

[Federal Register: March 30, 2006 (Volume 71, Number 61)]
[Rules and Regulations]               
[Page 16053-16060]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30mr06-16]                         

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 86

[OAR-2006-0160; FRL-8049-6]
RIN 2060-AN67

 
Control of Air Pollution From New Motor Vehicles: Amendments to 
the Tier 2 Motor Vehicle Emission Regulations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: EPA is taking direct final action to make minor amendments to 
the existing Tier 2 motor vehicle regulations (65 FR 6698, February 10, 
2000, hereinafter referred to as the Tier 2 rule). These minor 
amendments are consistent with our intention, under the original Tier 2 
rule, to provide interim compliance flexibilities for clean diesels in 
the passenger car market. While the automotive industry has made rapid 
advancements in light-duty diesel emissions control technologies and 
will, as a result, be able to produce diesel vehicles that can comply 
with the primary regulatory requirements of the Tier 2 program, diesel 
vehicles still face some very limited technological challenges in 
meeting the full suite of Tier 2 requirements. This action will provide 
two voluntary, interim alternative compliance options for a very 
limited set of standards for oxides of nitrogen (NOX), 
including only high altitude and high speed/high acceleration 
conditions. These temporary alternative compliance options are designed 
to be environmentally neutral, as manufacturers choosing them would 
then be required to meet more stringent standards in other aspects of 
the Tier 2 program. The alternative compliance options will last for 
only three model years, during which time advancements in diesel 
emissions control technologies will be further developed.

DATES: This direct final rule is effective on June 28, 2006 without 
further notice, unless we receive adverse comments by May 1, 2006 or if 
we receive a request for a public hearing by April 14, 2006. Should we 
receive any adverse comments on this direct final rule, we will publish 
a timely withdrawal in the Federal Register informing the public that 
this rule will not take effect.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-HQ-OAR-2006-0160. All documents in the docket are listed on the 
http://www.regulations.gov Web site. Although listed in the index, some 

information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically through http://www.regulations.gov
 or in hard copy at the Air Docket, EPA/DC, EPA 

West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The 
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through 
Friday, excluding legal holidays. The telephone number for the Public 
Reading Room is (202) 566-1744, and the telephone number for the Air 
Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Todd Sherwood, U.S. EPA, National 
Vehicle and Fuel Emissions Laboratory, Assessment and Standards 
Division, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone (734) 
214-4405, fax (734) 214-4816, e-mail sherwood.todd@epa.gov.

SUPPLEMENTARY INFORMATION: EPA is publishing this rule without a prior 
proposal because we view this action as noncontroversial and anticipate 
no adverse comment. However, in the ``Proposed Rules'' section of 
today's Federal Register publication, we are publishing a separate 
document that will serve as the proposal to adopt the provisions in 
this Direct Final Rule if adverse comments are filed. This rule will be 
effective on June 28, 2006 without further notice unless we receive 
adverse comment by May 1, 2006 or a request for a public hearing by 
April 14, 2006. If we receive adverse comment on one or more distinct 
amendments, paragraphs, or sections of this rulemaking, we will publish 
a timely withdrawal in the Federal Register indicating which provisions 
are being withdrawn due to adverse comment. We may address all adverse 
comments in a subsequent final rule based on the proposed rule. We will 
not institute a second comment period on this action.

[[Page 16054]]

Any parties interested in commenting must do so at this time. Any 
distinct amendment, paragraph, or section of today's rulemaking for 
which we do not receive adverse comment will become effective on the 
date set out above, notwithstanding any adverse comment on any other 
distinct amendment, paragraph, or section of today's rule.

Access to Rulemaking Documents Through the Internet

    Today's action is available electronically on the date of 
publication from EPA's Federal Register Internet web site listed below. 
Electronic copies of this preamble, regulatory language, and other 
documents associated with today's final rule are available from the EPA 
Office of Transportation and Air Quality Web site listed below shortly 
after the rule is signed by the Administrator. This service is free of 
charge, except any cost that you already incur for connecting to the 
Internet.
    EPA Federal Register Web site: http://www.epa.gov/fedrgstr/EPA-AIR/ 

(either select a desired date or use the Search feature).
    EPA Office of Transportation and Air Quality Web site for Tier 2 
Vehicle and Gasoline Sulfur Program Amendments: http://www.epa.gov/tier2/amendments.htm
.

    Please note that changes in format, page length, etc., may occur 
due to computer software differences.

Regulated Entities

    Entities potentially affected by this action are those that 
manufacture and sell motor vehicles in the United States. The table 
below gives some examples of entities that may have to comply with the 
regulations. However, since these are only examples, you should 
carefully examine these and other existing regulations in 40 CFR part 
80. If you have any questions, please call the person listed in the FOR 
FURTHER INFORMATION CONTACT section above.

----------------------------------------------------------------------------------------------------------------
                              NAICS codes
          Category                 a       SIC codes b         Examples of potentially regulated entities
----------------------------------------------------------------------------------------------------------------
Industry....................       336111         3711  Automobile and light truck manufacturers.
                                  336112
----------------------------------------------------------------------------------------------------------------
a North American Industry Classification System (NAICS).
b Standard Industrial Classification (SIC) system code.

