EPA Optimization Model for Reducing

            Emissions of Greenhouse Gases from

            Automobiles (OMEGA)
            Core Model Version L4.1 Documentation
United States
Environmental Protection

             EPA Optimization Model for Reducing
              Emissions of Greenhouse Gases from
                     Automobiles (OMEGA)

            Core Model Version L4.1 Documentation
                         Assessment and Standards Division
                        Office of Transportation and Air Quality
                        U.S. Environmental Protection Agency
United States
Environmental Protection
August 2012

Table of Contents
I   Background	3
II   Model Overview	3
III  Input Files	7
  A    The Market File: Vehicle Fleet Characterization	7
  B    The Technology File: Technology Package Characterization	11
  C    The Fuels File: Physical Properties and Prices of Fuel and Energy Sources	13
  D    The Scenario File: Definition of Regulatory Scenarios and Other Economic Parameters	14
    D.i Universal Target	15
    D.ii Piece-wise Linear	16
    D.iii    Logistic Curve Target	17
  E    The Reference File: Vehicle Survival Rates and Miles Driven	20
  F    Non-editable Input Data	20
  G    Input Files Currently Distributed with Model	21
IV  Model Operation	22
  A    Calculating Technology Effective Basis (TEBs) and Cost Effective Basis (CEBs)	22
  B    Calculating Other Effectiveness Basis (OEBs)	24
  C    Platform Aggregation	24
  D    Technology Application	25
    D.i Determination of Manufacturer-Specific CO2 Emission Standards	25
    D.ii Converting Lifetime Refrigerant Emissions to CO2-Equivalent emissions per Mile	26
    D.iii    Application of Technology - Methodology	27
    D.iv    Technology Application Ranking Factors	32
    D.v Applying Technology - Calculations	38
V   Output Files	40
  A    Summary of Outputs	40
    A.i Log of Technology Application Steps - Text Format	41
    A.ii Summary of Cost and Emissions -Excel Format	45
    A.iii    Summary of Technology Pack Distribution - Text format	45
    A.iv    VH1 /Final summary of Vehicle Attributes-Excel Format	45
    A.v VH2 / Stepwise listing of Vehicle Attributes—Excel Format	45
VI  Running the Model	46

I  Background
       On-road vehicles are the predominant source of greenhouse gas (GHG) emissions from
the transportation sector. Of all on-road vehicles, light-duty vehicles and light-duty trucks
(hereafter referred to as cars and trucks) produce the majority of the GHG emissions.  There are
many methods for reducing GHG emissions from cars and trucks due to the myriad technology
options available to improve the efficiency of vehicles. A detailed analysis of the costs and
benefits of various GHG emissions reduction requires an application that accounts for all the
potential technologies.  Therefore, EPA's Office of Transportation and Air Quality (OTAQ) has
developed the Optimization Model for reducing Emissions of Greenhouse gases from
Automobiles (hereafter referred to as the "OMEGA" model) to help facilitate the analysis of the
costs and benefits of reducing GHG emissions from cars and trucks.
       This documentation accompanies the fifth public release of the OMEGA model.
Versions 1.0.0 and 1.0.2 were respectively released with the noticed of proposed rulemaking and
final rule regarding "Model Year 2012-2016 Light-Duty Vehicle Greenhouse Gas Emissions
Standards and Corporate Average Fuel Economy Standards."  Versions 1.3.0, 1.4.0, and this
version were respectively released with the first notice of intent, the proposed rulemaking, and
the final rule regarding the  "2017  and Later Model Year Light-Duty Vehicle Greenhouse Gas
Emissions and CAFE Standards." These model releases, as well as their related inputs and
documentation are available at the OMEGA page on the EPA website.1
       The model is written in the C# programming language.  Inputs to and outputs from the model are
provided using spreadsheet and text files.  The spreadsheet output files also facilitate additional
manipulation of the results. The model source code is available in the relevant rulemaking dockets.2
   EPA has established a webpage for the OMEGA model on the EPA agency website
(http://www.epa.gov/otaq/climate/models.htm).  The OMEGA version  1.4.1  release includes a
set of sample input files; those used to support EPA's final rulemaking on cars and light trucks
for model years 2017+ are  also available on the website. Input files from earlier versions of
OMEGA are not compatible with this release. Periodic updates of both the model and this
documentation will be available to be downloaded.  Those interested in using the model are
encouraged to periodically  check this website for these updates.

II Model Overview
       Broadly speaking, the OMEGA model evaluates the relative cost and effectiveness of
available technologies and  applies them to a defined vehicle fleet in order to  meet a specified
GHG emission target.  Once the target has been met, OMEGA reports out the cost and societal
benefits of doing so. This document focuses on the core model, which is the component which
calculates cost of compliance.  OMEGA models two GHGs; carbon dioxide (CO2) from fuel use
and refrigerant emissions from the air conditioning (A/C) system.
OMEGA is primarily an accounting model. It is not a vehicle simulation model,  where basic
information about a vehicle, such  as its  mass, aerodynamic drag, an engine map,  etc. are used to
1 http://www.epa.gov/oms/climate/models.htm
2 EPA-HQ-OAR-2004-0075 and EPA-HQ-OAR-2010-0799

predict fuel consumption or CO2 emissions over a defined driving cycle.3 Such simulations may
be used to inform the OMEGA inputs, but are not performed by OMEGA itself.
       While OMEGA incorporates functions which generally minimize the cost of meeting a
specified CO2 target, it is not an economic simulation model which adjusts vehicle sales in
response to the cost of the technology added to each vehicle.  While OMEGA allows vehicle
sales to change over time, the vehicle sales in OMEGA 1.4.1 do not dynamically respond to the
addition of technology.4 That being said, EPA has begun development of an economic
simulation or consumer choice component to OMEGA. The model documentation and peer
review documents are provided on the EPA website.5
        OMEGA can be used to model either a single vehicle model or any number of vehicle
models. Vehicles can be those of specific manufacturers or generic fleet-average vehicles.
Because OMEGA is an accounting model, the vehicles can be described using only a relatively
few number of terms.  The most important of these terms are the vehicle's baseline emission
level, the level of CO2 reducing technology already present,  and the vehicle's "type," which
indicates the technology available for addition to that vehicle. Information determining the
applicable CO2 emission target for the vehicle must also be provided.  This may simply be
vehicle class (car or truck) or it may also include other vehicle attributes, such as footprint.6
       Since there are a large number of technologies which reduce CO2 emissions and a wide
array of different vehicle systems to which they apply, the manufacturers' design and production
processes play a major role in determining the technology cost associated with lowering fleet-
wide CO2 emissions. Vehicle manufacturers typically develop several unique models based on a
limited number of shared vehicle platforms, allowing for efficient use of design and
manufacturing resources. The platform typically consists of common vehicle architecture and
structural components. Given the very large investment put into designing and producing each
vehicle model, manufacturers typically plan on a major redesign for the models approximately
every 5 years. At the redesign stage, the manufacturer will upgrade or add all of the technology
and make all of the other changes needed in order that the vehicle model will meet the
manufacturer's plans for the next several years.  This includes meeting all of the emissions and
other requirements that would apply during the years before the next major redesign of the
       This redesign often involves a package of changes, designed to work together to meet the various
requirements and plans for the model for several model years after the redesign. This often involves
significant engineering, development, manufacturing, and marketing resources to create a new product
with multiple new features.  In order to leverage this significant upfront investment,  manufacturers plan
vehicle redesigns with several model years' of production in mind. Vehicle models are not completely
static between redesigns as limited changes are often incorporated for each model year. This interim
process is called a refresh of the vehicle and generally does not allow for major technology changes
although more minor ones can be done (e.g., aerodynamic improvements, valve timing improvements).
3 EPA has released other models that perform full vehicle simulations.  See the ALPHA
(http://www.epa.gov/otaq/climate/alpha.htm') and GEM models (http://www.epa.gov/oms/climate/gem.htmX
4 OMEGA may be expanded in the future to incorporate such market responses, however, such responses may currently be
addressed "outside of the model" through sequential model runs with market adjustments made between runs.
5 http://www.epa.gov/otaq/climate/publications.htm
6 A vehicle's footprint is the product of its track width and wheelbase, usually specified in terms of square feet.

More major technology upgrades that affect multiple systems of the vehicle thus occur at the vehicle
redesign stage and not in the time period between redesigns.
       There are a wide variety of emissions control technologies which involve several different
vehicle systems. Many can involve major changes to the vehicle, such as changes to the engine block
and heads, or redesign of the transmission and its packaging in the vehicle. This calls for tying the
incorporation of the emissions control technology into the periodic redesign process. This approach
reflects manufacturer capability to develop appropriate packages of technology upgrades that combine
technologies in ways that work together and fit with the overall goals of the redesign. It also reflects the
reality that manufacturers fit the process of upgrading emissions control technology into its multi-year
planning process, and it avoids the large increase in resources and costs that would occur if technology
had to be added outside of the redesign process.
       Within OMEGA, GHG emission control technology can be applied individually or in
groups, often called technology "packages."  The user specifies the cost and effectiveness of
each technology or package for a specific "vehicle type," such as midsize cars with V6 engines
or minivans. The user can limit the application of a  specific technology to a specified percentage
of each vehicle's sales (i.e., a "cap"). The effectiveness, cost, application limits of each
technology package can also vary over time.7 A  list of technologies or packages is provided for
each vehicle type, providing the connection to the specific vehicles being modeled.
       OMEGA is designed to apply technology in a manner similar to the way that a vehicle
manufacturer might make such decisions.  In general, the model considers three factors which EPA
believes are important to the manufacturer: 1) the cost of the technology at the consumer level, 2) the
value which the consumer is likely to place on improved fuel economy and 3) the degree to which the
technology moves the manufacturer towards its CO2 emission target.
       Technology can be added to individual vehicles using one of three distinct ranking
approaches.  Within a vehicle type, the order of technology packages is set by the user. The
model then applies technology to the vehicle with the lowest Technology Application Ranking
Factor (hereafter referred to as the TARF).  OMEGA offers several different options for
calculating TARF values. One TARF equation considers only the cost of the technology and the
value of any reduced fuel consumption considered by the vehicle purchaser. The other two
TARF equations consider these two factors in addition to the mass of GHG emissions reduced
over the life of the vehicle.  Fuel prices by calendar year, vehicle survival rates and annual
vehicle miles travelled (VMT) with age are provided by the user to facilitate these calculations.
       For each manufacturer, OMEGA applies technology to vehicles until the sales-weighted
GHG emission average complies with the specified GHG emission standard or until all the
available technologies have been applied.  The GHG emission standard can be a flat standard
applicable to all vehicles within a vehicle class (e.g., cars, trucks or both cars and trucks).
Alternatively the GHG standard can also be in the form of a linear or constrained logistic
function, which sets each vehicle's target as a function of vehicle footprint (vehicle track width
times wheelbase).  When the linear form of footprint-based standard is used, the "line" can be
7 "Learning" is the process whereby the cost of manufacturing a certain item tends to decrease with increased production
volumes or over time due to experience.  While OMEGA does not explicitly incorporate "learning" into the technology cost
estimation procedure, the user can currently simulate learning by inputting lower technology costs in each subsequent
redesign cycle based on anticipated production volumes or simply with time.

converted to a flat standard for footprints either above or below specified levels. This is referred
to as a piece-wise linear standard.
       The GHG emission target can vary over time, but not on an individual model year basis.
One of the fundamental features of the OMEGA model is that it applies technology to a
manufacturer's fleet over a specified vehicle redesign cycle. OMEGA assumes that a
manufacturer has the capability to redesign any or all of its vehicles within this redesign cycle.
OMEGA does not attempt to determine exactly which vehicles will  be redesigned by each
manufacturer in any given model year. Instead, it focuses on a GHG emission goal several
model years in the future, reflecting the manufacturers' capability to plan several model years in
advance when determining the technical designs of their vehicles. Any need to further restrict
the  application of technology can be effected through the caps on the application of technology
to each vehicle type mentioned above.
       GHG emission standards are specified in terms of CO2 equivalent emissions. These CO2
equivalent emissions can be based on any test procedure. The only  requirement is that the base
CO2 emissions specified for each vehicle and the effectiveness of the specified technologies be
based on the same test cycle(s).  For example, these emissions can simply be those from the
tailpipe as measured over the current two-cycle GHG standard test procedure or they can also
include tailpipe CO2 emissions from air conditioner use, as well as refrigerant emissions from the
air conditioning system. In the case of the latter,  the descriptions of vehicle emissions and
technologies must include baseline refrigerant emissions and the effectiveness of each
technology in reducing these emissions.  GHG emissions could also be based on the 5-cycle
formulae now used to calculate most vehicles' fuel economy labels. The user simply needs to
take care to specify CO2 and refrigerant emission and technology effectiveness estimates which
are  based on emissions over all five emission tests and as combined according to the five-cycle
formulae.  OMEGA bases all of its calculations on a single estimate of test cycle emissions.
Compliance cannot be specified for two distinct test cycles, for example, city and highway test
emissions.  Only combined city alone, highway alone or city-highway emissions can be modeled.
       Once technology has been added so that every manufacturer meets the specified targets
(or  exhausts all of the available technologies), the model produces a variety of output files.
Outputs include specific information about the technology added to each vehicle and the
resulting costs and emissions. Average costs and emissions per vehicle by manufacturer and
industry-wide are also determined for each vehicle class.
       The remainder of this document is divided into four sections. The first section describes
the  information which can be input to the model.  The second section describes the application of
technology in order to comply with the specified  standards, what we define as the "core model."
The third section describes the various output files produced by the  model.  The fourth section
describes the steps necessary to operate the OMEGA model.

