
components like electric power steering and high-strength steel. The "Supplying Ingenuity"
report is also attached to these comments. [EPA-HQ-OAR-2010-0799-9563-A2, p.5]
Because of the UAW's interest in seeing improved fuel economy and reduced tailpipe pollution
bolster the domestic auto industry, we were particularly pleased that in President Obama's 2010
memo directing the agencies to develop rules extending beyond 2016, he also directed that the
proposed program "... should strengthen the industry and enhance job creation in the United
States." [EPA-HQ-OAR-2010-0799-9563-A2, p.5]
Accordingly, EPA made an effort to estimate the employment effects of the proposed regulation
in order to demonstrate the proposal was constructed so that its effect would meet the conditions
set forth in President Obama's memo. The UAW commends the EPA for its extensive
consideration and extended discussion of the issues associated with estimating the employment
effects of the proposed rule. [EPA-HQ-OAR-2010-0799-9563-A2, p.5]
Although the EPA was unable to complete and publish estimates of several important ways that
the rule could affect employment, the UAW applauds EPA's findings that the additional content
on each vehicle needed to reduce tailpipe emissions does indeed result in increased employment
in the auto industry and the intermediate and basic industries that supply the auto industry. By
estimating broad employment effects in the auto industry using data on the number of employees
per million dollars of expenditure, EPA has outlined a useful approach for understanding how
cleaner cars can create jobs. The UAW is also encouraged by the EPA's recognition that the
import share of additional production must be taken into consideration when estimating these
domestic employment effects. [EPA-HQ-OAR-2010-0799-9563-A2, pp.5-6]
The UAW also believes that in the Draft Regulatory Impact Analysis (DRIA) that accompanies
the proposed rules, the EPA has provided excellent and useful examples of how to assess the
change in labor demand for several of the fuel-saving technology packages that are projected to
be widely applied during the 2017 - 2025 period. This methodology centers on tear-down studies
of fuel-saving technology packages by EPA's engineering consultant that accounts for the net
incremental content in that specific package. [EPA-HQ-OAR-2010-0799-9563-A2, p.6]
The results, as summarized in table 8.2-3 of the DRIA, show that in each of the six technologies
evaluated, additional labor is required to produce the technology. In the case of switching from a
six-speed to an eight-speed transmission, an additional .33 hours of labor are required for each
unit. This result suggests that one full-time job will be created for each increment of about 4,500
eight speed transmissions when upgrading from a six-speed. [EPA-HQ-OAR-2010-0799-9563-
A2, p.6]
In the example of a downsized, turbocharged gas direct injection V-6 that replaces a V-8 engine,
similar to the EcoBoost engine offered by Ford in its full-size pick-up trucks, the additional labor
requirement is estimated at 1.82 hours per unit. This implies that a full-time position is created
for each increment of about 825 such engines. [EPA-HQ-OAR-2010-0799-9563-A2, p.6]
More complicated technology packages with greatly increased content require even more labor.
A full hybrid with a power-split design is estimated to require an additional 8.54 hours of labor,
18-234
-------
Analysis of Estimated Costs, Economic and Other Impacts
which implies an additional full-time employee for each 175 units produced. [EPA-HQ-OAR-
2010-0799-9563-A2, p.6]
However, because EPA was unable to evaluate the additional labor requirement for all the
technologies that were considered in the technical analysis, EPA was not able to give a complete
estimate of the potential employment effects using this excellent methodology. The UAW urges
EPA to continue this work in its ongoing evaluation of the cost and effectiveness of fuel-saving
technologies. [EPA-HQ-OAR-2010-0799-9563-A2, p.6]
EPA was also unable to quantify the employment effects of any potential change in sales
resulting from the increase in the price of vehicles accounted for by the additional content. This
is a tortured subject, studied repeatedly with conflicting results across studies at even the basic
level of whether the effect is positive or negative. The UAW recognizes EPA's effort to discuss
and sort through the issues involved with estimating change in sales due to the regulation of
tailpipe emissions. [EPA-HQ-OAR-2010-0799-9563-A2, p.6]
[These comments were submitted as testimony at the Detroit, Michigan public hearing on
January 17, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11786, pp. 22-25.]
Adopting the proposed rules will give an additional boost to the revitalization of the auto
industry that began with President Obama's courageous action in the depths of the industry's
crisis to save American manufacturing jobs by giving GM and Chrysler the breathing room they
needed to restructure.
After a painful process in which workers and retirees made significant sacrifices, the industry is
coming back strong. Our units with collective bargaining agreements with Ford, General Motors
and Chrysler include substantial investments by all three companies, in some cases bringing back
work from overseas.
The 20,000 UAW-represented hourly jobs that will be protected and added over the next four
years will have a substantial and positive ripple effect throughout the supply chain as well as the
local communities.
One important reason we are so confident that the industry's future — in the industry's future is
that we are excited about the new green technologies that are being developed in the United
States and produced in UAW-represented facilities. The drive to bringing innovative fuel-saving
technologies to market is transforming the auto industry in the United States in creating good
jobs in the research labs to the factory floor. General Motors, Ford and Chrysler have made
unprecedented commitments to invest billions of dollars in their U.S. operations over the next
few years and in every case the investment of supporting new vehicles and powertrains that will
be more efficient than the previous generation.
There's a common element in all of these technologies. They are all now or will soon be
produced by UAW members and factories located in the United States, and that's just the
beginning.
18-235
-------
EPA Response to Comments
Although most auto makers will continue to meet fuel efficiency and tailpipe emissions through
improvements in conventional vehicles, we are excited that these new transforming technologies
are being produced by UAW members. These are the automotive jobs of the future. We are very
pleased that they are starting to ramp up here in the United States.
Thanks to the fresh start President Obama gave to the domestic auto industry, new labor
agreements that are the result of innovative, problem-solving approach in bargaining and the
strong transparent working relationships we have with UAW employers, the U.S. auto industry is
growing and adding employees. These proposed rules are the cornerstone of that growth. It
provides certainty as manufacturers map out their product investment plans.
I want to underscore why we believe the drive to increase fuel efficiency and reduce tailpipe
pollution is creating jobs in the U.S. auto industry.
A second, more fundamental reason is because the technology needed to improve efficiency and
reduce pollution represents additional content on each vehicle. That additional content must be
engineered and produced by additional employees.
Last year the UAW and the Natural Resources Defense Council and Larry's organization, The
National Wildlife Federation, produced a report called Supplying Ingenuity. That report
identifies more than 500 separate facilities in the United States, employing over 150,000 people,
where some or all the employees are working to invent, engineer, or produce advanced vehicles
and fuel- savings components. These are real jobs supporting real American families.
Response:
Several commenters specifically requested inclusion of employment impacts in the
analysis for this rule. EPA discusses employment impacts in Preamble Section III.H.12 and RIA
Chapter 8.2. We include a detailed discussion of the expected impacts of this rule on
employment, and on methods for measuring employment impacts. We also present a partial
quantification of the impacts of this rule on employment in the auto sector, in our estimates of
the effects on employment due to developing and using the technologies expected to be used for
compliance with the standards (the "cost effect"). Our discussion explains that we do not
provide fuller quantification for several reasons. First, we do not quantify the impacts of the rule
on auto sector employment due to changes in vehicle sales (the "demand effect") or due to the
labor intensity of vehicle production (the "factor shift effect"), other pathways for employment
impacts, due to insufficient data to support that analysis. Second, the impacts of the rule on
national employment depend heavily on the state of the macroeconomy at the time of
implementation, which begins in MY 2017. If the economy is at or close to full employment, the
primary effect of the rule on employment will be to shift employment among sectors, rather than
to create or reduce job availability. On the other hand, if there is substantial involuntary
unemployment at the time of implementation, the rule may affect aggregate employment levels.
Difficulties in estimating unemployment rates in the future imply that the impacts of the rule on
employment in the wider economy will be highly uncertain. We offer the detailed discussion of
these issues as the explanation for our decision to quantify some but not all employment impacts
of the rule. We appreciate the support from the UAW of our identification of these multiple
18-236
-------
Analysis of Estimated Costs, Economic and Other Impacts
effects, our identification of domestic versus foreign impacts, and our discussion of these
complexities. We did not receive comments identifying problems with our analysis.
A major conclusion from this review is that increasing standards does not inevitably
cause losses in employment, either in the auto sector or in the economy as a whole. Because
employment impacts in the auto industry result from expenditures on new technologies as well as
effects on vehicle sales, it is possible that employment may increase; the analysis in Preamble
section III.H. 12 and RIA Chapter 8.2 in fact show increases. Employment impacts in the rest of
the economy may be positive in some sectors (such as suppliers of materials for auto parts) and
negative in others (such as gasoline production), as further discussed in those sections.
Comments from the Defour Group estimating employment losses of about 200,000 from
the rule analyze impacts in the auto and distribution sector due only to the demand effect; they
do not consider impacts due to the cost or the factor-shift effects. As discussed in Section 18.7
of this Response to Comments, the negative vehicle sales estimates from the Defour Group are
based on cost estimates substantially higher, and a smaller role for fuel savings, than those found
in this rule. TSD Chapter 3.1.2.2 discusses the Defour Group/NADA cost estimates - in
particular, the higher indirect cost estimates; Section 18.2.1 of this Response to Comments
discusses those cost estimates as well as those from the Center for Automotive Research
mentioned by several individuals. The omission in its study of cost-effect employment impacts
leaves out a potentially significant source of employment gains. Impacts due to the factor-shift
effect may increase or decrease employment. Because the Defour Group uses costs significantly
higher than those we have estimated, and because they do not consider some of the channels
through which employment in the auto sector is likely to be affected by the standards, we do not
rely on these results.
Other commenters point to expected increases in vehicle sales as a source of increased
employment; these analyses are based on lower per-vehicle cost estimates and possibly greater
consideration of fuel savings in the vehicle purchase decision. As discussed in Section 18.7 of
this Response to Comments, the difference between the results in these studies and those from
the Defour Group appear to be due to lower cost estimates and a greater role for fuel economy in
vehicle purchase decisions in the former group. Several commenters specifically cite a study by
Ceres showing an increase of 43,000 jobs in the auto industry in 2030. This employment appears
to be driven by the need for additional workers to reconfigure vehicles and add technology (the
cost effect), though it also estimates increases in vehicle sales. Ceres also shows job gains in the
broader economy. As discussed in Preamble Section III.H. 12 and RIA Chapter 8.2, we do not
extend our analysis to the broader economy, because of uncertainty over the state of the
macroeconomy in the time frame for this rule.
Additional comments point to gains in employment associated with developing the
technologies that companies will use to comply with the standards. Several commenters cite a
report from NRDC, NWF, and UAW, "Supplying Ingenuity," which estimates that 150,000
people are currently employed in companies that make "clean, fuel-efficient" technologies. As
discussed in Preamble Section III.H. 12 and RIA Chapter 8.2, we agree that the employment
effects of this rule in the auto sector depend, not only on vehicle sales, but also on the need to
develop and use the technologies for compliance with the standards, and any changes in labor
intensity of production associated with the new technologies. EPA, in MY 2025, estimates
18-237
-------
EPA Response to Comments
increases due solely to increased expenditures on technologies on the order of 6,000-31,000 jobs
in the auto industry.
A few commenters argue that, although employment may go down in fuel-related sectors,
switching consumer spending from fuel to other sectors should increase employment, because
fuel sectors have lower labor intensity than the economy as a whole. EPA acknowledges this
possibility but has not estimated this effect in this rule.
Commenters differ on the effects of this rule on the competitiveness of the auto industry
and its ability to innovate. Those who state that the rule will increase competitiveness and
innovation cite increasingly stringent fuel economy standards in other countries; this rule will
provide further incentives to coordinate vehicle and technology development for all these
markets and speed cost reductions. In addition, they state that the standards will provide the
regulatory certainty needed for increased investment in research and development and ensure
continued innovation. The increased investment and innovation, they say, will increase
employment in the auto industry. Those who state that innovation will decrease cite the need for
auto manufacturers to invest specifically in fuel-saving technology, which will reduce their
ability to invest in technological advances for other vehicle qualities and attributes (see
comments from Edmunds.com). EPA disagrees that investing more in fuel economy requires
reduced investments in improving other aspects of the vehicles; it is possible for auto makers to
do both, except under the circumstances that they are unable to convince potential investors of
the merits of those other improvements. As noted earlier in section 18.1, the agencies' costing
methodology includes the costs of preserving all attributes in the present vehicle fleet. In
addition, because all major auto makers selling vehicles in the U.S. are subject to the same rule
requirements, we do not expect changes in the competitive structure of the industry, nor in where
vehicles are produced, in response to these standards. EPA agrees that the standards are
stringent enough to encourage continuing innovation on technologies that reduce GHG emissions
and improve fuel economy, and that these innovations are likely to be useful for meeting
standards in other countries besides the U.S. Companies that make the greatest advances in these
innovations may increase their competitive position in both the U.S. and world markets.
A number of comments state that this rule will increase economic growth in the U.S.
Several commenters recommend that EPA include an analysis of the economy-wide impacts of
the rule, including impacts on U.S. gross domestic product (GDP) and consumption patterns.
They say that fuel savings from the rule would allow consumers to increase their spending on
other goods and services in more productive sectors of the economy, which would likely increase
GDP and consumption in the U.S. CFA specifically recommended that EPA use a GDP
multiplier approach that recognizes that national output would increase from the rule as a result
of reducing U.S. oil imports and reducing consumer expenditures on fuel. Several commenters
cite a report for Ceres by Management Information Services, Inc. that found that a 4 per cent
annual improvement in fuel economy would increase U.S. gross economic output by $21.3
billion, personal income by $14.2 billion, and revenue for federal, state, and local governments
18-238
-------
Analysis of Estimated Costs, Economic and Other Impacts
Q9
by $12.7 billion in 2030. On the other hand, other comments express concern that the
economy could be harmed as a result of this rule, because increased vehicle costs will reduce
vehicle sales and employment. Analyzing the economy-wide impacts from this rule is
challenging due to the inherent uncertainty in projecting a myriad of economic parameters into
the future (e.g., levels of employment of labor and capital, the structure of the economy, prices of
goods and services) and determining an appropriate economic framework to model (e.g., supply
equaling demand in all markets and specific forms of market interactions). EPA has not been
able to identify a widely agreed upon methodology and thus we continue to not quantify the
impacts of the rule on overall economic patterns in the U.S.
92 Management Information Services, Inc., July 2011, "More Jobs Per Gallon: How Strong Fuel
Economy/GHG Standards Will Fuel American Jobs", A Ceres Report, Washington DC (Docket EPA-HQ-OAR-
2010-0799).
18-239
-------
-------
EPA Statutory Authority
19. EPA Statutory Authority
Organizations Included in this Section
American Fuel and Petrochemical Manufacturers (AFPM)
American Petroleum Institute (API), National Association of Manufacturers (NAM), and
American Fuel & Petrochemical Manufacturers (AFPM)
Competitive Enterprise Institute (CEI)
Environmental Consultants of Michigan
Environmental Defense Fund (EDF)
Growth Energy
Natural Resources Defense Council (NRDC)
Sierra Club, Environment America, Safe Climate Campaign, and Clean Air Council
Steyn, R.
University of Michigan
U.S. Chamber of Commerce
Organization: American Fuel and Petrochemical Manufacturers (AFPM)
In addition, the Agencies should not issue the revised proposal until after the court has ruled on
the GHG lawsuits. [EPA-HQ-OAR-2010-0799-9485-A1, p.9]
Organization: American Petroleum Institute (API), National Association of Manufacturers
(NAM), and American Fuel & Petrochemical Manufacturers (AFPM)
V. The 2017 Car Rule Would Also Be Arbitrary and Capricious Because It Is Based on an
Invalid Endangerment Finding [EPA-HQ-OAR-2010-0799-9509-A1, p. 10]
Lastly, finalizing the 2017 Car Rule would also be arbitrary and capricious because the rule is
predicated on an invalid endangerment finding. As the 2017 Car Rule itself explains, EPA's
authority to propose the rule flows from the Endangerment Finding for GHGs. 76 Fed. Reg.
74,964. Thus, if the Endangerment Finding is invalid, EPA has no authority to finalize the 2017
Car Rule. For this reason, the Associations briefly explain some of the reasons why the
Endangerment Finding is arbitrary and capricious. A more complete explanation is contained in
the Associations' comments, which are also submitted here. Exhs. A-B. EPA's Endangerment
Finding is arbitrary and capricious for several reasons: [EPA-HQ-OAR-2010-0799-9509-A1, pp.
10-11]
• The Endangerment Finding failed to weigh offsetting or beneficial effects of climate
change against its threatened harms. Exh. A. at 7.
• The Endangerment Finding improperly failed to consider the possibility of adaptation to
climate change. Id. at 8-9.
• The Endangerment Finding improperly relied on effects of climate change occurring
outside of the United States, in violation of the CAA. Id. at 9-10.
19-1
-------
EPA Response to Comments
The Technical Support Document for the Endangerment Finding does not contain the
critical review of all the science that EPA's Information Quality Act Guidelines require.
Id. at 10-28.
EPA's finding that GHGs endanger public health is not scientifically supported or
justifiable under the CAA. Id. at 28-33.
EPA's finding that GHGs endanger public welfare is not supported. Id. at 33-38.
EPA's assertion that current atmospheric levels of GHGs endanger public health and
welfare is not supported. Id. at 38-39.
The Endangerment Finding is inappropriate because GHG emissions from motor vehicles
are insubstantial. Id. at 40-42.
The Endangerment Finding improperly includes two pollutants not emitted by mobile
sources—perfluorocarbons and sulfur hexafluoride. Id. at 42-43.
EPA failed to adequately explain its decision to exclude the most abundant GHG—water
vapor—from its Endangerment Finding. Id. at 43-44.
EPA should have proposed its rules for motor vehicles at the same time as its
Endangerment Finding. Id. at 44.
EPA failed to analyze the possible affect of its Endangerment Finding on stationary
source permitting requirements. Id. at 45-49.
EPA failed to explain why it did not use alternative approaches to addressing climate
change, such as CAA Section 115. Id. at 49-50. [EPA-HQ-OAR-2010-0799-9509-A1, p.
11]
Organization: Competitive Enterprise Institute (CEI)
Experts will likely debate for years the net benefits of the rule as data become available
regarding vehicle costs and sales and auto industry profits and employment. This comment letter
examines a cost most experts have not addressed: the damage the Obama Administration's fuel
economy agenda does to our constitutional system of separated powers and democratic
accountability. [EPA-HQ-OAR-2010-0799-9552-A1, p. 1]
I. End Run Around Congress
In the press release announcing their proposed MY 2017-2025 GHG/fuel economy standards,
EPA Administrator Lisa Jackson and Transportation Secretary Ray LaHood boast that they are
bypassing Congress: "Today's announcement is the latest in a series of executive actions the
Obama Administration is taking to strengthen the economy and move the country forward
because we can't wait for Congressional Republicans to act" [emphasis added].3 [EPA-HQ-
OAR-2010-0799-9552-A1, pp. 1-2]
A legislative proposal boosting average fuel economy to 54.5 mpg would not pass in the 112th
Congress. Note also that NHTSA need not propose fuel economy standards for MY 2017 until
2014. "We can't wait" really means: We won't let the people's representatives decide, either
now or after the 2012 elections. [EPA-HQ-OAR-2010-0799-9552-A1, p. 2]
Circumventing Congress has, alas, become the Administration's preferred M.O. Under the
statutory scheme Congress created, one agency -NHTSA - regulates fuel efficiency through one
19-2
-------
EPA Statutory Authority
set of standards - Corporate Average Fuel Economy (CAFE) - under one statute - the Energy
Policy Conservation Act (EPCA). Yet today, three agencies - EPA, NHTSA, and the California
Air Resources Board (CARB) - regulate fuel efficiency via three sets of standards under three
statutes - the Clean Air Act (CAA), EPCA, and California Assembly Bill 1493. The CAA
provides no authority to prescribe fuel economy standards, and EPCA specifically prohibits
states from adopting laws or regulations "related to" fuel economy standards. [EPA-HQ-OAR-
2010-0799-9552-A1, p. 2]
II. GHG, Fuel Economy Standards: Highly Related
EPA and CARB claim they are regulating GHG emissions, not fuel economy. But greenhouse
gas emission standards implicitly regulate fuel economy. As EPA and NHTSA's May 2010
Tailpipe Rule explains, no commercially available technologies exist to capture or filter out
carbon dioxide (CO2) emissions from motor vehicles. Consequently, the only feasible way to
decrease CC>2 emissions per mile is to reduce fuel consumption per mile — that is, increase fuel
economy. Carbon dioxide constitutes 94.9% of vehicular greenhouse gas emissions, and "there is
a single pool of technologies... that reduce fuel consumption and thereby CC>2 emissions as
well."4 [EPA-HQ-OAR-2010-0799-9552-A1, p. 2]
That EPA and CARB are regulating fuel economy is also apparent from EPA, NHTSA, and
CARB's Interim Joint Technical Assessment Report, the framework document for the agencies'
proposed rule. 5 The document considers four fuel economy standards, ranging from 47 mpg to
62 mpg; each is the simple reciprocal of an associated CC>2 emission reduction scenario. The
54.5 mpg standard is a negotiated compromise between the 4% (51 mpg) and 5% (56 mpg) CC>2
reduction scenarios. [EPA-HQ-OAR-2010-0799-9552-A1, p. 2]
CARB's 2004 Staff Report presenting the agency's plan to implement AB 1493 is another
smoking gun.6 Nearly all of CARB's recommended technologies for reducing GHG emissions
(Table 5.2-3) were previously recommended in a 2002 National Research Council study on fuel
economy (Tables 3-1, 3-2).7 CARB proposes a few additional options, but each is a fuel-saving
technology, not an emissions-control technology. [EPA-HQ-OAR-2010-0799-9552-A1, p. 2]
Even the text of AB 1493 implies that CARB is to regulate fuel economy. CARB's GHG
standards are to be "cost-effective," defined as "Economical to an owner or operator of a vehicle,
taking into account the full life-cycle costs of the vehicle."8 CARB reasonably interprets this to
mean that the reduction in "operating expenses" over the average life of the vehicle must exceed
the expected increase in vehicle cost.9 Virtually all such "operating expenses" are expenditures
for fuel. The CARB program cannot be "cost-effective" unless CARB regulates fuel
economy. [EPA-HQ-OAR-2010-0799-9552-A1, pp. 2-3]
V. Constitutional Common Sense
EPA contends that its current and future GHG rules derive from the CAA as interpreted by
Supreme Court in Massachusetts v. EPA (April 2007). The D.C. Circuit Court of Appeals is now
reviewing arguments regarding that claim in Coalition for Responsible Regulation v.
EPA. [EPA-HQ-OAR-2010-0799-9552-A1, p. 4]
19-3
-------
EPA Response to Comments
However that case is decided, EPA is clearly wielding powers Congress never intentionally
delegated. [EPA-HQ-OAR-2010-0799-9552-A1, p. 4]
Congress declined to give EPA explicit authority to regulate GHGs only last year, when Senate
leaders pulled the plug on companion legislation to the American Clean Energy and Security Act
(ACESA) - the House-passed cap-and-trade bill sponsored by Reps. Henry Waxman (D-Calif.)
and Ed Markey (D-Mass.). [EPA-HQ-OAR-2010-0799-9552-A1, p. 5]
One of ACES A's selling points was precisely that it would preempt regulation of GHGs under
several CAA programs. If instead of proposing cap-and-trade, Waxman and Markey had
introduced legislation authorizing EPA to do exactly what it is doing now - regulating GHGs via
the CAA as it sees fit - their bill would have been dead on arrival. [EPA-HQ-OAR-2010-0799-
9552-A1, p. 5]
The notion that Congress gave EPA such expansive authority when it enacted the CAA in 1970,
years before global warming emerged as a public policy concern, defies both history and
logic. [EPA-HQ-OAR-2010-0799-9552-A1, p. 5]
[See footnote list for this comment on pp. 5-6 of Docket number EPA-HQ-OAR-2010-0799-
9552-A1]
Organization: Environmental Consultants of Michigan
EPA erred in its implementation of the Supreme Court decision on GHG emissions [NHTSA-
2010-0131-0166-Al,p. 4]
On April 2, 2007, the U.S. Supreme Court issued its opinion in Massachusetts v. EPA, a case
involving EPA's 2003 denial of a petition for rulemaking to regulate GHG emissions from motor
vehicles under section 202(a) of the Clean Air Act (CAA). The Court held that GHGs fit within
the definition of air pollutant in the Clean Air Act and further held that the Administrator must
determine whether or not emissions from new motor vehicles cause or contribute to air pollution
which may reasonably be anticipated to endanger public health or welfare, or whether the
science is too uncertain to make a reasoned decision. The Court further ruled that, in making
these decisions, the EPA Administrator is required to follow the language of section 202(a) of
the CAA. The Court rejected the argument that EPA cannot regulate CO2 from motor vehicles
because to do so would de facto tighten fuel economy standards, authority over which has been
assigned by Congress to DOT. The Court stated that "[b]ut that DOT sets mileage standards in
no way licenses EPA to shirk its environmental responsibilities. EPA has been charged with
protecting the public's 'health' and 'welfare', a statutory obligation wholly independent of
DOT's mandate to promote energy efficiency." The Court concluded that "[t]he two obligations
may overlap, but there is no reason to think the two agencies cannot both administer their
obligations and yet avoid inconsistency." The case was remanded back to the Agency for
reconsideration in light of the Court's decision. [NHTSA-2010-0131-0166-A1, pp. 4-5]
EPA could have honored the decision of the Supreme Court by regulating the carbon content of
the fuel as is done in Europe; instead, they immediately began a duplicative tailpipe carbon
19-4
-------
EPA Statutory Authority
dioxide standard. EPA initially argued that their greenhouse gas standard was necessary because
there were vehicle emissions that were not covered by the CAFE equivalent standard. All of
these other GHG pollutants are currently regulated by the existing EPA tailpipe or evaporative
emission standards. In May 2009, the National Fuel Efficiency Policy was announced that for the
first time provided what amounted to double jeopardy for vehicle manufacturers with duplicative
greenhouse gas standards and CAFE standards. This unprecedented level of control provides two
sets of compliance regulations and two sets of penalties (fines) for what amounts to a single
action. [NHTSA-2010-0131-0166-A1, p. 5]
EPA should have done a thorough analysis of the policy alternatives prior to arbitrarily jumping
to vehicle tailpipe standards. A fair and balanced policy review would have led to a different
policy to achieve the target, one that changes the fuel such as the required use of a renewable
Fischer-Thropsch fuel. The DoE GREET model demonstrates that usage of this fuel can be an
effective strategy for achieving GHG reductions unlike the slow and limited progress that
accompanies tailpipe standards. This policy would have the secondary effect of reducing
petroleum consumption. [NHTSA-2010-0131-0166-A1, p. 5]
Organization: Environmental Defense Fund (EDF)
III. EPA HAS EXPANSIVE AUTHORITY UNDER THE CAA TO REGULATE GHG
EMISSIONS FROM LIGHT DUTY VEHICLES AND NHTSA'S AUTHORITY IS MORE
CONSTRAINED IN SEVERAL IMPORTANT WAYS
A. EPA and NHTSA have Different Statutory Mandates
The primary purpose of EPA's regulation under the Clean Air Act is "to protect and enhance the
quality of the Nation's air resources so as to promote the public health and welfare and the
productive capacity of its population." 42 U.S.C. § 7401(b)(l) (emphasis added). This protective
purpose is reflected in the text of Section 202 of the Act. Section 202(a) requires the EPA
Administrator to promulgate standards for the emission of air pollutants from new motor
vehicles "which in his [her] judgment cause, or contribute to, air pollution which may reasonably
be anticipated to endanger public health or welfare." 42 U.S.C. § 7521 (a) (emphasis added).
Both the "may reasonably be anticipated" and "endanger" language reflect Congress' intent for
EPA to act in a manner that prevents, rather than merely responds to, harm. See Ethyl Corp. v.
EPA, 541 F.2d 1, 12 (D.C. Cir. 1976) ("[E]ndangers means something less than actual harm.