I. Overview of Voluntary Alternative Compliance Options

    The amendments described below pertain to the Tier 2/Gasoline 
Sulfur regulations finalized by EPA on February 10, 2000 (65 FR 6698), 
hereafter referred to as the Tier 2 rule, or the Tier 2 program. The 
Tier 2/Gasoline Sulfur program was designed to significantly reduce the 
emissions from new passenger cars and light trucks, including pickup 
trucks, vans, minivans, and sport-utility vehicles. The program is a 
comprehensive regulatory initiative that treats vehicles and fuels as a 
system, combining requirements for much cleaner vehicles with 
requirements for much lower levels of sulfur in gasoline. The program, 
which began in model year 2004, phases in a single set of exhaust 
emission standards that will, for the first time, apply to all 
passenger cars, light trucks, and larger passenger vehicles operated on 
any fuel. To enable the very clean Tier 2 vehicle emission control 
technology to be introduced and to maintain its effectiveness, the Tier 
2 program also requires reduced gasoline sulfur levels nationwide. The 
Tier 2 program did not require similar changes for diesel fuel sulfur 
levels, but a separate rule mandated the reduction of highway diesel 
fuel sulfur levels beginning in September, 2006 (66 FR 5001, January 
18, 2001). Although we provide some additional context in the following 
discussions, the Tier 2 program is very detailed and will not be 
described completely in this direct final rule. Readers are advised to 
consult the documents associated with this rulemaking if they are 
interested in more information than is provided in this direct final 
rule. Information regarding the Tier 2 rule may be found on the EPA Web 
site at http://www.epa.gov/tier2.

    A key component of the Tier 2 program has been an emphasis on 
consistent emission standards regardless of fuel type. This approach 
helps to ensure that our overall air quality goals are met. However, 
the Tier 2 program also gives some consideration to the fact that 
diesel vehicles must accomplish a much greater emission reduction from 
current levels in order to comply with the final Tier 2 program. Under 
the Tier 1 emissions control program, diesel-powered vehicles could be 
more than twice as high in emissions as gasoline vehicles for 
NOX and in practice were almost ten times higher in 
emissions of PM. Tier 2 included a number of interim measures that 
provide a glide path for vehicles to improve incrementally before 
coming into full compliance with the final Tier 2 program. 
Manufacturers were given several flexibility options in the Tier 2 
regulations to ease their transition into meeting the final Tier 2 
standards until late in the phase-in period (as late as model year 2007 
for light-duty vehicles (LDVs) and light light-duty trucks (LLDTs), and 
model year 2009 for heavy LDTs (HLDTs)).\1\ These flexibilities were 
meant to give manufacturers an adequate amount of leadtime toward 
meeting the very stringent Tier 2 standards. Manufacturers were also 
permitted to certify vehicle families to less stringent bins during the 
phase-in, as long as the manufacturer's total fleet met the appropriate 
average NOX level.\2\ There were also provisions for 
specific flexibilities for diesel vehicles in the early years of the 
program.
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    \1\ Light-duty truck (LDT) means any motor vehicle rated at 
8,500 pounds gross vehicle weight rating (GVWR) or less which has a 
vehicle curb weight of 6,000 pounds or less and which has a basic 
vehicle frontal area of 45 square feet or less, which is: (1) 
Designed primarily for purposes of transportation of property or is 
a derivation of such a vehicle; or, (2) designed primarily for 
transportation of persons and has a capacity of more than 12 
persons; or, (3) available with special features enabling off-street 
or off-highway operation and use (40 CFR 86.1803-01). A light LDT 
means any LDT rated up through 6,000 pounds GVWR. A heavy LDT means 
any LDT rated greater than 6,000 pounds GVWR.
    \2\ The Tier 2 rule when fully phased in contains eight sets of 
emission standards, or ``bins'' (bins 1 through 8). Each bin is a 
set of emission standards to which manufacturers can certify their 
vehicles, provided that each manufacturer meets a specified fleet 
average NOX standard. During the initial years of the 
program, there are an additional three bins.
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    As EPA projected, the automotive industry has made rapid 
advancements in diesel emissions control technologies for 
NOX via NOX adsorber systems, advanced turbo 
chargers, and more effective exhaust gas recirculation, and for PM via 
particulate filters that control diesel PM to gasoline levels. These 
advancements mean that manufacturers will be able to produce diesel 
vehicles that can comply with the primary regulatory requirements of 
the Tier 2 program. However, diesel vehicles still face some very 
limited technological challenges in meeting the full suite of Tier 2 
requirements. Some diesel vehicle manufacturers have approached

[[Page 16055]]

EPA to express concerns with respect to a very limited set of standards 
for oxides of nitrogen (NOX) emissions. Specifically, some 
manufacturers are concerned with the 4,000 mile standards for high 
speed/high acceleration operating conditions (i.e., the US06 cycle and 
associated standards) and the NOX standards for high 
altitude operating conditions. These two narrow areas of operation are 
the most challenging for diesel vehicles due to the relatively high 
engine loads of the US06 test cycle and the relative lack of oxygen at 
high altitudes. The new technologies that have been applied to broadly 
bring these vehicles into Tier 2 compliance will require further fine-
tuning to fully address emissions under these conditions. We are 
projecting that, with only a few more interim years of refinement, 
these technologies will be able to achieve full compliance under these 
narrow conditions as they already demonstrate under typical operating 
conditions. We discuss these existing standards, the technical 
challenges faced by diesels, and our environmentally neutral interim 
voluntary compliance options below.

