EPA Will  Propose Historic Greenhouse
Gas Emissions Standards for Light-
Duty Vehicles
Overview
On May 19, 2009, President Obama announced a historic national policy that will
reduce greenhouse gas (GHG) emissions and improve fuel economy for all new
cars and trucks sold in the United States. The President's policy recognizes the critically
important need for our country to address global climate change and reduce oil
consumption. The U.S. Environmental Protection Agency (EPA) will coordinate
with the Department of Transportation (DOT) to propose standards for passenger
cars, light-duty trucks, and medium-duty passenger vehicles, covering model years
2012 through 2016. Together, these vehicle categories are responsible for almost
60 percent of all U.S. transportation-related greenhouse gas emissions. (Transporta-
tion-related emissions comprise approximately 30 percent of total U.S. greenhouse
gas emissions.) The President's national policy represents a historic collaboration
between the EPA, DOT, the world's largest automakers, the United Auto Workers,
environmental groups, the State of California, and other states,

EPA will propose to set the first ever federal emissions standards for greenhouse gases
using its authority under the Clean Air Act (CAA). DOT's National Highway Traffic
Safety Administration (NHTSA) will propose related fuel economy standards under
the Energy Policy and Conservation Act (EPCA). The intent of this coordinated
program is to allow auto manufacturers to build a single light-duty national fleet that
provides significant reductions in both greenhouse gases and oil consumption.

According to EPA's preliminary analysis, the standards under consideration are pro-
jected to reduce GHGs by approximately 900 million metric tons and save 1.8 billion
barrels of oil over the life of the program. The program would reduce GHG emis-
sions from the U.S. light-duty fleet by 19 percent by 2030. EPA estimates an aver-
age increased cost of about $1,300 per vehicle in 2016 compared to today's vehicles.
However, the typical driver would save enough in lower fuel costs over the first three
United States
Environmental Protection
Agency
                                   Office of Transportation and Air Quality
                                                      EPA-420-F-09-028
                                                             May 2009

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years to offset the higher vehicle cost. Over the life of a vehicle, drivers would save about $2,800
through the fuel savings that come from controlling GHG emissions.

This fact sheet contains an overview of the EPA and DOT "Notice of Upcoming Joint Rule-
making to Establish Vehicle GHG Emissions and CAFE Standards."
National Greenhouse Gas Emission Standards for Light-Duty Vehicles
EPA expects to propose a national carbon dioxide (CO2) vehicle emissions standard under
section 202 (a) of the Clean Air Act. EPA currently is considering proposing standards that
would, if made final, achieve on average 250 grams/mile of CO2 in model year 2016. The stan-
dards would begin with the 2012 model year. NHTSA expects to propose appropriate related
Corporate Average Fuel Economy (CAFE) standards under EPCA,

Based on the agencies'  technical work over the last several years, there is a wide range of
technologies available for auto manufacturers to consider in upgrading vehicles to reduce
GHG emissions and improve fuel economy. These include improvements to the engines such as
use of gasoline direct injection and downsized engines that use turbochargers to provide perfor-
mance similar to that of larger engines, the use of advanced transmissions, increased use of start-
stop technology, improvements in tire performance, increased use of hybrid and other advanced
technologies, and the initial commercialization of electric vehicles and plug-in hybrids. In addi-
tion, it is expected that most companies would apply some air conditioning improvements to reduce
GHG emissions. Although many of these technologies are available today, the emissions reductions
and fuel economy improvements under consideration for the proposal would be expected to
involve more widespread use of these technologies across the fleet. The proposal is expected to
allow manufacturers the multi-year time period needed to incorporate GHG control technolo-
gies during the vehicle redesign process consistent with their normal business practice.
Program Design and Implementation
EPA intends to propose attribute-based standards, based on vehicle footprint, for both passenger
cars and light-duty trucks.1 The vehicle footprint is essentially the area enclosed by the points at
which the wheels meet the ground. Generally, vehicles with larger footprints would be assigned
CO2 levels that are somewhat higher than vehicles with smaller footprints, based on where they
fall along "footprint curves." Manufacturers would use these assigned values to calculate their
separate fleet average standards for cars and light-duty trucks. Each manufacturer would have
unique standards for cars and light-duty trucks that are calculated based on the footprint curve
values and final model year sales of each of the vehicle models in its fleet,

EPA expects to propose standards that would provide compliance flexibility to manufactur-
ers, especially in the early years of the program. This flexibility would be expected to provide

 This approach would be similar to that used by NHTSA for its Reformed CAFE light-truck standards, which was
also extended to passenger cars in the 2011 CAFE standards.