When one is endangered, harm is threatened; no actual injury need ever occur."). Because of the
important public health purpose and preventative nature of the Clean Air Act's mandate, EPA's
authority to regulate under it is far-reaching. [EPA-HQ-OAR-2010-0799-9519-A1, pp. 4-5]
The National Highway Traffic Safety Administration (NHTSA)'s purpose in implementing the
Energy Policy Conservation Act (EPCA) is "to provide for improved energy efficiency of motor
vehicles." 42 U.S.C. § 6201(5). This mandate, while vital to curbing our Nation's energy use, is
narrowly focused on one aspect of motor vehicles— fuel efficiency—without regard to the
vehicles' effects on public health and welfare. The purposes of these two Acts are "wholly
independent," as the Supreme Court made clear in Massachusetts v. EPA, 549 U.S. 497, 531-32
(2007): [EPA-HQ-OAR-2010-0799-9519-A1, p. 5]
19-5
-------
EPA Response to Comments
EPA finally argues that it cannot regulate carbon dioxide emissions from motor vehicles because
doing so would require it to tighten mileage standards, a job (according to EPA) that Congress
has assigned to DOT. See 68 Fed. Reg. 52929. But that DOT sets mileage standards in no way
licenses EPA to shirk its environmental responsibilities. EPA has been charged with protecting
the public's "health" and "welfare," 42 U. S. C. 7521(a)(l), a statutory obligation wholly
independent of DOT's mandate to promote energy efficiency. See Energy Policy and
Conservation Act, §2(5), 89 Stat. 874, 42 U. S. C. §6201(5). The two obligations may overlap,
but there is no reason to think the two agencies cannot both administer their obligations and yet
avoid inconsistency. [EPA-HQ-OAR-2010-0799-9519-A1, p. 5]
B. EPA's Expansive Authority under Section 202
For light-duty vehicles, as well as heavy-duty vehicles, EPA's authority, and imperative, to
protect human health and the environment through rigorous emission standards is more far-
reaching and effective than the U.S. Department of Transportation's authority to set standards for
fuel economy because of EPA's ability to address all greenhouse gases, to efficiently and
effectively address the interactions between all vehicle components, and due to the breadth of the
delegated rulemaking authority and associated protections under the Clean Air Act. [EPA-HQ-
OAR-2010-0799-9519-A1, p. 5]
EPA has broad authority under Section 202(a)(l) of the Clean Air Act to "prescribe . . . standards
applicable to the emission of any air pollutant from any class or classes of new motor vehicles or
new motor vehicle engines, which in his judgment cause, or contribute to, air pollution which
may reasonably be anticipated to endanger public health or welfare." 42 U.S.C. § 7521(a)(l)
(emphasis added); see also id. §7521 (a) (EPA authorized to set standards for air pollutants from
vehicles and engines "whether such vehicles and engines are designed as complete systems or
incorporate devices to prevent or control such pollution"). This language clearly delegates to
EPA the responsibility to adopt standards for air pollutants. EPA relies on this authority in the
proposed rule to regulate, in addition to CO2, N2O, CH4, and hydrofluorocarbon (FIFC)
emissions. All of these substances are listed among the "primary GHGs of concern" as
contributors to global warming. 76 Fed. Reg. at 74,963. [EPA-HQ-OAR-2010-0799-9519-A1,
pp. 5-6]
C. Constraints on NHTSA's Authority
In contrast to EPA's expansive authority under Section 202 of the Clean Air Act, EPCA as
amended by EISA includes limitations on NHTSA's authority to regulate fuel economy.
NHTSA's authority is focused on fuel economy and not air pollution, and as a result, NHTSA is
constrained in regulating direct discharges of N20, CH4, and HFC emissions from automobiles.
76 Fed. Reg. at 74,902. [EPA-HQ-OAR-2010-0799-9519-A1, p. 6]
Within its focus on fuel economy, EPCA contains additional, limitations on NHTSA's discretion
to establish CAFE standards including the nexus to fuel efficiency. And, of particular
importance, any proposed expansion of NHTSA's fuel economy analysis must be consistent with
EPA's statutorily-mandated procedures to test fuel economy. [EPA-HQ-OAR-2010-0799-9519-
Al,p.6]
19-6
-------
EPA Statutory Authority
EPCA directs the Secretary of Transportation to prescribe CAFE standards, which "shall be the
maximum feasible average fuel economy level that the Secretary decides the manufacturers can
achieve in that model year." 49 U.S.C. § 32902; see also § 32902(f) (directing the Secretary to
consider statutorily-enumerated factors in making this determination). While NHTSA has
discretion in standard setting, under EPCA, EPA alone has the authority to measure fuel
economy and to calculate CAFE values, 49 U.S.C. § 32904(a). In doing so, EPA "shall use the
same procedures for passenger automobiles the Administrator used for model year 1975 ... or
procedures that give comparable results." Id. at 32904(c). The D.C. Circuit has concluded that, to
produce "comparable results," "[t]he critical fact is that a procedure . . . was available for
MY1975 testing, and those manufacturers, however few in number, that found it advantageous to
do so, employed that procedure." Center for Auto Safety v. EPA, 806 F.2d 1071, 1077 (D.C. Cir.
1986). [EPA-HQ-OAR-2010-0799-9519-A1, p. 6]
In a previous rulemaking, the agencies concluded that this statutory structure did not allow for
incorporation of air-conditioning efficiency improvement and off-cycle technology credits into
NHTSA's fuel economy analysis. 75 Fed. Reg. at 25,544 ("The CAFE standards and compliance
testing cannot capture all of the real world CO2 emissions, because EPCA currently requires
EPA to use the 1975 passenger car test procedures under which vehicle air conditioners are not
turned on during fuel economy testing."); 25,663 (requesting comment on including air
conditioning credits in light-truck testing requirements but emphasizing "that modernizing the
passenger car test procedures as well would not be possible under EPCA as currently
written"). [EPA-HQ-OAR-2010-0799-9519-A1, p. 6]
In this proposal, however, the agencies forward different legal rationales, id. at 74,998, which
they characterize as "major changes" from past practice, id., that would allow them to
incorporate air-conditioning efficiency and off-cycle technology improvements into NHTSA
standard setting. Both the agencies themselves, supra, and regulated industry have raised
questions regarding this conclusion. See EPA Doc. No. OAR-2009- 0472-7123.1 at 17
(Comments of Association of International Automakers on LDV Phase I) (noting that the
Association "does not support fundamentally changing the fuel economy/greenhouse gas test
procedures at this time"); see also EPA Doc. No. EPA-HQOAR- 2003-0214-0208 at 10
(Comments of the Alliance of Automobile Manufacturers) (noting that any change in test
procedures would require EPA "to develop a complex set of test procedure adjustment factors to
ensure that the new procedures 'give comparable results' to the existing ones"). [EPA-HQ-OAR-
2010-0799-9519-A1, pp. 6-7]
D. EPA and NHTSA Must Carefully Coordinate the Joint Rulemaking
Alone, NHTSA's CAFE standards cannot capture the significant opportunities for meaningful
greenhouse gas reductions available to EPA pursuant to its broad authority under the Clean Air
Act to address air pollution for the protection of human health and welfare. As such, EOF
strongly supports the agencies' focus on a joint rulemaking proposal that is "carefully
coordinated and harmonized," and, like the agencies, EDF recognizes that such coordination
must be "in accordance with all substantive and procedural requirements imposed by law" to
achieve durable and legally-defensible results. 76 Fed. Reg. 74,860; see also 76 Fed. Reg. at
74,902 (describing differences in the agencies' statutory authorities, including EPA's ability to
19-7
-------
EPA Response to Comments
address various GHGs and EPA's ability to account for certain compliance adaptability). Indeed,
the regulated community has long questioned the scope of NHTSA's authority. In contrast, there
is a well established body of law affirming the broad authority of EPA under the Clean Air Act
to adopt emission standards protecting human health and welfare from air pollutants. [EPA-HQ-
OAR-2010-0799-9519-A1, p. 7]
EDF applauds the agencies' efforts to collaborate on regulations to reduce greenhouse gas
emission and improve fuel economy and recognizes the imperative of doing so consistent with
the agencies' separate statutory mandates. EDF also recognizes the imperative of EPA action
under the full breadth and protections of the Clean Air Act to safeguard human health and the
environment from harmful air pollutants and to ensure those protections are lasting through
EPA's durable, tested delegated rulemaking authority. [EPA-HQ-OAR-2010-0799-9519-A1, p.
7]
Organization: Growth Energy
If EPA believes that the examination of the proposal to increase octane outlined in Attachment 3
is unnecessary or inappropriate because it lacks authority under section 211 of the Clean Air Act
to take the recommended action, then the Agency should fully explain why it believes it lacks
that authority, among other reasons so that Congress can consider appropriate changes in the
statute. [EPA-HQ-OAR-2010-0799-9505-A1. p. 6]
Organization: Natural Resources Defense Council (NRDC)
With this proposal, EPA is leveraging four decades of authority and expertise in successfully
regulating conventional pollutants from mobile sources to establish controls on GHG emissions.
While past improvements to Corporate Average Fuel Economy (CAFE) have made some
progress in reducing GHG emissions, the Clean Air Act authority is a far superior statute for the
purpose of controlling greenhouse gas (GHG) emissions since it provides the agency the ability
to adopt forward looking standards that are consistent with long-term environmental targets,
address all GHG emissions—not just carbon dioxide, and accurately reflect the true carbon
impacts of substituting different fuels for gasoline through life-cycle analysis. [EPA-HQ-OAR-
2010-0799-9472-A2, p. 2]
II. Clean Air Act is Appropriate Statute for Regulating Greenhouse Gases from Motor Vehicles
The Supreme Court in Massachusetts v. EPA ruled that the Clean Air Act (CAA) requires the
adoption of standards to control greenhouse gas (GHG) pollution from motor vehicles if EPA
determines that these emissions contribute to endangerment of public health or welfare. With the
model year 2012-2016 National Program Final Rule, the U.S. EPA and NHTSA established an
important partnership that ensures that the pollution and health protections of the CAA are
appropriately aligned with the fuel-conservation directive of the Energy Policy and Conservation
Act (EPCA). The latest proposal maintains that current partnership and alignment. [EPA-HQ-
OAR-2010-0799-9472-A2, p. 7]
19-8
-------
EPA Statutory Authority
EPA has used its authority and technical expertise to successfully regulate conventional
pollutants from mobile source emissions for nearly four decades. Since the 1970s, EPA has
significantly reduced transportation emissions by establishing performance-based standards for
all categories of mobile sources. The impact has led to tremendous success — EPA's mobile
source emission programs have reduced conventional pollutants from today's new personal
vehicles by 98-99 percent compared to those sold in the 1960s. EPA's fuel programs have
effectively removed lead from gasoline and most recently, led to the development of ultra low
sulfur diesel in the U.S. and advanced clean diesel technologies. [EPA-HQ-OAR-2010-0799-
9472-A2, p. 7]
Several major factors have led to EPA's success in controlling conventional pollutants from
mobile sources. These same factors provide the Agency with distinct advantages in terms of
regulating greenhouse gas emissions. [EPA-HQ-OAR-2010-0799-9472-A2, p. 7]
First, unlike EPCA which limits NHTSA to setting standards just five years into the future, the
CAA allows EPA to set technology-forcing standards that consider longer-term environmental
targets. With this latest proposal, EPA is proposing standards for a nine-year period into the
future, consistent with previous pollution emission standards. Addressing the multi-generational
environmental challenges of climate change is virtually impossible with only a five-year
perspective that necessarily relies upon only incremental additions of new technologies. This
longer-term, innovation-based approach creates the regulatory certainty necessary for
automakers to strategically plan for and invest in emerging and advanced technologies that are
needed to meet climate stabilization goals. [EPA-HQ-OAR-2010-0799-9472-A2, pp. 7-8]
Second, it is critical to address all GHG emissions, not just CC>2. Unlike EPCA, the CAA allows
EPA to set standards that directly address non-CC>2 GHG pollutants, in particular HFC-134a,
N2O, and CH4. According to EPA, these latter GHG pollutants currently compose 7.2 percent of
the effective vehicle GHG emissions.31 Inclusions of these pollutants enable EPA to adopt GHG
standards that achieve the maximum feasible reductions in GHGs in the most flexible and cost-
effective manner possible. [EPA-HQ-OAR-2010-0799-9472-A2, p. 8]
Third, the CAA allows EPA to adopt standards that accurately reflect the true impacts of
substituting different fuels for gasoline. Environmentally effective GHG standards must consider
both the carbon content and lifecycle emissions. Since fuel economy standards only consider the
miles driven per gallon of fuel used, it fails to account for the fact that a fuel such as diesel has a
higher carbon content per gallon than gasoline. Fuel economy standards under EPCA also do not
properly account for the differences in upstream emissions of different types of fuels. Ignoring
upstream emissions for fuels such as electricity, hydrogen, biofuels and diesel tend to inflate
their GHG benefits in comparison to gasoline. For example, a diesel-fueled vehicle that achieves
a fuel economy benefit of 20 percent or more versus a conventional gasoline-fueled vehicle using
diesel produced from coal (i.e. coal-to-liquid) could result in almost two times greater GHG life-
cycle on a per mile basis due to the inherently higher carbon content of diesel and the extremely
high carbon emissions associated with producing a diesel-like fuel from coal. [EPA-HQ-OAR-
2010-0799-9472-A2, p. 8]
19-9
-------
EPA Response to Comments
It is important to note that using the Clean Air Act to control carbon pollution was first initiated
by the Bush administration. In fact, in May 2007, a month after the Supreme Court's landmark
decision in Massachusetts v. EPA, President Bush went to the Rose Garden and ordered EPA
Administrator Johnson to carry it out by setting carbon pollution standards for new
vehicles. [EPA-HQ-OAR-2010-0799-9472-A2, p. 8]
In January 2008, Administrator Johnson appealed directly - albeit unsuccessfully - to President
Bush to allow EPA to carry out the law. His letter to the president stated that the science
supported "a positive endangerment determination" on carbon pollution and "does not permit a
negative fmding."32 The Johnson letter reveals three important facts: [EPA-HQ-OAR-2010-
0799-9472-A2, p. 8]
(1) That the Bush administration's EPA thought "a positive endangerment finding" was
compelled by both the science and the law. Johnson wrote that the Supreme Court's decision
"combined with the latest science of climate change requires the Agency to propose a positive
endangerment finding." He continued: "the state of the latest climate change science does not
permit a negative finding, nor does it permit a credible finding that we need to wait for more
research." [EPA-HQ-OAR-2010-0799-9472-A2, pp. 8-9]
(2) That Johnson's action plan - to issue an endangerment finding, set vehicle standards, and
more - had "Cabinet-level" buy-in. Johnson wrote that the scientific and legal need to issue a
positive endangerment finding "was agreed to at the Cabinet-level meeting in November." He
continued: "A robust interagency policy process involving principal meetings over the past eight
months has enabled me to formulate a plan that is prudent and cautious yet forward
thinking." [EPA-HQ-OAR-2010-0799-9472-A2, p. 9]
(3) That Johnson's action plan contained exactly the same steps that his successor, Lisa Jackson,
has carried out. Johnson told President Bush he had formulated a "prudent and cautious yet
forward thinking" action plan that "will fulfill your Administration's obligations under the
Supreme Court decision." Phase 1 of the plan called for these actions: [EPA-HQ-OAR-2010-
0799-9472-A2, p. 9]
In response to the Supreme Court mandate in Massachusetts v EPA, issue a proposed positive
endangerment finding for public notice and comment as agreed to in the policy process. [EPA-
HQ-OAR-2010-0799-9472-A2, p. 9]
In response to the direction in [the Energy Independence and Security Act], issue a proposed
vehicles rule jointly with the Department of Transportation to implement the new EISA and
address issues raised in the Supreme Court case. [EPA-HQ-OAR-2010-0799-9472-A2, p. 9]
To address requirements under the Clean Air Act, issue a proposed rule to update the New
Source Review program to raise greenhouse gas thresholds to avoid covering small sources and
to better define cost-effective, available technology. [EPA-HQ-OAR-2010-0799-9472-A2, p. 9]
—Quoted from letter from EPA Administrator Stephen Johnson to President Bush, January 31,
2008. [EPA-HQ-OAR-2010-0799-9472-A2, p. 9]
19-10
-------
EPA Statutory Authority
31 4.3 percent, 2.7 percent and 0.2 percent respectively. 74 FR 49454 at 49524, 49525,
49532. [EPA-HQ-OAR-2010-0799-9472-A2, p. 8]
32Steven L. Johnson, Former EPA Administrator, Memo to Former US President George Bush,
January 31, 2008. [EPA-HQ-OAR-2010-0799-9472-A2, p. 8]
Organization: Sierra Club, Environment America, Safe Climate Campaign, and Clean Air
Council
The National Program accounts for both EPA's and NHTSA's authority and requires no
additional action: NHTSA notes that it is "confronted with the issue of how to treat" EPA
standards in setting its own standards under EPCA and EISA. The Supreme Court has ruled that
EPA has the authority to regulate greenhouse gases such as CO2, holding that the Clean Air act
"is unambiguous" in its "sweeping definition of 'air pollutant';" that the statute "embraces all
airborne compounds of whatever stripe," including the greenhouse gasses "[c]arbon dioxide,
methane, nitrous oxide, and hydrofluorocarbons."34 Both the prior rule for MY 2012-16 vehicles
and this NPRM, which continues the process of joint standard setting with California and EPA
carries out the Mass. v. EPA decision. The NPRM and the prior rule demonstrate successful
cooperation and NHTSA's capacity to both account for, and in fact, improve upon its standard
setting process. [EPA-HQ-OAR-2010-0799-9549-A2, p. 10]
34 Massachusetts v. E.P.A, 549 U.S. 497, 528-29 (2007). [EPA-HQ-OAR-2010-0799-9549-A2,
p. 10]
Organization: Steyn, R.
* EPA has NO statutory authority to determine fuel economy standards for any reason. [EPA-
HQ-OAR-2010-0799-8724-A1, p. 2]
Organization: University of Michigan
A Call to EPA and NHTSA to Consider the Consumer Fuel Usage Reduction Options in the
Mid-term Evaluation of the Greenhouse-Gas Emission and Corporate Average Fuel Economy
Standards for Light-Duty Vehicles. [EPA-HQ-OAR-2010-0799-7986-A1, p. 1] [This comment
can also be found in section 2.4 of this comment summary.]
The emission standard is completely based on vehicle technology applied to a specific drive
cycle. Even the potential off-cycle credits are based on technology advancements or vehicle
hardware improvements. In the past, meeting the emission standards for regulated pollutants has
been the sole responsibility of the vehicle manufacturers. This is appropriate since (1) only the
manufacturers can implement the emission control technologies on the vehicles, (2) the impact of
fuels and vehicle usage on pollutant emissions are relatively limited, and (3) the cost of such
19-11
-------
EPA Response to Comments
implementation has not been excessive even though we may be approaching the state of
diminishing return. In the case of GHG emissions from light-duty vehicles, however, vehicle
technology is only one of three contributors. The others are vehicle fuels and consumer usage.
Vehicle technology alone cannot shoulder the full burden of CC>2 emission reductions in mobile
sources when carbon-containing fuels are used. CO2 emissions are directly proportional to the
amount of carbon-containing fuels (in the well-to-wheels sense) used in propelling the vehicles.
[EPA-HQ-OAR-2010-0799-7986-A1, pp. 1-2]
The laws of physics dictate the limits of technology capability in CC>2 emission reduction.
Economics and material resource availability further constrain the potential affordability of some
new technologies, low-carbon fuels and their accompanying infrastructure, even when financial
incentives are provided to cushion the costs of initial investments. It is obvious that in the effort
toward increasingly stringent reductions of GHG emissions, the role of consumer fuel usage can
no longer be ignored. As both the EPA and NHTSA will be undertaking the midterm evaluation
of the GHG emission and the corporate average fuel economy standard for model year 2022-
2025 vehicles in due course, we recommend that meaningful incentives for consumer fuel usage
reduction be taken into consideration. [EPA-HQ-OAR-2010-0799-7986-A1, p. 2] [The last
sentence of this comment can also be found in section 2.4 of Docket number EPA-HQ-OAR-
2010-0799-7986-A1]
Bringing the consumer's energy usage into the picture for CC>2 emission reduction is obviously
nontrivial. Cap-and-trade and carbon tax are two known economically efficient approaches in
reducing CC>2 emissions. Cap and trade is a massive undertaking and can be achieved by an
upstream and/or a downstream approach. In the upstream approach, carbon trading is achieved at
the level of fuel producers with the incurred cost adjustments being eventually borne by fuel
users. In the downstream approach, consumers directly adjust their fuel usage through available
fuel or carbon tradable credits available to them. Anticipating the advent of cap and trade in the
US at the time, Ellerman, Jacoby and Zimmerman (2006) proposed a mechanism to bring the
CAFE standard into the realm of cap and trade. Their rationale and proposed mechanism are
most definitely worthy of further consideration. Carbon tax is considerably simpler to design and
administer but will likely face substantial political resistance in the US, perhaps even when the
designed carbon-tax system is revenue neutral. [EPA-HQ-OAR-2010-0799-7986-A1, pp. 2-3]
In the absence of the two most efficient fossil-carbon-fuel usage reduction programs, other
options need to be explored. Opportunities abound in the design of new mobility options. Key
among them includes incentives for transit usage (both public and private in the broadest sense)
that can be translated into verifiable CC>2 emission and equivalent fuel-economy credits;
manufacturer's or consumer credits for encouragement of telecommuting, car pooling, use of
public and private transit options, credits for coupling of private and public transportation modes
for trip completion; credits for use of car-share systems as well as taxi and private shuttle use
that lead to actual fuel use reduction; use of mileage-based vehicle-insurance policies, and other
new incentives for total annual trip mileage reduction that can be translated into CO2 reduction
credit. While it is difficult to assess the most feasible and equitable fuel-usage reduction
programs at this time, this fact should not deter the EPA and NHTSA to explore and to
encourage the public to explore these options. It is only a matter of time that non- hardware-
related, carbon-fuel usage reduction options must become an integral part of a workable and
19-12
-------
EPA Statutory Authority
meaningful CC>2 and GHG emission reduction program. It is high time that we seriously consider
novel ways to power our vehicles and facilitate innovation in broader approaches to mobility to
create new options and incentivize behavior that reduces CO2 and GHG emission. [EPA-HQ-
OAR-2010-0799-7986-A1, pp. 3-4]
Reference: Ellerman, A.D., Jacoby, H.D. and Zimmerman, M.B. (2006): "Bringing
Transportation into a Cap-and-Trade Regime." MIT Joint Program on the Science and Policy of
Global Change, Report No. 136, June. [EPA-HQ-OAR-2010-0799-7986-A1, p. 4]
Organization: U.S. Chamber of Commerce
Moreover, as was the case with the 2012-2016 fuel economy rule, the Chamber has serious
concerns with the redundant regulatory framework proposed for 2017-25, and recommends
consolidation into a single program administered by NHTSA. [EP A-HQ-OAR-2010-0799-9521-
Al,p. 1]
II. There Must Be One Fuel Economy Rule, Administered By NHTSA
The Chamber believes there should be only one rule governing fuel economy, administered by
NHTSA under its existing authority. The Energy Policy and Conservation Act (EPCA)3 gives
NHTSA authority to set mandatory CAFE standards for motor vehicles. To the extent that EPA's
rule is the same as NHTSA's, there is no need for the rule. If EPA's rule provides added benefits,
then those benefits should be identified with specificity and any EPA regulations should be
narrowly tailored to achieve those additional objectives.4 [EPA-HQ-OAR-2010-0799-9521-A1,
p. 3]
EPA attempts to justify two rules on the basis that its standards, unlike NHTSA's, include air
conditioning improvements and slightly different compliance flexibilities. However, just a few
sentences later, EPA admits the obvious: [EPA-HQ-OAR-2010-0799-9521-A1, p. 3]
These differences, however, do not change the fact that in many critical ways the two agencies
are charged with addressing the same basic issue of reducing GHG emissions and improving fuel
economy. The agencies are looking at the same set of control technologies (with the exception of
the air conditioning leakage-related technologies). The standards set by each agency will drive
the kind and degree of penetration of this set of technologies across the vehicle fleet. As a result,
each agency is trying to answer the same basic question—what kind and degree of technology
penetration is necessary to achieve the agencies' objectives in the rulemaking time frame, given
the agencies' respective statutory authorities?5 [EPA-HQ-OAR-2010-0799-9521-A1, pp. 3-4]
In other words, there is little to no need for dual sets of regulations by EPA and NHTSA. [EPA-
HQ-OAR-2010-0799-9521-A1, p. 4]
As the Chamber pointed out in its comments on the 2012-2016 program, EPA can regulate air
conditioning improvements without even using Title II of the Clean Air Act. Title VI of the Act,
"Stratospheric Ozone Protection," gives EPA wide flexibility to regulate motor vehicle air
conditioners and their emissions.6 Section 608 and its corresponding regulations govern the use
19-13
-------
EPA Response to Comments
and disposal of ozone-depleting substances—of which air conditioning refrigerant qualifies—
and prohibits the knowing release of these substances into the atmosphere.7 Section 609, entitled
"Servicing of motor vehicle air conditioners," and the regulations at 40 C.F.R. Part 82 subpart B,
set forth specific regulations for the handling of motor vehicle air conditioning refrigerant during
servicing and upon disposal.8 Section 612 and its corresponding regulations set forth criteria for
evaluation of substitutes for existing ozone-depleting substances.9 [EPA-HQ-OAR-2010-0799-
9521-Al,p. 4]
It seems as though the only reason EPA feels the need to regulate fuel economy is to pacify
California, which remains the driving force behind the continuation of this bizarre tripartite fuel
economy arrangement. But the California problem is one of EPA's own making, one that could
have easily been avoided by denying its request for a waiver to regulate greenhouse gases from
motor vehicles. [EPA-HQ-OAR-2010-0799-9521-A1, p. 4]
The Clean Air Act requires EPA to justify its emissions standards by articulating a rational
connection between the alleged risk and the selected standards. 10 To avoid irrational regulation,
EPA must explain how its emissions standards will meaningfully ameliorate the endangerment
risk it has identified. 11 EPA once again appears to provide shaky evidence regarding whether its
own rule will meaningfully avert any predicted danger not already averted by NHTSA's
standards. Likewise, EPA appears to overstate the potential benefits that accrue from EPA's rule
that would not otherwise occur from NHTSA's. [EPA-HQ-OAR-2010-0799-9521-A1, pp. 4-5]
EPA has consistently maintained that Massachusetts v. EPA12 recognized that EPA has a
statutory obligation "wholly independent" from NHTSA. But the Supreme Court was only
recognizing that EPA had an obligation to examine the issue of GHG regulation and could not
side-step that obligation merely because NHTSA has authority to regulate fuel economy.
Nothing in Massachusetts suggests that EPA should ignore NHTSA's specific fuel-economy
regulations or that EPA may refuse to consider whether those regulations are sufficient to realize
its own GHG reduction goals. Indeed, Massachusetts made clear that "there is no reason"
NHTSA and EPA could not "administer their obligations" in a way that "avoid[s]
inconsistency." 13 There is accordingly no reason EPA should not take into account GHG
reductions achieved by NHTSA's rules, especially because Congress has given NHTSA (unlike
EPA) a mandatory, specific instruction to promulgate fuel-economy standards. [EPA-HQ-OAR-
2010-0799-9521-A1, p. 5]
For all of the foregoing reasons, the Chamber strongly recommends issuing a single fuel
economy rule for the 2017-2025 period, administered by NHTSA. [EPA-HQ-OAR-2010-0799-
9521-Al,p. 5]
4 To the extent EPA continues to interpret this rule as triggering absurd regulation on other
sources that requires rewriting of the statute (i.e. the Tailoring Rule), then this rule relies on an
improper and untenable construction of the statutory requirements. Moreover, EPA must
consider all of the costs and consequences of its rule in a meaningful fashion.
19-14
-------
EPA Statutory Authority
6 Congress even recognized the ability to limit greenhouse gas emissions through Title VI:
Section 602(e), entitled "Ozone-depletion and global warming potential," requires the
Administrator to assess the global warming potential of each ozone-depleting substance covered
by Title VI.
742U.S.C. §7671g.
8 Id. at § 767 Ih.
9 Id. at § 7671L
10 See Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 525 (D.C. Cir. 1983);
Ethyl Corp. v. EPA, 541 F.2d 1 (D.C. Cir. 1976); see also CAA § 307(d)(9).