Ill Input Files
       OMEGA is designed to be flexible in a number of ways. Very few numeric values are
hard-coded in the model, and consequently, the model relies heavily on its input files. The
model utilizes five input files: Market, Technology, Fuels, Scenario, and Reference.  All of the
input files are Microsoft Excel 2003 spreadsheets and should not be converted into other formats.
The headings of the various types of input data are contained in Row 1 of each worksheet. It
should be noted that these headings cannot be modified by the user.  Each input file also contains
two common types of worksheets. One is named "Validation List" and lists the types of value
allowed in each column along with an allowed range of valid values.  This worksheet is typically
hidden and can be viewed using the Format/Sheet/Unhide command. The user can change the
range of valid values as desired.  The user should not change the type of data shown as OMEGA
is designed to look for certain types of information in each column and changing the values
entered in an input file  does not affect this expectation.
       The second common worksheet is named "Errors."  This worksheet contains a button
labeled "Validate Data" which can be selected.  When "clicked" this button triggers a macro
which determines if all values in the current workbook fit the expected type of data and fall
within the allowed range of values.  Cells that do not fit the criteria are listed and the  problem
described. This function can be very useful when developing new input files by reducing the
number of aborted model runs. While useful, please note that the error validation routines are
outdated and may falsely indicate errors, or may not indicate all errors.8
       It is important to note that OMEGA expects all the cells below the last row of required
data to be blank and,  more specifically, to have never been written into. If these cells are used
for temporary calculations, the user should go further below to  a row which has never been
written into and copy the entire row of blank cells into the row  which have been used
temporarily. The error identification process will then recognize these cells as actually being

A  The Market File: Vehicle Fleet Characterization
The market input file contains much of the required information which describes the vehicles being
modeled. This file consists of three worksheets in addition to the Validation List and Errors worksheets:
Vehicle, Manufacturer, and Vehicle Type. The "Manufacturer" and "Vehicle Type" tabs are lists of
valid values for columns C and E in the Vehicle worksheet. The "Vehicle" worksheet, which is the
substance of the market file, is discussed below.
8 Generally, OMEGA is moving towards a dynamic where more error reporting is provided by the model itself, rather than
these validation routines. The trace log, located in the same file directory as the model executable, provides useful
diagnostics on the model run.


       Table 1 shows the various types of data included in the "Vehicle" worksheet.
               Table 1 - Input Data in Market Data Worksheet of the Market File*
Platform Index #
Vehicle Index #
Vehicle Type #
EPA Vehicle Class
Classic Vehicle Class
Baseline Sales
Annual Sales by Cycle
Combined FE (mpg)
Tailpipe CC>2 (g/rni)
Footprint (ft2)
Curb Weight (Ib)
No. of Cylinders
Displacement (L)
Max Seating
Transmission Type
Towing Capacity
Primary Fuel Type
Combined EC (kWh/mi)
Refrigerant Type
Refrigerant Lifetime Leakage (g)
TEB Tech Package 1-50
CEB Tech Package 1-50
OEB Tech Package 1-50
                   * Columns highlighted in gray are not currently used by OMEGA
       Column A contains a positive numerical identifier matching each vehicle with a specific
platform type. Each platform represents a unique combination of vehicle characteristics.  During
input data pre-processing OMEGA automatically creates a version of the market.xls data set
aggregated by manufacturer and unique platform.  This process is described further in later
       Column B contains a unique, positive numerical identifier for each vehicle being
modeled.  The indices do not need to be in numerical order, just unique and positive. Column C
contains the name of each manufacturer.  There are no requirements with respect to the names,
except that the user needs to take care that vehicles intended to be produced by the same
manufacturer are given exactly the same name.  Slight differences in spelling or spacing will
cause the model to treat them as separate manufacturers.  A list of manufacturers has been
provided in the validation routine to help avoid this issue. Column D contains an alpha-numeric
name for each vehicle.  These names do not need to be unique, simply to be as descriptive as the
user desires.
       Column E contains the vehicle type number.  This value provides the connection
between the vehicles listed in the market data worksheet and the available technologies listed in
the Technology file.
       Column F contains the vehicle class designator.  Currently OMEGA can model up to two
vehicle classes: cars indicated with "C" and trucks indicated with "T."  This code provides the

connection between the vehicles listed in the market data worksheet and the standards listed in
the Scenario file.  If only one standard applicable to both cars and trucks is being modeled,
vehicles can be labeled as either cars or trucks or both.  If both vehicle labels are used,
compliance will still be based on the combination of both vehicle classes, but emissions will be
tracked separately in the model's outputs. This latter situation is advantageous if cars and trucks
are to have distinct scrappage rates and annual travel estimates.
       Column G contains the car/truck classification of vehicles under the pre-MY 2011 CAFE
definition. This column is not currently used by the OMEGA model
       Column H contains baseline sales.  The baseline is the model year prior to the first year
of the first redesign cycle being modeled.  Baseline sales are not used in the core model to add
technology to facilitate compliance; instead they are used in order to linearly interpolate annual
vehicle sales during the interim years between the baseline year and the year of the end of the
first redesign cycle.  Sales must be positive and may be fractional.
       Columns I through P contain sales for the last year of each of up to eight redesign cycles.
Sales must be positive and may be fractional. The basic assumption made by the model related
to the length of the redesign cycle is quite simple: that every vehicle sold by the manufacturer is
capable of being redesigned within a redesign.
       Sales must be entered for each vehicle, even if the value of sales is zero.  Values need
only be entered for redesign cycles actually being modeled. Thus,  if only one redesign cycle is
being modeled, then sales need only be entered in Column  I. Columns J through P can be blank
in this case.  Sales can change in any manner between redesign cycles.
       Column Q contains each vehicle's baseline fuel  economy value in miles per gallon
(mpg). It is not currently used by the model.
       Column R contains each vehicle's baseline CC>2 emissions in grams per mile (g/mi) over
whichever test cycle or cycles comprise the basis for compliance with the standards described in
the Scenario file.  This value should not include the CO2 equivalent emissions related to
refrigerant leakage emissions. Those emissions are described in later columns.  The CC>2
emissions of Column R could include the CC>2 equivalent emissions of GHGs like methane and
nitrous oxide, as long as the effectiveness of the technologies described in the Technology file
and the standards  listed in the Scenario file consider these emissions in a consistent manner.
       Column S  contains each vehicle's footprint value in square feet.  This value is used to
determine each vehicle's CO2 emission target when the standard is either a constrained logistic
curve or linear function.
       Columns T through AA describe several vehicle attributes which are not currently used
by the model.  These are included to facilitate future versions of the model which may base
compliance or evaluate model output using one or more of these attributes.  Column AB contains
the vehicle towing capacity in pounds.
       Column AC contains a designator for each vehicle's primary fuel type.  Any fuel type is
allowed in the model, so long as its  details appear in the Fuels input file. Plug in hybrid vehicles
would be designated by their liquid fuel type, depending on which  liquid fuel they used.  The
model will consider the electricity used by plug in vehicles based on the value of electricity
consumption per mile described in Column AD, which is described below.  Electric vehicles

must be designated with the fuel "EL." Fuel names are case sensitive, and each vehicle fuel
must appear, in exactly the same format, in the fuels file.
       Column AD contains the vehicle's baseline electricity consumption in units of kilowatt-
hour per mile (kw-hr/mi). This value is used in calculating the fuel savings component of the
TARF equation, in which a comparison must be made between vehicles and technologies which
may consume different types of energy sources, such as liquid gasoline or diesel, or electricity.
Since consumers tend to make decisions on which vehicle to purchase based  on how much the
vehicle costs them to drive it, this column helps the model account for the any energy in the
baseline vehicles which is supplied by the electrical grid. This term only applies to plug in
hybrids and battery based electric vehicles. In the Fuels input file, OMEGA allows the user to
input a value for the GHG emissions associated with generating a kw-hr of electricity when
determining compliance with the GHG standards.  Should a non-zero value be entered, the level
of electricity usage per mile also affects the vehicle's baseline CO2 emission  level when the
model is run.
       Column AE designates the type of refrigerant used by the vehicle.  This designator must
match one of the types of refrigerant listed on the Refrigerant worksheet of the Reference file
described further below. The primary purpose of this designation is to specify the Global
Warming Potential (GWP) of the refrigerant so that mass emissions of refrigerant leakage can be
converted to their CC>2 equivalent emissions. Editable refrigerant data is in the Reference file, so
that the user can edit or add additional refrigerant names and GWPs.
       Column AF of the market file designates the lifetime leakage of the refrigerant, which the
model uses to calculate the leakage rate in CC>2 equivalents. EPA chose to input the lifetime
leakage instead of the leakage rate because the lifetime leakage is easier to quantify.  The yearly
distribution of leakage is hard-coded, and OMEGA uses it to convert the refrigerant leakage to
grams of CO2 equivalents per mile.
       Columns  AG through CD are used to track technology that may be present in the baseline
or reference case. This data is necessary to prevent the model from double counting technology
costs and GHG improvements.  Columns AG through CD represent the fraction of the
technology package effectiveness for the different vehicles that is present in the reference case;
for example, a value of 35% for technology package 1 means that 35% of the effectiveness  of
technology package 1 on that vehicle type is already present in the baseline vehicle.  Similarly,
columns CE through EB represent the fraction of the technology packages' cost that is reflected
in the baseline. Likewise, a value of 75% in any of these columns means that 75% of the
technology package's cost on the particular vehicle has been included  in the reference case. A
method for calculating these values is described in Appendix A.
       Columns  CE through FZ contain Other Effectiveness Basis (OEB)  gram-per-mile credits
that may be associated with each technology package. Typically these are negative numbers.
While each technology package may have an associated gram-per-mile credit (specified in the
Technology.xls input data set) those are only applied when calculating the  TARF CO2 value.
When calculating total vehicle CO2 for compliance purposes, the OEB values from columns CE-
FZ are used instead. As documented in a later section, the use of OEBs provides vehicle level
accounting for credits.