A. High Speed/High Acceleration (US06 Cycle) Option

1. Background on Existing Tier 2 SFTP Requirements
    In addition to bins of exhaust emission standards for the Federal 
Test Procedure (FTP), the Tier 2 rule also includes exhaust emission 
standards for the Supplemental Federal Test Procedure (SFTP) for which 
standards were first established in 1996.\3\ The SFTP procedures are 
designed to control emissions that occur during types of driving that 
are not well-represented on the FTP. Such ``off-cycle'' driving 
includes high speed driving and rapid accelerations and decelerations, 
and driving with the air conditioner operating. We have separate test 
cycles and associated standards for each of these operating conditions: 
High speed/rapid acceleration is covered by the US06 cycle and 
standards, and air conditioner operation is covered by the SC03 cycle 
and standards. SFTP emission levels are a composite of the emission 
levels over these two test cycles and the FTP cycle. SFTP emissions 
from each vehicle test group must meet a set of SFTP emission standards 
in addition to the FTP standards.\4\ The Tier 2 SFTP standard is 
calculated based on the Tier 1 SFTP standards, the Tier 1 FTP 
standards, and the standards for the Tier 2 bin to which the vehicle is 
being certified according to the equation:
---------------------------------------------------------------------------

    \3\ 61 FR 54852.
    \4\ SFTP emissions are determined according to the equation 
SFTP=0.35x(FTP)+0.28x(US06)+0.37x(SC03).

SFTPTier 2=SFTPTier 1-
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[(0.35)x(FTPTier 1 - FTPTier 2)]

Standards for NMHC and NOX are added together in the 
calculation, and Tier 2 NMOG standards are treated as NMHC in the 
calculation.

    Beginning with the 2004 model year (i.e., with the Tier 2 program), 
LDVs and LDTs have been required to meet the US06 and SC03 standards at 
4,000 miles and the SFTP standard at 120,000 miles.\5\ \6\ These 
standards are shown in Table 1 for Tier 2 bins 1 through 8.
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    \5\ A 120,000 mile useful life is actually a 120,000 mile useful 
life or 10 years for LDVs and LLDTs, or 120,000 miles or 11 years 
for HLDTs, whichever occurs first. A 150,000 mile useful life is 
actually 150,000 miles or 15 years, whichever occurs first. These 
time elements are implied throughout the text wherever we refer to 
useful life.
    \6\ Our National Low Emission Vehicle (NLEV) rulemaking (63 FR 
926) required the 4,000 mile standards and 120,000 mile useful life 
for manufacturers opting into the NLEV program. The Tier 2 program 
made these a requirement for all vehicles.

         Table 1.--Tier 2 SFTP Exhaust Emissions Standards for 2004 and Later Model Years--LDV/LDT1 Only
                                                 [NOX+NMHC g/mi]
----------------------------------------------------------------------------------------------------------------
                                                                         4k Mile standards           120k Mile
                                                                 --------------------------------  standards \a\
                               Bin                                                               ---------------
                                                                       US06            SC03            SFTP
----------------------------------------------------------------------------------------------------------------
8...............................................................            0.14            0.20            0.71
7...............................................................            0.14            0.20            0.68
6...............................................................            0.14            0.20            0.66
5...............................................................            0.14            0.20            0.65
4...............................................................            0.14            0.20            0.63
3...............................................................            0.14            0.20            0.62
2...............................................................            0.14            0.20            0.60
1...............................................................            0.14            0.20           0.59
----------------------------------------------------------------------------------------------------------------
\a\ 120,000 miles or 10 years, whichever occurs first.

    Through model year 2006, the Tier 2 program allows diesel LDVs and 
diesel LDT1s to comply with an intermediate useful life SFTP standard 
in lieu of complying with the 4,000 mile US06 and SC03 standards.\7\ In 
the Tier 2 rule preamble, we stated that we were providing this option 
because we lacked certainty as to whether diesel vehicles could comply 
with the 4,000 mile US06 and SC03 standards that were actually 
established based on gasoline vehicles under the California LEV 
program.\8\ Manufacturers choosing this option were required to 
calculate intermediate useful life SFTP standards using the same 
approach described for full useful life standards by substituting the 
appropriate intermediate useful life values in the SFTP standard 
equation shown above. Table 2 shows the applicable SFTP standards for 
diesel LDVs/LDT1s making use of this option.
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    \7\ This option was also available to all light light-duty 
trucks (LDT1 and LDT2), see 40 CFR 86.1811-04(f)(6).
    \8\ 65 FR 6791, section V.C.4.