11 See Chemical Mfirs., 217 F.3d 861, 865-67 (D.C. Cir. 2000) (although statute mandated
regulation, EPA still must show that regulations served statutory objectives); Alabama Power
Co. v. Costle, 636 F.3d 323, 360 (D.C. Cir. 1979) (interpretations that "mandate pointless
expenditures of effort" should be avoided).
12 549 U.S. 497(2007).
13 Id. at 532.
Response:
The comments that EPA lacks authority to issue standards controlling GHG emissions
from new motor vehicles, that EPA's regulations rest on an incorrect finding that greenhouse
gases endanger public health and welfare, and that EPA should defer any regulation to NHTSA
under the CAFE program, have all been rejected by the D.C. Circuit in Coalition for Responsible
Regulation v. EPA, No. 09-1322 (June 26, 2012). In particular, the court held that the
endangerment finding was reasonable and fully grounded and supported by the vast body of
scientific literature and information on climate change, and that EPA had a mandatory duty
under section 202 (a) to issue the MYs 2012-2016 standards. Slip op. pp. 22-34, 40-43. Section
202 (a) (1) further provides that EPA may revise section 202 (a) "from time to time", which
authority EPA is exercising in this proceeding. The Coalition for Responsible Regulation court
likewise rejected arguments that EPA had any discretion to defer regulation of vehicular GHGs
due to NHTSA's authority under EPCA/EISA: "Just as EPA lacks authority to refuse to regulate
on the grounds of NHTSA's regulatory authority, EPA cannot defer regulation on that basis."
Slip op. p. 41. The commenters' argument that the EPA and NHTSA programs are duplicative is
also factually wrong. As with the MYs 2012-2016 rules, the section 202 (a) GHG standards
"provide benefits above and beyond those resulting from NHTSA's fuel-economy standards."
Slip op. p. 42. These benefits "above and beyond" are not just from control of direct air
conditioning emissions, as the commenters mistakenly would have it. The GHG rules result in
more reductions of CO2 emissions (see preamble Tables 111-61 and IV-42), and more reductions
in petroleum consumption than the CAFE rules (see preamble Tables 111-80 and IV-41). These
incrementally greater reductions of both GHGs and savings of petroleum are substantial: Thus,
19-15
-------
EPA Response to Comments
even assuming that the MYs 2022-2025 augural CAFE standards were actually in place, the
GHG rules are estimated to achieve 17%, 23%, and 27% greater reductions in GHG emissions in
calendar years 2030, 2040, and 2050, and to achieve 9%, 18%, and 20% greater reductions in
petroleum than the CAFE standards in those same calendar years. The differences are far greater
in fact, since there are no CAFE standards after MY 2021.
The comment that these rules are an end-run on Congressional authority are likewise
misplaced. Section 202 (a) has been definitively construed as applying to carbon pollution, and
EPA's duty to determine if carbon pollution endangers public health and welfare, and to issue
standards to control emissions of the pollutants which endanger is mandatory. EPA is thus
implementing the authority delegated by Congress, not flouting Congressional authority.
Comments that the GHG rules should reflect fuel content, or otherwise should be based
on lifecycle analysis rather than tailpipe emissions are addressed in sections 6 and 14 of this
document. We note here that section 202(a) standards address control of vehicular emissions.
Converting that program into a fuel-based program would constitute a dramatic distortion of the
purpose and structure of the vehicle emissions standard program. There is no good reason to
consider such a result, and that is especially the case here where there is a separate fuel based
program, the RFS program, that achieves a reduction in lifecycle GHG emissions associated with
the diesel fuel used by motor vehicles, through a mandate to use certain renewable diesel fuels.
Regarding comments from the University of Michigan, some of the concepts suggested
by the commenter go beyond the scope of this rule. Nevertheless, EPA appreciates the
suggestions of the commenter, and notes that we have been involved in programs that encourage
the voluntary change in travel behavior, such as encouraging commuters to use public
transportation.
19-16
-------
Statutory and Executive Orders
20. Statutory and Executive Orders
Organizations Included in this Section
American Petroleum Institute (API), National Association of Manufacturers (NAM), and
American Fuel & Petrochemical Manufacturers (AFPM)
Center for Biological Diversity
Competitive Enterprise Institute (CEI)
Growth Energy
Pacific Legal Foundation (PLF)
RVIA
Organization: American Petroleum Institute (API), National Association of Manufacturers
(NAM), and American Fuel & Petrochemical Manufacturers (AFPM)
Contrary to the text of the statute, and the Supreme Court's direction in Massachusetts, EPA
failed to consider the cost of compliance with the stationary source regulations that the 2017 Car
Rule could trigger. [EPA-HQ-OAR-2010-0799-9509-A1, p. 9]
EPA failed to perform a host of other mandatory analyses, including but not limited to: [EPA-
HQ-OAR-2010-0799-9509-A1, p. 9]
• Under the Regulatory Flexibility Act (RFA), 5 U.S.C. §§ 603(a) & 605(b), EPA must
prepare an analysis that describes the effects of a proposed rule on small businesses, or
certify that there are no such effects. Despite EPA's assertion that vehicle emissions
standards trigger permitting requirements for stationary sources, it certified that the 2017
Car Rule would "not have a significant economic impact on a substantial number of small
entities." 2017 Car Rule, 76 Fed. Reg. at 75,161. EPA's reliance on Mid-Tex. Elec. Coop
v. FERC, 773 F.2d 327 (D.C. Cir. 1985), and Cement Kiln Recycling Coalition v. EPA,
255 F.3d 855 (D.C. Cir. 2001), is misplaced because the 2017 Car Rule's impact on small
businesses is not merely an indirect effect of the 2017 Car Rule's impact on regulated
entities. Instead, as a result of the triggering effect of the 2017 Car Rule for stationary
source permitting requirements, many small businesses will be regulated directly by EPA
as a result of this rule. EPA is required to analyze these impacts in accordance with the
RFA before issuing a rule. Instead, EPA asserts that any impact on small businesses
should be attributed to express statutory requirements in the CAA or previously
promulgated EPA regulations. 76 Fed. Reg. at 75,162 n.597. EPA ignores the fact that
once the Car Rule and Truck Rule are vacated, the 2017 Car Rule will be sole "trigger"
for EPA's GHG permitting requirements for stationary sources. [EPA-HQ-OAR-2010-
0799-9509-A1, p. 9]
• Under the Unfunded Mandates Reform Act (UMRA) 2U.S.C.§1535, EPA must
consider regulatory alternatives and adopt the least costly, most cost-effective, or least
burdensome alternative that achieves the objectives of the rule. Here, EPA's sole
proclaimed goal is regulating emissions from vehicles, yet it has ignored apparent
alternatives that would fully realize that goal while avoiding the heavy burdens on
stationary sources. See Section I supra. [EPA-HQ-OAR-2010-0799-9509-A1, p. 10]
20-1
-------
EPA Response to Comments
• Similarly, under the Paperwork Reduction Act (PRA), 44 U.S.C. §§ 3501-3521, EPA
must seek approval from the Office of Management and Budget before creating rules that
will involve information collection requirements. EPA never submitted a request for
approval of the massive information collection requirements that the 2017 Car Rule could
impose on stationary sources newly subject to permitting requirements. 76 Fed. Reg. at
75,160. [EPA-HQ-OAR-2010-0799-9509-Al,p. 10]
• EPA has also failed to perform the economic impact assessment required by CAA § 317,
42 U.S.C. § 7617, which, by law, must contain an analysis of a proposed rule's
compliance costs, inflationary or recessionary effects, competitive effects, effect on
consumers, and impact on energy use. [EPA-HQ-OAR-2010-0799-9509-A1, p. 10]
• Finally, the proposed rule fails to satisfy Executive Order 13211 's requirement that EPA
conduct an analysis of its actions' impact on energy supply, distribution, and use, 76 Fed.
Reg. at 75,163, as well as Executive Order 12898's requirement that EPA identify and
address disproportionate effects of its actions on minority and low-income populations in
the United States, id. Triggering stationary source permitting requirements for GHGs will
undoubtedly raise energy prices, thereby harming low-income populations that are most
vulnerable to high energy prices. EPA failed to consider these impacts in proposing its
rule. [EPA-HQ-OAR-2010-0799-9509-Al,p. 10]
Thus, in the proposed rule, EPA has "entirely failed to consider an important aspect of the
problem," making the proposed GHG Truck Rule arbitrary and capricious. Motor Vehicle Mfrs.,
463 U.S. at 43. [EPA-HQ-OAR-2010-0799-9509-A1, p. 10]
Response:
These incorrect assertions were rejected in their entirety by the D.C. Circuit in Coalition
for Responsible Regulation v. EPA. No. 09-1322 (D.C. Cir. June 26, 2012) slip op. pp. 44-45.
The commenter is equally mistaken in this rulemaking. Thus, EPA has prepared an RIA which
assesses, among other things, costs of the vehicle program, impacts and assessment of standards
both more and less stringent than those adopted, vehicle sales impacts, employment impacts in
the light duty vehicle sector, consumer lifetime savings on new vehicle purchases, energy use
impacts, and small business impacts. Substantially the same analysis was available as part of the
record for the proposed rule. This analysis fully satisfies the requirement in CAA section 317.
The commenter is equally incorrect regarding requirements of the Paperwork Reduction Act.
See 76 FR 75160 ("[t]he information collection requirements in this proposed rule have been
submitted for approval to the Office of Management and Budget... under the Paperwork
Reduction Act... The Information Collection Request... document prepared by EPA has been
assigned EPA ICR number 0783.61"). The remaining assertions are predicated on the incorrect
assumption that EPA must account for stationary source burdens flowing from this rule, an
argument rejected in its entirety by the D.C. Circuit in Coalition for Responsible Regulation v.
EPA. In any case, this rule has no such effect on stationary sources, since greenhouse gases are
already "regulated pollutants" under the Act by virtue of the MYs 2012-2016 rule, as well as
other regulatory actions which control emissions of GHGs.
Organization: Center for Biological Diversity
20-2
-------
Statutory and Executive Orders
A. The Agencies Misapprehend the Nature and Relative Weight of the Factors They Must
Consider Under EPCA and EISA
In enacting EPCA in 1975, shortly after the energy crisis of 1973, Congress observed that "[t]e
fundamental reality is that this nation has entered a new era in which energy resources previously
abundant, will remain in short supply retarding our economic growth and necessitating an
alteration in our life's habitats and expectations."7 Among the goals of EPCA are to '"decrease
dependence on foreign imports, enhance national security [and to] achieve the efficient
utilization of scarce resources . . .'"8 The fundamental purpose of EPCA, however, is energy
conservation.9 [EPA-HQ-OAR-2010-0799-9479-A1, p. 3]
In furtherance of the overarching goal of energy conservation, NHTSA must set fuel economy
standards at "the maximum feasible average fuel economy level that the Secretary decides the
manufacturers can achieve in that model year." 10 The statute provides that "[w]hen deciding
maximum feasible average fuel economy under this section, the Secretary . . . shall consider
technological feasibility, economic practicability, the effect of other motor vehicle standards of
the Government on fuel economy, and the need for the United States to conserve cannot balance
them in a manner that is contrary to fuel conservation: NHTSA "cannot set fuel economy
standards that are contrary to Congress' purpose in enacting the EPCA - energy
conservation."12 Further, NHTSA cannot give so much weight to any factor, including
consumer choice or demand, that the goal of fuel conservation is undercut: "NHTSA may
consider consumer demand, but 'it would clearly be impermissible for NHTSA to rely on
consumer demand to such an extent that it ignored the overarching goal of fuel conservation.'"13
The Agencies also cannot act arbitrarily or capriciously; cannot advance conclusions
unsupported by the evidence; if they conduct cost-benefit analyses, they may not assign values of
zero to benefits that can be ascertained within a range; and they cannot bias their cost-benefit
analysis. [EPA-HQ-OAR-2010-0799-9479-Al, pp. 3-4]
I. The Agencies must Complete an Endangered Species Act Section 7 Consultation to Ensure
that their Action will not Jeopardize or Adversely Modify the Critical Habitat of any Species
Listed as "Threatened" or "Endangered"
To our knowledge the Agencies have not initiated consultation with the U.S. Fish and Wildlife
Service and National Oceanic and Atmospheric Administration Fisheries Service under Section 7
of the federal Endangered Species Act to ensure that this action will not jeopardize or adversely
modify the critical habitat of any species listed as "threatened" or "endangered." [EPA-HQ-
OAR-2010-0799-9479-A1, p. 25]
Congress enacted the Endangered Species Act ("ESA") to conserve endangered and threatened
species and the ecosystems upon which they depend. 111 The Supreme Court's review of the
ESA's "language, history, and structure" convinced the Court "beyond a doubt" that "Congress
intended endangered species to be afforded the highest of priorities."! 12 As the Court found,
"the plain intent of Congress in enacting this statute was to halt and reverse the trend toward
species extinction, whatever the cost." 113 Species are added to the lists of endangered and
threatened species by the U.S. Fish and Wildlife Service (with jurisdiction over most terrestrial
and freshwater species) and the National Marine Fisheries Service (with jurisdiction over most
20-3
-------
EPA Response to Comments
marine species) (collectively, the "Services"). A species is "endangered" if it "is in danger of
extinction throughout all or a significant portion of its range." 114 A species is "threatened" if it
"is likely to become an endangered species within the foreseeable future throughout all or a
significant portion of its range."! 15 Once a species is listed under the ESA, Section 7 requires all
federal agencies to "insure" that their actions neither "jeopardize the continued existence" of any
listed species nor "result in the destruction or adverse modification" of its "critical habitat."! 16
In addition, the "take" of listed species is generally prohibited.! 17 "Take" means "to harass,
harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any
such conduct."! 18 The Services may, however, permit "incidental" take on a case-by-case basis
if it finds, among other things, that such take will be minimized and mitigated and that such take
will not "appreciably reduce the likelihood of survival and recovery of the species."! 19 [EPA-
HQ-OAR-2010-0799-9479-A1, pp. 25-26]
Section 7 consultation is required for "any action [that] may affect listed species or critical
habitat." 120 Agency "action" is defined in the ESA's implementing regulations to include "all
activities or programs of any kind authorized, funded, or carried out, in whole or in part, by
Federal agencies in the United States or upon the high seas. Examples include, but are not
limited to: (a) actions intended to conserve listed species or their habitat; (b) the promulgation of
regulations; (c) the granting of licenses, contracts, leases, easements, rights-of-way, permits, or
grants-in-aid; or (d) actions directly or indirectly causing modifications to the land, water, or
air."121 This regulatory definition of "action" clearly encompasses the Agencies' rulemaking,
since the emissions from the regulated vehicles unquestionably will cause "modification to the
land, water, or air." The U.S. Fish and Wildlife Service's and National Marine Fisheries
Service's Consultation Handbook, Procedures for Conducting Consultation and Conference
Activities under Section 7 of the Endangered Species Act (March 1998,) explains the above
terms and definitions. There can also be no question that the enormous volume of direct, indirect,
and cumulative emissions from the regulated vehicles "may affect" listed species, and therefore
the Agencies must consult. [EPA-HQ-OAR-2010-0799-9479-A1, p. 26]
The rulemaking will impact species listed as threatened and endangered in several ways, yet the
Agencies have failed to initiate the required Section 7 consultations with the Services on its
impact. If the Agencies fail to initiate and complete the required Section 7 consultations on the
rulemaking, they may be held liable for take of listed species caused by the impacts of their
action, including increased greenhouse gas emissions and other emissions such as NOX. On May
15, 2008, the U.S. Fish and Wildlife Service listed the polar bear as a threatened species
throughout is range due to global warming. 122 The Agencies must consult on the impact of the
rulemaking on the polar bear. [EPA-HQ-OAR-2010-0799-9479-A1, p. 26]
On May 9, 2006, the National Marine Fisheries Service listed the staghorn and elkhorn corals as
threatened due in part to increasing ocean temperature and ocean acidification due to
anthropogenic greenhouse emissions. 123 The Agencies must consult on the impact of the
rulemaking on these coral species. The Agencies must also consult on the impact of the
rulemaking on the polar bear's and the corals' critical habitat, once such habitat is
designated. [EPA-HQ-OAR-2010-0799-9479-A1, p. 26]
20-4
-------
Statutory and Executive Orders
Global wanning was cited by the U.S. Fish and Wildlife Service in its critical habitat
rulemakings for the Quino Checkerspot and Bay Checkerspot butterflies. 124 The Agencies must
consult on the impact of the rulemaking on these species and their critical habitat as well. [EPA-
HQ-OAR-2010-0799-9479-A1, p. 26]
The Agencies must not limit their consultation, however, to species like the polar bear, corals,
and checkerspot butterflies for which anthropogenic greenhouse emissions were cited as a reason
for listing or as an impact in the listing or critical habitat rules. Numerous species are affected by
climate change as reflected in the recovery plans for those species and other documents. [EPA-
HQ-OAR-2010-0799-9479-A1, p. 27]
There at least 124 listed species for which a recovery plan has been adopted that specifically
identifies climate change or a projected impact of climate change as a direct or indirect threat to
the species, as a critical impact to be mitigated, as a critical issue to be monitored, and/or as a
component of the recovery criteria. 125 These findings constitute clear evidence that the
Agencies' rulemaking "may affect" these species, and that they must consult on the impact of
this action on all listed species which may be affected. [EPA-HQ-OAR-2010-0799-9479-Al, p.
27]
The rulemaking will impact listed species in ways beyond global warming and ocean
acidification. For example, vehicles are a primary source of excess nitrogen in the environment.
Excess nitrogen contributes to major environmental problems including reduced water quality,
eutrophication of estuaries, nitrate-induced toxic effects on freshwater biota, changes in plant
community composition, disruptions in nutrient cycling, and increased emissions from soil of
nitrogenous greenhouse gases. 126 Nitrogen deposition therefore impacts species listed under the
Endangered Species Act in a number of ways. [EPA-HQ-OAR-2010-0799-9479-A1, p. 27]
The direct, indirect, and cumulative impacts of setting fuel economy standards for all passenger
vehicles and light trucks nationally are extraordinarily significant, and therefore a large number
of species may be implicated. Where, as here, the Agencies' rulemaking is national in scope,
they should conduct a nationally focused consultation. The agencies must not attempt to use the
large scale of the rulemaking as an excuse for ignoring its environmental review duties; instead,
the scope of the action only makes it more important to thoroughly review its impacts under all
applicable laws. Nor can the mere fact that a large geographical area or large number of species
will be affected be used as an excuse for inaction. 127 If anything, a nationally focused
consultation will provide the opportunity to most efficiently analyze the impact of the
rulemaking on species and groups of species. [EPA-HQ-OAR-2010-0799-9479-A1, p. 27]
7 H.R. Rep. No. 94-340 at 1-3 (1975), as reprinted in 1975 U.S.C.C.A.N. 1762, 1763. [EPA-HQ-
OAR-2010-0799-9479-A1, p. 3]
8 Center for Biological Diversity v. NHTSA, 538 F.3d 1172, 1182 (9th Cir. 2008) ("CBD v.
NHTSA") (quoting S.Rep. No. 94-516 (1975) (Conf. Rep.), as reprinted in 1975 U.S.C.C.A.N.
1956, 1957). [EPA-HQ-OAR-2010-0799-9479-A1, p. 3]
20-5
-------
EPA Response to Comments
9 Id. at 1195. [EPA-HQ-OAR-2010-0799-9479-A1, p. 3]
10 49 U.S.C. § 32902(a)(emphasis added). [EPA-HQ-OAR-2010-0799-9479-A1, p. 3]
11 Id. § 32902(f). [EPA-HQ-OAR-2010-0799-9479-A1, p. 4]
12 CBD v. NHTSA, 538 F.3d at 1197. [EPA-HQ-OAR-2010-0799-9479-A1, p. 4]
13 Id. at 1195 (quoting Center for Auto Safety v. NHTSA, 793 F.2d 1322, 1338 (D.C. Cir.
1986). [EPA-HQ-OAR-2010-0799-9479-A1, p. 4]
111 16 U.S.C. § 153l(b). [EPA-HQ-OAR-2010-0799-9479-A1, p. 25]
112 Tennessee Valley Authority v. Hill, 437 U.S. 153, 174 (1978). [EPA-HQ-OAR-2010-0799-
9479-A1, p. 25]
113 Id. at 184. [EPA-HQ-OAR-2010-0799-9479-A1, p. 25]
114 16 U.S.C. § 1532(6). [EPA-HQ-OAR-2010-0799-9479-A1, p. 25]
115 16 U.S.C. § 1532(20). [EPA-HQ-OAR-2010-0799-9479-Al, p. 25]
116 Id. at § 1536(a)(2). [EPA-HQ-OAR-2010-0799-9479-A1, p. 25]
117 Id. at § 1538(a); 50 C.F.R. § 17.3l(a). [EPA-HQ-OAR-2010-0799-9479-A1, p. 25]
118 16 U.S.C. § 1532(19). [EPA-HQ-OAR-2010-0799-9479-A1, p. 25]
119 Id. at § 1539(a). [EPA-HQ-OAR-2010-0799-9479-A1, p. 26]
120 50 C.F.R. § 402.14. [EPA-HQ-OAR-2010-0799-9479-A1, p. 26]
121 50 C.F.R. § 402.02. [EPA-HQ-OAR-2010-0799-9479-A1, p. 26]
122 Endangered and Threatened Wildlife and Plants, Determination of Threatened Status for the
Polar Bear (Ursus maritimus) Throughout its Range, 73 Fed. Reg. 28212-28303 (May 15,
2008). [EPA-HQ-OAR-2010-0799-9479-A1, p. 26]
123 71 Fed. Reg. 26852 [EPA-HQ-OAR-2010-0799-9479-A1, p. 26]
124 See 73 Fed. Reg. 3328-3373 and 72 Fed. Reg. 48178-48218. [EPA-HQ-OAR-2010-0799-
9479-A1, p. 26]
125 Anthony Povilitis and Kieran Suckling, Addressing Climate Change Threats to Endangered
Species in U.S. Recovery Plans, Conservation Biology, Vol. 24, No 2, 372-376 (2010). [EPA-
HQ-OAR-2010-0799-9479-A1, p. 27]
20-6
-------
Statutory and Executive Orders
126 Fenn M.E. et al., Ecological Effect of Nitrogen Deposition in the Western United States,
Bioscience 53:404 (2003), available at
www.fs.fed.us/psw/publications/fenn/psw_2003_fenn012.pdf [EPA-HQ-OAR-2010-0799-9479-
Al, p. 27]
127 See, e.g., Wash. Toxics Coalition v. EPA, 413 F.3d 1024 (9th Cir. Wash. 2005) (upholding
order requiring the EPA to consult on the impact of 54 pesticide ingredients on 25 species of
fish.). [EPA-HQ-OAR-2010-0799-9479-A1, p. 27]
Response:
Section 7(a)(2) of the Endangered Species Act (ESA) requires federal agencies, in
consultation with the National Oceanic and Atmospheric Administration Fisheries Service
(NOAA Fisheries) and/or the U.S. Fish and Wildlife Service (FWS, and, with NOAA Fisheries,
the Services), to ensure that actions they authorize, fund, or carry out are not likely to jeopardize
the continued existence of federally-listed threatened or endangered species, or result in the
destruction or adverse modification of designated critical habitat of such species. 16 U.S.C. §
1536(a)(2). Under the Services' relevant implementing regulations, consultation is required for
actions that "may affect" listed species or designated critical habitat. 50 CFR § 402.14.
Consultation is not required where the action has "no effect" on such listed species or critical
habitat. Under this standard, it is the federal agency taking the action that evaluates the action
and determines whether consultation is required. See 51 FR 19926, 19949 (June 3, 1986). The
effects of a federal action are defined by regulation to include both the direct and indirect effects
of the action on listed species or designated critical habitat. 50 CFR § 402.02. Indirect effects
are those that are caused by the action and are later in time, but still are reasonably certain to
occur. Id.; Cf., 51 FR at 19932-19933 (discussing "reasonably certain to occur" in the context of
cumulative effects analysis and noting that only matters that are likely to occur - and not
speculative matters - are included within the standard).
Pursuant to Section 7(a)(2) of the ESA, EPA has carefully considered the effects of its
MYs 2017-2025 light duty motor vehicle rule and has reviewed applicable ESA regulations, case
law, and guidance to determine what, if any, impact there may be to listed species or designated
critical habitat. EPA has considered issues relating to emissions of carbon dioxide (CO2) and
other greenhouse gases (GHGs) as well as issues relating to emissions of non-GHG air
pollutants. EPA has also coordinated with NHTSA to assess ESA requirements in connection
with EPA's rulemaking and NHTSA's related CAFE Standards. EPA notes that NHTSA's
response to the ESA comment submitted on the NPRM is found in Chapter 9 (pages 9-99
through 9-102) of its Final EIS. EPA agrees with the reasoning in NHTSA's response as applied
to EPA's rulemaking. Based on EPA's assessment, EPA has determined that the agency's
rulemaking action, which will generally result in emissions reductions from what would
otherwise occur in the absence of this rule, does not require consultation with the Services under
Section 7(a)(2) of the ESA.
EPA notes that similar issues regarding applicability of ESA Section 7(a)(2) consultation
requirements were raised by the same commenter in connection with EPA's MY 2012-2016 light
duty motor vehicle rulemaking. In that context, EPA addressed in detail issues regarding ESA
Section 7(a)(2) in its Response To Comment document at pages 4-94 through 4-103 (the MY
20-7
-------
EPA Response to Comments
2012-2016 ESA Response). EPA believes that the same basic rationale as set forth in that
response also applies to the current comment and rulemaking, and EPA adopts and incorporates
that prior response here.
In particular, EPA notes that its rulemaking will result in GHG emissions reductions that
would be expected to have beneficial effects with respect to global climate change and associated
impacts. The commenter appears to generally misunderstand the effect of the rule and to
attribute the entire volume of emissions from the regulated sector to EPA's action. To the
contrary, the rule will generally reduce the impacts of climate change and will, therefore, be
expected to have a beneficial effect with respect to global climate change. EPA believes,
however, that any potential for a specific impact to particular listed species and their habitats
associated with the emission changes achieved by this rulemaking is too uncertain and remote to
trigger the threshold for ESA Section 7(a)(2) consultation.
As detailed in the MY 2012-2016 ESA Response, EPA's conclusion that ESA Section
7(a)(2) consultation is not required relies on the significant legal and technical analysis
undertaken by FWS, the Department of the Interior (DOI), and EPA regarding GHG emissions
and the ESA. As explained in that response, FWS and DOI have - in the context of various
documents relating to the listing of the polar bear as a threatened species - determined that it is
not possible, for ESA purposes, to trace a causal link between a single stationary source's GHG
emissions and any reasonably certain effect on a specific species in a specific habitat.93 Although
EPA's rule involves GHG reductions from mobile sources rather than emissions from a single
stationary source, EPA believes that the analysis regarding causation is relevant here. EPA
agrees that there must be a causal connection between a federal action and a potential effect on
listed species or critical habitat for Section 7(a)(2) consultation requirements to apply, and that
the potential effect must be reasonably certain to occur.
In addition, as EPA did in the MY 2012-2016 ESA Response, EPA has also considered
the specific GHG emissions reductions achieved by the current rule in light of any potential
impacts on listed species or designated critical habitat. In the MY 2012-2016 ESA Response,
EPA explained that it had previously attempted to analyze the impacts on temperature and
tropical ocean pH of GHG emissions from a single large stationary source. In that prior analysis,
EPA concluded that any such potential effects were too remote to trigger ESA Section 7(a)(2)
consultation requirements. In the MY 2012-2016 ESA Response, EPA extended that analysis to
the magnitude of GHG emission changes resulting from implementation of that rule and for
similar reasons concluded that ESA consultation was not required. EPA has also considered the
magnitude of GHG emission changes achieved by the current rule and finds that for the same
reasons described in the MY 2012-2016 ESA Response, any potential effects attributable to such
93 One of the principal relevant documents from the polar bear listing is FWS' Final Special Rule for the
Polar Bear (73 FR 76249 (Dec. 16, 2008)). EPA is aware that the Federal District Court for the District of Columbia
has found that the Final Special Rule did not comply with requirements of the National Environmental Policy Act
(NEPA). See In re Polar Bear Endangered Species Act Listing and § 4(d) Rule Litigation, 818 F. Supp.2d214
(D.D.C. 2011). Importantly, however, the District Court did uphold FWS' approach regarding ESA Section 7(a)(2),
which supports the relevant analytical framework addressed in EPA's MY 2012-2016 ESA Response and adopted as
part of the current response set forth here.