B  The Technology File: Technology Package Characterization
       The technology input file defines the technology packages (up to 50) which the model
can add to the vehicle fleet.  For each vehicle type, the user must add a separate row for each
technology package in the order of how OMEGA should add them to that specific vehicle type.
This approach puts considerable onus on the user to develop a reasonable sequence of
technologies. However, the model also produces output information which can help the user
determine if a particular technology package might be "out of order". The package approach
also simplifies the model's calculations and enables synergistic effects among technology
packages to be included to the fullest degree possible.
             There are four tabs which contain technology packages, each tab keyed to a
particular redesign cycle. Similar to the Market file, the Technology file contains an additional
tab entitled "errors", which is used for validation purposes. Table 2, below describes the data in
the each redesign cycle tab.
             Table 2 - Input Data in Each Worksheet of the Technology File
Vehicle type number
Technology package number
Technology package name
Market penetration caps
Incremental tailpipe CO2 emission control effectiveness
Incremental Cost
Primary fuel of the new technology package
The fuel to which the technology package applies
Electrical Conversion %
Gram/mile CO2 credit
Refrigerant emission control effectiveness
Refrigerant type (NC = no change from previous step)
       The data in this file can be categorized in four ways:  1) Information which describes the
individual packages, such as name and vehicle type; 2) Parameters the model uses to calculate
CO2 improvement, such as effectiveness and market penetration cap (the latter being the cap of
sales for each vehicle model of a vehicle type that can receive a technology package); 3)
technology costs 4) Properties of the technology package, such as refrigerant type, fuel type,
electricity usage, credit value, and applicable fuel.
       Each tab in the Technology input file contains a user-defined list of technology packages
for all of the different vehicle types. This list is organized in ascending order by the vehicle type
to which it applied (Column A), and then by ascending technology package (Column B).  The
user need not use the full 20 lines for each vehicle type, but can stop after the last technology
package has been listed.  There cannot be any blank lines between technology packages or
vehicle types.  The user must record the technology packages within each vehicle type from top
to bottom in the order of how the model should add them to the particular vehicle.  In typical
OMEGA usage, each package is replaced by the subsequent technology package, so it is critical
that packages improve in aggregate  CO2 reduction.  The user records a description of the

technology package in Column C, and an abbreviation, if desired, in Column D. The
abbreviation of the last technology package added is displayed in the output files.
       Column E contains the maximum market penetration caps for the technology packages.
When technology is sufficiently new, or the lead-time available prior to the end of the redesign
cycle is such that it is not reasonable to project that it could be applied to all vehicle models that
are of the same specific vehicle type (i.e,; all minivans), the user can limit its application to
minivans through the use of a market cap of less than 100%. If subsequent technology packages
can be applied to the vehicle, the user should consider whether in reality the new technology
would likely be applied to those vehicles which received the previous technology or those which
did not, and design the technology file accordingly.  The effectiveness of adding the  subsequent
technology will depend on which vehicles are receiving it.
       Column F contains the Average Incremental Effectiveness (AIE) of the technology
package over the previous package (or over the baseline in the case of technology package 1).
For example, a value of 7.0% in the AIE column would denote a 7.0% tailpipe CO2 improvement
beyond any CC>2 improvements already realized. ("Tailpipe CCV refers to the CC>2 emitted over
the test cycle assumed to be used to determine compliance- which relates it to vehicle
efficiency.) This value of 7% would include any synergistic effects that components of the
technology package may have with technologies that are remaining on the  vehicle type.
       Column G contains the incremental technology package cost, which represents the cost
beyond the cost of other technology packages that the model may have added in a previous step.
In the specific  case of technology package 1 on each vehicle type, this will be the package cost
over the baseline, since no other technology has been added prior to technology package 1.
       Column H and I respectively contain the fuel used by the vehicle after addition of the
technology package, and the fuel of the vehicles to which the technology package applies. These
fuel abbreviations must also appear in the Fuels input file, and are case specific.
       Column J contains the electrical conversion percentage. Each technology package potentially
has an "electricity conversion percentage," which refers to the increase in the grid-supplied electrical
energy consumed by the electric drivetrain relative to reduction in the consumption of energy from
liquid fuel. More specifically, the electricity conversion percentage is the ratio of the increase in grid-
supplied electrical energy used by the vehicle (in BTU per mile) divided by the reduction in liquid fuel
use (also in BTU per mile), multiplied by 100%. Electricity is a highly refined form  of energy which
can be used quite  efficiently to create kinetic energy.  Thus, electric motors are much more efficient than
liquid fuel engines.  Consequently, the electric consumption percentages input in the Technology File
for plug-in hybrid vehicles and battery electric vehicles are generally well below 100%. It may be
possible that this percentage could exceed 100% under certain circumstances, for example when one
type  of plug-in vehicle is being converted into another plug-in vehicle and  electricity consumption per
mile is increasing due to larger and heavier batteries,  etc.
       Column K contains a gram per mile credit that is applied to this technology step when
calculating the TARF CC>2 values. As described above, the OEB, rather than this credit value, is
used in calculating the compliance CC>2 for a vehicle using this technology package.  However,
this value is used in computing the TARF.
       Column L contains the refrigerant effectiveness and is based on the fraction reduction in
direct refrigerant leakage emissions and is separate from tailpipe CC>2. Based on a change in


refrigerant included as part of a technology package, noted in Column V, the model will convert
the refrigerant emissions to grams per mile of CO2 equivalent emissions, and add the resultant to
the tailpipe CC>2 emissions for the vehicle compliance calculation.  A value of "NC" in column
M denotes that there is "No Change" in refrigerant from the previous step, or in the case of
technology package 1, no change from the baseline refrigerant.

C The Fuels File: Physical Properties and Prices of Fuel and Energy Sources
       The Fuels input file contains data relevant to liquid fuel and electricity, including energy,
mass, and carbon density, and annual price forecasts for up to 20 years.  Similar to the other
input files, the fuels input file is comprised of two worksheets: A worksheet containing  data used
by the model and an additional worksheet designed to ensure that the data is within allowable
ranges.  There is a third hidden worksheet which contains the range of allowable values. Table 3
describes the layout and content of the "fuel" tab in the fuels input file.
                    Table 3 - Input Data in Fuel Worksheet of the Fuels File
Fuel Type
Energy Density
Mass Density*
Carbon Density
CAFE Equivalency Factor
Fuel Price ($/gal)
                             *The columns highlighted in gray are not used
                             by the model's calculations.
       Column A describes the fuel type.  This value can be any descriptor desired, but EPA
typically specifies gasoline as "G", diesel fuel as "D," etcetera. The one exception is that
electricity must be designated as "EL", in order for the model to connect inputs like the
electricity conversion factor with this fuel. Please note that the fuel names in this file must
match the fuels in the technology and market files at a case specific level.
       Column B contains the energy density of the energy source. For the liquid fuels, this
factor has the units of BTU per gallon.  Electricity has the units of BTU per kilowatt-hour, which
is essentially a fixed conversion factor. This factor is used when a technology package increases
the ability of the vehicle to operate on grid-supplied electricity. It is used in conjunction with the
electrical conversion factors listed in the technology file.
        Column C contains the mass density of the liquid fuels in terms of grams per gallon, and
is not used in the model.
       Column D describes the carbon density of the energy source, and is used in the
calculation of the fuel savings component of the TARF9 as well as in the compliance
calculations.  Carbon density is specified in units of grams of carbon per gram per the unit of fuel
 TARF formulas are discussed on page 26.

which is associated with the fuel price. For liquid fuels, this is grams of carbon per gallon and
for electricity this is grams of carbon per kWh. If a user wishes to incorporate the upstream
emissions of the carbon content of CC>2 emissions in the TARF and compliance calculations,
they could enter a positive value in this cell.  Please note that these emission values are in terms
of grams of carbon, not grams carbon dioxide.
       Column E contains the CAFE equivalency factor used in the calculation of manufacturer fines.
If there is a fine, and if the manufacturer fails to meet the target, then the TARF rankings would change.
However, because the OMEGA model does not allows the manufacturer to choose to pay fines, this
input should typically be set to I.10
       Columns F through Y contain the fuel price either in US Dollars per gallon or US Dollars per
kWh for liquid fuel and electricity, respectively, for 20 calendar years.  Fuel prices are to be input in
ascending order by year and are used when calculating the fuel savings over the payback period in the
TARF.  The first calendar year listed should be that of the baseline year plus one.

D The Scenario File: Definition of Regulatory Scenarios and Other Economic Parameters
       The Scenario input file contains data specifying the number and types  of model runs.
The  Scenarios tab acts as a directory for different model runs, where the user can create an entry
for any number of runs that the model can perform in succession. In the Scenarios tab, the user
must specify the base year, type of compliance target (CC>2 or MPG), type of compliance
function, the number of redesign cycles, and the names of the other input files that describe the
vehicle fleet, technology packages, and fuel properties.  At present, the model is limited to a CO2
equivalent standard. The elements in the "Scenarios" tab described above are summarized in the
following table:
10 In other words, the OMEGA model's technology application algorithm only ceases to apply technology when a
manufacturer comes into compliance, or when all technology options have been exhausted. There is no option to pay fines
rather than comply through technology.


                Table 4 - Input Data in Scenarios Worksheet of the Scenario File
Scenario ID number
Scenario name
Baseline year
Target Type
TARF Option
GHG Target Function Type
Fleet type (single or combined)
Number of redesign cycles
Fleet trading limit
Market input file indicator
Technology input file indicator
Fuels input file indicator
Reference input file indicator
                    *The columns highlighted in gray are not used by the model's calculations.

       Column A in the Scenarios tab indicates the ID number of the model run. From a single
scenario file, the model can run as many different scenarios as the user desires.  In Column B,
the user can give each scenario a name,  which the model will use in naming the output directory
and files for each scenario.  Column C denotes the baseline year for each scenario.  This is the
year prior to the first year of the first redesign cycle. Column D indicates the type of standard or
target (CO2 or MPG) the model will use for compliance, and is not  currently active in the model.
       Column E is where the user designates which of the three TARF equations the model
should use. The model uses the TARF equations to determine the order of technology package
application on the different vehicle models.  There are three TARF  equations which are
summarized below  and are described in detail on page 32.
          1.  Effective Cost = [Technology package cost minus fuel savings over the payback
          2.  Cost Effectiveness-Society = [Effective Cost] divided by discounted lifetime CC>2
          3.  Cost Effectiveness -Manufacturer = [Effective Cost] Divided by lifetime CC>2
       Column F indicates the user's preference for type of function for the industry-wide GHG
level.  There are four options for compliance targets: 1 = universal; 2 = piecewise linear; 3 =
constrained logistic.

D.i Universal Target
       The universal target option is a numeric designation which the manufacturers' average
fleet CC>2 cannot exceed. For a universal standard (which could apply to cars, trucks or cars and
trucks combined), only the value listed in the first of each set of the four coefficients is used
(Labeled "A" in the header row of the Target worksheet).

D.ii    Piece-wise Linear
       The attribute-based linear target function is described by up to four coefficients and has
the following piecewise linear mathematical form:
D.iii  Logistic Curve Target
The footprint-based logistic curve (shown below) is described by four coefficients and has the
mathematical form described below.
                                                   Where A, B, and FP have the same definitions
                                                   as above
                                                   C:  Footprint value at equation inflexion point
                                                   (i.e., midpoint)
                                                   D:  The term which controls the rate at which
                                                   the CC>2 target moves from the minimum to
                                                   maximum values.  High values of D cause the
                                                   curve to move slowly (in terms of footprint)
                                                   from the minimum to maximum target (i.e., a
                                                   sort of "inverse slope")
                                                   FP:  Vehicle footprint
T = A + (B - A]
                  FP-C  \
                 Example of Footprint-Based CO2 Logistic Target Function
                               Footprint (ft )

       Column G of the Scenarios tab in the Scenario input file is entitled "fleet type."  There
are two acceptable values for cells in this column: 1 = 1 fleet and 2 = 2 fleets. If 1 is chosen, the
standard defined in the "Standards" tab will be taken from the "Car" standard section and applied
to all of the vehicles listed in the market file, whereas if 2 is chosen, the standards will be defined
by both the "Car" and "Truck" standard sections and applied to cars and trucks separately.
       Column H contains the number of redesign cycles the model considers in a given run.
There can be as few as one redesign cycle and as many as eight. The model allows any length to
be assumed for a redesign cycle, as long as the redesign cycle length is the same for all vehicles.
The inputs should be designed appropriately to reflect the user's assumptions.
       Column I contains the limit (in units of g/mi CC^) imposed on the trading of compliance
credits between cars and trucks.
       Columns J-M indicate which files the model will access for the different runs. Column J
contains the name of the market input file; column K contains the name of the technology input
file; column L contains the name of the fuels input file; column M contains the name  of the
References file. All files must be in the same directory as the scenario file.
       The Scenario input file also contains the economic parameters that the model uses to
calculate the TARF equations. Such economic data is contained in the "Economics" tab and is
organized as illustrated in the following table:
        Table 5 - Input Data Contained in the Economics Worksheet of the Scenario File
Scenario ID number
Discount rate
Payback period
CAFE fine
Threshold cost
CO2 value increase rate
EPA Lifetime VMT - Car
EPA Lifetime VMT - Truck
       Column A contains the ID number for the model run, and it must be identical to that in
Column A of the Scenarios tab.
       Column B contains the discount rate for future dollar values. The model uses the
discount rate in the TARF calculations when calculating the fuel savings over the payback
       Column C designates the payback period over which consumers are believed to consider
fuel savings when purchasing a vehicle.
       Column D indicates the value of a fine for non-compliance. EPA typically records $0
into this column. Changes to this value will affect the TARF, but not allow fine payment.