[[Page 16056]]



Table 2.--Existing Optional Tier 2 SFTP Exhaust Emissions Standards Available through the 2006 Model Year Diesel
                                                  LDV/LDT1 Only
                                                 [NOX+NMHC g/mi]
----------------------------------------------------------------------------------------------------------------
                                                         4k Mile standards           50k Mile        120k Mile
                                                 --------------------------------  standards \a\   standards \b\
                       Bin                                                       -------------------------------
                                                       US06            SC03            SFTP            SFTP
----------------------------------------------------------------------------------------------------------------
8...............................................             n/a             n/a            0.51            0.71
7...............................................             n/a             n/a            0.49            0.68
6...............................................             n/a             n/a            0.48            0.66
5...............................................             n/a             n/a            0.47            0.65
4...............................................             n/a             n/a            0.46            0.63
3...............................................             n/a             n/a            0.45            0.62
2...............................................             n/a             n/a            0.43            0.60
1...............................................             n/a             n/a            0.42           0.59
----------------------------------------------------------------------------------------------------------------
 \a\ There are no intermediate useful life FTP standards for bins 1 through 4 so the Tier 2 120,000 mile
  standards were used in their place according to 40 CFR 86.1811-04(f)(6)(ii).
\b\ 120,000 miles or 10 years, whichever occurs first.

2. Voluntary Interim Compliance Option for US06 Standards
    Some diesel vehicle manufacturers have approached EPA to express 
concerns with respect to the US06 standard for 2007 and later model 
years (Table 1). The concern is that the US06 standard, while generally 
feasible, cannot yet be met by some diesel LDVs with a sufficient 
compliance margin. Typically, manufacturer certification levels are 20 
to 30 percent below the standards to provide some level of compliance 
margin. The risk associated with the low compliance margin for some 
diesel LDVs is such that some manufacturers may choose not to certify 
such vehicles for the U.S. market. These manufacturers have noted that 
the SFTP standards were developed based on vehicle weight 
classifications (i.e., LDV/LDT1, LDT2, etc.), as shown in Table 3. 
While capable today of meeting the LDT2 standard, manufacturers note 
that some LDVs need more time to achieve the LDV emissions level. They 
note that it makes sense since some LDVs are as heavy as some LDT2s. 
Vehicle weight directly impacts engine-out NOX emissions due 
to the increased engine load necessary to accelerate a heavier vehicle. 
While this issue has largely been addressed over most normal driving 
modes by increasing catalyst size with vehicle mass, further 
improvements in catalyst management (e.g., regeneration strategies and 
system optimization) are needed for the heaviest diesel passenger cars. 
Given the rapid improvement in diesel catalyst systems to address the 
bulk of NOX emissions, we are confident in projecting that 
further system optimization will enable all diesel vehicles to address 
this narrow area of control with only a few more years of development.

  Table 3.--Tier 2 US06 Exhaust Emissions Standards for 2004 and Later
                               Model Years
                             [NOX+NMHC g/mi]
------------------------------------------------------------------------
                                                           4k Mile US06
                      Weight class                           standard
------------------------------------------------------------------------
LDV/LDT1................................................            0.14
LDT2....................................................            0.25
LDT3....................................................            0.4
LDT4....................................................            0.6
------------------------------------------------------------------------

    Consistent with providing the optional SFTP standards for diesel 
LDVs and diesel LDTs through the 2006 model year in the current Tier 2 
rule, this direct final rule provides a temporary voluntary alternative 
compliance option for diesel LDVs and LDT1s beginning with the 2007 
model year. Manufacturers choosing this option for a given vehicle line 
will be allowed to comply with the LDT2 4,000 mile US06 standard of 
0.25 g/mi NOX+NMHC in lieu of meeting the current LDV/LDT1 
level of 0.14 NOX+NMHC. We believe that this voluntary 
compliance option should be environmental neutral, reflecting the full 
degree of emission reduction potential achieved by diesel vehicles. To 
ensure environmental neutrality, vehicles for which manufacturers 
choose this option will be required to meet a more stringent full 
useful life SFTP composite standard than the base Tier 2 SFTP standards 
shown in Table 1. This more stringent standard will be the optional 
50,000 mile standard that had been available for diesels through the 
2006 model year (Table 2). For example, a bin 8 diesel vehicle will 
have to meet the 0.51 g/mi SFTP composite standard shown in Table 2 
rather than the 0.71 g/mi SFTP composite standard shown in Table 1. 
Further, these vehicles will be required to meet the SFTP composite 
standard for a longer useful life of 150,000 miles rather than the base 
Tier 2 useful life of 120,000 miles.
    The resultant standards for diesel LDVs/LDT1s for which 
manufacturers choose the alternative compliance option are shown in 
Table 4. The alternative compliance option will be available for model 
years 2007 through 2009, during which time we expect that manufacturers 
will be able to meet the remaining narrow challenges facing diesel 
technology to fully comply with the full suite of Tier 2 requirements.