20-8
-------
Statutory and Executive Orders
changes are too remote to trigger ESA consultation. In particular, the EPA technical analysis for
MY 2017-2025 concludes that, relative to the reference case, by 2100 projected atmospheric CC>2
concentrations are estimated to be reduced by 3.21 to 3.58 part per million by volume (ppmv),
global mean temperature is estimated to be reduced by 0.0074 to 0.0176°C, and sea-level rise is
projected to be reduced by approximately 0.071-0.159 cm, based on a range of climate
sensitivities. The analysis also demonstrates that ocean pH will increase by 0.0017 pH units by
2100 relative to the reference case (ie, reduced acidification). As noted above, EPA believes that
these results fit within the analytical framework of EPA's prior ESA/GHG assessments as
described in the MY 2012-2016 ESA Response.
In the MY 2012-2016 ESA Response, EPA also considered non-GHG air pollutant
emissions and concluded - for similar reasons as explained in relation to GHG emission changes
- that the changes in emissions of such pollutants attributable to that rule did not trigger ESA
Section 7(a)(2) consultation. EPA has also considered changes in non-GHG pollutant emissions
associated with the current rulemaking. The following chart provides EPA's estimated changes
for each of the non-GHG pollutants.
Annual Non-GHG Pollutant Emission Impacts of Program (short tons)
Pollutant
VOC
CO
NOX
PM2.5
SOX
1,3-
Butadiene
Acetaldehyde
Acrolein
Benzene
Formaldehyde
CY 2020
Impacts
(Short Tons)
-11,712
14,164
-904
-136
-1,270
1
3
0
-16
-7
% of Total
US Inventory
-0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
CY 2030
Impacts
(Short Tons)
-123,070
224,875
-6,509
-1,254
-13,377
25
57
2
-101
-43
% of Total
US Inventory
-1.0%
0.4%
-0.1%
0.0%
-0.2%
0.2%
0.1%
0.0%
0.0%
0.0%
Source: RIA Table 4.3-19
Consistent with the MY 2012-2016 ESA Response, EPA notes that the modeling tools
available for EPA's regulatory analysis of the non-GHG pollutants are not designed to trace
fluctuations in ambient concentration levels to potential impacts on particular species. EPA
believes that such models do not, therefore, attribute any biological response or impact on listed
species to the ambient concentration changes with the degree of reasonable certainty required
under the ESA. In addition, EPA is unaware of information identifying any effects on listed
species from the small fluctuations in amounts of non-GHG pollutants indicated in the chart. For
the same reasons identified in the MY 2012-2016 ESA Response, EPA thus concludes that ESA
20-9
-------
EPA Response to Comments
consultation is not required with respect to the non-GHG emission changes attributable to the
current light duty motor vehicle rule.
For additional discussion of EPA's analysis regarding the light duty motor vehicle rule
and ESA Section 7(a)(2) requirements, see the MY 2012-2016 ESA Response.
Organization: Competitive Enterprise Institute (CEI)
III. EPA/NHTSA: Denying Plain Facts They Must Know to be True
At a recent hearing before a House oversight panel, three Obama Administration witnesses —
NHTSA Administrator David Strickland, EPA Assistant Air Administrator Gina McCarthy, and
EPA Transportation and Air Quality Director Margo Oge - denied under oath that motor vehicle
GHG emission standards are "related to" fuel economy standards. 10 In so doing, they denied
plain facts they must know to be true. They lied to Congress. [EPA-HQ-OAR-2010-0799-95 52-
Al,p.3]
House Government Oversight and Reform Chairman Darrell Issa put it more diplomatically:
"Your statements under oath misrepresented the relationship between regulating greenhouse
gases and regulating fuel economy." By "obstinately insisting" that regulating greenhouse gases
and fuel economy are "separate and unrelated endeavors," he said, the Administration officials
"impede the Committee's important oversight work." [EPA-HQ-OAR-2010-0799-9552-A1, p. 3]
Why did they "misrepresent" and "impede"? Had they answered truthfully, they would have to
admit that California's greenhouse gas motor vehicle emissions law, AB 1493, which EPA
approved in June 2009,11 violates EPCA' s express preemption of state laws or regulations
"related to" fuel economy. 12 The officials would also have to admit that EPA is effectively
regulating fuel economy, a function outside the scope of its statutory authority. [EPA-HQ-OAR-
2010-0799-9552-A1, p. 3]
IV. Power Grab
The falsehood that GHG emission standards are not related to fuel economy standards does more
than mask EPA and CARB's poaching of NHTSA's statutory authority. It also protects EPA's
efforts to legislate climate policy under the guise of implementing the CAA. [EPA-HQ-OAR-
2010-0799-9552-A1, p. 3]
To begin with, the falsehood facilitated a regulatory extortion strategy enabling the Obama
Administration to convert the auto industry from opponent to ally in any congressional debate on
EPA's greenhouse gas regulations. [EPA-HQ-OAR-2010-0799-9552-A1, p. 3]
In February 2009, EPA Administrator Jackson decided to reconsider 13 Bush EPA Administrator
Stephen Johnson's denial of California's request for a waiver to implement AB 1493.14 Because
GHG emissions standards implicitly regulate fuel economy, because the waiver would allow
20-10
-------
Statutory and Executive Orders
other states to follow suit, and because auto makers would have to reshuffle the mix of vehicles
sold in each "California" state to achieve the same average fuel economy, Jackson confronted the
financially-distressed auto industry with the prospect of a market-balkanizing fuel-economy
"patchwork." 15 [EPA-HQ-OAR-2010-0799-9552-A1, p. 3]
Then, in May 2009, in backdoor negotiations conducted under a vow of silence ("We put nothing
in writing, ever," CARB Chairman Mary Nichols told the New York Times), 16 the White House
offered to protect auto makers from the patchwork threat if - but only if- they agreed to support
EPA and CARB's newfound careers as GHG/fuel economy regulators. [EPA-HQ-OAR-2010-
0799-9552-A1, p. 3]
Specifically, under what President Obama dubbed the "Historic Agreement," 17 California and
other states agreed 18 to deem compliance with EPA's GHG standards as compliance with their
own in return for auto makers' pledge!9 not to challenge either the Tailpipe Rule or the
California waiver. The Administration may also have tied its offer of bailout money to
automakers' acceptance of the 'triplification' of fuel economy regulation.20 Outsiders may never
know the details, because participants, in apparent defiance of the Presidential Records Act,21
kept no minutes or notes of the meetings. [EPA-HQ-OAR-2010-0799-9552-A1, p. 4]
The political payoff for EPA and CARB was not long in coming. In 2010, Alaska Sen. Lisa
Murkowski introduced a resolution22 to overturn EPA's greenhouse gas Endangerment Rule,23
the prerequisite for the Tailpipe Rule and all other EPA greenhouse gas regulations. The auto
industry lobbied against the resolution,24 warning that it would undo the Historic Agreement
and, thus, expose auto makers to a "multitude" of conflicting state and federal
standards.25 [EPA-HQ-OAR-2010-0799-9552-A1, p. 4]
Of course, the threat of a patchwork exists only because Jackson, disregarding the EPCA
preemption, granted the waiver in the first place. [EPA-HQ-OAR-2010-0799-9552-A1, p. 4]
EPA then parlayed its new role as de-facto fuel economy regulator into a mandate to regulate
GHG emissions throughout the economy. The Tailpipe Rule - at least as EPA reads the CAA26
- compels the agency to regulate GHGs from "major emitting facilities." EPA is now applying
CAA preconstruction and operating permit requirements to large CO2 emitters such as coal-fired
power plants, petroleum refineries, cement production facilities, steel mills, and pulp and paper
factories.27 [EPA-HQ-OAR-2010-0799-9552-A1, p. 4]
Given these precedents, it was inevitable that EPA would settle environmental lawsuits by
consenting to develop GHG "performance standards" for power plants28 and refmeries,29 with
GHG performance standards for other industrial categories sure to follow. In time, litigants will
likely induce EPA to establish quasi-fuel economy standards for marine vessels, aircraft, and
non-road engines,30 even though no agency sets such standards under any existing
statute. [EPA-HQ-OAR-2010-0799-9552-A1, p. 4]
Because the Endangerment Rule identifies the "elevated concentration" of GHGs as the source
of endangerment,31 EPA has logically committed itself to develop national ambient air quality
standards (NAAQS) for GHGs set below current atmospheric concentrations.32 In an August
20-11
-------
EPA Response to Comments
2010 brief to the Supreme Court in American Electric Power v. State of Connecticut, the
Department of Justice favorably cited the NAAQS program as a potential regulatory tool
displacing federal common law tort action against GHG emitters.33 [EPA-HQ-OAR-2010-0799-
9552-A1, p. 4]
[See footnote list for this comment on pp. 5-6 of Docket number EPA-HQ-OAR-2010-0799-
9552-A1]
Response:
Most of this comment again reflects reasoning repudiated by the D.C. Circuit in Coalition
for Responsible Regulation v. EPA. In addition, the stationary source consequences that the
commenter decries occur essentially by operation of statute, not because of EPA action.
Coalition for Responsible Regulation v. EPA, no. 09-1322 (D.C. Cir. June 26, 2012) slip op. pp.
40-41, 54-59.
Organization: Pacific Legal Foundation (PLF)
We address two issues regarding the Proposed Regulations. First, the Proposed Regulations must
be submitted to EPA's Science Advisory Board ("SAB") for review during the public comment
period, pursuant to 42 U.S.C. § 4365. In addition, the preamble to the final regulations should set
forth in detail the time and circumstances of EPA's submittal of the Proposed Regulations to
SAB, as well as any comments provided by SAB, whether EPA made changes to the Proposed
Regulations in response to such comments, and why or why not. [Refer to pp. 2-4 of Docket
number EPA-HQ-OAR-2010-0799-8108-A1 for detailed information] [EPA-HQ-OAR-2010-
0799-8108-Al,p. 2]
Second, EPA must comply with the special rulemaking provisions of 42 U.S.C. § 7607(d) in
connection with the promulgation of the Proposed Regulations. Among other things, that
subsection of the Clean Air Act sets forth detailed requirements for EPA's "promulgation ... of
regulations under section 202" of the Clean Air Act. Because EPA is promulgating the
regulations under section 202 (a) (1) of the Clean Air Act, the regulations are subject to the
special rulemaking requirements of 42 U.S.C. § 7607(d). EPA must document in detail in the
preamble to the final LDVR II regulations the precise manner in which it has complied (or not
complied) with such requirements. The remainder of this letter sets forth in detail the reasons
EPA must perform the two actions summarized above. [Refer to pp. 4-7 of Docket number EPA-
HQ-OAR-2010-0799-8108-A1 for detailed information] [EPA-HQ-OAR-2010-0799-8108-A1,
p. 2]
Response:
The commenter is factually mistaken. In fact, EPA submitted the proposed rule to the
SAB at its meeting of March 23, 2012. The SAB declined to consider the proposed rule.
Surprisingly, given the commenter's professed interest in the matter, it failed to submit either
written or oral comments to the SAB, even though notice of the meeting was published in the
20-12
-------
Statutory and Executive Orders
Federal register and other entities submitted comments on matters discussed at the meeting. See
77 FR 12579, 12580 (March 1, 2012). EPA-HQ-OAR-2010-0799-11793.
In addition, the commenter fails to demonstrate that 42 USC. 4365 ©(1) is applicable.
That provision applies only when EPA submits documents to other agencies "for formal review
and comment." The light duty vehicle GHG rule implements section 202 (a) of the Clean Air
Act. That provision contains no requirement that implementing regulations be submitted to other
federal agencies for formal review and comment, nor did EPA do so. EPA submitted the draft of
the proposed rule to the Office of Management and Budget for informal review, pursuant to
Executive Order 12866, but this is not the type of formal review to which section 4365 (c)(l)
speaks. See Coalition for Responsible Regulation v. EPA, No. 09-1322 (D.C. Cir. June 26,
2012) slip op. pp. 35-36 (noting this distinction).
Finally, EPA agrees that the procedures set out in section 307 (d) apply to this
rulemaking, and EPA has followed all of those procedures in promulgating the proposed and
final rules setting GHG emission standards for MYs 2017-2025 light duty motor vehicles. The
commenter does not allege otherwise. Rather, the commenter maintains (comment pp. 6-7) that
EPA must document in the preamble compliance with each of the procedural requirements of
section 307 (d). This argument lacks any statutory foundation. The commenter mistakenly cites
section 307 (d)(3)(C) as support. This provision states that a proposed rule shall "set forth ...
any pertinent finding, recommendations, and comments of the Scientific Review Committee
established under section 109 (d)". Section 109 (d) applies exclusively to establishment of
National Ambient Air Quality Standards, so section 307 (d)(3)(C) is inapplicable here. EPA in
fact established a docket for the proposed and final rule (see 76 FR 74855-56), announced and
held public hearings (76 FR at 74857), set forth in the preamble, draft TSD and DRIA the basis
and purposes of the proposed rule, etc. The commenter is consequently mistaken as a matter of
both fact and law.
Organization: RVIA
Cost considerations per Executive Order # 13563 [EPA-HQ-OAR-2010-0799-9550-A2, p.3]
In accordance with Section l(b) of Executive Order 13563 (Improving Regulations and
Regulatory Review}., when issuing new regulations, agencies shall tailor their regulations to
impose the least burden on society, consistent with obtaining regulatory objectives, taking into
account, among other things, and to the extent practicable, the costs of cumulative regulations."
In proposing the 2017-2025 GHG and CAFE standards for light duty vehicles, RVIA believes
that EPA and NHTSA have failed to fully comply with this directive. While the agencies have
informed the public of what the cost impact of the proposed standards are projected to be, they
have not informed the public of the cumulative costs of their regulations. When informing the
public of the cost of the impact, we believe that, as a matter of good public policy, the public
should be informed that the vehicle is going to realize additional price increases due to other
EPA and NHTSA regulations that will be implemented during these same model years. NHTSA
rules that will likely be implemented in the future and thus add additional cost to new vehicles
include the following: [EPA-HQ-OAR-2010-0799-9550-A2, p.3]
1. FMVSS 111 backup camera [EPA-HQ-OAR-2010-0799-9550-A2, p.3]
20-13
-------
EPA Response to Comments
2. FMVSS 124 accelerator control update [EPA-HQ-OAR-2010-0799-9550-A2, p.3]
3. FMVSS 214 side impact upgrade [EPA-HQ-OAR-2010-0799-9550-A2, p.3]
4. FMVSS 216 roof crush upgrade [EPA-HQ-OAR-2010-0799-9550-A2, p.3]
5. FMVSS 226 ejection mitigation [EPA-HQ-OAR-2010-0799-9550-A2, p.3]
6. 49 CFR Part 563 Event Data Recorder mandate [EPA-HQ-OAR-2010-0799-9550-A2, p.3]
7. Pedestrian Safety Enhancement Act audible alert [EPA-HQ-OAR-2010-0799-9550-A2, p.4]
8. Pedestrian safety Global Technical Regulation [EPA-HQ-OAR-2010-0799-9550-A2, p.4]
9. Brake override mandate [EPA-HQ-OAR-2010-0799-9550-A2, p.4]
For the above rules that have already been finalized but not yet fully implemented, NHTSA has
projected that the costs per rule could be as much as: [EPA-HQ-OAR-2010-0799-9550-A2, p.4]
$299/vehicle for the ejection mitigation rule [EPA-HQ-OAR-2010-0799-9550-A2, p.4]
$243/vehicle for the side impact rule [EPA-HQ-OAR-2010-0799-9550-A2, p.4]
$203/vehicle for the backup camera rule [EPA-HQ-OAR-2010-0799-9550-A2, p.4]
$114/vehicle for the roof crush rule [EPA-HQ-OAR-2010-0799-9550-A2, p.4]
These four rules alone cumulatively could increase the price of a new vehicle by $859 (eight
hundred and fifty-nine dollars). [EPA-HQ-OAR-2010-0799-9550-A2, p.4]
EPA (along with CARB) will also introduce new requirements like the Tier 3 emissions
standards. If the cost of implementing Tier 3 standards compares to the cost of implementing
Tier 2 emissions standards, one can expect the average price of a passenger car to increase by
$100 and the average price of a light truck to increase by $200. [EPA-HQ-OAR-2010-0799-
9550-A2, p.4]
Just the five rules mentioned here could potentially increase the cost of a new light vehicle by
another $1,000 (one-thousand dollars). Consumers have a right to know the cumulative cost
impact of the EPA/NHTSA regulations. RVIA therefore recommends that the agencies take
these cumulative costs into consideration when setting future standards and that you inform the
public of the cumulative cost impacts of EPA/NHTSA regulations on new vehicle prices. [EPA-
HQ-OAR-2010-0799-9550-A2, p.4]
With regard to all light vehicles, EPA and NHTSA should take the cumulative costs of its
regulations into consideration when setting future standards and inform the public of the impact
on new car prices. In this rulemaking, EPA and NHTSA did not fully consider the cumulative
20-14
-------
Statutory and Executive Orders
costs of its regulations on new car prices. We have listed several EPA and NHTSA rules that
were not discussed in the NPRM that will drive up new car prices by possibly another $1,000.
[EPA-HQ-OAR-2010-0799-9550-A2, p.5]
Response:
EPA believes it has followed both Executive Orders 12866 and 13563 both in the
proposal and in this final rulemaking. Specifically, Executive Order 13563 was published
January 21, 2011 (76 FR 3821) to, "supplement and reaffirm the principles, structures and
definitions of government contemporary regulatory review that were established in Executive
Order 12866 of September 30 1993."
In responding to these executive orders, EPA has provided detailed costs analysis of this
action in both the Preamble and Final Regulatory Impact Analysis (FRIA). EPA submitted this
action to the Office of Management and Budget (OMB) as required under these Executive
Orders for review and any changes made in response to OMB recommendations have been
documented in the docket for this action as required by CAA section 307(d)(4)(B)(ii). .
Specifically, section III. H of the preamble provides an in-depth discussion of the
estimated costs, economic and other impacts of this final rule. This is supplemented by further
detailed discussion in the FRIA, Chapter 3. Regarding the treatment of cumulative costs from
previous light-duty vehicle rules, EPA for this final rule, has estimated the 2025MY reference
case costs (i.e, the cost to meet the 2016 standards in the 2025MY) at $719 (see RIA Table 3.6-
1). We have also estimated 2025MY control case costs (i.e., the cost to meet the 2025 standards
in the 2025MY) at $1836. The total cost of these rules would then be $2555. To properly add
the costs, one needs to use the cost of the 2016 standards in the 2025MY as we have done. With
regard to Tier 2 costs which became effective in 2004MY EPA has not specially highlighted
those costs but they are part of the baseline for the 2025 reference case costs. Given that EPA
has not even proposed Tier 3 rules, it would be premature (at best) and merely speculative (at
worst) to estimate those costs here. Neither executive order addresses, or contemplates including
costs of pre-proposal nascent regulatory potential actions.
20-15
-------
-------
Comments Regarding Proposed Regulatory Text
21. Comments Regarding Proposed Regulatory Text
Organizations Included in this Section
Alliance of Automobile Manufacturers
American Honda Motor Co., Inc.
Association of Global Automakers, Inc. (Global Automakers)
Borg Warner, Inc.
Ferrari
Fisker Automotive, Inc.
Ford Motor Company
Motor & Equipment Manufacturers Association (MEMA)
Roush Industries, Inc.
Toyota Motor North America
Organization: Alliance of Automobile Manufacturers
Proportion of Recovered Braking Energy for Hybrid Electric Vehicles [EP A-HQ-OAR-2010-
0799-9487-A1, p.88]
The following comments address EPA's proposed changes to 40 C.F.R. §600.116-12(c) for
determining the proportion of recovered braking energy for hybrid electric vehicles. [EPA-HQ-
OAR-2010-0799-9487-A1, p.88]
In 40 C.F.R. §600.116-12(c)(l)(i)(A) and (B), it is unclear whether road load power and applied
deceleration power are to be calculated from scheduled speed or measured speed. We
recommend that Vmph, V and Vt+1 be defined as "measured velocity in miles/hour, rounded to
the nearest 0.01 miles/hour..." [EPA-HQ-OAR-2010-0799-9487-A1, p.88]
In 40 C.F.R. §600.116-12(c)(l)(C), EPA proposes to determine braking power by the following
equation: [EPA-HQ-OAR-2010-0799-9487-A1, p.88]
Pbrake = Paccel - Proadload [EPA-HQ-OAR-2010-0799-9487-A1, p.88]
We recommend that the equation be changed to the following: [EP A-HQ-OAR-2010-0799-9487-
Al,p.88]
Pbrake = Paccel + Proadload and if Pbrake >0, set Pbrake = 0 [EP A-HQ-OAR-2010-0799-9487-
Al,p.88]
The Proadload should decrease the magnitude of the Pbrake term. As it is currently written, the
magnitude of Pbrake is not decreased by Proadload during deceleration. If Pbrake isn't decreased
by Proadload, the Emax equation would assume that the roadload force could be recovered by
regenerative braking, and this would cause the Emax calculation to give a higher value than is
possible (thus lowering the eventual Energy Recovered %). [EPA-HQ-OAR-2010-0799-9487-
Al,p.89]
21-1
-------
EPA Response to Comments
As can be seen in the following chart, the proposed equation would indicate that roadload during
steady cruising would be able to be recaptured as regeneration (red line). The green line is Emax
when you replace the '-' sign with a '+' sign in the Pbrake equation and revise the Pbrake = 0
criteria. [EPA-HQ-OAR-2010-0799-9487-A1, p. 89] [For the chart please refer to EPA-HQ-
OAR-2010-0799-9487-A1, p.89]
Therefore, it would be more appropriate if the equation were written as Pbrake = Paccel +
Proadload with the additional criteria that Pbrake = 0 whenever the calculation results in a
positive value. [EPA-HQ-OAR-2010-0799-9487-A1, p.89]
In addition, the following clerical errors were discovered during our review of the NPRM: [EPA-
HQ-OAR-2010-0799-9487-A1, p.89]
§600. 1 16-12(c)(l)(i)(A): Road load equation has an extra "x" between 0.47704 and 4.448 [EPA-
HQ-OAR-2010-0799-9487-A1, p.89]
§600.116-12(c)(3)(iii): "battery" is misspelled as "batter" [EPA-HQ-OAR-2010-0799-9487-A1,
p.89]
§600. 1 16-12(c)(4)(3)(iii): Definition of Erec under the Energy Recovered % equation references
paragraph (c)(2)(iii), should reference paragraph (c)(3)(iii) instead [EPA-HQ-OAR-20 10-0799-
9487-A1, p.89]
§600. 1 16-12(c)(4)(3)(iii): Conflicting nomenclature. Energy Recovered % equation uses Emax,
which appears to be called Ebrake in the paragraph referenced by the Emax definition, §600.1 16-
12(c)(2). [EPA-HQ-OAR-2010-0799-9487-A1, p.89]
Further, prior to the final rule, we plan to engage the agency technical experts to ensure that the
test procedure specifications and regulatory language for determining the proportion of
recovered braking energy is clear, accurate and consistent with previous hybrid procedural
guidance (e.g., SAE J171 1, Part 86, Part 600), where applicable. [EPA-HQ-OAR-20 10-0799-
9487-A1, pp.89-90]
Fuel Economy Calculations [EPA-HQ-OAR-20 10-0799-9487-A1, p.91]
The Alliance suggests following corrections to the fuel economy calculations in § 600. 113-12
(fuel economy, CO2 emissions, and carbon-related exhaust emission calculations for FTP, HFET,
US06, SC03 and cold temperature FTP tests): [EPA-HQ-OAR-2010-0799-9487-A1, p.91]
Ethanol FE equation: [EPA-HQ-OAR-2010-0799-9487-A1, p.91]
mpg = (CWF x SG x 3781.8)/((CWFexHC x HC) + (0.429 x CO) + (0.273 x CO2) + (0.375 x
CH3OH) + (0.400 x HCHO) + (0.521 x C2H5OH) + (0.545 x C2H4O)) [EPA-HQ-OAR-20 10-
0799-9487-A1, p.91]
Comment: This entire section needs review of equations, but specifically the ethanol equation
and its importance to E15/E10 testing. The referenced FE equation is incorrect. The equation
21-2
-------
Comments Regarding Proposed Regulatory Text
does not utilize net heating value (NHV) as an adjustment for different ethanol blends, so it is
unclear how this equation accounts for different ethanol blends or equivalence back to the
conventional gasoline FE equation. This equation will produce lower FE due to the fact that
ethanol blended fuels have less energy content (NHV) per gallon than conventional gasoline.
[EPA-HQ-OAR-2010-0799-9487-Al,p.91]
The Alliance requests a test procedure adjustment (TPA) that references the carbon weight
fraction (CWF), net heating value, and specific gravity of the 1975 EO reference fuel that was
used to establish the initial CAFE baseline. A TPA (including coverage of the density and R-
Factor) is necessary to maintain consistency with the 1975 test procedures. [EPA-HQ-OAR-
2010-0799-9487-Al,p.91]
86.1866-12(b)(2)(ii) [EPA-HQ-OAR-2010-0799-9487-A1, p.92]
The reference to the annual refrigerant leakage rate in the definition section should be titled
"LeakScore" instead of "Leakage" to align with the terminology in the Leakage Credit equation.
[EPA-HQ-OAR-2010-0799-9487-Al,p.92]
Organization: American Honda Motor Co., Inc.
• U.S. "Production" vs. "Sales": §86.1866-12(d)(l) shows a table that identifies certain off-
cycle technologies, their credits for passenger cars and light trucks, and the "minimum percent of
U.S. production" that must have a feature applied before receiving the off-cycle credit. We
believe the intent of this section is better understood to be "minimum percent of U.S. Sales,"
since many U.S. - produced vehicles are intended for export and are not relevant. Similarly, it is
unclear how imported vehicles would be treated. [EPA-HQ-OAR-2010-0799-9489-A1, p. 6]
Organization: Toyota Motor North America
U.S. Production Criteria
There are provisions in the proposed regulations that reference U.S. production as a component
of applicability or eligibility for those provisions. For example, in describing the minimum sales
volume threshold for the list of pre-determined off-cycle technologies, §86.1866-12 (d)(l)(i)
states The manufacturer may generate a CC>2 gram/mile credit... provided that each technology
is applied to the minimum percentage of the manufacturer's U.S. production of passenger
automobiles ... for which credit is claimed'. Similarly, the provisions for advanced technology
vehicles in §86.1866-12 (a)(l) state 'Electric vehicles, plug-in hybrid electric vehicles, and fuel
cell vehicles...that are certified, produced, and delivered for sale in the United States ... may use a
value of zero (0) grams/mile ofCO2". [EPA-HQ-OAR-2010-0799-9586-A1, p.23]
A reasonable interpretation of the provisions above could imply they are applicable only to
vehicles produced in the U.S. Toyota understands the agencies do not intend for the applicability
or eligibility of the proposed regulations to depend on a vehicle's origin. [EPA-HQ-OAR-2010-
0799-9586-A1, p.24]
21-3
-------
EPA Response to Comments
Toyota requests that the agencies clarify that the eligibility and applicability of the provisions
being proposed are not contingent on a manufacturer producing vehicles in the United States. We
suggest that where the agencies currently reference 'U.S. production' in a provision, that
language be revised to instead use the term "production for U.S. sale' which is consistent with the
intent of the provisions in both the CAA and EISA/EPCA. [EPA-HQ-OAR-2010-0799-9586-A1,
p.24]
Organization: Association of Global Automakers, Inc. (Global Automakers)
Global Automakers is concerned that the proposed regulatory language is not sufficient to truly
make the MY 2022-2025 standards "conditional;" rather, they have all of the hallmarks of final
standards that are simply subject to possible revision at a later time. As such, we believe that the
proposed regulatory language violates the prohibition against adopting standards for more than
five model years found in 49 U.S.C. § 32902(b)(3)(b). Global Automakers suggests that a
better—and more legally defensible—approach would be to draft 49 C.F.R. § 531.5(c) to cover
only vehicles through MY 2021, and to have MY 2022 through 2025 covered in a separate
subsection that explicitly states that the standards for those model years are not final, but rather
have been conditionally set at these levels subject to future de novo final rulemaking. [EPA-HQ-
OAR-2010-0799-9466-A1, p. 10]
Organization: Borg Warner, Inc.