       Column E contains the gap, which is the percentage difference between on-road fuel
economy and test cycle fuel economy. This value is important because compliance is based on
test cycle CC>2, whereas the true impact on climate is based on the on-road CC>2 and consumer
fuel savings are based on on-road fuel economy.  The model uses this difference to convert test
cycle CC>2 emissions to on-road fuel economy and calculate fuel savings in the core model's
TARF equations, as described further on page 32 below.
      Column F contains the value for the "threshold cost". This value determines whether the model
will accept some  degree of over-compliance when it determines the degree of technology addition
needed for a manufacturer to meet a standard, or if it will reduce the addition of technology so that a
manufacturer just barely complies. Specifically, if the per vehicle cost of the last technology added by
the model in order to reach compliance exceeds the threshold value, the model reduces the percentage of
that vehicle's sales which receives that technology to just the degree needed to enable compliance.  If
the per vehicle cost of the last technology added by the model in order to enable  compliance is below the
threshold value, the model leaves the percentage of vehicle sales receiving that technology at the
technology penetration cap for that technology.11
      Column G represents the  rate of increase in the real value of CC>2 emission reductions over time.
This value is included since some studies have predicted that the real value of CC>2 emission reductions
will increase over time as the impact of global climate change increase.  The units of this term are
percent per annum. This value is used in the Cost Effectiveness-Society TARF described below.
      Columns H and I contain the statutory lifetime miles driven by cars and trucks.  These values are
used to calculate  the credit trading ratio between cars and trucks. Because real VMT tends to grow over
time, but the VMT used in the credit trading equation is determined by regulation, this value can differ
from the VMT in the reference file (described below). For example, the lifetime VMTs per vehicle for
cars and  trucks provided in EPA's current GHG regulations are 195,264 and 225,865, respectively.12
      The Target  tab of the Scenario file  contains the parameters describing the GHG compliance targets
required  by the universal, piece-wise linear and constrained logistic functions described above. The first
40 columns describe the car standards for up to eight redesign cycles, if "2"  fleets are selected in column
G of the  Scenarios worksheet.  If "1" fleet is  selected, then the standards described in Columns A
through AO apply to both cars and trucks. Similarly, the next 40 columns (AP through CC) describe the
truck standards for up to eight redesign cycles if "1" fleet is selected. This second set of values is not
used if "1" fleet is selected. This is described in Table 6.
11 This flexibility was included in the model to reflect the different ways in which manufacturers apply various technologies.
For example, when adding basic engine technology such as variable valve timing, the manufacturer would generally convert
the entire production volume of a specific engine to this technology. The production of two otherwise identical engines, one
with the technology and one without, would likely not be maintained. However, with more extreme technologies, such as
dieselization or hybridization, the manufacturer often maintains two versions of the vehicle, one with and one without these
technologies. By setting the threshold in between the costs of these two examples, the model will reflect these two
approaches to technology application on the part of a manufacturer.
12 However, while the user may choose to model different statutory and accumulated VMT, differences in this values can
yield to counter-intuitive TARF values.


           Table 6 - Input Data Contained in the Target Worksheet of the Scenario File
Coefficients describing the CO2 Standard for Design Cycle 1
Coefficients describing the CO2 Standard for Design Cycle 2
Coefficients describing the CO2 Standard for Design Cycle 3
Coefficients describing the CO2 Standard for Design Cycle 4
Coefficients describing the CO2 Standard for Design Cycle 5
Coefficients describing the CO2 Standard for Design Cycle 6
Coefficients describing the CO2 Standard for Design Cycle 7
Coefficients describing the CO2 Standard for Design Cycle 8
Coefficients describing the CO2 Standard for Design Cycle 1
Coefficients describing the CO2 Standard for Design Cycle 2
Coefficients describing the CO2 Standard for Design Cycle 3
Coefficients describing the CO2 Standard for Design Cycle 4
Coefficients describing the CO2 Standard for Design Cycle 5
Coefficients describing the CO2 Standard for Design Cycle 6
Coefficients describing the CO2 Standard for Design Cycle 7
Coefficients describing the CO2 Standard for Design Cycle 8
Vehicle Class
Car If "2" fleets
Car and Truck if "1"
fleet selected
Truck If "2" fleets
Not used if "1" fleet
     As indicated, each CC>2 standard is described by up to five coefficients. For a universal standard,
only the value listed in the first of each set of four columns is used (Labeled "A" in the header row of
the Target worksheet).  The first four columns are required to describe either the segmented linear or
constrained logistic functions described above.

E  The Reference File: Vehicle Survival Rates and Miles Driven
       The Reference file contains car and truck annual miles driven and survival rates by year. These
estimates are used in the cost effective TARF (1) and the cost effectiveness-society TARF (2)
calculations when determining fuel savings over the payback period and in the cost effectiveness-
manufacturer TARF (3) when determining the lifetime CC>2 reduction. TARF 3 uses the statutory VMT
values in the scenario file.
       The vehicle survival and VMT estimates are inputted in the tab entitled Vehicle Age. Column A
in this tab  contains the vehicle age in years. Columns B and C contain the percentage of cars and trucks
still projected to be on the road of the specified ages, respectively.  Columns D and E contain the
average miles driven annually (per vehicle) for cars and trucks, respectively, for vehicles of the specified
       The Refrigerant tab contains data which is only used if refrigerant emissions are included in the
market file.  A dynamic list of acceptable refrigerants can be created, and accompanied with their
respective global warming potential.  Column A is the refrigerant name, while column B is the GWP.

F  Non-editable Input Data
       The only values "hard-coded" into the model which are potentially used in the
application of technology to vehicles are the distribution of leakage rate by vehicle age.
The following table describes the refrigerant leakage rates which are currently hard-coded.

                              Table 7 - Refrigerant leakage rates
Refrigerant Leakage Fractions
% of Total Lifetime
Leakage g/year
% of Total Lifetime
Leakage g/year
   EPA intends to make this data editable in a future version.

G Input Files Currently Distributed with Model
       The sample files bundled with the installation file contain example or "dummy" data and
are only indicative of realistic values. The input files from recent rulemaking analyses are
available  on the EPA OMEGA webpage.

IV Model Operation

A Calculating Technology Effective Basis (TEBs) and Cost Effective Basis (CEBs)
       The market data input file utilized by OMEGA, which characterizes the vehicle fleet, is designed
to account for the fact that the vehicles which comprise the baseline fleet may already be equipped with
one or more of the technologies available in general to reduce CO2 emissions.  As described previously,
OMEGA is typically used with technologies in packages, as opposed to one at a time. However, actual
vehicles are equipped with a wide range of technology combinations, many of which cut across the
packages. Thus, EPA developed a method to account for the presence of the combinations of applied
technologies in terms of their proportion of the technology packages. This analysis can be broken down
into four steps
       The first step in the process is to break down the available GHG control technologies into five
groups: 1) engine-related, 2) transmission-related, 3) hybridization, 4) weight reduction and 5) other.
Within each group we gave each individual technology a ranking which generally followed the degree
of complexity, cost and effectiveness of the technologies within each group. More specifically, the
ranking is based on the  premise that a technology on a baseline vehicle with a lower ranking would be
replaced by one with a higher ranking which was contained in one of the technology packages which we
included in our OMEGA modeling.  The corollary of this premise is that a technology on a baseline
vehicle with a higher ranking would  not be replaced by one with an equal  or lower ranking which was
contained in one of the technology packages which we chose to include in our OMEGA modeling.
       In the second step of the process, we use these rankings to estimate the complete list of
technologies which would be present on each baseline vehicle after the application of each technology
package.  We then use the EPA lumped parameter model to estimate the total percentage CO2 emission
reduction associated with the technology present on the baseline vehicle (termed package 0), as well as
the total percentage reduction after application of each package, including any baseline technology  still
expected to remain present after the application of each package.  Similarly, we use a cost estimation
tool to estimate the cost of the CO2 reducing technology present on the baseline vehicle and after the
addition of each package.
       The third step in this process  is to convert these total levels of emission control effectiveness and
cost to TEB and CEB13 values which can be used when the OMEGA model applies technology packages
on an incremental basis. This is done by comparing each technology package's incremental
effectiveness and incremental cost on each specific vehicle to those of the package when applied to a
vehicle with no baseline technology. The value of each vehicle's TEB for each applicable technology
package is determined as follows:
13  As described earlier, the degree to which a technology package's incremental effectiveness is reduced by technology
already present on the baseline vehicle is termed the technology effectiveness basis, or TEB, in the OMEGA model.  The
degree to which a technology package's incremental cost is reduced by technology already present on the baseline vehicle is
termed the cost effectiveness basis, or CEB, in the OMEGA model.

                                      TotalEffectvi_,}  ( \-TotalEffect
1 1 - TotalEffect , I 11- TotalEffect , I
7777? — ^ • / V P< /

^ 1- TotalEffect p. "|

       TotalEffectv,! =  Total effectiveness of all of the technologies present on the baseline vehicle after
                      application of technology package i
       TotalEffectv.i-i = Total effectiveness of all of the technologies present on the baseline vehicle after
                      application of technology package i-1
       TotalEffectp)1 =  Total effectiveness of all of the technologies included in technology package i
       TotalEffectp)1_i = Total effectiveness of all of the technologies included in technology package i-1
       i = the technology package being evaluated
       i-1 = the previous technology package

                                     Equation A-l - TEB calculation

       The value of each vehicle's CEB for each applicable technology package is determined as

               CEB; = 1 - (TotalCostv,i - TotalCostv>i.i) / (TotalCostp;i - TotalCostp;i.i)

       TotalCostv! =    total cost of all of the technology present on the vehicle after addition
                      of package i to baseline vehicle v
       TotalCostv,i-i =  total cost of all of the technology present on the vehicle after addition
                      of package i-1 to baseline vehicle v
       TotalCostB1 =    total cost of all of the technology included in package i
       TotalCostp,i_i =  total cost of all of the technology included in package i-1
       i = the technology package being evaluated
       i-1 = the previous technology package

                                     Equation A-2 - CEB calculation

       The fourth step is to combine the TEB and CEB values for each individual vehicle
models to match the vehicles being included in the Market file.  The CEB for each vehicle group
is simply the sales-weighted average of the CEB values for each individual vehicle model, since
the cost of each package is the same for each vehicle in a vehicle type. (Only vehicles of the
same vehicle type should be combined.) The TEB for each vehicle group is determined in a
slightly more complex fashion.  The individual TEB values are weighted by both sales and base
CC>2 emission level. This appropriately  weights vehicle models with either higher sales or CC>2
emissions within a vehicle type. Once again, this process prevents the model from  adding
technology which is already present on vehicles, and thus ensures that the model does not double
count technology  effectiveness and cost associated with complying with the reference standards
or the CO2 control scenarios.

B  Calculating Other Effectiveness Basis (OEBs)

       As noted above, the market data input file utilized by OMEGA is also designed to account for
the fact vehicles may not have the exact equipment in the package after the package is applied.  This is
particularly relevant in the context of a regulatory incentive for specific technologies. As an example, if
incentives are provided for start-stop systems, the model needs to know whether that vehicle contains a
start-system in order to provide the credit.  If a vehicle platform already contains start-stop before any
packages are applied, the model needs to account for the baseline credit impacts of the technology. As it
varies at the vehicle, rather than vehicle type, level, this accounting needs to occur at the level of the
market file rather than the technology file.
       However, it is important that the technology packages are ranked in the same order for all
vehicles in a vehicle type.  Therefore, the TARF is calculated with the credit value in the technology
file, but the compliance CO2 value is calculated using the vehicle specific value.