  Table 4.--Optional Tier 2 SFTP Exhaust Emissions Standards Available for Model Years 2007 Through 2009 Diesel
                                                  LDV/LDT1 Only
                                                 [NOX+NMHC g/mi]
----------------------------------------------------------------------------------------------------------------
                                                         4k Mile standards           50k Mile        150k Mile
                                                 --------------------------------    standards     standards \a\
                       Bin                                                       -------------------------------
                                                       US06          SC03 \b\          SFTP            SFTP
----------------------------------------------------------------------------------------------------------------
8...............................................            0.25            0.20            0.51            0.51

[[Page 16057]]


7...............................................            0.25            0.20            0.49            0.49
6...............................................            0.25            0.20            0.48            0.48
5...............................................            0.25            0.20            0.47            0.47
4...............................................            0.25            0.20            0.46            0.46
3...............................................            0.25            0.20            0.45            0.45
2...............................................            0.25            0.20            0.43            0.43
1...............................................            0.25            0.20            0.42           0.42
----------------------------------------------------------------------------------------------------------------
\a\ 150,000 miles or 15 years, whichever occurs first.
\b\ The SC03 standard shown here is the same as the base Tier 2 SC03 standard. No change is made to this
  standard under the alternative compliance option.

    We are providing this US06 alternative compliance option because 
diesel vehicles have developed rapidly, reducing NOX 
emissions by more than 80 percent from the Tier 1 level, thereby 
demonstrating an ability to meet the Tier 2 FTP standards. We are 
projecting that, with only a few more years of development, they will 
be able to meet the 4,000 mile US06 provisions. Further, we believe 
clean diesel technology can play an important role in the U.S. light-
duty market. This is particularly true given the consumer interest in 
the increased fuel efficiency that diesels can provide. While vehicles 
using this option will be certified to a less stringent 4,000 mile US06 
standard, they will be held to not only a more stringent full useful 
life SFTP standard, but also an increased useful life for that 
standard.
    As an example, we can consider a bin 8 LDV. Under the base Tier 2 
SFTP standards, a bin 8 LDV would meet a 4,000 mile US06 standard of 
0.14 g/mi NOX+NMHC. Beyond 4,000 miles, the SFTP standard 
would be the 0.71 g/mi value shown in Table 1. That means that the 
vehicle could legally emit at the 0.71 g/mi level for miles 4,000 
through 120,000. Under the alternative compliance option, while the 
4,000 mile US06 standard will be somewhat higher (up to 0.25 g/mi 
NOX+NMHC), the vehicle will be required to emit no more than 
0.51 g/mi of NOX+NMHC for miles 4,000 through 150,000.

B. High Altitude Option

    Under the Tier 2 program, the emissions standards for each bin 
apply regardless of altitude. The significant progress to date has 
enabled diesel vehicles to comply with the FTP standards. However, 
NOX control from diesel vehicles at high altitude is 
particularly challenging due to the relative lack of oxygen, and hence, 
a need to reduce exhaust gas recirculation (EGR) rates in order to 
compensate. Since EGR is a primary engine-out NOX control 
measure, engine-out NOX can increase at high altitude. The 
NOX catalysts applied to meet the broad Tier 2 emission 
standards for 2007 will largely offset these increased emissions under 
most but not all conditions. We are projecting that the NOX 
catalyst systems will require additional refinement in design and 
calibration to fully address NOX emissions under these 
conditions. Based on the rapid progress to broadly address 
NOX emissions with catalyst technologies, we are confident 
in projecting that further system optimization will fully address this 
narrow emission issue.
    Some diesel vehicle manufacturers have approached EPA to express 
concerns that they do not yet have an adequate compliance margin to 
accommodate the expected emissions increase experienced at high 
altitude. As with the US06 issue described above, these manufacturers 
are concerned about the compliance margin afforded by the stringent 
Tier 2 standards. They have stated that, while the Tier 2 standards are 
technologically feasible, the risks associated with in-use compliance 
are such that they may choose to forego light-duty diesel certification 
for the U.S. market.
    During the phase-in period, the Tier 2 program already includes a 
provision for higher in-use FTP standards. Our basis for that provision 
was that, as with any new technology or even with new calibrations of 
existing technology, there are risks of in-use compliance problems that 
may not appear in the certification process.\9\ In support of the 
provision, we also noted that in-use compliance concerns may discourage 
manufacturers from applying new technologies or new calibrations. For 
those reasons, we established higher in-use standards for those bins 
most likely to require the greatest applications of effort as a means 
to provide assurance to manufacturers that they would not face a recall 
action if they were to exceed the standards by a specified amount.\10\
---------------------------------------------------------------------------

    \9\ 65 FR 6796, section V.I.3.
    \10\ The in-use factors applied for NOX in the Tier 2 
rule ranged from 1.4 to 1.7 depending on the bin.
---------------------------------------------------------------------------