Additionally, for the "Engine Heat Recovery" off-cycle credit, although a clear definition is not
provided in the Technical Support Document, it uses a term "thermoelectric device". This term is
normally applied to devices using the Peltier-Seebeck effect. We request that the EPA and
NHTSA clarify the definition of "Engine Heat Recovery" to be technology neutral and include
any device that captures waste heat energy and converts it into electricity for use on the vehicle.
[EPA-HQ-OAR-2010-0799-9320-A1, p. 2]
Organization: Ferrari
40 CFR § 86.1838-01(b) is amended by adding a new subparagraph (4) as follows: [EPA-HQ-
OAR-2010-0799-9535-A2, p.7]
(4)(a) Notwithstanding the provisions of subparagraph (b)(3), upon application to the
Administrator, a manufacturer may be classified as a small volume manufacturer for purposes of
this section, if the Administrator determines that it is operationally independent of the
manufacturer that owns 10 percent or more of the applicant and, for the three years preceding the
year in which the initial application is submitted, the average United States sales for the applicant
does not exceed 5,000 vehicles per year. The Administrator may make a determination of
operational independence if the criteria in (i)-(vii) are met for the at least 24 months preceding
the application. [EPA-HQ-OAR-2010-0799-9535-A2, p.7]
(i) No financial or other support of economic value is provided by related manufacturers for
purposes of design, parts procurement, R&D and production facilities and operation, and any
other transactions between related manufacturers are conducted under normal commercial
21-4
-------
Comments Regarding Proposed Regulatory Text
arrangements like those conducted with other parties, at competitive pricing rates to the
manufacturer; [EPA-HQ-OAR-2010-0799-9535-A2, p.7]
(ii) related manufacturers maintain separate and independent research and development, testing,
and production facilities; [EPA-HQ-OAR-2010-0799-9535-A2, p.7]
(iii) the applicant does not use any vehicle powertrains or platforms developed or produced by
related manufacturers; [EPA-HQ-OAR-2010-0799-9535-A2, p.7]
(iv) patents are not held jointly with related manufacturers; [EPA-HQ-OAR-2010-0799-953 5-
A2, p.7]
(v) related manufacturers maintain separate business administration, legal, purchasing, sales, and
marketing departments, as well as autonomous decision making on commercial matters; [EPA-
HQ-OAR-2010-0799-9535-A2, p.7]
(vi) the overlap of the Board of Directors between related manufacturers is limited to 25% with
no sharing of top operational management, including president, chief executive officer, chief
financial officer, and chief operating officer, and provided that no individual overlapping director
or combination of overlapping directors exercises exclusive management control over either or
both companies; and [EPA-HQ-OAR-2010-0799-9535-A2, p.7]
(vii) parts or components supply between related companies must be established through open
market process, and to the extent that the manufacturer sells parts/components to non-related
manufacturers, it does so through the open market a competitive pricing. [EPA-HQ-OAR-2010-
0799-9535-A2, p.7]
(b)(i) The Administrator shall require the applicant to submit information to update any of these
factors as material changes to any factor occur. If there are no material changes to any of the
factors, the applicant shall certify to the Administrator on an annual basis. With respect to any
such changes, the Administrator may consider extraordinary conditions (e.g., changes to
economic conditions, unanticipated market changes, etc.) and may continue to find the applicant
to be operationally independent. [EPA-HQ-OAR-2010-0799-9535-A2, p.7]
(c) If a manufacturer loses its eligibility as an operationally independent small volume
manufacturer at any time, the manufacturer must begin compliance with the primary greenhouse
gas emissions program in the third model year after the manufacturer loses its eligibility. [EPA-
HQ-OAR-2010-0799-9535-A2, p.8]
(d) If a manufacturer loses its eligibility as an operationally independent small volume
manufacturer at any point in time, the manufacturer must meet the criteria in (a)(i)-(vii) for three
consecutive years before applying to the Administrator to be again considered operationally
independent. [EPA-HQ-OAR-2010-0799-9535-A2, p.8]
(e) The manufacturer applying for operational independence shall engage an independent
certified public accountant, or firm of such accountants (hereinafter referred to as "CPA"), to
21-5
-------
EPA Response to Comments
perform an agreed-upon procedures attestation engagement of the underlying documentation that
forms the basis of the application as required in (a)(i)-(vii). [EPA-HQ-OAR-2010-0799-953 5-
A2, p.8]
(i) The CPA shall perform the attestation engagements in accordance with the Statements on
Standards for Attestation Engagements. [EPA-HQ-OAR-2010-0799-9535-A2, p.8]
(ii) The CPA may complete the requirements of this paragraph with the assistance of internal
auditors who are employees or agents of the application, so long as such assistance is in
accordance with the Statements on Standards for Attestation Engagements. [EPA-HQ-OAR-
2010-0799-9535-A2, p.8]
(iii) Notwithstanding the requirements of subparagraph (ii) of this section, an applicant may
satisfy the requirements of this paragraph if the requirements of this paragraph are completed by
an auditor who is an employee of the applicant, provided that such employee: a. Is an internal
auditor certified by the Institute of Internal Auditors, Inc. (hereinafter referred to as "CIA"); and
b. Completes the internal audits in accordance with the Codification of Standards for the
Professional Practice of Internal Auditing. [EPA-HQ-OAR-2010-0799-9535-A2, p.8]
(iv) Use of a CPA or CIA who is debarred, suspended, or proposed for debarment pursuant to the
Government wide Debarment and Suspension Regulations, 2 CFR part 1532, or the Debarment,
Suspension, and Ineligibility Provisions of the Federal Acquisition Regulations, 48 CFR part 9,
subpart 9.4, shall be deemed in noncompliance with the requirements of this section. [EPA-HQ-
OAR-2010-0799-9535-A2, p.8]
(v) The following documents are incorporated by reference: the Statements on Standards for
Attestation Engagements, Codification of Statements on Auditing Standards, written by the
American Institute of Certified Public Accountants, Inc., 1991, and published by the Commerce
Clearing House, Inc., Identification Number 059021, and the Codification of Standards for the
Professional Practice of Internal Auditing, written and published by the Institute of Internal
Auditors, Inc., 1989, Identification Number ISBN 0- 89413-207-5. These incorporations by
reference were approved by the Director of the Federal Register in accordance with 5 U.S.C.
552(a) and 1 CFR part 51. Copies of the Statements on Standards for Attestation Engagements
may be obtained from the American Institute of Certified Public Accountants, Inc., 1211 Avenue
of the Americas, New York, New York 10036, and copies of the Codification of Standards for
the Professional Practice of Internal Auditing may be obtained from the Institute of Internal
Auditors, Inc., 249 Maitland Avenue, Altamonte Springs, Florida 32701- 4201. Copies may be
inspected at the U.S. Environmental Protection Agency, Office of the Air Docket, 401 M St.,
SW., Washington, DC., or at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, call 202-741-6030, or go to:
http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_lo cations.html.
[EPA-HQ-OAR-2010-0799-9535-A2, pp.8-9]
Organization: Fisker Automotive, Inc.
21-6
-------
Comments Regarding Proposed Regulatory Text
Given the feasibility of optionally complying to the greenhouse gas standards beginning with the
2012 model year, Fisker Automotive respectfully proposes the following modifications to the
regulatory language: [EPA-HQ-OAR-2010-0799-9266-Al, p. 3]
§ 86.1801-12 Applicability.
(j) Exemption from greenhouse gas emission standards for small businesses.
(2) Effective for the 2011 and later model years, a A manufacturer that would otherwise be
exempt under the provisions of paragraph (j)(l) of this section may optionally comply with the
greenhouse gas emission standards specified in § 86.1818. A manufacturer making this choice is
required to comply with all the applicable standards and provisions in § 86.1818 and in
associated provisions in this part and in part 600 of this chapter. A manufacturer may optionally
comply with the greenhouse gas emission standards as soon as the rule goes into effect
beginning with the 2012 model year. Manufacturers may optionally earn early credits in the 2012
and/or 2013 model years by demonstrating CO2 omission levels bolow tho floot average CO2
standard that would have been applicable in those model years if the manufacturer had not been
exempt. Manufacturers electing to earn these early credits must comply with the model year
reporting requirements in § 600.512 12 for each model year. [EPA-HQ-OAR-2010-0799-9266-
Al,p.3]
Organization: Ford Motor Company
Also related to the 5-cycle demonstration methodology, we believe there is a typographical error
in the calculation described in 40 CFR § 86.1866-12(d)(2)(iii). The text indicates that the 5-cycle
weighted city/highway value from paragraph (d)(2)(i) [without the off-cycle technology
operating] should be subtracted from the value from paragraph (d)(2)(ii) [with the off-cycle
technology operating] to determine the off-cycle benefit. Presumably, the carbon-related exhaust
emissions from (d)(2)(ii) will be lower than those from (d)(2)(i), resulting in a negative value for
the credit calculation. To remedy this, Ford believes the text of 40 CFR § 86.1866-12(d)(2)(iii)
should be revised to state the following: [EPA-HQ-OAR-2010-0799-9463-Al, p. 17]
"Subtract the combined city/highway value determined in paragraph (d)(2)(ii) of this section
from the value determined in paragraph (d)(2)(i) of this section" [EPA-HQ-OAR-2010-0799-
9463-Al,p. 18]
Regulatory text clarification: With regard to the production volume multiplier and the 0 gram per
mile emissions value, the proposed regulatory text reads as follows:
86.1866-12(a)(l) and (2) Electric vehicles, plug-in hybrid electric vehicles, and fuel cell
vehicles, as those terms are defined in S.86.1803-01, that are certified and produced and
delivered for sale in the United States... [EPA-HQ-OAR-2010-0799-9463-Al, p. 20]
We request clarification that the intent is that the provisions apply to those vehicles "delivered
for sale" in the United States, and that production in the United States is not a new conditional
provision, per the following recommended revision:
21-7
-------
EPA Response to Comments
86.1866-12(a)(l) and (2) Electric vehicles, plug-in hybrid electric vehicles, and fuel cell
vehicles, as those terms are defined in S.86.1803-01, that are certified and produced and
delivered for sale in the United States... [EPA-HQ-OAR-2010-0799-9463-Al, p. 20]
Organization: Motor & Equipment Manufacturers Association (MEMA)
The definition in the proposed regulatory text at § 86.1866-12 (d)(l)(i) for active seat ventilation
is "a device which draws air from the seating surface ... and exhausts it... away from the seat."
MEMA believes this definition is narrow in scope because there are other mechanisms for active
seat ventilation available. For example, systems that push the air (versus drawing the air) to the
seating surface and remove the heated, humid air between the seat surface and the passenger
contact points just like the drawing type of active seat ventilation. Therefore, MEMA requests
the agencies modify the definition to also include a push type system. [EPA-HQ-OAR-2010-
0799-9478-A1, p.8]
In the NPRM's regulatory text for this section, § 86.1866-12 "CC>2 fleet average credit and
incentive programs" Subpart (e) "Credits for certain full-size pickup trucks"9 there are several
places where the mild and strong hybrid propulsions are referenced as "gasoline-electric." There
are several other technical possibilities for full-size pick-up truck hybrids - such as, diesel-
electric, gasoline-hydraulic, diesel-hydraulic. Therefore, MEMA strongly recommends that the
agencies change the regulatory text to simply the term "hybrid" and to remove specific
descriptive terms "gasoline-electric." Otherwise, the credits in this area would only be narrowly
restricted to "gasoline-electric" hybrids, which MEMA believes is counter to the intent of the
standards. [EPA-HQ-OAR-2010-0799-9478-A1, p.11]
11 - In the NPRM, it is proposed to issue a credit of lOg/mile (MY2017-2021) for mild hybrid
full size pickup trucks, on the condition that the vehicle manufacturer produces a minimum of 30
percent of total full-size pickups as mild hybrids in 2017 subsequently increasing them to 80
percent of total full size pickups by 2021. A credit of 20g/mile will be issued if the manufacturer
produces 10 percent of total full size pickups as strong hybrids.
Organization: Roush Industries, Inc.
Upon review of the subject document the absence of regulations to calculate constituent fuel
economy, CREE and CAFE for the LPG alternate fuel was noted. [EPA-HQ-OAR-2010-0799-
7823-A2, p. 1]
The LPG regulation proposal is recommended for inclusion in CFR 40 commencing Part
600.113-12 amongst the regulatory description for the other fuels. Also reference of LPG in Part
600.510-12 (Calculation of average fuel economy and average carbon-related exhaust emissions)
is desirable. [EPA-HQ-OAR-2010-0799-7823-A2, p. 1]
Response:
21-8
-------
Comments Regarding Proposed Regulatory Text
Proportion of Recovered Braking Energy
The comments from the Alliance pointed out confusion over the appropriate sign for the terms in
the equation used in this calculation. The regulations have been amended to clarify the
appropriate sign for each term that will result in the equation being correct.
EPA appreciates the comments pointing out various clerical errors and conflicting nomenclature,
and appropriate corrections have been made.
Fuel Economy Calculations
The ethanol equation was finalized in the MY 2012-2016 program, and EPA believes it to be
correct. However, the regulations always permit manufacturers to approach EPA with alternative
calculations that yield similar or improved results.
Production vs. Sales and U.S. Production Criteria
EPA agrees with the comment that suggests clarification. Certainly EPA does not intend any
provision to be limited to vehicles produced in the U.S.
MY 2022-2025 Standards
The comments from the Association of Global Automakers are principally directed at NHTS A
and that agency's statutory limitation regarding the establishing of CAFE standards. EPA does
not face such a restriction, and EPA regulations are drafted accordingly.
Engine Heat Recovery
EPA has modified the definition in the final rule to read as follows. We believe this is consistent
with the comments from Borg Warner.
(viii) Waste heat recovery means a system that captures heat that would otherwise be lost
through the engine, exhaust system, or the radiator or other sources and converting that heat to
electrical energy that is used to meet the electrical requirements of the vehicle or used to
augment the warming of other load reduction technologies (e.g., cabin warming, active engine or
transmission warm-up technologies).
Operational Independence Regulatory Provisions
The provisions regarding small volume manufacturers and operational independence provisions
are discussed in detail in section III.B.5 of the preamble to the final rule. Ferrari was the
strongest advocate of the operational independence provisions, and, as shown above, they
proposed specific regulatory language. EPA agrees with the substance of the operational
independence provisions as outlined in Ferrari's comments, and we note that their proposed
regulatory language is essentially identical to the language in the preamble to the proposed rule.
As described in the preamble to the final rule, EPA is finalizing the operational independence
criteria that were described in the request for comments in the proposal (see 76 FR 74922).
21-9
-------
EPA Response to Comments
Although our final regulations regarding operational independence criteria are consistent with
our proposal and with Ferrari's proposed regulations, there is one key difference between our
final rule and Ferrari's proposal. Ferrari proposed a regulatory structure that would broadly
amend the existing definition of small volume manufacturer and would appear to expand the use
of the operational independence provisions to a broad set of EPA emission control programs.
EPA did not propose such a broad use of the operational independence criteria, and although the
elements of the criteria are virtually the same as those proposed by Ferrari, we are finalizing the
provisions such that their applicability is limited to determining eligibility for the specific GHG
programs contemplated in the proposal (i.e., the remaining years of the conditional exemption for
small manufacturers available through the 2016 model year, and the alternative standards for
small manufacturers in the 2017 and later model years). The final operational independence
regulations are structured such that other EPA programs could incorporate them, but doing so
would require an evaluation of the impact and appropriateness of doing so and would have to be
conducted via a separate notice and comment process.
Optional Small Business Compliance
At least one small business manufacturer, Fisker Automotive, in discussions with EPA
prior to proposal, suggested that small businesses should have the option of voluntarily opting-in
to the GHG standards. This manufacturer sells electric vehicles, and sees a potential market for
selling credits to other manufacturers. As discussed in the proposal, EPA believes that there
could be several benefits to this approach, as it would allow small businesses an opportunity to
generate revenue to offset their technology investments and to encourage commercialization of
the innovative technology. There would likewise be a benefit to any manufacturer seeking those
credits to meet their compliance obligations. EPA proposed and is finalizing allowing small
businesses to waive their small entity exemption and opt-in to the primary GHG standards based
on this same rationale. This will allow small business manufacturers to earn CC>2 credits under
the program, which may be an especially attractive option for the new electric vehicle
manufacturers entering the market. The small business would have to meet the primary standard
for its fleet (that is, the small business would be allowed to opt-in to the primary program
standard, but not the small volume manufacturer standards, since SVMs are not eligible to
generate credits for trading as explained above). As proposed, manufacturers waiving their small
entity exemption must meet all aspects of the GHG standards and program requirements across
their entire product line.
EPA proposed to make the opt-in available starting in MY 2014, as the MY 2012, and
potentially the MY 2013, certification process will have already occurred by the time this
rulemaking is finalized. See 76 FR at 74994. EPA proposed this timing to avoid retroactively
certifying vehicles that have already been produced. EPA proposed, however, that
manufacturers certifying to the GHG standards for MY 2014 would be eligible to generate
credits for vehicles sold in MY 2012 and MY 2013 based on the number of vehicles sold and the
manufacturer's footprint-based standard under the primary program that would have otherwise
applied to the manufacturer if it were a large manufacturer. This approach would be similar to
that used by EPA for early credits generated in MYs 2009-2011, where manufacturers did not
certify vehicles to CO2 standards in those years but were able to generate credits. See 75 FR at
25441.
21-10
-------
Comments Regarding Proposed Regulatory Text
EPA received comments from Fisker requesting that EPA reconsider the timing of the
opt-in provisions. Fisker commented that under EPA's proposal, manufacturers would not be
able to generate credits until the end of MY 2014, even for vehicles that are produced in MYs
2012-2013. Fisker commented that this would significantly diminish the revenue generating
benefit of these credits, particularly during the critical early years of their company when
potential credit revenues would be of most benefit to the company. EPA is persuaded by this
reasoning, and the final rule therefore provides that believes that the opt-in provisions begin with
MY 2013. See §86.1801-12(j)(2)(i). The timing of the final rule will allow the GHG
requirements to be integrated into the MY 2013 certification process for these small businesses.
Once the small business manufacturer opting into the GHG program completes certification for
MY 2013, the company will be eligible to generate GHG credits for their MY 2012 production.
Manufacturers will not have to wait until the end of MY 2013 to generate MY 2012 credits.
EPA believes this provision is responsive to the concerns of the commenter while still ensuring
that the manufacturer is certified under the GHG program prior to generating credits.
Regulatory Text Clarifications from Ford
EPA appreciates the detailed look that Ford and some other manufacturers took at the
regulations, and informing us of errors and useful clarifications. These have been incorporated to
the extent that is appropriate.
Active Seat Ventilation Definition
EPA agrees with the commenter and has modified the definition to read as follows:
(ix) Active seat ventilation means a device which draws air, pushes or forces air, or
otherwise transfers heat from the seating surface which is in contact with the seat occupant and
exhausts it to a location away from the seat. At a minimum, the driver and front passenger seat
must utilize this technology for a vehicle to be eligible for credit.
Definition of Mild and Strong Hybrid Electric Vehicles
EPA agrees with the commenter and the regulations have been amended to no longer use the
phrase "gasoline-electric." The final regulations should be neutral regarding the fuel that is
paired with a hybrid battery system.
Calculation of Values for LPG
In response to the comments, EPA has added equations for calculating the MPG for LPG
vehicles.
21-11
-------
-------
Tier 3 Standards
22. Comments Regarding EPA Tier 3 Rulemaking
Organizations Included in this Section
American Lung Association of the Mid-Atlantic
Environmental Defense Fund (EDF)
Union of Concerned Scientists (UCS)
Organization: American Lung Association of the Mid-Atlantic
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing
on January 19, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11788, pp. 83-84.]
Therefore, just last week the American Lung Association nationally in concert with six other
leading public health and medical organizations wrote to EPA Administrator Lisa Jackson to
request that she should move forward with Tier 3 vehicle emission and fuel standards, and that
she finalize those standards as soon as possible.
According to the National Association of Clean Air Agencies, by 2030 such standards will
reduce overall mobile source emission of NOxby 29 percent, CO by 38 percent and VOCs by 26
percent.
Organization: Environmental Defense Fund (EDF)
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 175.]
We respectfully urge EPA to build from the foundation forged by California's leadership and
immediately propose Tier 3 emissions and gasoline fuel standards for passenger vehicles and to
finalize these protections by the summer of 2012. Such rigorous programs would have immediate
and far-reaching health and environmental benefits.
Organization: Union of Concerned Scientists (UCS)
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 140-141.]
In addition, we urge the EPA to move forward expeditiously with the next round of criteria
pollutant standards — the Tier 3 emissions and gasoline standards for passenger vehicles — and to
finalize these protections by the summer of 2012. A rigorous Tier 3 program would have
immediate and far-reaching health and environmental benefits: Reducing harmful airborne
contaminants, ensuring longer and healthier lives, and helping states and communities across our
country to restore healthy air. These vital health protections will be achieved at an extremely
modest cost. Timely finalization of Tier 3 standards would allow manufacturers to efficiently
align technology upgrades with the proposed 2017 through 2025 fuel efficiency and greenhouse
gas emissions standards.
22-1
-------
EPA Response to Comments
Response:
These comments deal with a different rulemaking matter and so are outside the scope of
this rulemaking.
22.1. Tier 3 Standards
Organizations Included in this Section
American Lung Association
California Air Resources Board (CARB)
Environmental Defense Fund (EDF)
Mercedes-Benz USA, LLC
Renewable Fuels Association (RFA)
South Coast AQMD
Organization: American Lung Association
Also, promulgation of a Tier 3 vehicle and fuels standard would complement the proposed rule
while reducing overall mobile source emissions of nitrogen oxides by 29 percent, carbon
monoxide by 38 percent and volatile organic compounds by 26 percent by 2030. [EPA-HQ-
OAR-2010-0799-9902-A2, p. 2]
Organization: California Air Resources Board (CARB)
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, p. 14.]
We know that EPA is nearing completion of its Tier 3 proposal to address these same pollutants
from passenger vehicles. We know this because we shared with you our assessment of the
feasible standards and the implementation schedule, and we've worked together to reach a
common understanding of the many testing and compliance details.
We urge you to propose and finalize this Tier 3 regulation as soon as possible. It will benefit the
vehicle manufacturers in that they'll be able to build one car that meets California and EPA
standards. And it will benefit California and our partner states by assuring that federally certified
new cars that subsequently operate in our states will be as clean as those sold here and purchased
by our citizens.
Organization: Environmental Defense Fund (EDF)
II. EDF URGES EPA TO FINALIZE TIER 3 STANDARDS IN 2012
We strongly urge EPA to immediately propose Tier 3 emissions and gasoline standards for
passenger vehicles and to finalize these protections by the summer of 2012. A rigorous Tier 3
program would have immediate and far-reaching health and environmental benefits: reducing a
22-2
-------
Tier 3 Standards
cascade of harmful airborne contaminants, ensuring longer and healthier lives, and helping states
and communities across our country restore healthy air. [EPA-HQ-OAR-2010-0799-9519-A1, p.
3]
In a May 2010 Rose Garden ceremony, President Obama announced his intention to finalize a
Tier 3 program by 2012 that would reduce sulfur levels in gasoline and introduce cleaner cars
and light trucks on the same schedule as his already-finalized greenhouse gas program.
Proposing this program now will help ensure that the President's commitment is kept. And
timely fmalization of Tier 3 standards would allow manufacturers to efficiently align technology
upgrades with the proposed fuel efficiency and greenhouse gas emissions standards. [EPA-HQ-
OAR-2010-0799-9519-A1, pp. 3-4]
Millions of Americans breathe cleaner, healthier air as a result of the U.S. Environmental
Protection Agency's leadership in carrying out our nation's clean air laws. But serious challenges
remain. More than 1 in 3 Americans still live in areas where air pollutant levels exceed at least
one of the health-based National Ambient Air Quality Standards. And passenger vehicles remain
the second largest emitters of oxides of nitrogen and volatile organic compounds in the U.S. -
the primary pollutants that form ozone. These vehicles also emit more than half of all carbon
monoxide pollution and contribute significantly to lethal particulate matter emissions. 15 [EPA-
HQ-OAR-2010-0799-9519-A1, p. 3]
A protective Tier 3 program has the potential to cut gasoline vehicle emissions of nitrogen
oxides by nearly sixty percent, carbon monoxide by about 38 percent, and volatile organic
compounds by close to a third when these protections are carried out. The substantial emissions
reductions from all vehicles will translate into more than 400 avoided premature deaths and
52,000 avoided lost workdays each year. 16 [EPA-HQ-OAR-2010-0799-9519-A1, p. 4]
Reducing sulfur in gasoline will also result in an immediate reduction in emissions from the
existing fleet - on the order of approximately 260,000 tons of nitrogen oxides in 2017 when the
program begins - equivalent to taking 33 million cars off our nation's roads. And the additional
cost to consumers of the cleaner gasoline would be less than a penny a gallon. 17 [EPA-HQ-
OAR-2010-0799-9519-A1, p. 4]
A timely federal Tier 3 program is also imperative for states to meet the health-based National
Ambient Air Quality Standards, including the ozone standard adopted in 2008, which assumed
final Tier 3 emissions and gasoline standards in its baseline. Emissions reductions not achieved
through a rigorous Tier 3 program would have to come from controls on local sources, which
could be far less significant in magnitude and less cost-effective. [EPA-HQ-OAR-2010-0799-
9519-Al,p. 4]
Organization: Mercedes-Benz USA, LLC
DAG supports the agencies' efforts to implement the Tier III and LEV III programs and will
continue to work towards a nationwide requirement for ultra low sulfur gasoline to maximize the
potential for direct injection gasoline engines. [EPA-HQ-OAR-2010-0799-9483-A1, p. 2]
22-3
-------
EPA Response to Comments
Organization: Renewable Fuels Association (RFA)
EPA/NHTSA must ensure the final standards are harmonized with the upcoming "Tier 3"
vehicle and fuel standards. [EPA-HQ-OAR-2010-0799-9490-A1, p.2]
IN ADDITION TO MAKING CERTAIN THE PROPOSED CAFE/GHG STANDARDS ARE
COMPLEMENTARY TO THE REQUIREMENTS OF RFS2, EPA MUST ALSO ENSURE
THE FINAL STANDARDS ARE HARMONIZED WITH THE UPCOMING "TIER 3"
VEHICLE AND FUEL STANDARDS. [EPA-HQ-OAR-2010-0799-9490-A1, p.6]
In the current CAFE/GHG proposal, EPA states that it will propose Tier 3 vehicle and fuel
standards "in the near future." The Tier 3 rulemaking, which EPA acknowledges will generally
apply to the "same set of new vehicles... as would the proposed light-duty GHG emissions
standards," is expected to set new limits for tailpipe and evaporative emissions from light-duty
vehicles, including volatile organic compounds, nitrogen oxides, particulate matter, and air
toxics. EPA acknowledges the need for close coordination of the Tier 3 rules with the
CAFE/GHG standards, such that automakers and fuel providers can most effectively plan for the
future regulatory landscape. [EPA-HQ-OAR-2010-0799-9490-Al, p.7]
Vehicle engines, the fuels that power them, and emissions control systems must be considered as
equally important components of integrated systems. Thus, EPA/NHTSA should take a systems
approach to the coordination of pending and existing regulations that affect both future fuel
composition and future vehicle and engine technology. It is absolutely critical that EPA/NHTSA
ensure the requirements of one rule don't impede the regulated community's ability to comply
with the requirements of separate, but related, rules. [EPA-HQ-OAR-2010-0799-9490-Al, p.7]
Organization: South Coast AQMD
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 70-71.]
While the focus of the proposed rule is on greenhouse gas emissions, we urge U.S. EPA to move
forward with proposals to set criteria pollutant tailpipe emissions standards as soon as possible.
Response:
These comments all deal with issues outside the scope of this rulemaking.