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sufficient lead time to make necessary technological improvements, and reduce the overall cost
of the program without compromising overall environmental objectives. EPA is considering
several flexibility provisions including:

       Credit carry-back, credit carry-forward, credit transfers, and credit trading
       Credits for reducing GHG emissions related to air conditioning system improvements
       Flex-fuel (FFV) and alternative fuel vehicle credits
       Temporary lead-time allowance alternative standards for manufacturers with total U.S.
       vehicle sales below a specified cut-off
       Early credits for achieving emissions reductions in the  2009-2011 model years, based on
       a national level established by EPA equivalent to those of the California standards
       Early credits for over-complying with CAFE in 2009-2011 model years for vehicles sold
       in states outside of the California and CAA section 177 states (without use of
       FFV credits)
       Additional credits for electric vehicles and plug-in hybrids
       Possible credits for employing technologies that achieve GHG reductions that are not
       reflected on current test procedures. Examples of such technologies could include solar
       panels on hybrids, adaptive cruise control, and active aerodynamics.
Compliance
EPA also intends to propose a compliance program that recognizes and replicates as closely as
possible the compliance protocols associated with the existing CAA Tier 2 vehicle emission
standards, and with CAFE standards. The certification, testing, reporting, and associated com-
pliance activities could closely track current practice and thus be familiar to manufacturers. EPA
already oversees testing, collects and processes test data,  and performs calculations to determine
compliance with both CAFE and CAA standards. In a coordinated approach, compliance
mechanisms for both programs could be consistent and non-duplicative.
Background
Currently, one federal agency is responsible for a standard that focuses on GHG emissions, an-
other federal agency is responsible for a standard that focuses on fuel economy, and several state
agencies are working on standards that address similar issues. The intended proposed program
would establish a consistent, harmonized, and streamlined approach to delivering environmen-
tal and energy benefits, cost savings, and administrative efficiencies,

EPA has been working on responses consistent with the decision of the Supreme Court in Mas-
sachusetts v. EPA and EPA's recent proposal to find that emissions of GHGs from new motor
vehicles and motor vehicle engines cause or contribute to air pollution that may reasonably be
anticipated to endanger public health and welfare.2
274 Fed. Reg. 18886; April 24, 2009.

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Since the 1970s, NHTSA has promulgated CAFE standards for light-duty vehicles to address
our country's need to reduce oil consumption. In 2008, NHTSA proposed CAFE standards for
model years (MY) 2011 through 2015. However, responding to a Presidential Memorandum of
January 26, 2009, NHTSA issued CAFE standards limited to MY 2011,3 and has been compre-
hensively reviewing how it sets CAFE standards in the context of preparing to propose CAFE
standards for MY 2012 and later model years.

In addition, in 2005 California adopted GHG emissions standards for new light-duty vehicles.
Thirteen states and the District of Columbia to date, comprising approximately 40 percent of
the light-duty vehicle market, have adopted California's GHG emission standards. In 2008,
EPA denied a request by California for a waiver of preemption under the CAA for its GHG
emissions standards. However, consistent with another Presidential Memorandum of January 26,
2009, EPA is currently reconsidering the prior denial of California's request.4 California and the
states that have adopted California's standards are planning to enforce these standards if EPA
grants California's request for a waiver of preemption.
Proposed Rulemaking Process
EPA and NHTSA are developing a joint proposed rulemaking, which will include full details on
the proposed program and supporting analyses, including the costs and benefits of the proposal
and its effects on the economy, auto manufacturers, and consumers. After the proposed rules are
published in the Federal Register, there will be an opportunity for public comment and public
hearings. EPA currently anticipates release of these proposals in the late Summer of 2009,

For More Information
You can access the EPA and DOT "Notice of Upcoming Joint  Rulemaking to Establish Vehicle
GHG Emissions and CAFE Standards" at EPA's web site at:

www.epa.gov/otaq/climate/regulations.htm

You can access The White House press release on President Obama's National Fuel Efficiency
Policy at:

www.whitehouse.gov/the_press_office/President-Obama-Announces-National-Fuel-Efficiency-
Policy/

For additional information, please contact EPA's Office of Transportation and Air Quality,
Assessment and Standards Division, at asdinfo@epa.gov, or (734) 214-4636.
374 Fed. Reg. 14196; March 30, 2009.
474 Fed. Reg. 7040; February 12, 2009.

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