C  Platform Aggregation
     The market file includes a vehicle Platform Index (see the description of the new market.xls file
layout in section 2A.)  Vehicles with the same Platform Index share a common Vehicle Type and engine
configuration. While every entry in the market.xls file has a unique Vehicle Index, several vehicles may
share the same Platform Index.  Vehicles in a single platform should share vehicle class and vehicle
     In some analytical situations it is useful to have a market file with a single record for every unique
manufacturer / platform combination.14  This requires combining individual vehicles with matching
manufacturer / platforms into single representative records. Since OMEGA already loads all  of the
information  necessary to perform this calculation, EPA has chosen to include creation of a manufacturer
/ platform version of the market file as a standard feature in the model.
     After loading the market file, OMEGA performs the necessary calculations and creates  a Platform
Aggregation version of the market file, and then uses this new market file in the subsequent OMEGA
run. The new output data set is tab-delimited with a layout matching the market.xls file (the output
filename isX-Market-Platform_Mfr.log, as shown in Table 8.)
     Records in the manufacturer / platform file are created by calculating weighted average values for
the vehicle records with matching manufacturer and platform codes.
   The following data elements in the market file are calculated as a sales weighted  average using the
Annual Sales in Cycle  1:

   •   CO2  (grams per mile)
   •   Footprint (ft2 )
   •   Curb Weight (pounds)
   •   Displacement (Liters)
   •   Horsepower
   •   Max Seating
   •   Towing Capacity (pounds)
14 This is how EPA has typically ran the model, although this calculation is typically done in a spreadsheet, rather than
through using this model feature.


   •   Combined EC (kWh/mi)
   •   Refrigerant Lifetime Leakage (grams)
   •   CEB_Tech_l-CEB_Tech_50
   •   Combined Miles per Gallon (harmonically averaged)
       The following data elements in the market file are calculated as a sales-CO2 weighted average
using CC>2 * Annual Sales in Cycle 1:
   •   TEB_Tech_l-TEB_Tech_50;
   •   OEB_Tech_l-OEB_Tech_50;15
       Vehicle sales (baseline and annual sales) are the sum of sales in the individual vehicle records.
All other data elements are set equal to the values found in the first vehicle in the manufacturer /
platform set.

D Technology Application
       The technology application portion of the model can be described in several steps. The first step
determines the effective CC>2 emission standard for each manufacturer and vehicle class.  The second
step converts the baseline lifetime refrigerant emissions specified for each vehicle into its g/mi CC>2
equivalent and adds this to the baseline tailpipe CO2 emissions for each vehicle. The third step applies
technology until this standard is met or all available technology has been applied. These  steps  are
described below.

D.i Determination of Manufacturer-Specific CC>2 Emission Standards
       As described above, three types of standards can be evaluated by OMEGA: universal or
flat, piecewise linear, and constrained logistic. Determining each manufacturer's effective
standard under a flat standard is simple; it equals the flat standard.  The other two types of
standards require sales-weighting the CC>2 target applicable to each specific vehicle model
produced by that manufacturer.  Under these standards, the model calculates each vehicle's CC>2
target by plugging the vehicle's footprint into the formula describing the standard.  Each of the
vehicle-specific targets are then multiplied by the vehicle's sales in that redesign cycle and the
statutory lifetime VMT for that vehicle class and summed across all vehicles.  The sum is then
divided by the sum of the product of vehicle sales by that manufacturer in that redesign cycle and
the lifetime VMT for each vehicle. The result is a sales and lifetime VMT weighted corporate
average CC>2 target for each manufacturer's  relevant set of vehicles (i.e., cars, trucks, or cars and
trucks combined).
       If one fleet is specified, then the model only performs this calculation once and includes
both cars and trucks in the calculation. If separate standards are specified for cars and trucks,
then the model performs this task twice for each manufacturer for each redesign cycle being
modeled: once for cars and once for trucks.  If the same standard is specified for both cars and
trucks and two compliance fleets are specified in the Scenario file, then two separate calculations
are still performed.  The result is still two distinct CC>2 emission targets, one for cars and one for
15 This weighting will be changed to sales-weighted only in future model versions, which is consistent with the methodology
used in the MY 2017 and later light duty greenhouse gas rulemaking.


       If a trading limit of "0" is specified, then this stage of the model operation is complete.  If
a non-zero trading limit is specified, an additional step is required to ensure that this trading limit
is not exceeded, as described in the section below on credit trading algorithms. Conceptually, we
assume that a manufacturer would prefer to evaluate the application of technology to both its
cars and trucks at the same time in order to optimize compliance (via the TARF) over the widest
set of vehicles. At the same time, the manufacturer is assumed to want to avoid generating
credits from one of its two vehicle class fleets which cannot be used by the other fleet due to the
limit on trading, since it would incur cost with no benefit.

D.ii  Converting Lifetime Refrigerant Emissions to COi-Equivalent emissions per Mile
       Refrigerant leakage emissions are input to the model  in terms of lifetime emissions,
where refrigerant leakage increases with wear and tear of the A/C system.  Leakage emissions
also occur during accidents, repairs and vehicle scrappage. Refrigerant emissions per year
increase significantly with age.  Since annual mileage decreases with age in general, refrigerant
emissions per mile increase even more  significantly with age than emissions per year.  In
contrast,  CO2 tailpipe emissions are input in terms of g/mi and are generally assumed to be
constant with age. Thus, some processing is needed to ensure that the leakage rates for the two
types of emissions are comparable.
       OMEGA converts lifetime refrigerant emissions to their equivalent value in terms of CC>2
emissions per mile (RCC^) considering the change in societal value of CC>2 emissions over time.
The goal is to estimate a level of CC>2 emissions per mile, which, if constant over the vehicle's
life, like tailpipe CO2 emissions are generally assumed to be, would produce the same societal
value of CC>2 emissions  as the distribution of refrigerant emissions over the life of the vehicle.
This equality is shown in the following equation:

         Equation 3 - Conversion of refrigerant emissions to equivalent lifetime emissions
Value of Equivalent Lifetime CC>2 Tailpipe Emissions =
                                   Value of Lifetime Refrigerant Emissions
         L                               L
RCO2*^[VMTt *ValueofCO2l} = GWP*J^ [Re/Leakage t *ValueofCO2i}
        i=\                              i=\
              VMTj = the annual miles travelled for the relevant class of vehicle at age i, (i.g., VMTi =
              Survival Fraction for a vehicle of age i times the annual vehicle miles driven for a vehicle
              of age i as input in the Reference file),
              L = the lifetime of the vehicle.
              ValueofCO2i = the societal value of CO2 emissions in the calendar year when the vehicle
              is at age i,
              RefLeakage; = the annual rate of refrigerant emissions  when the vehicle is at age i, and
              GWP is the global warming potential of the refrigerant relative to CO2.

       The value of CC>2 in a particular year can be described as its base value divided by one
plus the applicable discount rate raised  to the power of the age of the vehicle.  In this case, the
applicable discount rate is the societal discount rate less the rate of increase in the real value of
CC>2 emissions.  Since the normal discounting equation assumes that the  relevant activity (e.g.,

payment) occurs at the end of the year and emissions occur throughout the year, we multiply by
one plus half of the applicable annual discount rate.  The resulting equation is described as
RCO2(g I mi) *
                                                         1 +
                                     i * BaseValueo/CO2 •
                                                        (\ +DR-IR)
      ] =
                  GWP*J^[RefLeakagi * BaseValuejCOl^
                                                          1 +
This equation can be rearranged to solve for the level of CO2 equivalent emissions per mile as
shown in the next equation. (Note that the societal value of CC>2 in the base year falls out of the
                     RCO2(glmi) =
                                                 _ + -
                    LeakRate, x
                                                (i + DR - IR}'
                                                  1 +
                         VMT, x -
                                                 (I + DR- IR)'
       There are other approaches to converting lifetime refrigerant emissions to their g/mi
equivalent level. Future versions of OMEGA may provide the user with several approaches
from which to select. One approach would be to simply allow the user to specify a baseline
value for g/mi CO2 equivalent refrigerant emissions in the Market file. This way, the user could
use whatever approach was deemed appropriate to estimate this value. Another approach would
be the same as the above,  except to base the equivalency on physical emissions and remove the
factors involving discounting. Therefore, if the user desires to perform this equivalency using
physical emissions, they should set the rate of increase in the societal value of CO2 emission
reductions to equal the overall societal discount rate being specified.  This will cause all of the
discount factors in the above equation to be equal to  1.0.  Then, if the user desires to use a
different rate of increase in the societal value CO2 emission reductions in the estimation of
benefits, they can change  this value in the benefits calculation spreadsheet.

D.iii  Application of Technology - Methodology
       The portion of the model which applies technology can most easily be described as the multiple
application of three logical steps.  The first step is to determine the vehicle in the "best" position to
receive the next technological improvement to enable the manufacturer to meet the specified CO2

emission standard. The second step is to apply this technology, reduce the vehicle's emissions
accordingly and add the cost of this technology to the manufacturer's total cost for this redesign cycle.
The third step is to assess the compliance situation and act accordingly.  If the standard applies to cars
only, trucks only, cars and trucks combined with a single standard, or cars and trucks combined with two
distinct standards and a zero trading limit (i.e., no trading), the model will:

   •   Recalculate the manufacturer's sales and VMT-weighted emissions and compare this new
       corporate average emission level to the manufacturer's standard
           o   If the manufacturer is now below the standard, determine if the cost of the last technology
              is above or below the threshold cost specified
                 •  if the cost is below the threshold, the evaluation of this manufacturer is over and
                    the model moves onto the next manufacturer;
                 •  If the cost is above the threshold, the percentage of sales which receive the
                    technology is decreased until the standard is just met; the evaluation of this
                    manufacturer is over and the model moves onto the next manufacturer.
   •   If the manufacturer is still above the  standard, the model goes back to steps 1  and 2 above and
       applies another technology package to further reduce emissions. If no more technology packages
       are  available, the model moves onto the next manufacturer.

   If a non-zero trading limit is specified, the model will follow largely the same procedure, but
additionally will  consider the credit trading algorithms.
       Once all manufacturers are in compliance or have exhausted the technology available for their
vehicles, the model moves to the next redesign cycle and repeats the above sequence  of steps.  The
evaluation of the second and any subsequent redesign cycles starts from scratch in that every vehicle
begins with only those technologies present in the Market file. In other words, the model does not start
with the technology added in previous redesign cycles. The assumption behind this aspect of the model
is that manufacturers have the flexibility to reevaluate technology each time a vehicle is being
redesigned. This could involve the evaluation of a technology which was not available in the prior
redesign cycle or a technology which had a maximum penetration cap of less than 100%. Of course,
starting the analysis over each redesign cycle could lead to situations where a manufacturer is projected
to utilize several very different technologies for most of their vehicles in each of several  redesign cycles.
The user would have to evaluate the reasons for such an outcome and determine if the inputs were
reasonable  or required modification.
       The application of technology, described conceptually above, is described in more detail below.
In the following formulae, the subscripts (t-1) and (t) indicate vehicle conditions before and after
applying technology package "t", respectively.

D.iii.a   Use of Technology phase in "Caps"
OMEGA 1.4.0 tracks CO2 emissions by  fuel and at each package application step within each vehicle.
Conceptually, a vehicle platform is composed of vehicles, each with its own fuel, CO2 emission rate and
energy consumption rate. When a technology is fully available (when its cap is 100%), it can be applied
to all vehicles within a platform. However, when the cap is less than 100%, OMEGA applies the
technology to only a portion of the vehicle platform. An example follows (Figure IV-1).

                             Figure IV-1 - Application of packages
        Example A:
        A package with cap of 100% & effectiveness of 50%
Fmr.'iion Rate
Platform A
Emission Rate
         Example B:
         A package with cap of 50% & effectiveness of 50%
Emfoion Rale

Emi^iion Rate
300 g/mile
Emiibioii Rale
       This model feature simplifies the ability to apply technology packages which have caps of less
than 100%.  By effectively treating the cap limited packages as separate segments within a platform, we
simplify the addition of subsequent technologies to the subset of vehicle sales with this technology and
those without it.
       Applying the caps at the vehicle platform level is consistent with our platform based approach, in
that many cap limited technologies would not necessarily replace all instances of other technologies on a
platform.  As an example, consider a hybrid package, which is often offered in parallel to a conventional
engine package.

