EPA Decision Document:
Off-Cycle Credits for Volkswagen Group
of America, Inc* for High-Efficiency
Alternators
United Stales
Environmental Prutuclion
Agency

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EPA Decision Document:
Off-Cycle Credits for Volkswagen Group
of America, Inc* for High-Efficiency
Alternators
Compliance Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
x=/EPA
United States	EPA-420-R-21-007
Environmental rrulocHon	.. 		
Agency	March 2021

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EPA Decision Document: Off-Cycle Credits for
Volkswagen Group of America, Inc. for High-
Efficiency Alternators
Introduction
EPA's light-duty vehicle greenhouse gas (GHG) rules include opportunities for manufacturers to generate
C02 credits for technologies that provide C02 reductions not captured by the 2-cycle emissions test.
There are three pathways by which manufacturers can generate off-cycle credits: (1) a pre-determined
"menu" of technologies and credits that is available for 2014 and later model years, (2) a testing-based
option, and (3) an alternative methodology that includes opportunity for public comment. These are
described in more detail in Section II.
Pursuant to those rules, Volkswagen Group of America ("VW") submitted an application requesting off-
cycle credits for implementation of a High-Efficiency Alternators using new technology to reduce the
overall load on the engine yet continue to meet the electrical demands of the vehicle systems, resulting
in lower fuel consumption and lower C02 emissions.
EPA published a notice in the Federal Register on October 23, 2020 announcing a 30-day public
comment period for this application.1 EPA received and has reviewed the comments regarding the
methodologies presented for determining the credits sought by VW and is hereby approving the
technologies, methodologies for determining credits, and credit levels as described in VW's application
and in the Federal Register.
Section II of this document provides background on EPA's off-cycle credits program. Section III provides
EPA's decision. This Decision Document applies to the application referenced herein. Future VW
requests for credits for implementations of the same technology, same methodology and similar
analysis in future model years for the same or new models may be considered, at EPA discretion,
without additional public notice or comment periods. Decision Documents describing the approvals of
any such subsequent credit requests will be created and made available publicly as these approvals are
granted.
EPA's Off-cycle Credits Program
EPA's light-duty vehicle greenhouse gas (GHG) program provides three pathways by which a
manufacturer may accrue off-cycle carbon dioxide (C02) credits for those off-cycle technologies that
1 85 FR 67535, October 23, 2020.
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achieve C02 reductions in the real world but where those reductions are not adequately captured on the
test procedure used to determine compliance with the C02 standards. The first is a predetermined list of
credit values for specific off-cycle technologies that may be used beginning in model year 2014.2 This
pathway allows manufacturers to use conservative credit values established by EPA for a wide range of
technologies, with minimal data submittal or testing requirements. In cases where additional laboratory
testing can demonstrate emission benefits of an off-cycle technology, a second pathway allows
manufacturers to use a broader array of emission tests (known as "5-cycle" testing because the
methodology uses five different testing procedures) to demonstrate and justify off-cycle C02 credits.3
The additional emission tests allow emission benefits to be demonstrated over some elements of real-
world driving not captured by the GHG compliance tests, including high speeds, hard accelerations, and
cold temperatures. Credits determined according to this methodology do not undergo additional public
review. The third and last pathway allows manufacturers to seek EPA approval to use an alternative
methodology for determining the off-cycle C02 credits.4 This option is only available if the benefit of the
off-cycle technology cannot be adequately demonstrated using the 5-cycle methodology. Manufacturers
may also use this option to demonstrate reductions that exceed those available via use of the
predetermined list.
Under the regulations, a manufacturer seeking to demonstrate off-cycle credits with an alternative
methodology (i.e., under the third pathway described above) must describe a methodology that meets
the following criteria:
	Use modeling, on-road testing, on-road data collection, or other approved analytical or
engineering methods;
	Be robust, verifiable, and capable of demonstrating the real-world emissions benefit with strong
statistical significance;
	Result in a demonstration of baseline and controlled emissions over a wide range of driving
conditions and number of vehicles such that issues of data uncertainty are minimized;
	Result in data on a model type basis unless the manufacturer demonstrates that another basis is
appropriate and adequate.
Further, the regulations specify the following requirements regarding an application for off-cycle C02
credits:
	A manufacturer requesting off-cycle credits must develop a methodology for demonstrating and
determining the benefit of the off-cycle technology and carry out any necessary testing and
analysis required to support that methodology.
2	See 40 CFR 86.1869-12(b).
3	See 40 CFR 86.1869-12(c).
4	See 40 CFR 86.1869-12(d).
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	A manufacturer requesting off-cycle credits must conduct testing and/or prepare engineering
analyses that demonstrate the in-use durability of the technology for the full useful life of the
vehicle.
	The application must contain a detailed description of the off-cycle technology and how it
functions to reduce C02 emissions under conditions not represented on the compliance tests.
	The application must contain a list of the vehicle model(s) which will be equipped with the
technology.
	The application must contain a detailed description of the test vehicles selected and an
engineering analysis that supports the selection of those vehicles for testing.
	The application must contain all testing and/or simulation data required under the regulations,
plus any other data the manufacturer has considered in the analysis.
Finally, the alternative methodology must be approved by EPA prior to the manufacturer using it to
generate credits. As part of the review process defined by regulation, the alternative methodology
submitted to EPA for consideration must be made available for public comment.5 EPA will consider
public comments as part of its final decision to approve or deny the request for off-cycle credits.
Although these credits are requested under regulatory provisions that don't explicitly require
limitations, or caps, on credit values, EPA is stipulating here that credits for technologies for which there
is a regulatory cap must be held to the applicable regulatory cap, if such credits are approved by EPA.
For example, for reasons described in the implementing rulemaking documents and analyses, EPA
established caps on thermal technology credits of 3.0 grams/mile for cars and 4.3 grams/mile for trucks.
The rationale for these caps is applicable regardless of the off-cycle pathway being used to achieve such
credits. EPA also established caps on technologies that improve the efficiency of air conditioning
systems (5 grams/mile for cars and 7.2 grams per mile for trucks). Thus, credits approved in this Decision
Document are being approved only to the extent that the regulatory caps on credits for certain
technologies or categories of technologies are not exceeded.
UM decision on Off-cycle Credit Application
High-Efficiency Alternators
VW requested GHG credits for the use of High efficiency alternators to reduce the overall load on the
engine resulting in lower fuel consumption and lower C02 emissions as compared to that of
conventional alternators, for model years 2016, 2017, 2018 and 2019 model years. EPA has previously
approved credits for high-efficiency alternators using this methodology for Ford Motor Company,
General Motors Corporation, Fiat Chrysler Automobiles, Hyundai, Kia, and Toyota Motor Company.
Details of the testing and analysis can be found in the manufacturer's applications. The VW application
describes VW's implementation and provided test data and analysis to support and quantify the off-
5 See 40 CFR 86.1869-12(d)(2).
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cycle credits requested. EPA reviewed the application for completeness and made it available for public
review and comment as required by the regulations.
EPA received limited public comments on the VW application and has considered those in the context of
the regulatory language and intent. EPA has evaluated the application and finds that the methodologies
described therein are sound and appropriate. Therefore, EPA is approving the credits requested by VW
for the 2016 and later model years and models as described in the application. All information necessary
to determine the total Megagrams of credits must be included in the reporting to EPA as appropriate,
and the total Megagrams for each fleet and model year should be included in a summary of credit
averaging, banking, and trading as soon as practicable.
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