22.2. Changes to Fuel Specifications
Organizations Included in this Section
Alliance of Automobile Manufacturers
American Petroleum Institute (API)
Growth Energy
Volvo Car Corporation (VCC)
22-4
-------
Tier 3 Standards
Organization: Alliance of Automobile Manufacturers
Fuel quality improvement can help further the program goals. As EPA has requested, the
Alliance plans to make its substantive comments about market fuel quality specifications within
the context of the pending EPA "Tier 3" proposed rule (and perhaps independently as well,
separate from the Tier 3 rulemaking) and will not elaborate on them here. We want to note,
however, that fuel quality can have a significant impact on fuel efficiency and GHG emission
reductions. [EPA-HQ-OAR-2010-0799-9487-A1, pp.5-6]
In the meantime, it is expected that market fuel sulfur content and possibly other fuel properties
will be addressed as part of the pending EPA "Tier 3" rulemaking. As noted above, market fuel
developments need to be part of the planned Mid Term Evaluation incorporated in this rule.
[EPA-HQ-OAR-2010-0799-9487-Al,p.85]
As EPA has requested, the Alliance plans to make its substantive comments about market fuel
quality specifications within the context of the pending EPA "Tier 3" proposed rule (and perhaps
independently as well, separate from the Tier 3 rulemaking) and will not elaborate on them here.
[EPA-HQ-OAR-2010-0799-9487-Al,p.85]
Alliance members want to underscore for the rulemaking record and any future regulatory
review that in reserving substantive comments on fuel quality to the pending Tier 3 rulemaking
as requested, we recognize that considerable benefits could inure to fuel efficiency and economy,
and GHG emission reductions (and thus to the relevant statutory authority for this rulemaking),
from fuel quality changes addressed elsewhere. We are relying on the agency that consideration
of such benefits and reliance on such authority will not be foreclosed by reserving our fuel
quality comments for the Tier 3 rulemaking or other rulemaking initiatives. [EPA-HQ-OAR-
2010-0799-9487-A1, p.85]
Organization: American Petroleum Institute (API)
EPA's Plans for Further Standards for Light-Duty Vehicle Criteria Pollutants and Gasoline Fuel
Quality
EPA references plans to propose a "Tier 3" program of emissions and fuel quality standards
intended to further reduce non-GHG pollutants (including volatile organic compounds, nitrogen
oxides, particulate matter, and air toxics) from new light-duty vehicles. API and its members
firmly support the principle that no Tier 3 regulation of fuel quality should be proposed without
first providing a thorough science-based justification that demonstrates the health benefits along
with a rigorous economic and supply impact analysis that assesses fundamental cost and energy
security consequences related to the viability of a domestic refining industry. As noted above,
vehicle technologies that might require fuel changes are not likely to be employed for meeting
the CAFE standards proposed for MY 2017 - 2025 light-duty vehicles. [EPA-HQ-OAR-2010-
0799-9469-A1, p. 8]
22-5
-------
EPA Response to Comments
Until EPA releases data and analysis on the benefits of the Tier 3 standards under consideration,
a comprehensive fuel/vehicle system-focused assessment cannot be conducted or evaluated by
stakeholders and/or the public. In this regard, EPA should complete an Anti-Backsliding study of
the RFS program and make it available for public scrutiny and comment prior to proposing any
rule to change fuel quality. Congress mandated the study, which is now more than two years
overdue. In addition, EPA has indicated to industry that it has been performing emissions
measurements on in-use vehicles operated on gasoline fuels containing significantly lower levels
of sulfur. These data and EPA's associated analyses also need to be made publicly available prior
to the issuance of a proposed rule. Absent these actions and a demonstration that fuel changes
will achieve cost effective emissions reductions that would improve air quality or have other
health benefits, EPA should not propose a Tier 3 Rule. By moving forward with a Tier 3
proposal, EPA is making conclusions based on an incompletely vetted set of data and analysis
and is allowing scant time for scrutiny from interested stakeholders. [EPA-HQ-OAR-2010-0799-
9469-A1, p. 9]
• Tier 3 fuel requirements are unnecessary and unjustified - The EPA should not link a Tier 3
program of non-GHG emissions and fuel quality standards for new light-duty vehicles to the
referenced proposed rulemaking. The EPA has not yet completed long overdue studies mandated
by Congress, nor has it conducted and released a thorough science-based justification that
demonstrates the need for Tier 3. Finally, the Agency has yet to provide stakeholders with
adequate opportunity to evaluate and submit input on all of the data and analysis that it has
collected and performed to support such an initiative. [EPA-HQ-OAR-2010-0799-9469-A2, p. 2]
Organization: Growth Energy
II. Potential Fuel Parameter Changes
A. Background
In the Joint NPRM EPA did not evaluate potential fuel quality changes in the GHG proposal.
The proposed rule contains the following discussion with respect to the Tier 3 standards and
possible fuel changes: In the May 21, 2010 Presidential Memorandum, in addition to addressing
GHGs and fuel economy, the President also requested that EPA examine its broader motor
vehicle air pollution control program. The President requested that "[t]he Administrator of the
EPA review for adequacy the current nongreenhouse gas emissions regulations for new motor
vehicles, new motor vehicle engines, and motor vehicle fuels, including tailpipe emissions
standards for nitrogen oxides and air toxics, and sulfur standards for gasoline. If the
Administrator of the EPA finds that new emissions regulations are required, then I request that
the Administrator of the EPA promulgate such regulations as part of a comprehensive approach
toward regulating motor vehicles." [EPA-HQ-OAR-2010-0799-9505-A1, p. 31]
EPA is currently in the process of conducting an assessment of the potential need for additional
controls on light-duty vehicle non-GHG emissions and gasoline fuel quality. EPA has been
actively engaging in technical conversations with the automobile industry, the oil industry,
nongovernmental organizations, the states, and other stakeholders on the potential need for new
regulatory action, including the areas that are specifically mentioned in the Presidential
22-6
-------
Tier 3 Standards
Memorandum. EPA will coordinate all future actions in this area with the State of
California. [EPA-HQ-OAR-2010-0799-9505-A1, p. 32]
Based on this assessment, in the near future, EPA expects to propose a separate but related
program that would, in general, affect the same set of new vehicles on the same timeline as
would the proposed light-duty GHG emissions standards. It would be designed to address air
quality problems with ozone and PM, which continue to be serious problems in many parts of the
country, and light-duty vehicles continue to play a significant role. [EPA-HQ-OAR-2010-0799-
9505-A1, p. 32]
EPA expects that this related program, called "Tier 3" vehicle and fuel standards, would among
other things propose tailpipe and evaporative standards to reduce non-GHG pollutants from
light-duty vehicles, including volatile organic compounds, nitrogen oxides, particulate matter,
and air toxics. EPA's intent, based on extensive interaction to date with the automobile
manufacturers and other stakeholders, is to propose a Tier 3 program that would allow
manufacturers to proceed with coordinated future product development plans with a full
understanding of the major regulatory requirements they will be facing over the long term. This
coordinated regulatory approach would allow manufacturers to design their future vehicles so
that any technological challenges associated with meeting both the GHG and Tier 3 standards
could be efficiently addressed. [EPA-HQ-OAR-2010-0799-9505-A1, p. 32]
It should be noted that under EPA's current regulations, GHG emissions and CAFE compliance
testing for gasoline vehicles is conducted using a defined fuel that does not include any amount
of ethanol. If the certification test fuel is changed to some ethanol-based fuel through a future
rulemaking, EPA would be required under EPCA to address the need for a test procedure
adjustment to preserve the level of stringency of the CAFE standards.26 EPA is committed to
doing so in a timely manner to ensure that any change in certification fuel will not affect the
stringency of future GHG emission standards. [EPA-HQ-OAR-2010-0799-9505-A1, p. 32]
The discussion indicates EPA will evaluate changes to certification fuel in Tier 3, and if there are
changes made to this certification fuel, that EPA would be required under EPCA to preserve the
stringency of the GHG standards. Thus, EPA acknowledges that certification fuel has an effect
on GHG emissions, and therefore also acknowledges that vehicles and fuels operate as a system,
not only for the criteria pollutants like PM and NOX, but also GHGs. And yet, EPA did not
evaluate changes in fuel for the GHG rule. Growth Energy believes that because vehicles and
fuels are obviously inseparable when it comes to both criteria pollutants and GHG emissions,
that the Agencies should have evaluated both changes to vehicles and fuels for the GHG
rule. [EPA-HQ-OAR-2010-0799-9505-A1, pp. 32-33]
EPA has not yet published its Tier 3 proposal, and it is possible that EPA will propose new
certification fuel requirements that directly affects the ability of automakers to meet the GHG
requirements. Therefore, new certification fuels should have been examined in the GHG
requirements, and it is in this context that Growth Energy proposes a new certification and in-use
fuel for 2017 and later cars and light duty trucks. We believe that EPA and the Agencies should
examine this proposed certification and in-use fuel as an alternative in developing the final
GHG/CAFE rules for 2017-2025 vehicles. [EPA-HQ-OAR-2010-0799-9505-A1, p. 33]
22-7
-------
EPA Response to Comments
Growth Energy's proposal for 2017 certification fuel is shown in Table 3. This certification fuel
is essentially the same as the Alliance of Automobile Manufacturer's proposal to CARB, but
with the addition of 20 volume percent more ethanol, so that octane is higher, the distillation
parameters are changed, and other parameters are lower by dilution. [Table 3 can be found on p.
33 of Docket number EPA-HQ-OAR-2010-0799-9505-A1] [EP A-HQ-OAR-2010-0799-9505-
Al,p.33]
Fuel marketers would be required to produce fuel that would be similar to this proposed fuel for
2017+ vehicles.27 In conventional areas of the U.S., it would meet EPA's sulfur, MSAT and
RVP regulations, but still have 94 octane and 30% ethanol. In reformulated gasoline areas, it
would meet the requirements of the RFG regulations, the low sulfur regulations, and the MSAT
and RVP regulations, but otherwise have 94 octane and 30% ethanol. [EP A-HQ-OAR-2010-
0799-9505-A1, pp. 33-34]
Most of the U.S. already has E10, so both RFG and conventional fuel already contains E10 for
the current fleet. Adding 20% more ethanol to these fuels would increase octane, reduce sulfur,
reduce RVP, reduce total and multi-substituted aromatics, olefms, benzene, and change the T50
and T90 points. [EPA-HQ-OAR-2010-0799-9505-A1, p. 34]
Other concepts of this proposal are as follows:
• Automakers would certify 2017+ vehicles only on E30, they would not be required to
certify on E10. The legacy fleet would continue to operate on E10
• Ramp-up of ethanol for E30 would build with the introduction of each successive model
year of 2017+ vehicles. Ethanol would have to be used preferentially for E30, then for
E10 in the legacy fleet.
• There may be a net positive impact on upstream GHG emissions from producing the base
gasoline (normalized to gasoline volume); this would have to be evaluated [EPA-HQ-
OAR-2010-0799-9505-A1, p. 34]
The primary advantages of implementing this type of fuel are:
• Low carbon intensity ethanol volumes ramp up slowly from calendar year 2017 as the
new vehicles using this fuel are introduced into the fleet, and continue ramping up well
beyond the 2020-2022 timeframe, providing ongoing upstream (i.e., lifecycle) GHG
reductions well into the future (through 2040) beyond the RFS.
• Currently the cellulosic projections in the RFS are not being met in part because the
United States ethanol market is saturated by E10. Creating an E30 certification fuel
would send a fresh market signal to the cellulosic industry that market space is being
created through this new fuel standard. To meet the 36 billion gallon biofuel projection
by 2022, market access for advanced (50% lifecycle emissions reduction) and cellulosic
ethanol (60% lifecycle emissions reduction) must be offered a path. This proposal would
provide that opportunity as well as the other benefits a higher octane standard would
offer.
• Automakers should be able to use the higher octane ethanol fuel to boost engine
efficiency beyond the engine efficiency obtained from the current Agency proposal
22-8
-------
Tier 3 Standards
(tailpipe GHG emissions would be the same as the Agency proposal), maintaining the
same fuel economy and vehicle range
• Importantly, exhaust Particulate Matter (PM) emissions and carbon monoxide (CO)
emissions from 2017-2025 model year vehicles would be much lower than the current
proposal because of increased fuel oxygen content. [EPA-HQ-OAR-2010-0799-9505-A1,
p. 34]
Other criteria pollutant emissions (exhaust and evaporative NMOG and NOX) from onroad 2017+
motor vehicles should be the same with E30 as with current certification fuel, whether they are
Tier 2 or Tier 3 vehicles, since the same tailpipe and evaporative standards must be met.
Distribution of the E30 fuel should ultimately be no more difficult than E85 distribution, which
has to take place anyway because of the RFS. The slow phase-in of E30 gives time for additional
low carbon intensity (i.e., cellulose and other) ethanol supplies to develop. [EPA-HQ-OAR-
2010-0799-9505-A1, p. 35]
It is also important to note that Tier 2 and Tier 3 vehicles will have to meet very low emission
standards for evaporative NMOG, exhaust NMOG, CO, and NOX, no matter what fuel they are
certified on. So ultimately, there should be no difference in these emissions between an E10 fuel
and an E30 fuel. A number of manufacturers offer FFVs that meet Tier 2 and emission standards
on E85 and EO now. Increasing ethanol from E10 to E30 reduces fuel volatility, so depending on
a final volatility specification, meeting evaporative requirements could be somewhat less
difficult with an E30 blend. Fuel system permeation also contributes to evaporative emissions.
Permeation emissions have not been studied on E30 blends, but a Coordinating Research Council
study on permeation from ethanol blends between E6 and E20 found that increasing ethanol
content from E10 to E20 increased diurnal permeation emissions by about 16% on five vehicles,
however, one FFV that was tested experienced lower permeation emissions on E20 than E10.
This factor should also be considered in a revised cost-benefit analysis. [EPA-HQ-OAR-2010-
0799-9505-A1, pp. 40-41]
26 EPCA requires that CAFE tests be determined from the EPA test procedures in place as of
1975, or procedures that give comparable results. 49 USC 32904(c).
27 Subject to approval/oversight by EPA and others, E30 could be marketed to FFVs prior to
calendar year 2017. Current FFV customers probably often have E30 in their fuel tanks if they
switch back-and-forth between E85 and EO.
Organization: Volvo Car Corporation (VCC)
Certification Gasoline and Harmonization
VCC supports a single certification fuel for EPA and CARB. It is expensive and inefficient to
develop toward and store several different fuels to meet two nearly identical regulations. [EPA-
HQ-OAR-2010-0799-9551-A2, p. 13]
22-9
-------
EPA Response to Comments
When EPA/NHTSA/CARB require different fuels, it effectively doubles the amount of testing
manufacturers are required to perform, while yielding limited, if any, additional environmental
benefit. Even though it appears that 10% ethanol is likely to be the most common fuel on the
U.S. market for the foreseeable future, EPA has, through the upcoming TIERS regulation,
indicated that it will require E15. [EPA-HQ-OAR-2010-0799-9551-A2, p. 13]
The consequence of this would be that CARB and EPA will have different certification gasoline
requirements. To eliminate unnecessary duplicative testing, VCC has requested that CARB
accept certification using the EPA proposed fuel from MY2017. VCC requests though that
EPA/NHTSA/CARB reach a harmonized approach toward a national fuel for certification after
reaching a common approach towards harmonized definition of CC>2 and fuel economy. [EPA-
HQ-OAR-2010-0799-9551-A2, p. 14]
Response:
These comments regarding possible changes to fuel specifications under a future EPA Tier 3
rulemaking are outside the scope this GHG rulemaking.
22-10
-------
Request for Extension of the Comment Period
23. Request for Extension of the Comment Period
Organizations Included in this Section
Association of Global Automakers, Inc. (Global Automakers)
National Automobile Dealers Association (NAD A)
Volkswagen
Organization: Association of Global Automakers, Inc. (Global Automakers)
The Association of Global Automakers, Inc. hereby requests a 30-day extension from January
30, 2012 to March 1, 2012 to submit its comments on the Notice of Proposed Rulemaking
(NPRM) for 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and
Corporate Average Fuel Economy Standards [76 FR 74854, December 1, 201 1]. [EPA-HQ-
OAR-201 0-0799-1 307-A1, p.l]
The need for this extension is underscored by the following: [EP A-HQ-OAR-20 10-0799- 13 07-
1. The complexity, cost, and importance of this rulemaking warrant allowing all stakeholders
sufficient time to review and understand the extensive Federal Register and supporting
documents and to provide meaningful feedback to the agencies. Although the basic outline of the
proposal was announced in advance through a supplemental notice of intent, the details of the
proposal were not publicly available until the issuance of the proposal. These details are of
critical importance to participants in the rulemaking in developing a full understanding of the
potential impacts of this far-reaching rulemaking. [EPA-HQ-OAR-2010-0799-1307-A1, p.l]
2. The release of this rulemaking corresponds to the release of other complex and significant
rulemaking documents by the California Air Resources Board (ARE), which are not limited to
GHG standards but also include proposals for the next round of low emission vehicle criteria
pollutant standards for 2015+ vehicles, zero emission vehicles, clean fuels outlets, and
environmental performance labeling. [EP A-HQ-OAR-20 10-0799- 13 07- Al, p.l]
3. The current end date of the comment period falls on the heels of the public hearings, which
will require additional time and resource commitments: [EP A-HQ-OAR-20 10-0799- 13 07- Al,
p.l]
a. The public hearings for the EPA-NHTSA proposal are scheduled on January 17, 19, and 24,
2012. [EPA-HQ-OAR-2010-0799-1307-A1, p.l]
b. The ARE Board hearing on the aforementioned California regulations is scheduled for January
26-27, 2012. [EPA-HQ-OAR-2010-0799-1307-A1, p.l]
23-1
-------
EPA Response to Comments
These overlapping and important rulemaking activities, in combination with the approaching
holiday season, make a modest extension of the comment period even more compelling. All of
our member companies and the auto industry generally are closed during the week between
Christmas and New Years Day, making communications among the Association and our
members extremely difficult. [EPA-HQ-OAR-2010-0799-1307-A1, pp. 1-2]
Furthermore, as noted in the NPRM and the Notice of Public Hearings for the proposal [76 FR
76932, December 9, 2011], NHTSA and EPA are required to "keep the official record of each
hearing open for 30 days to allow speakers to submit supplementary information" [76 FR
76933], as required by § 7607 (d)(5)(iv) of the Clean Air Act. Therefore, the public hearing
record must remain open until February 23, 2012 or so. Thus, approving our request would have
no material impact on the rulemaking schedule. [EPA-HQ-OAR-2010-0799-1307-A1, p.2]
Organization: National Automobile Dealers Association (NADA)
By this letter, NADA requests an extension of the January 30, 2012, comment period deadline
for the above-referenced proposed rulemaking for an additional 30 days or until February 29,
2012. 76 Fed. Reg. 76932, et seq. (December 9, 2011). In support of this request, please
recognize and consider the following: [EPA-HQ-OAR-2010-0799-1308-A1, p.l]
1. The joint proposal is 567 Federal Register pages long. It is accompanied by a 482 page Draft
Joint Technical Support Document, an 833 page Preliminary Regulatory Impact Analysis, and a
482 page Draft Environmental Impact Statement. These three documents cite hundreds of other
documents. In addition, the EPA docket currently contains 726 non-comment documents and the
NHTSA docket currently contains 148 non-comment documents. Despite an intention to devote
substantial resources to the task, NADA cannot complete a review of these documents by
January 30, 2012. [EPA-HQ-OAR-2010-0799-1308-A1, p.l]
2. On December 9, 2011, NHTSA and EPA issued a notice with details regarding three public
hearings on the proposal. 76 Fed. Reg. 76932-3 (December 9, 2011). NADA immediately
arranged for three dealers to testify at these hearings, sending an e-mail to EPA with the specifics
requested in the December 9 notice. Consequently, in addition to developing comments
responding to the joint proposal, NADA will be working diligently to assist these dealers with
the development of their testimony. Given the short time frame involved, this will be a daunting
task. [EPA-HQ-OAR-2010-0799-1308-A1, p.2]
3. As recognized by EPA and NHTSA, the Clean Air Act requires that the records for the
hearings discussed above be kept open for at least 30 days following each hearing. 42 USC
§7607(d)(5). At the very least, this means that EPA must accept written submissions pertaining
to the January 24, 2012, hearing until at least February 23, 2012. 42 USC §7607(d)(5).
Consequently, extension of the comment period to February 29, 2012, will have no negative
consequences for the regulatory development process. [EPA-HQ-OAR-2010-0799-1308-A1, p.2]
4. On December 7, 2011, the California Air Resources Board (CARB) announced a voluminous
package of advanced Clean Car Rules. These rules in part relate to the NHTSA/EPA proposal
and, if promulgated and granted a preemption waiver, will apply (at least in part) in as many as
23-2
-------
Request for Extension of the Comment Period
15 states. Consequently, NADA's limited resources also are burdened with reviewing and
responding to this CARB proposal, a hearing for which is scheduled for January 26-27, 2012.
[EPA-HQ-OAR-2010-0799-1308-Al,p.2]
5. The NHTSA/EPA proposal seeks to establish CAFE and GHG mandates which, at the earliest,
would begin to take effect in MY 2017. The proposal is not tied to a specific statutory deadline.
Indeed, the 35 mpg standard recently promulgated for MY 2016 will kick in some four years
earlier than Congress contemplated. 49 USC §32902(b)(2)(A). In any event, new CAFE
standards must be issued at least 18 months prior to the model year in question. 49 USC
§32902(a). In addition, new GHG standards may not issue sooner than the model year
commencing 4 years after they are promulgated. 42 USC §7521(a)((3)(C). Thus, affording
interested parties an additional 30 days to submit comments will neither conflict with a statutory
deadline nor interfere with existing statutory mandates designed to provide vehicle
manufacturers with adequate lead time. [EPA-HQ-OAR-2010-0799-1308-A1, p.2]
6. Of primary importance is the issue of fair and adequate due process. Persons potentially
impacted by the December 1, 2011, proposal are entitled to a reasonable opportunity to provide
comment and testimony to the record. In this regard, NADA appreciates the fact that NHTSA
and EPA allowed interested parties the opportunity to provide input in response to several
Notices of Intent leading up to the proposal. NADA also applauds the three hearing opportunities
mentioned above. It is in light of these fair and adequate opportunities for public participation
that NADA urges NHTSA and EPA to recognize that 60 days is an insufficient amount of time
for interested parties to develop and submit written comments on what may well be the most
voluminous, most far reaching, and most expensive regulatory proposal ever issued by the
Federal government. [EPA-HQ-OAR-2010-0799-1308-A1, p.2]
7. For comparison purposes, NADA pulled from its stack of regulatory notices two recently
issued items of interest to its members. The first, an EPA notice of some 89 pages involving
proposed management standards for the underground storage tanks sometimes found at
dealerships, allows for a 90 day comment period. 76 Fed. Reg. 71708, et seq. (November 18,
2011). The docket for this proposal currently contains a mere 211 documents. The second, a
NHTSA notice involving Theft Protection and Rollaway Prevention is 17 pages long yet it also
affords 90 days for public comment. 76 Fed. Reg. 77183, et seq. (December 12, 2011). The
docket for that proposal currently contains roughly 2 documents. Note that NADA is in no way
suggesting that these proposals are any less important than the joint CAFE/GHG proposal, only
that they would appear to be no more (and arguably far less) complex and burdensome for
interested parties to digest and respond to. [EPA-HQ-OAR-2010-0799-1308-A1, p.3]
For all of the above-listed reasons, NADA urges NHTSA and EPA to extend the comment period
in this matter to February 29, 2012. [EPA-HQ-OAR-2010-0799-1308-A1, p.3]
In mid-December, NADA petitioned NHTSA and EPA for a 30 day extension of the 60 day
comment period. A month later, a 14 calendar day extension was granted. Hearings on the
proposal were held on January 17, January 19, and January 24, 2012, with NADA dealer-
directors presenting testimony at each. The hearing records remain open for 30 days. [EPA-HQ-
OAR-2010-0799-9575-A1, p. 2]
23-3
-------
EPA Response to Comments
Organization: Volkswagen
With this letter Volkswagen Group of America (Volkswagen) requests a 30 day extension to the
comment period for the Notice of Proposed Rulemaking (NPRM) for 2017 and Later Model
Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy
Standards (76 FR 748S4, December 1, 2011). Volkswagen requests that the comment period be
extended from January 30, 2012 to February 29, 2012. [EPA-HQ-OAR-2010-0799-1309-A1,
p.l]
The reasons to extend the comment period are compelling. [EPA-HQ-OAR-2010-0799-1309-A1,
p.l]
• The regulation is extremely long, complex and costly. Sufficient time is required for all
stakeholders to thoroughly review the regulation and all the supporting documents that detail the
agency analysis that has led to the proposal published on December 1, 2011. While the overall
program was outlined earlier this year with the publication of the Supplemental Notice of Intent
(SNOI), there are many aspects of the joint regulation that are available for the very first time
with the publication of the NPRM. [EPA-HQ-OAR-2010-0799-13 09-Al, p.l]
• During the month of January EPA and NHTSA have scheduled 3 hearings to present this
complex regulation to the public and allow all stakeholders a chance to comment on the details
of the regulation. The short time frame between the hearings and the close of the comment
period and the fact that discussions that result from the hearings may also need to be addressed in
stakeholder comments lends additional need for an extension. [EPA-HQ-OAR-2010-0799-13 09-
Al,p.2]
• This joint regulation from EPA and NHTSA also coincides with a lengthy and complex
regulation issued by the state of California. The proposed regulation from California, in addition
to detailing their version of the Greenhouse Gas regulation that will be part of the National
Program, also proposes complex and costly regulations for criteria pollutants, evaporative
emissions, the California 2EV Program, changes to certification fuel and the Clean Fuels Outlet
Program. [EPA-HQ-OAR-2010-0799-1309-Al, p.2]
• Ninety day comment periods are typical and are appropriate given the size and scope of this
regulation and the sheer volume of supporting documents. [EPA-HQ-OAR-2010-0799-1309-Al,
p.2]
• A 30 day extension should have no impact on the timing for the publication of the final
regulation. [EPA-HQ-OAR-2010-0799-1309-A1, p.2]
Response:
EPA in fact extended the public comment period in response to the above requests.