D.iiLb    Credit Trading
       As the Clean Air Act allows credit trading between a manufacturer's car and truck fleets,
OMEGA allows the user to utilize a full range of credit trading scenarios. This trading is
controlled in OMEGA in column I of the scenarios tab of the Scenario input sheet. Entering a
zero into this column prevents credit trading and requires manufacturers to comply with the
relevant emission standards for their cars and its trucks separately.  If the user wants to allow
unlimited trading, this  is accomplished by inputting a large non-zero number in Column I (e.g.,
1000 g/mi CO2).  This effectively allows the model to apply technology across both cars and
trucks and meet the  combined standard described above.  We say "effectively", because the
model still checks to ensure that the trading limit is not triggered and this cannot be definitively

determined until compliance is achieved at the end of the evaluation of this manufacturer.16
Thus, in addition to requiring compliance with the fleetwide average CO2 target, the model must
also ensure that each fleet complies with its applicable target plus the trading allowance.
       Should a non-zero number be entered in column I, OMEGA determines the overall sales- and
VMT-weighted emissions target for the manufacturer with cars and trucks combined:17

                              Salescars x Standardcars x Regulatory VMTCars +
                             Salestrucks x Standardtrucks x Regulatory VMTtrucks
                argeimfr             Salescars x Regulatory VMTCars +
                                      Salestrucks x Regulatory VMTtrucks
The model also determines the starting point for each manufacturer using the same basic equation

                                Salescars x Base emissionscars x Regulatory VMTCars +
                .   .          Salestrucks x Base emissionstrucks x Regulatory VMTtrucks
       Base emisswnsmfr = 	^—,	„	;—	„..„	;	
                       mfr                Salescars x Regulatory VMTCars +
                                          Salestrucks x Regulatory VMTtrucks
       Credits are generated when a manufacturer's fleet of either cars or trucks overcomplies with the
applicable standard.  The amount of credits generated equals the difference between the sales weighted
average emission level for that vehicle class and the applicable standard multiplied by the lifetime VMT
per vehicle for that vehicle class. For either vehicle class, in aggregate, the generated credits are
calculated by the equation below.
          Credits Generated
                        = (Sales x Regulatory VMT x C02 emission standard)
                        — (Sales x Regulatory VMT x C02 emission average)

    Sales = Sales volume of each car or truck in that redesign cycle,
    Regulatory VMT = Lifetime VMT per vehicle according to regulation (from the reference file).
    CO2 emission standard = The target set in the scenario file
    CO2 emission average = The achieved CO2 level for the vehicles after the application of technology

       Credit use is determined by the same formula, except for the substitution of the vehicles
from the other vehicle class, as shown below.

          Credits used = (Sales x Regulatory VMT x C02 emission standard)
                        — (Sales x Regulatory VMT x C02 emission average)
    Sales = Sales volume of each car or truck in that redesign cycle,
    Regulatory VMT = Lifetime VMT per vehicle according to regulation (from the reference file).
16 If the trading limit is greater than the emission standard, trading is effectively unlimited.
17 VMT weighting allows the user to account for the difference in miles driven between difference classes of vehicles and
provides for environmentally neutral credit trading:

   CO2 emission standard = The target set in the scenario file
   CO2 emission average = The achieved CO2 level for the vehicles after the application of technology
       OMEGA utilizes a simple set of algorithms to determine the correct distribution of
technology between car and truck fleets. OMEGA calculates the level of sales and VMT
weighted emissions of either car and truck emissions which will generate the maximum
allowable use of credits by the other vehicle class (the "lower limit").  It then tracks sales and
VMT weighted car, truck and combined emissions when adding technology. When the sales and
VMT weighted average emissions for either cars or trucks reaches this lower limit, no additional
technology is applied to that vehicle class. Technology is only applied to the other vehicle class,
as this latter class still exceeds the level of its standard plus the allowable trading level.
       For example, assume a trading limit of 10 g/mi CO2 is input and the applicable car and
truck standards for a manufacturer are 220 and 300 g/mi CO2, respectively.  The model
calculates the combined sales and VMT weighted CO2 emission target using the above equation
for FleetwideCO2Target, which can be simplified as follows:
                                          (Salesv x LifeVMTv x Targetv)
                  Fleetwide CO 2 Target = ^	
Where vc represents the two vehicle classes, cars and trucks.
       Once the Fleetwide CO2 Target is known (assumed to be 260 g/mi in this example), this
same equation can be used to determine the level of average car emissions which achieves
compliance when the level of average truck emissions exceeds its target by 10 g/mi CO2 (310
g/mi in this example). For this example, assume this level is 198 g/mi CO2. Any level of
average car emissions between 198 and 220 g/mi produces credits for trading which can be
effectively utilized towards compliance by trucks. Likewise, the minimum level of average truck
emissions which produces useful credits for use towards compliance by cars is determined which
achieves compliance when the level of average car emissions exceed its target by 10 g/mi CO2
(230 g/mi in this example).  Again, for this example, assume this level is 290 g/mi  CO2.
       The model then proceeds to add technologies to cars and trucks (described  in greater
detail below) until one of three criteria is met:
          1)  combined car and truck emissions reach 260 g/mi CO2,
          2)  car emissions reach 198 g/mi  CO2,  or
          3)  truck emissions reach 290 g/mi CO2.
       If combined car and truck emissions reach 260 g/mi CO2 before the other two criteria are
met, the evaluation of this manufacturer is complete.  The manufacturer complies with the sales
and VMT weighted standard applicable to cars and trucks combined and any level  of trading
implied is less than the maximum allowed.  If criterion 2 is reached first, the model continues to
evaluate and apply technology, but only to trucks. In this case, the model continues to
effectively add technology to trucks only until criterion 1 is met (unless insufficient technology
exists to enable overall compliance). Likewise, if criterion 3 is reached first, the model continues
to evaluate and apply technology to cars.

       Fleetwide total tailpipe and refrigerant CC>2 equivalent emissions are determined in an
analogous fashion.  Compliance is achieved when fleetwide total CO2 is equal to or less than the
fleetwide CC>2 Target.

D.iv  Technology Application Ranking Factors
       The Technology Application Ranking Factor (TARF) is used to rank the application of
available technology packages across various vehicles. As described above, the user can choose
between three different TARF equations for ranking technology application:  1) Effective Cost, 2)
Cost Effectiveness-Society, and 3) Cost Effectiveness-Manufacturer.  The first and third TARF
equations take the view of the manufacturer in determining the application of technology.  This
can be deemed appropriate since the manufacturer controls the decision making process. Since
the manufacturer must satisfy its customers and regulatory mandates, a manufacturer's decision
making processes will reflect these needs, as well. More explicitly, the technology cost is
assumed to be the full cost of that technology at the consumer level, including research and
development  costs, amortization of capital investment, etc. This cost is generally the same cost
as EPA estimates in its regulatory support analyses when estimating the cost  of new standards.18
This cost is not necessarily the increment in price that the manufacturer would charge for that
technology, since price is a function of many factors which can change fairly quickly depending
on market conditions.  The fuel savings of interest are those assumed by a manufacturer to be
valued by the customer, so they are based on fuel prices including taxes and reflect the
timeframe which a customer might consider when purchasing a vehicle.  The residual value of
the added technology is not currently reflected in either TARF, but could be added in the future.
       While the first and third TARFS take the veiew of the manufacturer, the second TARF
takes the view of society in deciding which technologies should be added first.  This distinction
will be described further below.  In all three cases, the vehicle with the TARF with the most
negative value is applied first.

D.iv.a   Effective Cost TARF (TARF No. 1)
       The Effective Cost TARF (EffCosf) is defined as the cost of the technology (TechCost)
less the discounted fuel savings over a specified payback period of vehicle use. The Effective
Cost TARF was included in the OMEGA model,  since it is the equivalent of the technology
ranking process used in NHTSA's CAFE compliance Model. It allows a user to match this
aspect of the Volpe Model when modeling equivalent standards using both models, if this is
desired. Quantitatively, it is defined as follows:

                     EffCost = TechCost -FSx	CAFEFine

TechCost is the cost of technology t per vehicle, as input in the Technology file. Fuel
consumption  per mile (over the compliance test cycle used to determine compliance with the
input CO2 emission standards) before (FCt_i) and after technology addition (FCt) is calculated as
18 See Section III.H of the Draft Regulatory Impact Analysis to the recent EPA NPRM for the control of GHG emissions
from cars and light trucks for a discussion of technology costs at the manufacturer and consumer levels.


                                 FC   -
                                 1 ^--  —
                                  FC  =
                                         CD, x
CDU and CDt
              = the carbon density of the liquid fuel (in terms of grams carbon per gallon) before
              and after technology application.
              = the level of tailpipe emissions prior to the application of the technology being evaluated
              (i.e., after the application of technology t-1), and
              = the level of tailpipe emissions after application of technology t, without considering
              any cap on the level of the penetration of technology t.
44g CO2/12 g C = the mass ratio of CO2 to C, used in converting the carbon density of a fuel to
              an emitted mass of carbon dioxide.
       CC>2t-i is the actual level of CC>2 emissions from the particular vehicle which would occur
after the application of all the technologies prior to technology t, considering both the fact that:
1) some or all of these technology packages may already be present on this vehicle (i.e., the
TEBs), and 2) there may be caps on the application of one or more of these technology packages
which are less than 100%. This level is the appropriate "baseline" CC>2 level from which to
evaluate technology t since all previous technologies must be added to the vehicle before
technology t can be added.
       Please note, that the TARF equations are defined on a per vehicle basis. Consequently,
OMEGA does not factor in the potential cap  on the level of the penetration of technology t into
the TARF calculation.19  Because the calculation of CC>2TARF,t does not consider the impact of
any cap on technology penetration, this level of CC>2 emissions will differ from the CC>2 emission
level of the vehicle should this technology be selected for addition.  The equation for the latter
CC>2 emission level is described further below. In order to be consistent with the calculation of
CO2TARF,t, the technology cost (TechCosi) is  also determined without consideration of the
presence of the technology on the vehicle (via the value of CEB) and without consideration of
the cap on the penetration of the technology.   Thus, TechCost is simply the incremental cost of
the technology listed in the Technology file.
       With these premises, the formulae describing tailpipe CO2 emissions and refrigerant
emissions after the application of this technology package are as follows:
19 Amortized capital costs tend to be higher for technologies which are applicable to lower production volumes. However,
the capital investment of many technologies can be spread across more than one vehicle model. Thus, incorporating the
capital investment associated with technology into the TARF would not be a simple matter. If explicit consideration of
capital costs is added to the model's operation in the future, both the cap on application of a particular technology and the
sales volume of the vehicle model will likely be relevant and included in the revised TARF. The net result is that the cost of
each technology should represent that for the timeframe and expected production volume for each redesign cycle.

                                CO2TARF ,t =
       Please note that the TEB term is not included when calculating TARFS.  This is to
maintain consistency with the ranking process, which also does not include TEBS.
                                                           X GWPt_,

       The ratio of GWPs reflects the fact that the technology might change the refrigerant used and
affect the conversion of refrigerant mass emissions to CC>2 equivalent emissions.
       Fuel savings without consideration of the gap between on-road and certification fuel
economy (FS) is calculated as follows.  Vehicles can have up to two separate energy sources, a
liquid fuel (subscript "1" in the equation) and electricity (subscript "2" in the equation ), as
would be the case with plug in hybrids.20
                     FS =  y  [(fuelCost0 + elecCost0) — (fuelCostn + e/ecCostn)]
       Y             = cycle no * 5
       PP            = payback period [yrs]
       fuelCost0       = fuel cost with original technology
       elecCost0       = electricity cost with original technology
       fuelCostn       = fuel cost with new technology
       elecCostn       = electricity cost with new technology
       Where energy costs are:
                                   I Trr

                       fuelCost0 =  y
    I -Tff

         FP0[y + (cy - 1) x 5] x FC0 x VMTy x L   \
                                             1 T 1//V
EP0\y+ (cy - 1) x 5] x EC0 x VMTV x
20 For purposes of calculating TARFS, the CO2 credit values from the technology files are treated as both generating CO2
reductions and fuel savings.  This equivalency is required for two reasons. First, from the manufacturer's perspective, the
CO2 credit does provide real CO2 benefit towards their CO2 compliance goals. However, as will be seen in the next section,
providing CO2 benefit without increasing fuel savings in the TARF can provide perverse results, where the denominator is
increased, but the numerator of the TARF stays constant. Having the credit generate "fuel savings" in the TARF, is a work-
around for this issue.