    Consistent with that rationale, and because light-duty diesel 
vehicles require the greatest application of effort toward meeting the 
Tier 2 standards, this direct final rule provides a temporary 
compliance option at high altitude for light-duty diesels. While 
operating at high altitude, vehicles using this option will be held to 
a standard of 1.2 times the NOX standard to which they were 
certified. This option will be available during model years 2007 
through 2009 and for bins 7 and 8 only. This option is designed to be 
environmentally neutral and to reflect the full degree of emissions 
reductions available by light-duty diesel technology. Therefore, one 
condition for using this option is the requirement to meet the bin 5 
FTP PM standard of 0.01 g/mi. The FTP PM standard is 0.02 g/mi for bins 
7 and 8 while it is 0.01 g/mi for bins 6 and below. Therefore, we are 
limiting this option to bins 7 and 8. In other words, to use this 
option, the vehicle must be certified to a PM standard half the level 
of the base Tier 2 standard for their given bin. Further, vehicles for 
which manufacturers choose this option will have to be certified to a 
useful life of 150,000 miles rather than the base Tier 2 useful life of 
120,000 miles. Importantly, vehicles for which manufacturers choose 
this option will have the same certification standards (except for PM, 
which will be more stringent) as in the base Tier 2 program, and these 
two conditions for

[[Page 16058]]

using the option--tighter PM standard and longer useful life--will 
apply at all altitudes. Table 5 summarizes the base Tier 2 and optional 
standards for manufacturers choosing this high altitude option.

 Table 5.--Tier 2 NOX and PM Emissions Standards for Light-Duty Diesel Vehicles Under the Optional High Altitude
                                                Compliance Factor
                                  [Available for model years 2007 through 2009]
----------------------------------------------------------------------------------------------------------------
                                                     NOX standards (g/mi)        PM standards
                                               --------------------------------     (g/mi)
                                                                               ----------------  Useful life \a\
             Bin                   Program       Certification  In-use at high   Certification       (miles)
                                                 and in-use at     altitude      and In-use at
                                                 low altitude                    all altitudes
----------------------------------------------------------------------------------------------------------------
8............................  Base Tier 2....            0.20            0.20            0.02  120k.
                               Option \b\.....            0.20            0.24            0.01  150k.
7............................  Base Tier 2....            0.15            0.15            0.02  120k.
                               Option \b\.....            0.15            0.18            0.01  150k.
----------------------------------------------------------------------------------------------------------------
\a\ 120,000 miles or 10 years, whichever occurs first; 150,000 miles or 15 years, whichever occurs first.
\b\ An in-use at high altitude multiplicative factor of 1.2 has been applied to the certification NOX standard;
  this would be available to NOX only.

    Note that the optional standards shown in Table 5 carry with them a 
requirement to certify to a 150,000 mile useful life. There is a 
provision in the Tier 2 program that allows manufacturers to forego 
compliance with intermediate useful life standards (only bins 5 through 
8 have intermediate useful life standards in the final Tier 2 program) 
provided they certify the vehicle to a 150,000 mile useful life.\11\ 
Bins 5 through 8 vehicles using the option to forego intermediate 
useful life standards in favor of a 150,000 mile useful life are not 
permitted to generate additional NOX credits toward the 
fleet average NOX standard. Similarly, under this option, 
manufacturers choosing the option to use the high altitude compliance 
factor will not be allowed to generate additional NOX 
credits toward the fleet average NOX standard.
---------------------------------------------------------------------------

    \11\ 40 CFR 86.1811-04(c)(4).
---------------------------------------------------------------------------

    We are providing this high altitude alternative compliance option 
for the same reason stated above for the US06 option--because diesel 
vehicles have rapidly improved, reducing their NOX emissions 
by more than 80 percent, and will be able to fully comply with all of 
the Tier 2 provisions given only a few more years of development. We 
believe this option is environmentally neutral. While vehicles using 
the option will be allowed a compliance margin of 20 percent for 
NOX at high altitude, that comes with a 50 percent more 
stringent PM standard at all altitudes and an increased useful life for 
both the NOX and PM standards.

II. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency is required to determine whether this regulatory action would be 
``significant'' and therefore subject to review by the Office of 
Management and Budget (OMB) and the requirements of the Executive 
Order. The order defines a ``significant regulatory action'' as any 
regulatory action that is likely to result in a rule that may:
     Have an annual effect on the economy of $100 million or 
more or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or state, local, or tribal governments or 
communities;
     Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
     Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or,
     Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, we have determined 
that this final rule is not a ``significant regulatory action.''

B. Paperwork Reduction Act

    The Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq., and 
implementing regulations, 5 CFR part 1320, do not apply to this action 
as it does not involve the collection of information as defined 
therein.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    EPA has determined that it is not necessary to prepare a regulatory 
flexibility analysis in connection with this final rule. EPA has also 
determined that this rule will not have a significant economic impact 
on a substantial number of small entities.
    For purposes of assessing the impacts of today's direct final rule 
on small entities, small entity is defined as: (1) A motor vehicle 
manufacturer with fewer than 1000 employees; (2) a small governmental 
jurisdiction that is a government of a city, county, town, school 
district or special district with a population of less than 50,000; and 
(3) a small organization that is any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.