23-4
-------
Comments Regarding PSD/Title V Implications
24. Comments Regarding PSD/Title V Implications and Pending GHG
Lawsuits
Organizations Included in this Section
American Fuel and Petrochemical Manufacturers (AFPM)
American Petroleum Institute (API), National Association of Manufacturers (NAM), and
American Fuel & Petrochemical Manufacturers (AFPM)
National Association of Manufacturers (NAM)
Utility Air Regulatory Group (UARG)
Organization: American Fuel and Petrochemical Manufacturers (AFPM)
I. EPA's GHG CAFE Standards are Under Judicial Review. [EPA-HQ-OAR-2010-0799-9485-
Al,p.2]
The legal effect of EPA's original light-duty vehicle GHG regulation is under judicial review and
the implications of that challenge likely will impact this rulemaking. Extensive, unreasonably
stringent GHG emissions standards for light-duty vehicles (LDVs) are not required by statute or
by the 2007 U.S. Supreme Court decision in Massachusetts v. EPA. Although section 102 of the
Energy Independence and Security Act of 2007 (Public Law 110-140, hereinafter EISA) requires
the Secretary of Transportation to establish automobile fuel economy standards for model years
through 2020, there is no statute requiring EPA to set GHG emission standards for LDVs. While
section 202(a) of the Clean Air Act (CAA) requires the Administrator of EPA to set standards
"which in [her] judgment cause, or contribute to, air pollution which may reasonably be
anticipated to endanger public health or welfare," the CAA does not require excessive or stretch
standards. [EPA-HQ-OAR-2010-0799-9485-A1, p.2]
On April 2, 2007, the U.S. Supreme Court held that EPA has the statutory authority to regulate
GHG emissions from new motor vehicles. Although the Supreme Court recognized that EPA has
"significant latitude as to the manner, timing, [and] content" of its regulations, this Supreme
Court decision in 2007 did not mandate GHG emissions rulemakings. [EP A-HQ-OAR-2010-
0799-9485-A1, p.2]
EPA is involved in at least four related lawsuits: [EPA-HQ-OAR-2010-0799-9485-A1, p.2]
• GHG endangerment, [EPA-HQ-OAR-2010-0799-9485-A1, p.2]
• GHG/CAFE standards for LDVs (MYs 2012-2016), [EPA-HQ-OAR-2010-0799-9485-A1, p.2]
• GHG Prevention of Significant Deterioration (PSD) "tailoring," and [EPA-HQ-OAR-2010-
0799-9485-A1, p.2]
• GHG PSD, review of 12/18/08 "Johnson memo" - also called "grounds arising after." [EPA-
HQ-OAR-2010-0799-9485-A1, p.2]
24-1
-------
EPA Response to Comments
Oral argument is scheduled for February 28 and 29, 2012 by the U.S. Court of Appeals for the
D.C. Circuit for all four of these lawsuits. A decision is expected in 2012 and will have
ramifications for a final rule for LDVs beginning with MY 2017. Judicial decisions on all four
lawsuits are likely before EPA and NHTSA promulgate a joint final rule for LDVs after MY
2016. Therefore, this proposal for MYs after 2016 is premature and presumptive. [EPA-HQ-
OAR-2010-0799-9485-A1, p.2]
EPA's LDV rule for MYs 2012-2016 has been challenged as arbitrary, capricious, and otherwise
not in accordance with law because EPA: (1) failed to address the broad consequences for
stationary sources that automatically result from that rule; (2) refused to analyze the
extraordinary burdens on other source categories imposed by that rule; (3) failed to give
meaningful consideration to the option of deferring regulation; and (4) failed to justify its rule by
articulating any rational connection between the alleged endangerment and EPA's selected
standards. EPA should delay promulgation of this rule to fully consider the implications of this
judicial review. The agency's LDV proposal is similarly arbitrary and capricious in its failure to
address these problems for LDVs with MYs after 2016. [EPA-HQ-OAR-2010-0799-9485-A1,
pp.2-3]
As a result of its improper interpretation of the Clean Air Act, EPA has also asserted that the
LDV rule for MYs 2012-2016 triggers an obligation to regulate GHG emissions from stationary
sources under the Prevention of Significant Deterioration (PSD) and Title V permitting
programs. AFPM strongly opposes any approach to implementing mobile source standards that
could impact such a wide swath of unrelated stationary sources. AFPM has filed joint comments
with American Petroleum Institute and the National Association of Manufacturers that address
the proposed rule's potential impact on stationary sources and explain why EPA's improper
interpretation renders the rulemaking arbitrary and capricious. We hereby incorporate by
reference those joint comments in this submission. In short, EPA should not assert that this rule
acts as an independent trigger for the PSD program, requiring regulation of GHG emissions from
stationary sources, particularly in the face of an imminent court decision vacating elements of
EPA's existing GHG regulatory regime. [EPA-HQ-OAR-2010-0799-9485-A1, p.3]
Organization: American Petroleum Institute (API), National Association of Manufacturers
(NAM), and American Fuel & Petrochemical Manufacturers (AFPM)
Regardless of the substance and stringency of the actual greenhouse gas (GHG) standards that
EPA proposes to impose on light-duty vehicles, the Associations strongly oppose any approach
to implementing mobile source standards in a manner that impacts a wide swath of unrelated
stationary sources. 1 As of January 2, 2011, as a result of a prior rulemaking for model year 2012-
2016 light-duty vehicles, EPA has begun imposing significant and unprecedented GHG
permitting requirements on stationary sources around the nation. It has accomplished this
through "four related actions that, taken together, trigger [permitting requirements] for GHG
sources on and after January 2, 2011." Action to Ensure Auth. to Issue Permits under the
Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions:
Finding of Substantial Inadequacy and SIP Call (Proposed SIP Call), 75 Fed. Reg. 53,892,
53,895 (Sept. 2, 2010) (emphasis added). These four actions are: [EPA-HQ-OAR-2010-0799-
9509-A1, p. 2]
24-2
-------
Comments Regarding PSD/Title V Implications
• the "Endangerment Finding," Endangerment and Cause or Contribute Findings for GHGs
under Section 202(a) of the Clean Air Act, 74 Fed. Reg. 66,496 (Dec. 15, 2009);
• the "Car Rule," Light-Duty Vehicle GHG Emission Standards and Corporate Average
Fuel Economy Standards, 75 Fed. Reg. 25,324 (May 7, 2010);
• the "PSD Interpretive Memorandum," Reconsideration of Interpretation of Regulations
that Determine Pollutants Covered by Clean Air Act Permitting Programs, 75 Fed. Reg.
• 17,004 (April 2, 2010); and
• the "Tailoring Rule," Prevention of Significant Deterioration and Title V Greenhouse Gas
Tailoring Rule, 75 Fed. Reg. 31,514, 31,557 (June 3, 2010). [EPA-HQ-OAR-2010-0799-
9509-A1, p. 2]
EPA explained that, in its view, the Car Rule regulations, "when they [took] effect on January 2,
2011, . . . subject GHGs emitted from stationary sources to" permitting requirements. Proposed
SIP Call, 75 Fed. Reg. at 53,892. [EPA-HQ-OAR-2010-0799-9509-A1, p. 3]
As explained in the Associations' comments on each of these four actions, EPA's decision to
impose GHG permitting requirements on stationary sources as a result of the implementation of
mobile source standards is "arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law" as well as being adopted "without observance of procedure required by
law." 42 U.S.C. § 9607(d)(9)(A),(D). Consequently, the Associations, as part of a coalition of
trade associations, have petitioned the United States Court of Appeals for the District of
Columbia Circuit to review each of the four related actions, that, in EPA's view, trigger GHG
permitting requirements. See National Association of Manufacturers et al. v. EPA, D.C. Cir Nos.
10-1044, 10-1127, 10-1166, 10-1218. The Associations have also challenged other EPA
regulations that EPA has suggested could have a role in triggering GHG permitting requirements.
See National Association of Manufacturers et al v. EPA, D.C. Cir. Nos. 10-1177, 10-1178, 10-
1179, 10-1180. Oral argument is scheduled in these cases for February 28 and 29, 2012. [EPA-
HQ-OAR-2010-0799-9509-A1, p. 3]
EPA has taken additional action by promulgating the "Truck Rule," Greenhouse Gas Emissions
Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles, 76
Fed. Reg. 57,106 (Sept. 15, 2011). The Truck Rule is analogous to the Car Rule in that it sets
standards for the quantity of GHGs that a vehicle may emit for a given amount of distance
covered or work performed. Id. at 57,115. In the likely event that the Car Rule is vacated by the
D.C. Circuit, EPA may continue to assert that the Truck Rule serves as a trigger for GHG
permitting requirements for stationary sources. See EPA, "Greenhouse Gas Emissions Standards
and Fuel Efficiency Standards for Medium- and Heavy-Duty Vehicles: EPA Response to
Comments Document for Joint Rulemaking," EPA-420-11-004, at p. 2-8 (Aug. 2011). Thus,
several of the Associations, as part of a coalition of trade associations, have also petitioned the
United States Court of Appeals for the District of Columbia Circuit to review the Truck Rule.
See American Petroleum Institute et al v. EPA, D.C. Cir No. 10-1440. That case has not yet been
briefed or set for argument. [EPA-HQ-OAR-2010-0799-9509-A1, p. 3]
Like the initial Car Rule, the 2017 Car Rule sets standards for the quantity of GHGs that a
vehicle may emit for a given distance travelled. 2017 Car Rule, 76 Fed. Reg. 74,976. In the
context of the initial car rule, EPA inappropriately and illegally took the position that the Car
24-3
-------
EPA Response to Comments
Rule triggers GHG permitting requirements for stationary sources. Consequently, as it did in the
Car Rule and Truck Rule dockets, the Associations submit these comments explaining why it is
arbitrary and capricious or otherwise unlawful for EPA to adopt the 2017 Car Rule while
maintaining its illegal interpretation that Clean Air Act (CAA) permitting requirements for
stationary sources are triggered by vehicle emissions standards such as those proposed here or
adopted in the Car Rule and Truck Rule. [EPA-HQ-OAR-2010-0799-9509-A1, p. 3]
EPA has not yet asserted that this rulemaking would independently have the same triggering
effect on stationary source GHG regulations as the Car Rule and Truck Rule despite the fact that
it also seeks to regulate GHG emissions from the transportation sector. 2017 Car Rule, 76 Fed.
Reg. 74,963. In general, EPA's position is that "any impacts on stationary sources arise because
of express statutory requirements in the CAA, not as a result of vehicle regulation. Moreover,
GHGs have become subject to regulation under the CAA by virtue of other regulatory actions
taken by EPA before this proposal." Id. at 75,162. In the final 2017 Car Rule, EPA should clarify
whether, in the likely event that the Car Rule and Truck Rule are vacated, it would cite to the
2017 Car Rule as an independent trigger for GHG stationary source permitting
requirements. [EPA-HQ-OAR-2010-0799-9509-A1, pp. 3-4]
As explained below, finalizing the 2017 Car Rule would be arbitrary and capricious and
unlawful because EPA has not corrected its interpretation of the CAA to provide that vehicle
emission standards do not trigger GHG stationary source permitting requirements. Thus, EPA
should not finalize the 2017 Car Rule with an incorrect interpretation of the CAA. In the
alternative, the NHTSA standards would realize equivalent GHG reductions without CAA
ramifications on stationary sources. Further, EPA has not considered the costs or ramifications
that the 2017 Car Rule will impose on stationary sources by triggering GHG permitting
requirements in violation of numerous laws and Executive Orders, as well as the Administrative
Procedure Act. Lastly, finalizing the 2017 Car Rule would also be arbitrary and capricious and
unlawful because the rule is predicated on an invalid endangerment finding. [EPA-HQ-OAR-
2010-0799-9509-A1, p. 4]
The Associations further elaborate on these issues below. They also incorporate by reference
here each of the comments that they submitted on the actions that comprise EPA's regulatory
scheme to impose PSD permitting requirements as a result of mobile source standards2 as well
as their Petition to Reconsider, Rescind and/or Revise EPA's Prevention of Significant
Deterioration Regulations. Because EPA is relying on a similar flawed approach and
interpretation in the context of the 2017 Car Rule, the Associations' positions in those comments
are germane here and are incorporated herein in their entirety. These comments, hereby
submitted as comments to the 2017 Car Rule docket, are attached as Exhibits A through J, and
should be considered as part of and incorporated into the Associations' submission of comments
to the 2017 Car Rule. Below, the Associations summarize key positions but do not waive the
more complete set of arguments made in the comments in the five rulemakings and attached
herein. [Exhibits A through J can be found on pp. 12-397 of Docket number EPA-HQ-OAR-
2010-0799-9509-A1] [EPA-HQ-OAR-2010-0799-9509-A1, p. 4]
I. EPA Must Correct Its Mistaken View That Mobile Source Emission Standards Trigger GHG
Permitting Requirements
24-4
-------
Comments Regarding PSD/Title V Implications
EPA has stated that, in its view, the Car Rule's vehicle emission standards took effect on January
2, 2011, and as a result triggered GHG permitting requirements for stationary sources as of that
date under two programs: the Title V operating permit program; and the Prevention of
Significant Deterioration (PSD) pre-construction permit program. PSD Interpretive Rule, 75 Fed.
Reg. at 17,019-20. EPA has not expressly announced whether it would take the same position
regarding the vehicle emission standards proposed in the 2017 Car Rule. Instead, it has simply
asserted that "GHGs have become subject to regulation under the CAA by virtue of other
regulatory actions taken by EPA before this proposal." 76 Fed. Reg. 75,162 n.597. But to the
extent EPA believes that regulations of GHGs from model year 2017-2025 light-duty vehicles,
like those from model year 2012-2016 light-duty vehicles, trigger stationary source permitting
ramifications, such position is inconsistent with the CAA, as explained below. [EPA-HQ-OAR-
2010-0799-9509-A1, p. 4]
A. The Title V Operating Permit Program and the PSD Preconstruction Permit Program
Added by Congress in the 1990 amendments, CAA Title V requires a source that emits, or has
the potential to emit, more than 100 tpy of any air pollutant to obtain an operating permit that
lists applicable regulatory requirements. See, e.g., 42 U.S.C. §§ 7661a(b), 7661c. [EPA-HQ-
OAR-2010-0799-9509-A1, p. 5]
The PSD program is significantly more complex. It was designed to help states maintain the
National Ambient Air Quality Standards (NAAQS) prescribed by EPA for specific air pollutants
known as "criteria pollutants." Under CAA § 107, EPA establishes geographic air quality
districts and designates them as (a) in attainment, (b) in non-attainment, or (c) unclassifiable for
each criteria pollutant. 42 U.S.C. § 7407(d). The CAA treats areas designated attainment and
unclassifiable for a particular pollutant—hereinafter "attainment areas"— identically for PSD
purposes. States apply NAAQS to individual stationary sources through a State Implementation
Plan (SIP) "for each 'air quality control region' within the state," which ensures that the region
meets the applicable NAAQS. Alabama Power Co. v. Costle, 636 F.2d 323, 346 (D.C. Cir.
1979); 42 U.S.C. § 7410. [EPA-HQ-OAR-2010-0799-9509-A1, p. 5]
Congress enacted the PSD program to prevent "a decline of air quality to the minimum level
permitted by NAAQS." Wisconsin Elec. Power Co. v. Reilly, 893 F.2d 901, 904 (7th Cir. 1990).
Consequently, it requires a facility in an attainment area for a specific criteria pollutant to obtain
a pre-construction permit when it has the potential to emit more than the CAA threshold for that
pollutant, either 100 or 250 tons per year (tpy), depending on the source. 42 U.S.C. §§ 7471,
7475(a), 7479. No construction may begin on a new or modified source until a final PSD permit
is obtained. Sources subject to PSD must adopt Best Available Control Technology (BACT) for
emissions of pollutants "subject to regulation" under the CAA. 42 U.S.C. § 7475(a). [EPA-HQ-
OAR-2010-0799-9509-A1, p. 5]
EPA's view that mobile source emission standards trigger GHG permitting requirements hinges
on this final point—that sources subject to PSD permitting must adopt BACT for pollutants
"subject to regulation" under the CAA. EPA argues that GHGs became "subject to regulation"
under the CAA when the Car Rule took effect because that rule imposed GHG emission
standards. PSD Interpretive Rule, 75 Fed. Reg. at 17,019-20. Consequently, EPA asserted that,
24-5
-------
EPA Response to Comments
starting January 2, 2011, stationary sources that require a PSD permit must adopt the BACT for
GHGs. Id. As explained in Section 1C. below, that argument is mistaken—mobile source
emission standards do not make GHGs subject to regulation for purposes of the PSD
program. [EPA-HQ-OAR-2010-0799-9509-A1, p. 5]
EPA goes even further, however, arguing that GHG emissions, standing alone, may trigger the
need for a PSD permit. Tailoring Rule, 75 Fed. Reg. 31,560-62. As explained in Section IB.
below, this violates the plain text of the CAA. Briefly, as noted above, PSD permits are only
required in "attainment areas." 42 U.S.C. § 7471. And areas are only designated "attainment" in
reference to a NAAQS. 42 U.S.C. § 7407(d). Thus, it is logically impossible for there to be
"attainment areas" for GHG, and so GHG emissions cannot necessitate a PSD permit. That is,
even if EPA is correct that a source that already must obtain a PSD permit due to emissions of
other pollutants for which the area is in attainment must therefore adopt BACT for GHGs, that
does not mean that GHGs can trigger the prerequisite need for a PSD permit. [EPA-HQ-OAR-
2010-0799-9509-A1, p. 5]
B. A Source Triggers PSD Permitting Only if it Emits a NAAQS Pollutant in an Area
Designated Attainment for That Pollutant
CAA Section 107(d) establishes the process of designating an area as "attainment,"
"nonattainment," or "unclassifiable" for each pollutant for which "a new or revised [NAAQS]"
has been issued. 42 U.S.C. § 7407(d). Section 107(d) thus explicitly links the designation
determinations exclusively to NAAQS criteria pollutants. In turn, Section 107's designation
determinations are the critical prerequisite to determining if the PSD program is triggered. [EPA-
HQ-OAR-2010-0799-9509-A1, p. 6]
CAA Section 161, the first substantive provision of Part C (the PSD provisions), incorporates
those prerequisites by limiting the PSD program to areas designated under Section 107 as
attainment or unclassifiable:
In accordance with the policy of section 7401(b)(l) of this title, each applicable implementation
plan shall contain emission limitations and such other measures as may be necessary, as
determined under regulations promulgated under this part, to prevent significant deterioration of
air quality in each region (or portion thereof) designated pursuant to section 7407 of this title as
attainment or unclassifiable. [EPA-HQ-OAR-2010-0799-9509-A1, p. 6]
42 U.S.C. § 7471 (emphasis added). These geographic limitations make sense because the
purpose of the PSD program is to assure that NAAQS continue to be achieved. See 42 U.S.C. §
7410(a)(2)(C) (describing PSD permit program as "necessary to assure that [NAAQS] are
achieved"). In fact, almost all of the 1977 CAA amendments focused on attainment of NAAQS,
and essentially codified EPA's original PSD program, which had been focused solely on
NAAQS pollutants. See S 95-127 (95th Cong., 1st Sess.), at 27; Tailoring Rule, 75 Fed. Reg. at
31,549. Finally, CAA § 165(a) limits the facilities for which a PSD permit is required to facilities
constructed "in any area to which this part applies." 42 U.S.C. § 7475(a) (emphasis
added). [EPA-HQ-OAR-2010-0799-9509-A1, p. 6]
24-6
-------
Comments Regarding PSD/Title V Implications
Because there is no NAAQS for GHGs, no region is designated attainment or unclassifiable for
GHGs. No stationary source, then, is located in a region designated attainment or unclassifiable
for GHGs. Consequently, no source triggers PSD permitting simply because it emits GHGs
above the statutory thresholds. The D.C. Circuit, indeed, has mandated this interpretation in
Alabama Power Co. v. Costle, 636 F.2d 323 (D.C. Cir. 1980), where it held that location is the
key determinant for PSD applicability. EPA had argued that PSD permitting requirements should
apply not only to sources in attainment areas for a given pollutant, but to sources located any
place where a new emitting facility would "adversely affect the air quality of an area to which"
PSD requirements apply. Id. at 364. The Court held that EPA's reading violated the CAA's plain
language: "The plain meaning of the inclusion in [Section 165, 42 U.S.C. § 7475] of the words
'any area to which this part applies' is that Congress intended location to be the key determinant
of the applicability of the PSD review requirements." Id. at 365. [EPA-HQ-OAR-2010-0799-
9509-A1, p. 6]
Rather than comply with the D.C. Circuit's ruling, EPA's interpretation defies it. EPA's position
requires permits for a source emitting above the statutory thresholds for one pollutant as long as
the source is located in an area that is in attainment for any pollutant. See 45 Fed. Reg. 52,675,
52,677 (Aug. 7, 1980) ("PSD requirements apply to any area that is "designated ... as
'attainment' or 'unclassifiable' for any pollutant for which a national ambient air quality
standard exists."); 40 C.F.R. § 52.21(i)(2) (PSD "shall not apply to a major stationary source or
major modification with respect to a particular pollutant if ... the source or modification is
located in an area designated as nonattainment under section 107"). That is no limitation at all.
Every area of the country is, and always has been, in attainment for at least one criteria pollutant.
Id. at 31,561. Thus, in response to Alabama Power's holding that EPA has improperly broadened
the geographic confines of the PSD program, EPA actually broadened the geographic scope even
further, so that, under EPA's current interpretation, it now applies to every area of the country.
EPA's view defies both Alabama Power and the language of the CAA that it was
interpreting. [EPA-HQ-OAR-2010-0799-9509-A1, pp. 6-7]
C. GHGs Are Not Subject to Regulation Under the PSD Program
Furthermore, Title II GHG vehicle emission standards cannot make GHGs "subject to
regulation" within the meaning of the CAA's PSD program. Congress did not intend for PSD
requirements to apply to unconventional, non-NAAQS pollutants, particularly GHGs. EPA
readily concedes Congress did not have GHGs in mind when it formulated the PSD provisions of
the Act. Tailoring Rule, 75 Fed. Reg. at 31,549, 31,555, 31,561, 31,559 n.41 (Congress "might
not have appreciated the possibility that burning fossil fuels could lead to global warming"). The
text of the PSD provisions and their application to GHGs bear that out. [EPA-HQ-OAR-2010-
0799-9509-A1, p. 7]
The 28 source categories listed in Section 169(1) as major emitting facilities potentially subject
to the PSD program are the very ones EPA thought (in 1977, when the PSD program was added)
posed the greatest threat to air degradation because they emitted conventional air pollutants—
that is, pollutants with local air quality impacts. Naturally, Congress included only those source
categories in Section 169(1) because Congress, too, was concerned about only conventional
pollutants. GHGs, by contrast, are emitted by many more categories of sources. The emissions
24-7
-------
EPA Response to Comments
cutoffs in Section 169(1) reflect the same concern. Whereas conventional pollutant emissions of
100 and 250 tpy are significant, GHG emissions of 100 and 250 tpy are commonplace. The
thresholds make sense only if Congress envisioned only conventional pollutants as "subject to
regulation." [EPA-HQ-OAR-2010-0799-9509-A1, p. 7]
The PSD program itself is geared toward conventional pollutants. The program is principally
concerned with "air quality," 42 U.S.C. § 7471, that is, the air people breathe. GHG emissions
have no nexus to local air quality. Instead, they are distributed globally. For that reason, PSD
provisions focusing on local or regional impacts of a pollutant cannot encompass GHGs. For
instance, the provisions of Sections 165(a) and (e) require air quality monitoring and air quality
impact analysis. Such local monitoring and local analysis is illogical for emissions of
GHGs. [EPA-HQ-OAR-2010-0799-9509-A1, p. 7]
D. EPA's Interpretation of the CAA Is Unreasonable [EPA-HQ-OAR-2010-0799-9509-A1, p. 7]
EPA's contrary interpretation, that GHGs are made subject to regulation by vehicle emissions
standards, is unreasonable. EPA has admitted that its approach leads to burdens that "should be
considered 'absurd results.'" Tailoring Rule, 75 Fed. Reg. at 31,517. According to EPA, its
interpretation creates a scenario where "PSD permit issuance would be unable to keep up with
the flood of incoming applications, resulting in delays, at the outset, that would be at least a
decade or longer." 75 Fed. Reg. at 31,557. "During this time, tens of thousands of sources a year
would be prevented from constructing or modifying." Id. As a result, EPA's interpretation
"slow[s] construction nationwide for years, with all of the adverse effects that this would have on
economic development." Id. EPA has said this outcome would be "administratively infeasible,"
75 Fed. Reg. at 31,516, and would "adversely affect national economic development," id. at
31,557. As EPA has acknowledged, this outcome is absurd. Contrary to EPA's assertions, an
agency interpretation of a statute that is absurd cannot also be reasonable. Courts "must reject
administrative constructions of [a] statute ... that frustrate the policy that Congress sought to
implement." Continental Air Lines v. Dep't of Transp., 843 F.2d 1444, 1453 (D.C. Cir. 1988);
see also Int'l Alliance of Theatrical & Stage Employees v. NLRB, 334 F.3d 27, 35 (D.C. Cir.
2003). EPA must, instead, adopt the reasonable interpretations proposed by the
Associations. [EPA-HQ-OAR-2010-0799-9509-A1, pp. 7-8]
II. EPA Should Delay Finalizing The 2017 Car Rule Until It Has Corrected Its Mistaken
Interpretation of the CAA, Allowing NHTSA to Move Forward
EPA has broad discretion to delay finalizing the 2017 Car Rule under the "rule of reason" that
courts employ in assessing delay in agency decision making. Telecommunications Research &
Action Center v. FCC, 750 F.2d 70, 80 (D.C. Cir. 1984); see also Massachusetts v. EPA, 549
U.S. 497, 533 (2007) (EPA has "significant latitude as to the manner, timing, content, and
coordination of its regulations with those of other agencies"). Given this discretion, it would be
arbitrary and capricious for EPA to finalize the CAA component of the 2017 Car Rule at this
time; instead, it should allow NHTSA to finalize the rule independently. When the D.C. Circuit
vacates EPA's Car Rule and Truck Rule for the reasons stated in the Associations' Comments,
see Exhs. A-J, the 2017 Car Rule could cause the same harm that the Car Rule (and Truck Rule)
24-8
-------
Comments Regarding PSD/Title V Implications
threatened: triggering massive and unwarranted permitting burdens. Tailoring Rule, 75 Fed. Reg.
at 31,517. [EPA-HQ-OAR-2010-0799-9509-A1, p. 8]
These harms entirely outweigh any possible benefit from finalizing the rule, because the rule was
jointly proposed by EPA and NHTSA. This means the NHTSA portion of the 2017 Car Rule
could be finalized under NHTSA authority, avoiding triggering permitting requirements under
the CAA. Consequently, delaying the EPA rule (but not the NHTSA rule) would not cause any
serious disruption to implementing GHG emission standards for model years 2017-2025 light-
duty vehicles, but would avoid massive harm to stationary sources. Furthermore, the delay need
not be long—if EPA implemented the interpretation offered in Section I, above, it could then
finalize the 2017 Car Rule without harming stationary sources. [EPA-HQ-OAR-2010-0799-
9509-A1, p. 8]
III. EPA Failed to Assess the Consequences of Its Rule and Alternatives to Its Actions Rendering
the Rulemakings Arbitrary and Capricious [EPA-HQ-OAR-2010-0799-9509-A1, p. 8]
Given EPA's interpretation that vehicle emissions standards trigger stationary source GHG
permitting requirements, PSD Interpretive Rule, 75 Fed. Reg. at 17,019-20, EPA is required to
consider the ramifications on stationary sources subject to those permitting requirements before
promulgating the 2017 Car Rule. EPA has entirely failed to perform this duty—the proposed
2017 Car Rule contains no discussion of its impacts on stationary sources. Instead, it states in
cursory fashion that impacts on stationary sources are attributable to EPA's upon are subject to
pending legal challenges and are at risk for being vacated.3 [EPA-HQ-OAR-2010-0799-9509-
Al, pp. 8-9]
EPA's refusal to consider the effects of its Rule makes the rule "arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law" as well as being adopted "without
observance of procedure required by law." 42 U.S.C. § 9607(d)(9)(A),(D). An agency acts
arbitrarily and capriciously if it does not "examine the relevant data," Motor Vehicle Mfrs. Ass'n
of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983), or fails to make its
decision "based on a consideration of the relevant factors," Bowman Transp., Inc. v. Arkansas-
Best Freight Sys., Inc., 419 U.S. 281, 285 (1974). [EPA-HQ-OAR-2010-0799-9509-A1, p. 9]
Congress and the Executive Branch have directed EPA, before taking final action, to assess all
the impacts of its actions and to consider the benefits of alternative approaches. Under the very
section discussed, Section 202(a), regulations may only "take effect after such period as the
Administrator finds necessary to permit the development and application of the requisite
technology, giving appropriate consideration to the cost of compliance within such period." 42
U.S.C. § 7621(a); see also Massachusetts v. EPA, 549 U.S at 529 (GHG regulation cannot be
"extreme" because EPA must "delay any action to permit the development and application of the
requisite technology, giving appropriate consideration to the cost of compliance"). [EPA-HQ-
OAR-2010-0799-9509-A1, p. 9]
IV. EPA Should Clarify Whether the 2017 Car Rule Triggers Stationary Source Impacts in the
Absence of Another Trigger
24-9
-------
EPA Response to Comments
The Associations believe EPA's position to be that, absent any other trigger such as the Car Rule
or Truck Rule, the 2017 Car Rule will trigger applicability of the Title V and PSD programs to
GHG emissions from stationary sources. Thus, for example, should the Car Rule and Truck Rule
be vacated by the Court, the 2017 Car Rule would become the regulation that triggers the
stationary source regulation of GHGs. If that is not EPA's position, EPA should so clarify and
explain its position. [EPA-HQ-OAR-2010-0799-9509-A1, p. 10]
1 These comments do not address the substance and stringency of the actual GHG standards that
EPA proposes to impose on light-duty vehicles. Each Association is filing individual comments
that discuss various policy and technological impacts of the GHG standards in the 2017 Car
Rule.
2 Because the Truck Rule will undoubtedly serve the same role in EPA's justifications after the
Car Rule is vacated, the Associations also incorporate by reference their comments on the Truck
Rule.
3 At a minimum, EPA should delay finalizing the 2017 Car Rule until after the D.C. Circuit has
issued decisions in the challenges to the Car Rule and Truck Rule. Until these decisions become
final, EPA cannot accurately assess the impact that the 2017 Car Rule will have on stationary
sources.