                        fuelCostt =  V
                                 FPn\y + (cy - 1) x 5] x FCt x VMTy x
                                                                            1 +
       t, n
                        elecCostt =
                                 Epn\y + (cy - 1) x 5] x ECn x VMT  x
               = fuel (liquid) price [$/gal]
               = fuel (liquid) consumption [gpm]
               = electricity price [$/kWh]
               = electricity consumption [kWh/mi]
               = vehicle miles of travel in year y
               = discount rate for year y
               = current technology
               = original technology from tech-apply step (or baseline)
               = year index
       Annual fuel prices for both fuels (liquid & electricity) are used

       CAFEFine is the fine a manufacturer pays for failing to meet the CAFE target.  The equation for this is:
        CAFEFine  = FEE x
                             SFcls   \CAFEFCavc)    CAFEFCavq - SFcls X (CAFEFCt - CAFEFC0}\




Co ^arget

                      = CAFEFee [$/mpg]
                      = Sales fraction of vehicle in its class, for a given Manufacturer

                      =FC0 xCAFE_LFeqv
                        (CAFE Weighted Fuel Consumption for baseline technology [gpm])

                      = FCt xCAFE_LFeqv + ECt  x CAFE_ELeqv
                        (CAFE Weighted Fuel Consumption for current technology [gpm])

                      = Co2target x (12/44) / CDgas
                        (Manufacturer's CAFE Fuel Consumption at the beginning of redesign cycle [gpm])

                      = manufacturer' s CO2 target [g/mi]
                      = carbon density of gasoline [g/gal]
                      = CAFE equivalence factor for liquid fuel [gal/gal]
                      = CAFE equivalence factor for electricity [gal/kWh]

                      = fuel (liquid) consumption [gpm]
                      = current technology
                      = original technology from tech-apply step (or baseline)
       A positive value for this TARF indicates that the consumer might view the vehicle less
desirably with the technology than without.  A negative value for this TARF indicates that the

consumer might view the vehicle more desirably with the technology than without.21 This TARF
assumes that manufacturers will incrementally add technologies which increase this desirability
to the maximum extent possible.
D.iv.b    Cost Effectiveness-Society TARF (TARF No. 2)
The Cost Effectiveness-Society TARF (CostEffSoc) is identical to the Cost Effectiveness-Manufacturer
TARF (TARF 3) with one exception. The Cost Effectiveness-Society TARF divides the Effective Cost
TARF by the discounted lifetime CC>2 emission reduction instead of the lifetime CC>2 emission
reduction. The discount rate used would be for the value of CC>2 emission reductions over time. The
rationale for discounting is simply that society is presumed to value CC>2 reductions in this way.  Also,
in this case, we would recommend that the user increase the payback period for fuel savings to cover the
life of the vehicle instead of the much shorter period of time often assumed to be considered by
consumers when purchasing a vehicle.  Society values fuel savings over the life of the vehicle and not
just for the first few years of use. The user could also estimate technology costs from a societal point of
view if this produced different cost estimates than those used above.  The Cost Effectiveness- Society
TARF can be described mathematically  as follows:

                                                        (1 - Gap)
                            CostEffSOC = EffCost  x •

       Where EffCost is defined using the equation in TARFi

Where CO^Saving is:
                                C02Saving = dC02x sumVMT

dCO2         = delta CO2 as calculated in TARF3
sumVMT      = discounted present value of lifetime VMT using the VMT schedules from the reference input
Where sum VMT:
                              sumVMT =
  >   VMTy x —
                                                        (DRy - IR}
       VMTy        = VMT in year y
       n            = vehicle lifetime
       DRy          = discount rate [%] for year y
       IR           = CO2 value increase rate [%1
D.iv.c    Cost Effectiveness-Manufacturer TARF (TARF No. 3)
    The Cost Effectiveness-Manufacturer TARF represents the degree to which consumer desirability
might change with the technology on a per ton of CC>2 controlled basis. The Effective Cost TARF
21 Of course, the calculated TARF values are dependent upon the assumed views of consumer valuation of fuel savings, the
payback period assumed, the discounting over that payback period, and other factors.


ignores the degree to which the technology moves the manufacturer closer to compliance. Thus, a fairly
expensive technology which produces a large fuel savings might have a fairly large negative Effective
Cost TARF.  The sequence of several less expensive technologies with smaller fuel savings might all
have less negative Effective Cost TARFs and so would not be chosen over the more expensive
technology. However, in total, the sequence of smaller steps might achieve the same overall emission
reduction as the more expensive technology at  a lower cost. The Cost Effectiveness-Manufacturer
TARF would divide these less expensive technologies by smaller CO2 emission reductions, thereby
imrpoving their TARF values relative to the more expensive technology.  This would allow the model to
choose the sequence of less expensive technologies over the single expensive technology if their
increase in effective cost per ton of CO2 reduced was higher.

   The Cost Effectiveness-Manufacturer TARF (CostEfjManuf) incorporates all  of the terms included
in the effective cost TARF, but also accounts for the degree that the technology brings the manufacturer
closer to its CO2 standard. It can be described  simply as the Effective Cost TARF divided by the mass
of the CO2 equivalent emission reduction over  the life of the vehicle due to addition of the technology.
The Cost Effectiveness-Manufacturer TARF can be described mathematically as  follows:
                           CostEffManuf = EffCost / C02Saving

       Where EffCost is defined using the equation in TARFi

       Where COJSaving is:
                               C02Saving = dC02 x  LifeVMT

lifeVMT      = lifetime VMT for a vehicle

Where dCO2 is:

        dC02 = ((tpC02o - tpC02n) + (rfC02o - rfC02n) + (grC02o - grC02ri) + (crC02o - crC02ri))

tpCO2        = tailpipe CO2
rfCO2        = refrigerant CO2
grCO2        = grid CO2
crCO2        = CO2 credit
o            = original technology from tech-apply step (or baseline)
n            = new Technology
Where tpCO2n is:
                               tpC02n = tpC02o  x (1 - AIE*)
       tpCO2o             = original technology from tech-apply step (or baseline)
       AIE          = average incremental effectiveness of the new technology

Where rfCO2n is:
                           rfC02n = rfC02o x refrigEff  x GWP
       rfCO2o       = original refrigerant from tech-apply step (or baseline)
       refrigEff      = refrigerant effectiveness
       GWP         = global warming potentials (varies by refrigerant)
Where grCO2n is:
                                grC02n = kWhMi x CD x Cr
       kWhMi      = kilo-watt hours per mile of travel
       CD          = carbon density (gC/kWh)
       Cr           = CO2/C ratio for electricity = 44.0 / 12.0
D.v   Applying Technology - Calculations
   As described above, for any individual vehicle, technologies are applied in the order in which they
are listed in the Technology file for the relevant vehicle type.  Thus, at the beginning of the evaluation
for a manufacturer, the only technology which is available to each vehicle is technology package 1 for
its vehicle type. Thus, the OMEGA model compares the TARF equations for applying technology
package 1 to all of the vehicles in that manufacturer's fleet and chooses the vehicle with the most
negative TARF. The model then applies technology package 1 to that vehicle and reduces its GHG
emission level.  The formulae for calculating the new tailpipe and refrigerant CO2 emission levels after
application of the technology are shown below:

                                            1 - AIE x TEB
                                         1 - AIE x TEB        GWPt_,
       Here, both the presence of the technology in the baseline configuration of this vehicle and the
cap on technology application are considered. The terms shown in the denominators of both equations
are included due to the definition of the incremental effectiveness of technology. When calculating the
effectiveness of a technology, the user should assume that the vehicle to which this technology is being
applied has all of the previous technology packages applied, but none of the additional technologies
included in the technology of interest.  Thus, the incremental effectiveness of hybridization over an
advanced gasoline engine and transmission package might be 10%. If a specific vehicle or more likely
group of vehicles already reflected half of this 10% hybrid benefit, it would not be correct to simply
reduce the effectiveness of the hybrid package to half of the 10% (i.e., 5%) and multiply base emissions
by 0.95. It is more accurate to remove the effect of the partial hybridization by dividing by 100% minus

5% (i.e., 0.95) and then multiplying by 100% minus 10% (i.e., 0.9). The net effect in this case is to
multiply base emissions by 0.9474, which produces a slightly greater emission reduction than
multiplying by 0.95.  For modest technologies, the difference is small.  However, for technologies which
might reduce emissions by 30% or more, the difference in methodology becomes more significant.  See
the section discussing calculation of TEB values.
       The model also adds the cost to the manufacturer's running total cost and recalculates the
manufacturer's corporate average emission level.  The formulae used to perform these two calculations
are as follows:
                        Equation 4 - calculation of compliance COi value

                  C02 = Techpack C02 +  Grid C02 + Refrigerant C02 + OEB

                              Equation 5 - Total Cost Calculations

             TotalCostt = TotalCostt -1 + TechCost x (1 - CEB) x Salesv

                          Equation 6 - Fleet Average COi calculations

                            _(Sale»v xLifeVMTv xTCO2t]
             FleetTCO, t  = ^
                                 £ SalesvxLifeVMTv

             v = a vehicle produced by the manufacturer,
             V = the total number of vehicles (cars, trucks, or both) produced by that manufacturer,
             TCO2t= the emissions of the vehicle after application of the technology
             LifeVMTv = the lifetime VMT of the class of vehicle to which vehicle v belongs. Lifetime VMT is statutory
             VMT as given in the scenario file.

       As mentioned above, compliance with the CC>2 standards is performed on a sales and VMT
weighted basis, for ease in trading between cars and trucks under the provisions of the proposed CC>2
       At this point, the model checks to see  if the manufacturer is in compliance with its CC>2  emission
standard. If so, it stops and moves on to the next manufacturer. If not, the model then evaluates the
TARF for the next technology package for the vehicle which just received the last technology package.
The model calculates the TARF for this  package and compares it to the TARF equations for the
technology packages 1 for all of the other vehicles. This sequence of adding one technology package to
one vehicle,  reevaluating compliance, and so  on, continues until either the manufacturer complies or
until all the available technologies have  been  applied. When either of these two endpoints is reached,
the model moves to evaluating the next manufacturer or the next redesign cycle.

       The model keeps track of a number of intermediate values throughout the process of adding
technology.  These include the order of technology application, the TARF equations for each
combination of vehicle and technology, the cumulative cost per vehicle, etc. for use in producing the
various output files.

V Output Files

A Summary of Outputs
       The model places each scenario output in a separate subfolder.  The name of each of these files
includes the name of the scenario listed in Column B of the Scenarios tab of the Scenario file.  Each of
these output files and their purpose are summarized in the table below. The main output files are also
discussed in greater detail later in this section.