[[Page 16059]]

    After considering the economic impacts of today's final rule on 
small entities, EPA has concluded that this action will not have a 
significant economic impact on a substantial number of small entities. 
In determining whether a rule has a significant economic impact on a 
substantial number of small entities, the impact of concern is any 
significant adverse economic impact on small entities, since the 
primary purpose of the regulatory flexibility analyses is to identify 
and address regulatory alternatives ``which minimize any significant 
economic impact of the proposed rule on small entities.'' 5 U.S.C. 603 
and 604. Thus, an agency may conclude that a rule will not have a 
significant economic impact on a substantial number of small entities 
if the rule relieves regulatory burden, or otherwise has a positive 
economic effect on all of the small entities subject to the rule.
    This direct final rule will not have any adverse economic impact on 
small entities. Today's rule revises certain provisions of the Tier 2 
rule (65 FR 6698, February 10, 2000), such that regulated entities have 
more flexibility in complying with the requirements of the Tier 2 rule. 
More specifically, today's action provides alternative compliance 
options that relax very limited elements of the Tier 2 standards in 
return for greater stringency in other, broader elements of the 
standards.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments, and the private sector. Under section 202 of the UMRA, we 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``federal mandates'' that 
may result in expenditures to state, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more for 
any single year. Before promulgating a rule for which a written 
statement is needed, section 205 of the UMRA generally requires us to 
identify and consider a reasonable number of regulatory alternatives 
and to adopt the least costly, most cost-effective, or least burdensome 
alternative that achieves the objectives of the rule. The provisions of 
section 205 do not apply when they are inconsistent with applicable 
law. Moreover, section 205 allows us to adopt an alternative that is 
not the least costly, most cost-effective, or least burdensome 
alternative if we provide an explanation in the final rule of why such 
an alternative was adopted.
    Before we establish any regulatory requirement that may 
significantly or uniquely affect small governments, including tribal 
governments, we must develop a small government plan pursuant to 
section 203 of the UMRA. Such a plan must provide for notifying 
potentially affected small governments, and enabling officials of 
affected small governments to have meaningful and timely input in the 
development of our regulatory proposals with significant federal 
intergovernmental mandates. The plan must also provide for informing, 
educating, and advising small governments on compliance with the 
regulatory requirements.
    This rule contains no federal mandates for state, local, or tribal 
governments as defined by the provisions of Title II of the UMRA. The 
rule imposes no enforceable duties on any of these governmental 
entities. Nothing in the rule will significantly or uniquely affect 
small governments.
    We have determined that this rule does not contain a federal 
mandate that may result in estimated expenditures of more than $100 
million to the private sector in any single year. This action has the 
net effect of providing alternative compliance options within the Tier 
2 rule. Therefore, the requirements of the UMRA do not apply to this 
action.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires us to develop an accountable process to ensure 
``meaningful and timely input by state and local officials in the 
development of regulatory policies that have federalism implications.'' 
The phrase ``policies that have federalism implications'' is defined in 
the Executive Order to include regulations that have ``substantial 
direct effects on the states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government.''
    Under section 6 of Executive Order 13132, we may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by state and local governments, or we consult 
with state and local officials early in the process of developing the 
proposed regulation. We also may not issue a regulation that has 
federalism implications and that preempts state law, unless we consult 
with state and local officials early in the process of developing the 
proposed regulation.
    Section 4 of the Executive Order contains additional requirements 
for rules that preempt state or local law, even if those rules do not 
have federalism implications (i.e., the rules will not have substantial 
direct effects on the states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government). Those 
requirements include providing all affected state and local officials 
notice and an opportunity for appropriate participation in the 
development of the regulation. If the preemption is not based on 
express or implied statutory authority, we also must consult, to the 
extent practicable, with appropriate state and local officials 
regarding the conflict between state law and federally protected 
interests within the Agency's area of regulatory responsibility.
    This rule does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. This rule provides alternative 
compliance options for complying with existing rules that adopted 
national standards to control vehicle emissions and gasoline fuel 
sulfur levels. The requirements of the rule will be enforced by the 
federal government at the national level. Thus, the requirements of 
Section 6 of the Executive Order do not apply to this rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' This final rule does not have 
tribal implications, as specified in Executive Order 13175. Today's 
rule does not uniquely affect the communities of American Indian tribal 
governments since the motor vehicle requirements for private businesses 
in today's rule will have national applicability. Furthermore, today's 
rule does not impose any direct compliance costs on these communities 
and no circumstances specific to such

[[Page 16060]]

communities exist that will cause an impact on these communities beyond 
those discussed in the other sections of today's document. Thus, 
Executive Order 13175 does not apply to this rule.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that: (1) Is determined to be ``economically significant'' 
as defined under Executive Order 12866; and, (2) concerns an 
environmental health or safety risk that we have reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, section 5-501 of the Executive Order directs us to 
evaluate the environmental health or safety effects of the planned rule 
on children, and explain why the planned regulation is preferable to 
other potentially effective and reasonably feasible alternatives 
considered by us.
    This rule is not subject to the Executive Order because it is not 
an economically significant regulatory action as defined by Executive 
Order 12866. Furthermore, this rule does not concern an environmental 
health or safety risk that we have reason to believe may have a 
disproportionate effect on children.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This rule is not subject to Executive Order 13211, ``Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use'' (66 FR 28355, May 22, 2001) because it is not a 
significant regulatory action under Executive Order 12866.