Organization: National Association of Manufacturers (NAM)
In addition, the NAM, along with American Petroleum Institute and American Fuel &
Petrochemical Manufacturers (Associations) have submitted joint comments on this proposed
rule opposing any approach to implementing of mobile source standards that will impact a wide
swath of stationary sources. We hereby incorporate by reference those joint comments in this
submission. This proposed rule is the EPA's third rulemaking to regulate greenhouse gas (GHG)
emissions from mobile sources, following the Light Duty Vehicle GHG Emission Standards and
Corporate Fuel Economy Standards, 75 Fed. Reg. 25,324 (May 7, 2010) and Greenhouse Gas
Emissions Standards and Fuel Efficiency Standards for Medium- and Heavy- Duty Engines and
Vehicles, 76 Fed. Reg. 57,105 (Sept. 15, 2011). The EPA has taken the position that these
mobile source standards - along with related regulations and guidance - require it to regulate
GHG emissions from stationary sources under the Prevention of Significant Deterioration (PSD)
and Title V Programs. Both of those rules are currently subject to judicial review and the
Associations are concerned that once they are vacated the EPA will assert that this rule serves as
an independent trigger for the regulation of GHG emissions from stationary sources.
In the joint comments, we explain why the EPA's view that mobile source emission standards
trigger GHG permitting requirements for stationary sources is mistaken and urge it to correct its
interpretation. Further, because NHTSA can issue the same mobile source standards without
creating the risk of adverse impacts on stationary sources, we urge the EPA to defer any further
action on the proposed rule until it corrects its interpretation, allowing NHTSA to proceed alone
at this time. The joint comments also explain why the EPA's failure to consider the
24-10
-------
Comments Regarding PSD/Title V Implications
consequences of the proposed rule on stationary sources and alternatives to its proposed actions
render the rulemaking arbitrary and capricious. Finally, we explain that the rulemaking is
arbitrary and capricious because it is based on an invalid endangerment finding for GHGs that is
likely to be vacated upon judicial review. [Joint comments can be found in Docket number EPA-
HQ-OAR-2010-0799-9509-A1] [EPA-HQ-OAR-2010-0799-9538-A2, pp. 1-2]
Organization: Utility Air Regulatory Group (UARG)
UARG submits these comments solely for the purpose of addressing possible alleged stationary
source effects under the Clean Air Act's ("CAA" or "Act") prevention of significant
deterioration ("PSD") and Title V permitting programs that might result from promulgation of a
final rule in the present rulemaking. [EPA-HQ-OAR-2010-0799-9510-A1, p. 1]
On May 7, 2010, EPA published a final rule establishing greenhouse gas ("GHG") emissions
standards for model year 2012-2016 light-duty vehicles. 75 Fed. Reg. 25324 (hereinafter the
"2012 Light-Duty Rule"). EPA has adopted an interpretation of the CAA under which
promulgation of the 2012 Light-Duty Rule made GHGs subject to the CAA's PSD and Title V
permitting programs for stationary sources beginning on January 2, 2011. See Reconsideration of
Interpretation of Regulations That Determine Pollutants Covered by Clean Air Act Permitting
Programs, 75 Fed. Reg. 17004 (Apr. 2, 2010) (hereinafter the "Reconsideration Rule"). EPA's
regulation of GHG emissions from stationary sources under the PSD and Title V programs is the
subject of considerable controversy, and every major EPA rule related to the Agency effort to
require regulation of GHG emissions under those programs is, in one respect or another, the
subject of pending petitions for review filed in the U.S. Court of Appeals for the District of
Columbia Circuit by numerous parties, including UARG. See, e.g., Coalition for Responsible
Regulation, et al. v. EPA, No. 09-1322 (and consolidated cases) (D.C. Cir.) (petitions for review
of EPA's GHG "endangerment" and "cause or contribute" findings for motor vehicles under
CAA section 202(a)); Coalition for Responsible Regulation, et al. v. EPA, No. 10-1073 (and
consolidated cases) (D.C. Cir.) (petitions for review of the Reconsideration Rule); Coalition for
Responsible Regulation, et al. v. EPA, No. 10-1092 (and consolidated cases) (D.C. Cir.)
(petitions for review of the 2012 Light-Duty Rule); Southeastern Legal Foundation, et al. v.
EPA, No. 10-1131 (and consolidated cases) (D.C. Cir.) (petitions for review of EPA's Tailoring
Rule for GHGs under the PSD and Title V programs). [EPA-HQ-OAR-2010-0799-9510-A1, p.
1]
Depending on the outcome of these pending cases, it is possible that the current PSD and Title V
permitting rules as they are deemed by EPA to apply to stationary sources' GHG emissions may
be vacated in whole or in part or otherwise changed significantly as a result of judicial review. If
that occurs, it is possible that the proposed 2017 Light-Duty Rule, if made final by EPA at the
conclusion of the present rulemaking, could be interpreted by the Agency to be the rule that
makes GHGs subject to the PSD and Title V permitting requirements. 1 To protect its interests in
the event that occurs, UARG submits the following comments to the docket for the present
rulemaking: [EPA-HQ-OAR-2010-0799-9510-A1, p. 2]
• The proposed 2017 Light-Duty Rule relies on EPA's final endangerment and "cause or
contribute" findings for GHGs under section 202(a) of the Act, which EPA published at
24-11
-------
EPA Response to Comments
74 Fed. Reg. 66496 (Dec. 15, 2009); see, e.g., 76 Fed. Reg. at 74861, 74964. UARG filed
three sets of comments on EPA's proposed endangerment and cause or contribute
findings under section 202(a): (1) Comments of the Utility Air Regulatory Group on the
Proposed Endangerment and Cause or Contribute Findings for Greenhouse Gases Under
Section 202(a) of the Clean Air Act, EPA Docket ID No. EPA-HQ-OAR-2009-0171-
3394.1 (Attachment 1 to these comments [Attachment 1 can be found on pp. 5-265 of
Docket number EPA-HQ-OAR-2010-0799-9510-A1]); (2) Supplemental Comments of
the Utility Air Regulatory Group on the Proposed Endangerment and Cause or Contribute
Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act, EPA Docket
ID No. EPA-HQ-OAR-2009-0171-4932.1 (Attachment 2 to these comments
[Attachment 2 can be found on pp. 266-279 of Docket number EPA-HQ-OAR-2010-
0799-9510-A1]); and (3) the Utility Air Regulatory Group's Additional Supplemental
Comments on the Proposed Endangerment and Cause or Contribute Findings for
Greenhouse Gases Under Section 202(a) of the Clean Air Act, EPA Docket ID No. EPA-
HQ-OAR-2009-0171-11491.1 (Attachment 3 to these comments [Attachment 3 can be
found on pp. 280-291 of Docket number EPA-HQ-OAR-2010-0799-9510-A1]). UARG
incorporates all of these comments herein by reference. [EPA-HQ-OAR-2010-0799-
9510-Al,p. 2]
As discussed in UARG's previous comments incorporated herein, the proper purpose of
any EPA endangerment finding under the CAA is to avert or prevent the danger the
Agency concludes is presented by the emissions that are the subject of the finding, or at
least to significantly mitigate that danger. This principle is reflected in the CAA's
legislative history and the decision in Ethyl Corp. v. EPA, 541 F.2d 1 (D.C. Cir. 1976)
(en bane). As the legislative history and Ethyl make clear, the fundamental purpose of the
CAA provisions that incorporate the endangerment criterion, such as section 202(a)(l), is
to authorize regulation of emissions when and to the extent such regulation will be
effective in fruitfully attacking the cause of the endangerment, and not to impose
"regulation for regulation's sake." The proposed 2017 Light-Duty Rule does not meet
this standard. EPA analyzed the reductions in GHG emissions that would result from the
proposed 2017 Light-Duty Rule by the year 2100 and projected the effects those
reductions would have on atmospheric carbon dioxide concentrations, global mean
surface temperature, sea-level rise, and ocean-water acidity. 76 Fed. Reg. at 75097-99 &
Table 111-62. EPA acknowledges that "[t]he projected reductions are small." Id. at 75099.
EPA makes the following projections for the year 2100 as a result of the proposed 2017
Light-Duty Rule: (1) atmospheric carbon dioxide concentrations will be reduced by 3.29
to 3.68 parts per million by volume; (2) global mean surface temperature will be reduced
by 0.0076°C to 0.0184°C; (3) sea-level rise will be reduced by 0.074 to 0.166 centimeter;
and (4) ocean pH will increase by 0.0018 pH unit. Id. at 75097-99 & Table III- 62. These
amounts constitute a minuscule fraction of changes projected by the Intergovernmental
Panel on Climate Change, on whose reports EPA relies. See, e.g., id. at 75096, 75098 &
nn.385, 386. Even assuming that EPA's proposed 2017 Light-Duty Rule would achieve
the maximum EPA-projected reductions, these reductions are vanishingly small, to the
point of being all but unquantifiable and, in any event, imperceptible on any human scale.
Thus, the proposed 2017 Light-Duty Rule does not meet the Ethyl standard for regulation
under section 202. See Attachment 3; Comments of the Utility Air Regulatory Group on
the Proposed Rulemaking To Establish Light-Duty Vehicle Greenhouse Gas Emission
24-12
-------
Comments Regarding PSD/Title V Implications
Standards and Corporate Average Fuel Economy Standards, EPA Docket ID No. EPA-
HQ-OAR-2009-0472-7262, at 7-10 (Attachment 4 to these comments; incorporated
herein by reference [Attachment 4 can be found on pp. 292-329 of Docket number EPA-
HQ-OAR-2010-0799-9510-A1]). [EPA-HQ-OAR-2010-0799-9510-A1, pp. 2-3]
Furthermore, EPA appears to analyze the projected GHG emission reductions from the
proposed 2017 Light-Duty Rule by including the projected GHG emission reductions that
would occur from the vehicle fuel efficiency standards proposed by the National
Highway Traffic Safety Administration ("NHTSA") concurrently with EPA's proposed
rule. It appears that the majority of the emission reductions projected by EPA likely
would occur anyway as a result of promulgation of the NHTSA fuel efficiency standards.
Accordingly, the already minuscule projected effects from EPA's proposed rule, noted
above, become even smaller if one excludes (as one should) the projected effects from
the NHTSA standards. See Attachment 3; Attachment 4 at 10-15. [EP A-HQ-OAR-2010-
0799-9510-A1, p. 3]
If the proposed 2017 Light-Duty Rule, if made final, is interpreted by EPA to be the rule
that makes GHGs subject to PSD and Title V requirements, then — accepting arguendo
such an EPA interpretation — the date on which, according to EPA, that rule "takes
effect" for purposes of commencing the applicability (in EPA's view) of PSD and Title V
requirements to GHGs should be no earlier than the date on which the applicable model
year begins pursuant to NHTSA rules or practice, i.e., October 1 of the preceding
calendar year (e.g., October 1, 2016, for model year 2017). See Utility Air Regulatory
Group Petition for Reconsideration and Request for Administrative Stay, EPA Docket ID
No. EPA-HQ-OAR- 2009-0597, at 11-13 (June 1, 2010) (Attachment 5 to these
comments; incorporated herein by reference [Attachment 5 can be found on pp. 330-350
of Docket number EPA-HQ-OAR-2010-0799-9510-A1]).2 [EPA-HQ-OAR-2010-0799-
9510-Al,p. 3]
EPA published its final Tailoring Rule on June 3, 2010. Prevention of Significant
Deterioration and Title V Greenhouse Gas Tailoring Rule, 75 Fed. Reg. 31514. EPA
promulgated the Tailoring Rule because the Agency concluded that application of the
PSD and Title V requirements to stationary sources of GHG emissions would, due to the
Act's PSD and Title V applicability thresholds, produce absurd results contrary to
congressional intent. For the reasons described in UARG's comments on the proposed
Tailoring Rule, however, EPA instead could have avoided, and should have avoided,
such results by adopting the approaches described in those UARG comments, and, in
particular, by determining that carbon dioxide is excluded from the scope of the PSD
requirements under the CAA and EPA's regulations. See Comments of the Utility Air
Regulatory Group on the Proposed Prevention of Significant Deterioration and Title V
Greenhouse Gas Tailoring Rule, EPA Docket ID No. EPA-HQ-OAR-2009-0517-5317.1,
at 19-27 (Attachment 6 to these comments; incorporated herein by reference
[Attachment 6 can be found on pp. 351-424 of Docket number EP A-HQ-OAR-2010-
0799-9510-A1]). [EPA-HQ-OAR-2010-0799-9510-A1, pp. 3-4]
1 Nothing herein should be construed as suggesting that UARG would agree with any such
interpretation.
24-13
-------
EPA Response to Comments
2 EPA has not responded to this petition.
Response:
The District of Columbia Circuit recently held that the unambiguous language of the Clean Air
Act makes stationary source permitting requirements applicable automatically to a pollutant
when that pollutant is regulated under the Act (including Title II of the Act). Coalition for
Responsible Regulation v. EPA. No. 09-1322 (D.C. Cir. June 26, 2012), slip op. pp. 50-77. This
decision expressly and implicitly rejects the arguments advanced by comments against regulation
of GHG under the Prevention of Significant Deterioration (PSD) and Title V permitting
programs. The court held that the PSD requirements apply to all air pollutants anywhere in the
atmosphere and are not limited to only pollutants that affect public health at ground level or in
local areas near the source of the air pollutants. The court rejected the argument that PSD
requirements are only applicable to pollutants for which EPA has promulgated a National
Ambient Air Quality Standard. The court also recognized that EPA was not required to
promulgate regulations under section 166 of the Act before the permitting programs may apply
to greenhouse gases.
24-14
-------
Comments Unrelated to the Proposed Rule
2 5. Comments Unrelated to the Proposed Rule
Organizations Included in this Section
Adams, G.
Axford, H.
Climate Institute
EutecticSolutions Inc.
Green, K.
Haroldson, C.
Hohenstein, H.
Integrated Consultants, Inc.
Lipetzky, P.
Marks, R.
Marlinghaus, E.
Marshall, C.
Miller, P.
National Association of Convenience Stores (NACS)
South Coast AQMD
Statman, P.
Organization: Adams, G.
The price of gas is once again squeezing the budgets of American families, who already are
forced to cut back in other areas just to pay for basic transportation needs.This needs to happen,
in order to break our dependence on fossil fuel, both foreign and domestic. [EPA-HQ-OAR-
2010-0799-1550-Al,p. 1]
I believe there is a lot to be said for switching FROM non-tariff regulation of pollution including
greenhouse gases TO excise taxes high enough to account for all external costs. This would
create LOTS of CONSUMER pressure to improve efficiency of all consumer energy-using
products. If Detroit insists on producing gas hogs, they can go the way of the Edsel. It should
increase demand for sustainable energy in all areas of the economy. Already, in Connecticut
where consumers are allowed to choose their electric generation firm, while stuck with the
distributing utility where they live, sustainable source electricity ranges from the same price as
fossil fuel electricity to only about one half cent per kWh more. I believe there is a lot to be said
for bribing fossil fuel firms to invest in sustainable energy by accepting such investment as
payment of the excise tax on the greenhouse gas part of pollution. While sustainable energy also
helps cut toxic pollution from fossil fuel, it will take so long (approximately twenty years) to
replace all our fossil fuel-fired electric generators with sustainable energy electric generators that
fossil fuel firms should be allowed write off each year against toxic pollution excise tax only as
much toxic pollution as would be emitted by the fossil fuel being replaced by the sustainable
energy generator that year. [EPA-HQ-OAR-2010-0799-1550-Al, pp. 1-2]
Organization: Axford, H.
25-1
-------
EPA Response to Comments
Build More Oil Refinerys, Drill for oil and gas in America and put more people back to work!!
Approve the Pipeline you have tabled, and call all the drilling bands off, and call our rigs and
workwes back from South America where many have gone. Chose to be an American President,
instead of a apoligetic pice of junk politics. You can not do for others what they refuse to do for
themselves, stop being a fundamentel Liberal Marxtist and seek Freedom and Liberty for all our
financial and religious freedoms that were established by our founders. [EPA-HQ-OAR-2010-
0799-9149-A1, pp. 1-2]
Organization: Climate Institute
I also, however, would note that actions are needed to reduce emissions from all types of
transportation, not just automobiles, so please keep working to do more. Making the voluntary
black carbon reduction program mandatory would be a great step as well—perhaps by requiring
all construction vehicles working on federally funded transportation projects to be equipped with
black carbon capture equipment. This might be done by allowing the installation of black carbon
filters to be a legitimate charge to the construction project, and this would have the effect
of getting at the very high emissions from older, long-lasting equipment. The US per capita black
carbon emissions are higher than the global average—we need to act and act now. [EPA-HQ-
OAR-2010-0799-7944-A1, p. 1]
And there is more that can be done on methane-also by making voluntary programs mandatory
(and many of the steps are cost effective for other reasons). So, please keep aggressively working
to limit warming influences. [EPA-HQ-OAR-2010-0799-7944-A1, p. 1]
Organization: EutecticSolutions Inc.
As you are working towards reducing GHGs and improving fuel economy, don't forget the issue
of HD trucks with excessive air brake leaks. Many need to idle for extended periods of time
when the air supply has leaked below 60psi over night. FYI when an air brake system leaks its
air below 60psi, the parking brake system comes ON and the vehicle cannot move until the
pressure is built back up over 60 psi (sometimes more). A vehicle that has lost all of its air may
need to idle for as much as 15 minutes before it can be moved to do useful work. [NHTSA-2010-
0131-0270, p. 1]
This is not a rare occurrence and many HD trucks are operating with large leaks that technicians
cannot find or repair. These vehicles use more fuel than necessary and add to the GHG issue.
[NHTSA-2010-0131-0270, p. 1]
Organization: Green, K.
The price of gas is once again squeezing the budgets of American families, who already are
forced to cut back in other areas just to pay for basic transportation needs. While this may be
true - this situation did not have to arise! [EPA-HQ-OAR-2010-0799-1524-A1, p. 1]
25-2
-------
Comments Unrelated to the Proposed Rule
The introduction of mandatory bio-fuel quotas has been a tragic and immoral mistake that has
enriched a few and brought hunger to many! It is not an answer that can prevail for very long!
[EPA-HQ-OAR-2010-0799-1524-A1, p. 1]
America has, within its borders, immense potential for energy independence. It has the
opportunity to purchase even more fossil fuel from a friendly neighbor, Canada. Look
realistically at the future and devise a more intelligent Energy Plan! [EPA-HQ-OAR-2010-0799-
1524-Al,p. 1]
Organization: Haroldson, C
Instead, let's increase our domestic drilling for oil and reduce our dependence on foreign oil. Of
course this is a much safer alternative than shipping oil from the middle east and it will also
create jobs at home. [EPA-HQ-OAR-2010-0799-11137-A1, p. 1]
Organization: Hohenstein, H.
I support greater drilling in America to reduce U.S. dependence on imported oil.
The price of gas is once again squeezing the budgets of American families, therefore the market
will cause Americans to drive more efficient cars.
Close DOE permanently, use more CNG, drill in the productive deposits in America and allow
American entrepreneurs to develop the necessary technology to buy American. [EPA-HQ-OAR-
2010-0799-1515-Al,p. 1]
Organization: Integrated Consultants, Inc.
Integrated Consultants, Inc. (ICI) is a Military prototype hardware R&D firm. During our efforts
on extended Battery range/life research for electric powered devices we developed a New
Operator Driving Feature that Increases Vehicle Efficiency. Although initially for electric cars a
modified regeneration arrangement could potentially increase the mileage range/efficiency of all
vehicles. [NHTSA-2010-0131-0217, p. 1]
The issue for vehicle manufacturers becomes the adoption of a new indicator standard for
vehicles, and vehicle safety. Manufacturers are reluctant to apply non adopted options that could
affect vehicle safety, and efficiencies that can be easily leveraged are being abandoned. As
electric vehicles and electric assist motor vehicles proliferate, the adoption of a standard will be
required from a motor vehicle operator safety standpoint. [NHTSA-2010-0131-0217, p. 1]
ICI has been researching this topic for over 2 years, and we believe the regenerator slowing
indicator is a more significant indicator than the high center "third brake light". Could someone
kindly visit http://www.integratedconsultants.com/ and view the data listed on our home
page. [NHTSA-2010-0131-0217, p. 1]
25-3
-------
EPA Response to Comments
Organization: Kobus, D.
We must stop the PetroChemical/Agribusiness lock on the direction of our nation and future.
Healthcare, the environment, and energy can all be targeted through correcting the nation's food
sources. We must stop targeting extreme energy sources (oil sands, hydrofracturing, deep ocean
drilling), GMOs, and nanoparticles. We are launching full-on into realms of science that are
untested and unsafe in standard scientific terms. It is not right, and it is our right as Americans to
say so. [EPA-HQ-OAR-2010-0799-1370-A1, p. 2]
Organization: Lipetzky, P.
Just think what we can do for the economy RIGHT NOW if we lower gas by $ I/gallon. Let's
focus on the economy NOW. [EPA-HQ-OAR-2010-0799-8184-Al, p. 1]
Organization: Marks, R
We need an immediate $1.00 per gallon tax on gas, followed each year for the next 8 years with
an additional $0.50. This sets a long term term vision to start to change our wasteful habits. This
tax money needs to be strictly allocated with public oversight, to develop alternative energy
sources - 35%, build mass transit - 20%, into infrastructure of roads and rails - 10%, help those
caught in the cost shift - 25% going to 0% and rebuild our cities - 10% going to 35%. If you
want to extend to dirty coal used in electricity generation, now is the time to tax it. [EPA-HQ-
OAR-2010-0799-1680-A1, p. 1]
Organization: Marlinghaus, E.
The price of gas is once again squeezing the budgets of American families, who already are
forced to cut back in other areas just to pay for basic transportation needs. But, what the
American people don't seem to realize, is that the price of gas is this country is really way below
what it should be. If all the real costs of our addiction to oil were factored in, the true cost of a
gallon of gasoline would be at least 2-3 times the current price. I can't help but believe that if
even a portion of these costs were allowed to be added in that our government, bolstered by the
insistence of the American public, would finally get their priorities straight and demand that our
automotive industry make fuel economy their highest priority. [EPA-HQ-OAR-2010-0799-1581-
Al,p. 1]
Organization: Marshall, C.
It may also be a good idea to encourage that highway funds be switched from a tax on gasoline
to a tax on vehicle miles traveled. As less gasoline is used to meet this standard, fewer revenues
will come into the highway funding programs. [EPA-HQ-OAR-2010-0799-5917-A2, p. 1]
Organization: Miller, P.
25-4
-------
Comments Unrelated to the Proposed Rule
The price of gas is once again squeezing the budgets of American families, who already are
forced to cut back in other areas just to pay for basic transportation needs. We need to move
ahead much more strongly! [EPA-HQ-OAR-2010-0799-1755-A1, p. 1]
Organization: National Association of Convenience Stores (NACS)
Cost of Satisfying the RFS
Currently, the market is struggling to accommodate the 'blend-wall,' that point beyond which
traditional blends of E10 and E85 cannot satisfy the mandated volumes of the RFS. EPA has
sought to relieve this pressure for a short period of time by authorizing the sale of E15 for
vehicles manufactured in and after model year 2001. However, automobile manufacturers are
concerned that even these vehicles are not suitable for this fuel and there is ongoing litigation
concerning the authorization to use E15. [EPA-HQ-OAR-2010-0799-9543-A1, p. 3]
For retailers, the challenge is two-fold: equipment compatibility and consumer demand.
Current federal law requires retail equipment to be listed by a nationally recognized testing
laboratory as compatible with the fuel they wish to sell. The vast majority of equipment,
however, is listed as compatible with fuels containing no more than 10% ethanol. Underwriters
Laboratories (most equipment is listed by Underwriters Laboratories) does not recertify
equipment after it has been manufactured. Consequently, retailers wishing to sell fuels
containing more than 10% ethanol are required to replace their underground storage tank systems
and dispensers with equipment that is certified as compatible with the new fuels. This is an
extremely costly proposition. Underground storage tank systems can cost $100,000 to $200,000
and dispensers can cost up to and above $20,000 per unit. Retailers interested in pursuing a fuel
like El 5 may find the investment difficult to justify, especially considering the automobile
manufacturers' opposition to the fuel and the uncertainty regarding consumer demand. [EPA-
HQ-OAR-2010-0799-9543-A1, p. 3]
Similar equipment compatibility conditions apply for E85. However, there is the additional
concern regarding consumer demand. At the end of 2010, the number of flexible fuel vehicles
(FFVs), which are designed to operate on fuels containing between 0% and 85% ethanol,
represented only 3.6% of the market. By 2025, EIA projects FFVs will represent only 16% of the
vehicles on the market. Further, FFV customers, who have the ability to purchase regular
gasoline or E85, for a variety of reasons often do not purchase E85 when available.
Consequently, this is a very limited potential market and this can dissuade retailers from making
the considerable investment to upgrade a facility to sell E85. [EPA-HQ-OAR-2010-0799-9543-
Al,p.3]
These are the current challenges associated with overcoming the blend-wall that exists in 2012.
With the proposed CAFE revisions, the problem becomes exponentially more serious over the
next 10 years. By 2022, to satisfy the RFS every gallon of gasoline must contain nearly 40%
renewable fuels. This means that every fuel retailer will be required to replace all of their fueling
equipment. This will cost the industry billions of dollars. [EPA-HQ-OAR-2010-0799-9543-A1,
p. 3]
25-5
-------
EPA Response to Comments
The average convenience store selling fuel operates four dispensers and two underground storage
tanks. Assuming the average price for a dispenser is $20,000 and the average price for a new
underground storage tank system is $100,000, the typical store will be required to invest
$180,000 to accommodate the fuels required by the RFS. Multiply the per-store total by the
120,950 convenience stores that sell fuels and the industry-wide cost is staggering: $21.7 billion.
After this enormous investment, it may still be impossible to satisfy the RFS considering that
only one in six consumers will drive vehicles capable of running on the mandated fuels: EIA
projects only 16% of consumers will drive FFVs by 2035. [EPA-HQ-OAR-2010-0799-9543-A1,
p. 3]
Of the 120,950 convenience stores that sell fuel, 58% are one-store companies and fewer than
1% are owned by an integrated oil company. Therefore the burden for satisfying the RFS under
the new CAFE standards will fall squarely on the small businesses that dominate the fuels
retailing market and many will likely go out of business. [EPA-HQ-OAR-2010-0799-9543-A1,
p. 4]
Conclusion
NACS members strongly support efforts to enhance the nation's energy security and do not
oppose improving the fuel efficiency of the nation's vehicle fleet. However, they are very
concerned that the policies being enacted and proposed are not effectively coordinated. The
effect of the proposed rule on overall fuel consumption in the United States will greatly
exacerbate the difficulties associated with implementation of the Renewable Fuels Standard.
NACS members are concerned that this incompatibility has not been recognized or considered
by the Agency. [EPA-HQ-OAR-2010-0799-9543-A1, p. 4]
Further, NACS is concerned that if policies like these cannot be designed in a manner that
compliments rather that compromises the other, countless small businesses will be forced to
examine whether they want to spend the money for upgrades or exit the business. Either way, the
consumer ultimately loses. [EPA-HQ-OAR-2010-0799-9543-A1, p. 4]
NACS urges EPA to consider the implications of this proposed rule on other regulatory
requirements already affecting not just the automobile industry but the fuels industry as well.
NACS does not believe that improved efficiency, enhanced sustainability, national energy
security and economic growth are mutually exclusive objectives. But if they are not pursued in a
strategic, coordinated effort they can lead to unintended consequences that can derail progress
towards all of the objectives. [EPA-HQ-OAR-2010-0799-9543-A1, p. 4]
Organization: South Coast AQMD
[These comments were submitted as testimony at the San Francisco, California public hearing on
January 24, 2012. See Docket Number EPA-HQ-OAR-2010-0799-11787, pp. 70-71.]
Lastly, we urge U.S. EPA to begin analysis to set criteria and greenhouse gas emissions
standards for vehicles produced after 2025. It is critically important, given that many areas in the
25-6
-------
Comments Unrelated to the Proposed Rule
U.S. must meet the new eight-hour ozone standard and the potential for ever tighter ambient air
quality standards.
Organization: Statman, P.
The price of gas is once again squeezing the budgets of American families, who already are
forced to cut back in other areas just to pay for basic transportation needs. [EPA-HQ-OAR-2010-
0799-1472-A1, p. 1]
Response:
These comments, although clearly sincere, concern issues beyond the scope of this
rulemaking and therefore no response is necessary.
25-7
------- |