                             Table 8 - Summary of Model Outputs
Summary Description
Main Output Files
Step by step details of the model operation including tech
pack application, cost, CO2, and electricity.
Summary file that includes manufacturer specific details on
tech pack application, cost, CO2 and electricity.
Details on the sales of vehicles by tech pack at the
completion of the scenario. Useful in tracking technology
Summary of final cost, emissions, and electricity
consumption by vehicle
Step by step details of cost by technology pack application,
summarized by vehicle.
Diagnostic Output Files
X-Market-Platform_Mfr. log
Repeats data that is contained in X.xls.
Summarized Manufacturer-Fleet results by Fuel type for
every cycle.
Data for a Manufacturer/Platform version of the Market.xls
Summarizes the TARF of every technology package vehicle
Final Sales Fraction for each Tech Pack on every vehicle
Reports fuel-level summaries for every vehicle.
Lists the sales fraction and CC>2 emissions for each fuel type
without all of the extra detail in CO2.log
Scenario Comparison Table
Summary table comparing manufacturer-level results across
all scenarios in the scenario.xls file.
              *X is substituted here for scenario name.
A.i Log of Technology Application Steps - Text Format

       This file depicts the process of technology application to each manufacturer's fleet and shows the
progress being made towards compliance with the  specified standards. Please note that the log has
several different formats which depend upon the user options selected.
       The beginning of the file lists basic information about the model user, the version of OMEGA
being used and the input files. It then presents the  technology application information by redesign cycle

and within each redesign cycle by manufacturer and within each manufacturer by vehicle class (i.e., cars
first and then trucks). If a combined car-truck standard is being evaluated, then only one set of
technology application steps is presented which combines both types of vehicles. At the beginning of
each redesign cycle, the file describes the standard or standards being evaluated. For universal
standards, this means the standard itself. For footprint-based standards, the four coefficients described
in the input file are listed. The file then begins a sequence of sections which apply to a single
manufacturer and single vehicle class, as shown below.
       The first line lists the manufacturer, its starting CO2 emission level, its CO2 target or standard for
this scenario and the vehicle class (C for car or combine, and T for Truck).  The starting CO2 emission
level is simply the base CO2 emission level of each vehicle weighted by vehicle sales in this redesign
cycle. The CO2 standard is  either the universal standard listed in the Scenario file, or the foot-print
based CO2 standard applied to that manufacturer's vehicles.
       The following lines list the step-by-step application of technology packages.  Going through the
columns, step is simply a numerical counter following by a hyphen. Index identifies the vehicle
receiving the technology or  package and refers to the vehicle number in the Market file. Type shows the
vehicle type for this vehicle. The first column labeled CO2 pipe shows  the tailpipe CO2 emissions prior
to the application of technology.  For the application of technology package 1, this value is the base CO2
emission level shown in the Market file. For subsequent packages, it is the CO2 emission level resulting
from the application of the previous technology package. The first column labeled CO2tot stands for
total CO2 equivalent emissions and is analogous to CO2pipe.  CO2tot equals CO2pipe plus refrigerant
emissions in terms  of equivalent CO2 emissions.  Again, this is either the base refrigerant emission level
or the refrigerant emission level after application of the previous technology package. TP is the
technology package added in this step. TARF is the value of the TARF for this package applied to this
       The second column labeled CO2pipe shows the tailpipe CO2 emissions after the application of
the technology package. This value considers the efficiency of the technology package, the cap on the
percentage of sales which can receive the package, as well as the percentage of that package already
present on the vehicle (i.e., the TEB). The second column labeled CO2tot shows this value plus the level
of refrigerant emissions existing after any control which have been applied to these.
       CO2avg represents the corporate average  CO2 emission level for this manufacturer and vehicle
class combination.  It will generally decrease after each step of technology application and show
progress towards the manufacturer's standard.  Occasionally, this value will remain constant. This could
be due to round off. Or, the vehicle receiving the technology may have already been completely
equipped with that  technology. In this case, the model simply holds both emissions and costs constant
when it applies the technology.
       kWhavg represents the avg kwh/mile of electricity consumed by the fleet. This includes both the
baseline electricity and the additional electricity consumed by plug-in vehicles.  To be clear, this is the
average electricity consumed over all miles, not simply the electrically  powered miles.
       TotCost represents the cumulative cost in dollars per model year of the technology added up to
that point. The increment in this value from step to step is the product of three terms: 1) the cost of the
technology package being added, 2) the sales of the vehicle in this redesign cycle, and 3) the cap minus
the percentage of that package already present in terms of cost (i.e., CEB) or zero, whichever is higher.

       The very last step of technology addition for each manufacturer and vehicle class combination
may be shown twice, with "OC" following the second listing. In this case, this step does not represent
the addition of technology, but a backwards interpolation between the previous two steps of technology
addition which eliminates the over-compliance which usually results from adding discrete technologies
to specific vehicles. The presence of this interpolation step depends on the value of the threshold cost
input specified in the Scenario file and the cost of the last technology package, as discussed above under
Input files.
       This file can be very useful both for diagnostic and analytical purposes. The presence of the
TARF values in the file can be useful in identifying technology packages which have relative poor cost
effectiveness followed by packages with better cost effectiveness.  In general, the list of TARF values
should start out negative and become more positive with continued technology application.  The only
exception to this should be when the same vehicle receives technology in sequential steps.  In this case,
the TARF may become more negative in a successive step, since the OMEGA model could not consider
the more cost effective technology until it applied the previous technology to that vehicle.  When the
user observes a series  of technologies being applied to the same vehicle in successive modeling steps,
this indicates that separating these technology packages provides little practical purpose in the model
run. Worse, the relatively poor cost effectiveness of the first of the series of technology packages may
be causing the model to add technology to other vehicles which have worse cost effectiveness than the
combination of packages for the vehicle in question.  This sequence of technology package additions to
the same vehicle could also be an indication that the order of technologies might not be appropriate (or
there might be an error in one of the technology input values).
       From  an economic perspective, this file presents the increase in cumulative cost for each
manufacturer as its average CO2 level is reduced. If a sufficiently stringent CO2  standard (e.g., 50 g/mi)
is input to the model, manufacturers will not comply  with the specified standard.  However, the model
will apply all of the technology available to each vehicle. Thus, the file represents a complete
relationship between cost and emissions for each manufacturer.  By reading the information contained  in
this file into a spreadsheet or other program capable of analysis, the user can quickly determine the cost
for a wide range  of CC>2  standards without rerunning  OMEGA each time.  Since the social  costs and
benefits of CO2 standards tend to be relatively linear  with CO2 level, it is possible to represent these
costs and benefits with simple linear equations.  The  user can then easily combine the relationship
between manufacturer's emission levels and technology costs with social costs and benefits at an
industry-wide level. It would then be possible to solve for the industry-wide emission levels which
maximized net societal benefits, produced zero net societal benefit or met some other economic criteria.
The following table depicts a portion of the log file from an OMEGA model run.

CYCLE 1 Target Coeffs: (A=204.0, B=275.0, C=41.0, D=56.0) , (A=246.0, B=347.0, C=41.0, D=66.0)
Industry Baseline CO2avg = 287.35, Target CO2avg = 223.31, Fleet Type = 'C'

































       The first five technologies added to cars in this model run were all the first technology listed for
each vehicle type (TP = 1). The same is true for steps 6-32 (not shown). Step 33 also adds the first
technology available to vehicle 28. Step 34 adds the second technology available to vehicle 14, while
step 35 adds the third technology available to this vehicle. This sequence demonstrates how the model
evaluates the next available technology for each vehicle when deciding where to add technology next.
In this case, technology number 3 for vehicle 14 was preferred over any of the second technologies for
all the other vehicles. Examination of the TARF values explains why this was the case.
       The TARF for the technology number 2 for vehicle 14 was-0.0904, while that for technology 3
was -0.0973.  Thus, if-0.0904 was the lowest TARF for step 34, an even lower TARF would have to be
the lowest TARF in step  35. When it is observed that the model adds two technologies in a row to the
same vehicle, the user should question whether the first technology should be modified or the two
technologies should be combined. The reason for this is that, unless step 34 is the very last technology
added to enable compliance, the model will never simply add technology 2 to vehicle 14. Vehicle 14
will always receive either technology 1  or 3. The primary concern is that a relatively high TARF value
for technology package 2 could inappropriately inhibit the application of the combination of technology
packages 2 and 3 to this vehicle relative to the application of technologies to other vehicles.
       In this case, the TARFs for technologies 2 and 3 are quite close. Thus, combining them into one
technology package would not produce substantively different results. The same sequence occurs with

vehicle 7 later in the run (steps 54 and 55 in the above table).  In this latter case, the difference between
the TARFs is much greater. Combining the two steps may have resulted in the earlier application of the
two technologies than applying them separately.
       The final three lines of the above table illustrate the interpolation that occurs in the compliance
determination if the cost of the last technology added exceeds the "threshold" input in the Scenario file.
After step 93, the manufacturer's corporate average CC>2 level was 221.06 g/mi, while the standard was
223.31 g/mi.  The model adjusted the manufacturer's corporate average CC>2 level to 223.31 g/mi by
only applying technology 2 to a portion of the sales of vehicle 28.  This reduced the overall cost of
compliance from $12.8 billion to $12.0 billion.  Mathematically, this is equivalent to interpolating
between the average emissions (CC^avg) and cumulative costs of steps 92 and 93.

A.ii   Summary of Cost and Emissions - Excel Format
       This file presents a summary of vehicle and manufacturer costs and  emission levels resulting
from a model run.  The file contains summary information about the run, the model user, the version of
OMEGA being used and the values input on the first tab of the Scenario file.  The file then lists five
types of information by manufacturer and vehicle class: 1) vehicle sales, 2) total costs, 3) cost per
vehicle, 4) electricity consumption, and 5) emission level per vehicle.
       The file continues by presenting the cost of the technology added to each vehicle and the last
technology package added to each vehicle.  The last section of the file presents the series of technologies
added to each vehicle. For each technology, the file shows the step (for each manufacturer-vehicle class
combination) in which the technology was added, the vehicle's emission levels before and after this
technology and the incremental total cost of adding this technology.

A.iii  Summary of Technology Pack Distribution - Text format
       This file lists the final distribution of technology packs applied to each vehicle, and takes the
form of a matrix of vehicles and technology packages, with the sales presented within the matrix.  This
is useful information when calculating technology penetrations.  As an example, if 40% of vehicle 7
sales receive technology package 6, then 40% of vehicle 7 sales have the technologies in package 6.22

A.iv  VH1 / Final summary of Vehicle Attributes- Excel Format
       The "VH1" file lists each vehicle, the final technology package applied to that vehicle, the final
cost, and various attributes about the vehicle. Most of these attributes are carried through from the
market data file, however some such as the CC>2 emission rate and electricity consumption are modified
by the model. In many senses, this file is a lower level corollary of the Excel summary file described in
IV.B, and is useful for determining the average  cost increase for a class of vehicles.

A.vVH2 / Stepwise listing of Vehicle Attributes—Excel Format
       The VH2 file provides the cost and CO2 emissions of each vehicle after each technology package
is applied.  Similar to the VH1  file, it is organized by vehicle.
  In rulemaking analyses, EPA typically uses a more detailed methodology to calculate technology penetrations. This
method is documented in Appendix F of the Interim Join Technical Assessment Report.

VI Running the Model

       Installing the model should add an "OMEGA" icon to the user's desktop. OMEGA is started by
double clicking on this icon.  A graphic user interface (GUI) should appear in a few seconds. The
current GUI is simple and relies on the fact that all of the information needed to run the model is
contained in the input files.
       Once the GUI appears, the first step is for the user to select the desired scenario file.  Click on
"File" in the menu bar and choose "Open" from the drop down menu. A window will  open which
displays the files contained in the model's input directory.  Double click on the desired Scenario file and
the model will load the data contained in this file and that in the Market, Technology, Fuel and
Reference files specified in the Scenario file.  The GUI will update and display portions of the Scenario,
Market and Technology input files.  The GUI allows the user to partially navigate through these three
files in order to confirm that the correct input files were specified in the Scenario file.  When everything
is loaded, the car icon will  turn green.
       By default, OMEGA saves output files in the Output subdirectory where the executable is
installed. However, the user can specify an alternative output directory by selecting File/Output Files
To...  From there, browse to, and select, the desired output directory. As a reminder, the selected output
directory name will  display in the GUI.
       In addition to the standard results, the model can generate a number of outputs which the user
may select prior to running the model.  Click on Log to see a drop-down list  of selectable  outputs. The
contents of these outputs are described in Section 4.  The user selections are "sticky", and will remain
selected (or not) between OMEGA runs.
       The user can now run the cases included in the Scenario file by clicking on the  green car button.
       As the model is running, the lower left hand corner of the GUI will indicate progress
(e.g., processing Scenario 1 of 5, processing Scenario 2 of 5, etc.).  If the Scenario file  only
specifies one case to be run, when the model is done with this case, the log (text) file showing
the sequence of technology addition by manufacturer and by redesign cycle appears. This file, as
all of the output files, is automatically named with the case name from the Scenario file, with the
file type "log"  added.  If more than one case is run, the indicator in the lower left hand corner
will simply say "Done" and no log files are displayed.