I. National Technology Transfer Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), section 12(d) of Public Law 104-113, directs us to 
use voluntary consensus standards in our regulatory activities unless 
it would be inconsistent with applicable law or otherwise impractical. 
Voluntary consensus standards are technical standards (e.g., materials 
specifications, test methods, sampling procedures, and business 
practices) developed or adopted by voluntary consensus standards 
bodies. The NTTAA directs us to provide Congress, through OMB, 
explanations when we decide not to use available and applicable 
voluntary consensus standards.
    This rule references technical standards adopted by us through 
previous rulemakings. No new technical standards are established in 
today's rule. The standards referenced in today's rule involve the 
measurement of gasoline fuel parameters and motor vehicle emissions.

J. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996, 
generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to Congress and the Comptroller General of the United 
States. We will submit a report containing this rule and other required 
information to the U.S. Senate, the U.S. House of Representatives, and 
the Comptroller General of the United States prior to publication of 
the rule in the Federal Register. A Major rule cannot take effect until 
60 days after it is published in the Federal Register. This action is 
not a ``major rule'' as defined by 5 U.S.C. 804(2). This rule will be 
effective June 28, 2006.

I. Statutory Provisions and Legal Authority

    Statutory authority for today's final rule is found in the Clean 
Air Act, 42 U.S.C. 7401 et seq., in particular, section 202 of the Act, 
42 U.S.C. 7521. This rule is being promulgated under the administrative 
and procedural provisions of Clean Air Act section 307(d), 42 U.S.C. 
7607(d).

List of Subjects in 40 CFR Part 86

    Environmental protection, Administrative practice and procedure, 
Motor vehicle pollution.

    Dated: March 21, 2006.
Stephen L. Johnson,
Administrator.

0
For the reasons set forth in the preamble, chapter I, title 40 of the 
Code of Federal Regulations is amended as follows:

PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES 
AND ENGINES

0
1. The authority citation for part 86 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart S--[Amended]

0
2. Section 86.1811-04 is amended by adding paragraphs (f)(8) and (p)(5) 
to read as follows:


Sec.  86.1811-04  Emission standards for light-duty vehicles, light-
duty trucks and medium-duty passenger vehicles.

* * * * *
    (f) * * *
    (8)(i) For model year 2007 through 2009 diesel LDVs and diesel 
LDT1s only, a manufacturer may optionally comply with the 4000 mile 
US06 NMHC+NOX standard shown in Table S04-4 for LDT2s (0.25 
g/mile), instead of the standards for LDV/LDT1s (0.14 g/mile). A 
manufacturer choosing this option also must comply with intermediate 
life SFTP NMHC+NOX standards determined using the 
calculation described under paragraph (f)(6)(ii) of this section. A 
manufacturer choosing this option must comply with the SFTP 
NMHC+NOX standard determined under paragraph (f)(6)(ii) not 
only at intermediate life but also at full useful life and must certify 
such vehicles to this SFTP NMHC+NOX standard for a full 
useful life of 150,000 miles or 15 years, whichever occurs first.
    (ii) In Part I of its certification application for model years 
2007 through 2009, a manufacturer of diesel LDV/LDT1s must declare 
which provision it will use (the base Tier 2 provision of paragraphs 
(f)(1) and (f)(2) of this section or the option described in paragraph 
(f)(8)(i) of this section).
* * * * *
    (p) * * *
    (5) For diesel vehicles certified to bin 7 and bin 8 only in model 
years 2007 through 2009, a manufacturer may optionally comply with the 
bin 5 FTP PM standard shown in Table S04-1. For diesel vehicles 
choosing this option, separate in-use NOX standards apply at 
high altitude conditions as defined in Sec.  86.1803-01. These 
standards are determined by multiplying the applicable NOX 
certification standards by a factor of 1.2. The resultant standards 
apply only in-use at high altitude conditions and do not apply for 
certification or selective enforcement auditing. A manufacturer 
choosing this option must certify such vehicles to the applicable FTP 
NOX and PM standards for a full useful life of 150,000 miles 
or 15 years, whichever occurs first. A manufacturer choosing this 
option would not be allowed to generate additional credits as described 
under Sec.  86.1860-04 (g).
* * * * *

[FR Doc. 06-2979 Filed 3-29-06; 8:45 am]

BILLING CODE 6560-50-P
